The Southern District of Texas has held that an arbitration award was not final before a party’s Motion for Clarification was denied. In Alvarado v. Wells Fargo Advisors, No. 10-0362, (S.D. Tex., February 15, 2011), Lisa Alvarado was employed as a financial advisor registered with Wachovia Securities. After Alvarado’s employment ceased, she entered into arbitration with Wells Fargo Advisors (“Wells Fargo”) over a promissory note and before a Financial Industry Regulation Authority (“FINRA”) panel. On January 6, 2010, the FINRA panel entered an award for Wells Fargo which was delivered to both parties the next day. Alvarado filed a Motion for Clarification which was denied by the arbitrator on January 21, 2010. Next, she filed a Motion to Vacate the arbitration in the Southern District of Texas on February 5, 2010, but failed to serve Wells Fargo until April 14, 2010. Wells Fargo responded by filing a Motion to Dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure which alleged Alvarado did not file her Motion to Vacate the arbitration “within three months after the arbitration award was “filed or delivered,” as required by 9 U.S.C. § 12.” Before the Southern District, Alvarado alleged the award was not finalized until the date on which her Motion for Clarification was denied. Wells Fargo argued the award was final “notwithstanding the reasons for Plaintiff’s Motion for Clarification,” and cited “the arbitration procedural rules that were used by FINRA,” in support of its position. The court began its analysis by looking to the statute, “Notice of a motion to vacate, modify, or correct an [arbitration] award must be served upon the adverse party or his attorney within three months after the award is filed or delivered.” 9 U.S.C. § 12 (“§ 12”). Next, the court held, Plaintiff specifically alleges that two issues in the arbitration that were not addressed in the award that was delivered on January 7, 2010, and that as a result Plaintiff was and is unable to comply with the award. If proven true, these allegations would render the arbitration award non-final, and thus render Plaintiff’s Motion to Vacate timely. Finally the court stated, The FINRA rules relied upon by Defendant are not to the contrary. First, although “[w]hether the award indicates that is final and whether the arbitrator intended the award to be final are factors in determining if an arbitration award is final,” Local 36, Sheet Metal Workers Intern. Ass’n, AFL-CIO, 951 F.2d at 949, the FINRA rule stating generally that awards are final “[u]nless the applicable law directs otherwise” is not dispositive of finality for purposes of this motion to dismiss. Plaintiff’s allegations, if proven, could show that the initial award did not “both resolve all the issues submitted to arbitration, and determine each issue fully so that no further litigation is necessary to finalize the obligations of the parties under the award” and was thus not final. Lummus Global Amazonas S.A., 256 F. Supp. 2d at 639. Second, the procedural validity of Plaintiff’s Motion for Clarification is irrelevant to whether the initial award was final. The Court finds not that the filing of Plaintiff’s Motion for Clarification tolled the three-month time period, but that the three-month time period had not begun as of January 21, 2010 because the initial arbitration award was not final. According to the court, Alvarado alleged facts sufficient to state a claim upon which relief could be granted. Because the arbitration award was not yet final when Alvarado’s Motion for Clarification was denied, the Southern District of Texas denied Wells Fargo’s Motion to Dismiss for untimely filing. Technorati Tags: ADR, law, arbitration

by Holly Hayes According to an American Hospital Association (AHA) News report, Don Berwick, M.D., Administrator of the Centers for Medicare & Medicaid Services, testified on February 10, 2011, at a House Ways and Means Committee hearing on the impact the Patient Protection and Affordable Care Act (PPACA) will have on Medicare. Dr. Berwick, said: “building an improved Medicare program and health care delivery system must be a collaborative effort” with states, health care providers and others. “CMS cannot do this alone, and neither can government as a whole,” he said. In response to concerns by Rep. Erik Paulsen (R-MN) about the law’s potential regulatory burden, Berwick said, “My attitude is that this is a partnership with providers and states. I’m not interested in making their jobs harder.” Last March, Disputing posted a New York Times interview with Dr. Howard Brody, Professor of Family Medicine and Director of the Institute for the Medical Humanities at the University of Texas Medical Branch in Galveston, which discussed a proposal for health care reform involving physicians. Physicians, Dr. Brody says, are not “innocent bystanders” to increasing health care costs but have made little effort to limit future medical costs. In an editorial published in The New England Journal of Medicine, he writes “If physicians seized the moral high ground, we just might astonish enough other people to change the entire reform debate for the better.” Drs. Berwick and Brody recognize a collaborative partnership is needed if we are to improve our health care delivery system. What are your thoughts on this issue? Technorati Tags: Mediation 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.

Christopher R. Drahozal, John M. Rounds Professor of Law at the University of Kansas School of Law, and Peter B. Rutledge, Associate Professor of Law at the University of Georgia School of Law, recently authored a theoretical and empirical law review article entitled Contract and Procedure, (February 14, 2011), Marquette Law Review, Forthcoming; University of Kansas School of Law Working Paper No. 2011-1; UGA Legal Studies Research Paper No. 11-02. In the article, the authors examine procedural contracts and the effect recent U.S. Supreme Court decisions such as Rent-A-Center, West and Stolt-Nielsen have had on such agreements. Here is the abstract: This paper examines both the theoretical underpinnings and empirical picture of procedural contracts. Procedural contracts may be understood as contracts in which parties regulate not merely their commercial relations but also the procedures by which disputes over those relations will be resolved. Those procedural contracts regulate not simply the forum in which disputes will be resolved (arbitration vs litigation) but also the applicable procedural framework (discovery, class action waivers, remedies limitations, etc.). At a theoretical level, this paper explores both the limits on parties’ ability to regulate procedure by contract (at issue in the Supreme Court’s recent Rent-A-Center decision) and the scope of an arbitrator’s ability to fill gaps in parties’ procedural contracts (at issue in the Supreme Court’s recent Stolt-Nielsen decision). At an empirical level, this paper taps a largely unexplored database of credit card contracts available at the Federal Reserve in order to examine actual practices in the use of procedural contracts. The article may be downloaded here (without charge) from Social Science Research Network. What are your thoughts? Technorati Tags: ADR, law, arbitration

The World Intellectual Property Organization (WIPO) has launched an International Survey on Dispute Resolution in Technology Transactions. The survey was “developed with the support of the International Association for the Protection of Intellectual Property (AIPPI), the Association of University Technology Managers (AUTM), the Fédération Internationale des Conseils en Propriété Industrielle (FICPI) and the Licensing Executives Society International (LESI) and in collaboration with in-house counsel and external experts in technology disputes from different jurisdictions and business areas.” Survey topics include: I. Information about the Survey Respondent II. Technology Related Agreements III. Dispute Resolution Clauses in Technology Contracts IV. Types of Technology Related Agreements V. Resolution of Technology Related Disputes VI. Final Comments According to WIPO, The Survey results will be presented in a WIPO Center report which we hope may support you in negotiating dispute resolution contract provisions with business partners, and in identifying appropriate solutions for existing disputes. The WIPO Center will provide you as a participating respondent with a preview of the Survey results prior to full publication. We would also be pleased to offer to you or to one of your colleagues access to WIPO Center Workshops at a considerably reduced registration fee. You may complete the survey here. More information regarding the survey is available here. Technorati Tags: law, ADR, arbitration, Mediation