The United States Court of Appeals for the Fifth Circuit ruled that an arbitrator exceeded his powers by ordering class arbitration without a sufficient contractual or legal basis for doing so. Background In Reed v. Florida Metropolitan University, Inc. No. 11-50509 (5th Cir. May 18, 2012) Plaintiff Jeffrey Reed obtained a bachelor’s degree in paralegal studies at Everest University Online’s (“Everest”) distance learning program. Everest is a brand of Defendant Corinthian Colleges, Inc. and Defendant Florida Metropolitan University, Inc. is a subsidiary of Corinthian Colleges (together, the “School”). Reed was assured from School officials that the degree would be accepted by educational institutions and employers. However, Reed later discovered that law schools would not recognize his degree , nor would the local police department, where he sought employment. District Court Reed filed a class action in a Texas state court alleging that the School violated certain provisions of the Texas Education Code when they solicited students in Texas without first having the required certification of approval from the Texas Workforce Commission. The School removed the action to the District Court, and then moved to compel individual arbitration pursuant to the arbitration provision of the Enrollment Agreement. The District Court found that (i) a valid arbitration agreement existed and (ii) the dispute was within the scope of that agreement. The District Court granted the School’s motion to compel arbitration. The District Court, however, declined to decide whether the parties’ agreement provided for class arbitration, and stated that the issue was “more appropriately decided by the arbitrator.” The AAA arbitrator determined that the parties implicitly agreed to class arbitration and entered an award to that effect. Reed sought confirmation of the award and the School moved to vacate the award on the basis that the arbitrator exceeded his powers. The District Court confirmed the award and the School appealed. Fifth Circuit Whether the District Court Properly Referred the Class Arbitration Issue to the Arbitrator. Because the parties agreed that the arbitrator should decide the class arbitration issue, the Fifth Circuit held that the District Court correctly referred that issue to the arbitrator. Whether the District Court Erred in Confirming the Arbitration Award. The Fifth Circuit agreed with the School and concluded the arbitration award was inconsistent with Stolt-Nielsen, and the arbitrator exceeded his authority by ordering the parties into class arbitration without a sufficient contractual or legal basis. Plaintiff had admitted before the arbitrator that the parties did not discuss whether class arbitration was authorized, and the arbitration agreement failed to address class arbitration. The Fifth Circuit said that “At most, the agreement in this case could support a finding that the parties did not preclude class arbitration, but under Stolt-Nielsen this is not enough.” Accordingly, the Fifth Circuit reversed the District Court’s order confirming the award and remanded the case for further proceedings.

by Holly Hayes We have posted here about improving provider/patient communication in healthcare. The Joint Commission (TJC) has a list of resources on its website titled: Advancing Effective Communication, Cultural Competence, and Patient-and Family-Centered Care: A Roadmap for Hospitals. The R3 Report Requirement, Rationale, Reference reviews the TJC patient-centered communication standards that will be effective July 1, 2012. The standards are summarized by TJC as follows: The Joint Commission released a set of new and revised standards for patient-centered communication as part of an initiative to advance effective communication, cultural competence, and patient- and family-centered care. These standards are designed to improve the safety and quality of care for all patients and to inspire hospitals to adopt practices promoting better communication and patient engagement. Hospitals that do not adequately address cultural, communication, mobility, and other patient needs will continue to put themselves and their patients at risk for negative consequences. The Joint Commission has made several efforts to better understand individual patients’ needs and to provide guidance for organizations working to address those needs. The Joint Commission first focused on studying language, culture and health literacy issues, but later expanded its scope of work to include the broader issues of effective communication, cultural competence, and patient and family-centered care. No longer considered to be simply a patient’s right, effective communication is now accepted as an essential component of quality care and patient safety. Additional studies show that incorporating the concepts of cultural competence and patient- and family-centeredness into the care process can increase patient satisfaction and adherence with treatment. We welcome your comments on effective communication practices in healthcare. Holly Hayes is a mediator at Karl Bayer, Dispute Resolution Expert where she focuses on mediation of health care disputes. Holly holds a B.A. from Southern Methodist University and a Masters in Health Administration from Duke University. She can be reached at holly@karlbayer.com.  

