By Don Philbin U.S. Chief Justice John Roberts released his sixth Year-End Report on the Federal Judiciary on New Year’s Eve. While most of the press coverage has turned on his discussion of judicial vacancies, a three-page appendix highlights the workload of the federal courts. The Clerk of the Fifth Circuit produces a similar workload report containing insightful statistics, and the Texas Lawyer recently reviewed certain statistics for the U.S. District Courts in Texas. John Council, Moving Right Along: Annual Slowpoke Report Examines Pending Motions, Civil Cases, (January 3, 2011). (Free registration required.) Appeals are down marginally in the Fifth Circuit and down with regard to paid filings at the U.S. Supreme Court. District and Bankruptcy Court filings are both up, however, reflecting the economic downturn and serving as a proxy for future appellate activity. Fraud cases, in particular, posted significant increases in 2010. Fraud filings were up 12%, as were the number of named defendants. In fact, the broader measure of civil cases trended upward in both the U.S. District Courts and the Fifth Circuit, although criminal and in forma pauperis cases distorted the overall trends in the Circuit and Supreme Courts. The Fifth Circuit disposed of more cases by unpublished opinions, many of which were delivered per curiam. That data point is particularly noticeable in the ADR cases we are currently reviewing for Texas Tech’s annual symposium issue due to be published in May. Trials continue to dispose of very few civil filings. According to Chief U.S. District Judge Fred Biery of the Western District of Texas, less than one percent of civil cases filed in the district went to trial. That is consistent with recent figures from the Texas Office of Court Administration, which stand at 0.5%, and earlier works by Justice Nathan Hecht, The Vanishing Civil Jury Trial: Trends in Texas Courts and an Uncertain Future, 47 S. Tex. L. Rev. 163 (2005), and Professor Marc Galanter, The Vanishing Trial: An Examination of Trials and Related Matters in Federal and State Courts, 1 J. Empir. Leg. Stud. 459 (2004). When parties decide whether and how to resolve their disputes (decision tree here), a high level look at the court workloads and their impact can be helpful. For instance, in the Fifth Circuit the odds of reversal stand at 7.4%. If you lose there, only nine of 210 en banc petitions (4%) were granted in 2010. Additionally, only 77 of 7,738 cases filed (1%) in the U.S. Supreme Court were disposed of by opinion. Even when running those odds, it is important to keep in mind the time value of money. Other disposition time stats can help decision makers decide the cost /benefit of trial. By the numbers: U.S. Supreme Court docket down 1% to 1,596 82 cases argued; 77 disposed of in 73 opinions In forma pauperis docket increased 7% to 6,576 filings Overall filings up 5.4% as a result U.S. Appellate Court activity down 3% overall to 55,992 Fifth Circuit stats: New appeals down 1% to 7,337 Pending appeals down 6% to 4,744 Reversal rate down slightly to 7.4% from 8.0% in 2009 Petitions for Certiorari Filed to Opinions up slightly to 26% Summary Calendar up 8%; Oral Argument Calendar down 3% Published Opinions down 5%; Unpublished Opinions up 3% Per curiam Opinions up 2.3%, 98.2% of which were Unpublished Opinions En Banc Petitions up 4 to 210 (6.5% of opinions); 9 were granted Federal Question cases up 9.9% Diversity cases up 7.4% U.S. Civil cases up 9.5% Bankruptcy cases down 21.3% Appeals from the U.S. Western District of Texas down 4% U.S. District Court civil filings were up 2% overall to 282,895 Federal question claim filings rose 2% to 138,655 Diversity jurisdiction filings rose 4% to 101,202 Fraud filings set a new record: Fraud cases grew 12% to 9,371 Defendants in fraud cases rose 13% to 12,639 Less than 1% of civil cases filed in the U.S. Western District of Texas went to trial (from: Texas Lawyer) U.S. Bankruptcy petitions climbed 14% to 1,596,355 Highest number since 2005 (pre-Bankruptcy Abuse Prevention Act) Business petitions down 1% Chapter 7 filings up 16% Chapter 11 filings down 4% Chapter 13 filings up 9% Technorati Tags: arbitration, ADR, law, U.S. Supreme Court Don Philbin is an AV-rated attorney-mediator, negotiation consultant and trainer, and arbitrator. He has resolved disputes and crafted deals for more than two decades as a business and commercial litigator, general counsel, and president of communications and technology-related companies. Don holds a Masters of Law degree from Pepperdine‘s top-ranked Straus Institute for Dispute Resolution, where he is now an adjunct professor, has trained and published at Harvard’s Program on Negotiation, is an elected Fellow of the International Academy of Mediators and the American College of Civil Trial Mediators, a member of the Texas Academy of Distinguished Neutrals, and was one of the first U.S. mediators certified under the international standards established by the International Mediation Institute. He has mediated hundreds of individual and class matters in a wide variety of substantive areas and serves as a neutral on several panels, including CPR’s Panels of Distinguished Neutrals. Don has published widely in the field, is Chair of the ABA Dispute Resolution Section‘s Negotiation Committee, and a member of the ADR Section Council of the State Bar of Texas. Mr. Philbin is listed in THE BEST LAWYERS IN AMERICA, TEXAS SUPER LAWYERS, and THE BEST LAWYERS IN SAN ANTONIO. His firm is listed in the inaugural edition of U.S. News and Best Lawyers “Best Law Firm” survey and the BAR REGISTER OF PREEMINENT LAWYERS.  

by Holly Hayes The American Health Lawyers Association has issued an electronic guidebook for the implementation of a new Joint Commission (TJC) Medical Staff Standard, MS.01.01.01. The timeline for implementation of the new standard is March 31, 2011. Changes to a variety of hospital rules and bylaws will be necessary in order to comply with this new standard. Here is a description of the guidebook: Authored by one of the pre-eminent experts on medical staff issues, S. Allan Adelman, Esquire and his colleagues Timothy Adelman, Esquire and Ann O’Connell, Esquire, this new publication is designed to provide you with all the interpretations, analysis, and practical advice you need to meet the requirements of this new standard. The Guide distills much of the commentary and discussion about the Standard and provides samples of bylaw provisions addressing the requirements of MS.01.01.01. In particular, the Guide contains sample bylaw text addressing the requirements of the various Elements of Performance, including: • Amendment of Bylaws • Conflict Management • General Requirements, Criteria and Qualifications for Medical Staff Membership • Medical Staff categories • Selection, Election and Removal of Medical Staff Officers • Function, Size and Composition of Medical Executive Committee • Applications for Medical Staff Membership • Role of the Credentials Committee • Automatic Suspsension or Termination of Medical Staff membership • Summary Action • Grounds for Corrective Action The guidebook may be purchased here. See Disputing‘s previous posts about the new TJC Medical Staff Standard here, here and here. We welcome discussion on implementation of the new standard. 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.

In an interesting case currently on appeal to the Supreme Court of Texas, the Houston [1st] Court of Appeals vacated a trial court’s order appointing a three-person arbitration panel because the court was not the authority contemplated in the parties’ arbitration agreement. In In re Aramco Services Co., No. 01-09-00624-CV, (Tex. App. – Houston [1st], March 19, 2010), DynCorp International, LLC and Aramco entered into a contract for a computer system which was to be manufactured in the U.S. and installed at Aramco’s offices in Saudi Arabia. The contract contained a Saudi “Choice of Law” provision and an arbitration clause which stated: 2. Arbitration Any dispute, controversy or claim arising out of or relating to this Contract . . . which is not settled by agreement between the parties shall be finally settled in accord with the Arbitration Regulations, Council of Ministers Decision No. 164, dated 21 Jumada II 1403 (“the Regulations”) and the Rules For Implementation of the Arbitration Regulations effective as of 10 Shawal 1405 (“the Rules”) and any amendments to either then in force, by one or more arbitrators appointed in accordance with the Regulations, the Rules and this Contract. …. Article 10 If the parties have not appointed the arbitrators, or if either of them fails to appoint his arbitrator(s) . . . and there is no special agreement between the parties, the Authority originally competent to hear the dispute shall appoint the required arbitrators upon request of the party who is interested in expediting the arbitration, in the presence of the other party or in his absence after being summoned to a meeting to be held for this purpose. The Authority shall appoint as many arbitrators as are necessary to complete the total number of arbitrators agreed to by the parties; the decision taken in this respect shall be final. (Emphasis added.) The Rules for Implementation of the Arbitration Regulations (“the Rules”), also referenced repeatedly in the Contract, are written in Arabic, and they provide, in part: Article 3 The Arbitrator must be a Saudi national or a Moslem foreigner chosen amongst the members of the liberal professions or other persons. He may also be chosen amongst state officials after agreement of the authority on which he depends. Should there be several arbitrators, the Chairman must know the Shari’a, commercial laws and the customs in force in the Kingdom. DynCorp filed suit in Houston seeking payment of certain monies pursuant to the contract. Aramco filed a motion to compel arbitration which the trial court granted. DynCorp then filed a motion to compel arbitration before JAMS or the American Arbitration Association. The trial court granted DynCorp’s motion in part and ordered the parties to submit to the court the name, address and qualifications of potential arbitrators and stated, Further, Plaintiff’s motion to compel, to the extent it asks this Court to determine any procedure for the conduct of the arbitration (language, venue, etc.), the motion is denied, as the Contract does not provide this Court with the authority to resolve the arbitration procedure disputes. Aramco filed a motion for clarification and reconsideration which was denied by the trial court. After both parties proposed potential arbitrators to the court, Aramco filed an objection because “the arbitrators proposed by DynCorp were unqualified to serve under the Regulations and Rules because they were neither Muslims nor Saudi nationals.” The trial court overruled Aramco’s objections and appointed a three party arbitration panel which consisted of two non-Muslims. Aramco filed a writ of mandamus to the Court of Appeals alleging “the trial court abused its discretion by (1) appointing arbitrators (2) who are not Muslims or Saudi nationals.” After briefly reviewing the law applicable to contract and arbitration agreement interpretation, the Houston Court stated: Here, “no party . . . interested in expediting the arbitration” requested that the trial court appoint arbitrators under Article 10 of the Regulations. Even if the request