The following bills relating to alternative dispute resolution were introduced by the 112nd U.S. Congress. The session convened in Washington, D.C. on January 3, 2011 and will end on January 3, 2013. Click on the bill number to read its text and on the status link to find the bill’s most recent legislative action. Bills that passed: Patent Reform Act of 2011 (a.k.a. America Invents Act). The Act provides, among other things that parties to a derivation proceeding may resolve the dispute via arbitration. See Section 135(f). H.R. 1249; Status. H.R. 1249 was signed by President Obama on Sept. 16, 2011 and became Public Law No. 112-29. Department of Defense and Full-Year Continuing Appropriations Act of 2011. Provides, among other things, that “None of the funds appropriated or otherwise made available by this Act may be expended for any Federal contract for an amount in excess of $1,000,000 unless the contractor agrees not to—1) enter into any agreement with any of its employees or independent contractors that requires, as a condition of employment, that the employee or independent contractor agree to resolve through arbitration any claim under title VII of the Civil Rights Act of 1964 or any tort related to or arising out of sexual assault or harassment, including assault and battery, intentional infliction of emotional distress, false imprisonment, or negligent hiring, supervision, or retention.” H.R.1473; Status. The Act was signed by the President on April 15, 2011 and became Public Law No. 112-10. Bills still pending: Consumer Mobile Fairness Act of 2011. The bill would amend title 9 of the United States Code to prohibit mandatory arbitration clauses in contracts for mobile service. S. 1652; Status. Disaster Recovery Act of 2011. The bill would create a dispute resolution program to facilitate an efficient recovery from major disasters. S. 1630; Status. Personal Data Protection and Breach Accountability Act of 2011. As introduced, the bill provides that “the rights and remedies afforded by this section shall not be abridged or precluded by any predispute arbitration agreement. S. 1535 IS; S. 1535 RS; Status. Emergency Jobs to Restore the American Dream Act. The bill would create an emergency jobs program during 2012 and 2013. The bill provides that each unit of general local government that is an entitlement community and each State that receives funding under the Act shall agree to the arbitration procedure described in the Act to resolve certain disputes. H.R. 2914; Status. American Specialty Agriculture Act. The Act would create a non-immigrant H-2C work visa program for agricultural workers and provides that any H-2C worker may, as a condition of employment with an employer, be subject to mandatory binding arbitration and mediation of any grievance relating to the employment relationship. H.R. 2847; Status. Arbitration Fairness Act of 2011. Declares that no predispute arbitration agreement shall be valid or enforceable if it requires arbitration of an employment, consumer, or civil rights dispute. S.987; Status. H.R.1873; Status. Lat year, the ABA sent a letter to the sponsors of the legislation expressing concerns regarding certain specific language in the bill that could inadvertently void existing international commercial arbitration agreements and potentially discourage international commercial parties from engaging in commerce with U.S. parties. Labor Relations First Contract Negotiations Act of 2011. Amends the National Labor Relations Act to require mediation and, if necessary, binding arbitration of initial contract negotiation disputes. H.R.129; Status. Surface Transportation Board Reauthorization Act of 2011. Certain appropriations for the Surface Transportation Board, including requiring the Board to establish a binding arbitration process to resolve rail rate, practice, and common carrier service disputes. S.158; Status. Endocrine Disruptor Screening Enhancement Act of 2011. “In the event of any dispute about an appropriate share or a fair method of determining an appropriate share of applicable costs of the testing requirements in a test order, any person involved in the dispute may initiate binding arbitration proceedings by requesting the Federal Mediation and Conciliation Service to appoint an arbitrator from the roster of arbitrators maintained by such Service or a hearing with a regional office of the American Arbitration Association.” H.R.553; Status. Non-Federal Employee Whistleblower Protection Act of 2011. It includes provisions on the nonenforceability of waivers and arbitration of disputes. S.241; Status. National Guard Technician Equity Act. Provides for a technician’s rights of grievance, arbitration, appeal, and review beyond the current stage of the adjutant general of the jurisdiction concerned. H.R.1169; Status. Postal Operations Sustainment and Transformation Act of 2011. Section 401 of the Act includes arbitration and labor dispute guidelines. S.1010; Status. Soledad Canyon High Desert, California Public Lands Conservation and Management Act of 2011. Advises the use of arbitration under Subchapter IV of chapter 5 of section 5 of the USC. S.759; Status. FAA Air Transportation Modernization and Safety Improvement Act of 2011. Requires the FAA Administrator and employee bargaining representatives, if their own negotiations and the services of the Federal Mediation and Conciliation Service (FMCS) have failed to lead to an agreement, to submit their controversy to the Federal Service Impasses Panel, subject to specified procedures, for binding arbitration. H.R.658; Status. S. 223; Status. Medical Care Access Protection Act of 2011 (MCAP Act). The limitations within the act apply to arbitration, and nothing in the act is meant to supersede arbitration. S.197; Status. Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011. Provides that, “whether by arbitration or other means, in any health care lawsuit, the court shall supervise the arrangements for payment of damages to protect against conflicts of interest that may have the effect of reducing the amount of damages awarded that are actually paid to claimants.” S.1099; Status. S.218; Status. H.R.5; Status. U.S. Postal Service Improvements Act of 2011. Authorizes arbitration boards to consider the financial condition of the USPS in rendering decisions. S.353; Status. Preventing Homeowners from Foreclosure Act of 2011. Directs the Secretary of Housing and Urban Development (HUD) to implement a competitive grants program for states and local governmental entities to establish mediation programs to assist mortgagors under home mortgages facing foreclosure […]

Professor S.I. Strong (University of Missouri School of Law) has posted Border Skirmishes: The Intersection Between Litigation and International Commercial Arbitration, 2012 Journal of Dispute Resolution __ (forthcoming 2012) on SSRN. Here is the abstract: This Essay considers the tension between the autonomous theory of international commercial arbitration and the more interactive theory advanced by Gary Born during his keynote address at the recent “Border Skirmishes” symposium at the University of Missouri School of Law. In his presentation, Born considered the relationship between litigation and international commercial arbitration and distinguished between permissible “border crossings” and impermissible “border incursions.” This Essay considers how these concepts play out both in routine interactions between courts and tribunals and more in difficult scenarios, such as those involving anti-suit injunctions. The discussion also presents statistics concerning the amount of ancillary litigation that arises in both the United States and the United Kingdom and offers several explanations for recent trends in this regard. The full article may be downloaded (for free) here. Other scholarly papers by Professor S.I. Strong are here.