contemplated by Article 10 had been presented to the trial court, the trial court is not the “Authority” empowered to appoint arbitrators. For example, Article 8 of the Regulations provides that the “Secretariat” of the “Authority . . . shall be in charge of all the summons and notices,” and Article 12 of the Rules specifies that notice must be provided in Arabic. Article 9 of the Rules provides that the clerk of the “Authority” will act as “secretary of the arbitral proceedings,” which Article 25 specifies are to be conducted in Arabic. Unrebutted expert testimony accepted into evidence by the trial court suggested that the “Authority” had to be a court of Saudi Arabia. In the face of such evidence and the plain provisions of the Contract, the Rules, and the Regulations, the trial court erred when it concluded that it could act as the “Authority.” In light of our conclusion that the trial court could not be the “Authority” empowered to appoint arbitrators pursuant to the parties’ agreement, we do not reach the question concerning the empanelment of non-Muslim arbitrators. The Houston Court of Appeals held that the trial court lacked authority to appoint an arbitral panel to decide the parties’ dispute. Because of this, the Appeals Court did not decide whether the trial court abused its discretion when it appointed non-Muslim and non-Saudi nationals to the arbitration panel. The Houston Court conditionally granted Aramco’s writ of mandamus and directed the trial court to vacate its previous orders. The Houston Court’s holding is not completely surprising as arbitration agreements based on religious precepts or scripture have been upheld in Texas in the past. For example, the Beaumont Court of Appeals recently held in The Woodlands Christian Academy v. Weibust, 09-10-00010-CV, (Tex. App. – Beaumont, October 7, 2010), that an arbitration agreement in an employment contract was valid and enforceable despite that the agreement included biblical scripture aspects and the parties failed to seek biblically based meditation prior to submitting their dispute to arbitration. More about that case here. In 2005, the 5th Circuit upheld an arbitral award […]

The Fifth Circuit Court of Appeals has held that a motion to compel arbitration did not defeat a federal district court’s preliminary injunction. In Janvey v. Alguire, et al., No. 10-10617, (5th Cir. December 15, 2010), the U.S. Securities and Exchange Commission filed suit in U.S. district court against the Stanford Group and other related corporate entities (collectively Stanford) alleging that Stanford perpetrated a multi-billion-dollar Ponzi scheme. A receiver, Janvey, was appointed to marshal the estate. Janvey moved for a preliminary injunction to freeze the accounts of several former Stanford financial advisors and employees pending the outcome at trial. The employees filed a motion to compel arbitration based on promissory notes which contained a broad arbitration clause they entered into with Stanford. The employees argued that Janvey was bound by the arbitration clause because he stood in Stanford’s shoes while acting as receiver. The district court did not rule on the employees’ motion to compel arbitration and granted a preliminary injunction under the Texas Uniform Fraudulent Transfer Act (TUFTA). The employees filed an interlocutory appeal arguing “the district court should have granted their motion to compel arbitration, and that the district court had no power to grant the preliminary injunction when the motion to compel arbitration was pending.” First, the Fifth Circuit held the district court was within its power to issue a preliminary injunction where the issue of arbitrability was not yet decided. Next, the court analyzed the four elements necessary to issue an injunction and found the district court did not abuse its discretion when it granted the preliminary injunction. After that, the court held the injunction was not overly broad despite that it included Individual Retirement Accounts (IRA’s) and did not account for losses on personal investments. According to the court, it was up to the employees to prove they had a legal right to the funds in their IRA’s and, just as with any other creditor, employee losses on personal investments had to be sought through the receiver claims process. The Fifth Circuit next held that the district court acted within its power when it granted an injunction under the TUFTA because the “TUFTA expressly provides for an injunction and the district court exercised its discretion to grant that injunction.” After the employees’ noted a circuit-split existed regarding whether a district court may issue an injunction while arbitration is pending, the court declared “the circuit-split cases are not applicable,” because the district court did not rule on the employees’ motion to compel arbitration. Finally, the Circuit Court reviewed the employees’ motion to compel arbitration de novo. The court held that the arbitration provision at issue did not apply to Janvey because in his role as receiver he was acting on behalf of the creditors, not Stanford. In conclusion, the court stated: In this appeal concerning the Receiver’s attempt to marshal estate assets, we hold: (1) The district court acted within its power when it considered and decided the motion for preliminary injunction before deciding the outstanding motion to compel arbitration. (2) The district court did not abuse its discretion in issuing the preliminary injunction. (3) The preliminary injunction was not an attachment, nor was it overly broad. And (4) The Receiver’s claims are not subject to arbitration because he is suing on behalf of estate creditors. The Fifth Circuit Court of Appeals affirmed the U.S. district court’s ruling and remanded the case. Technorati Tags: arbitration, ADR, law