by Holly Hayes In the Winter edition of the Texas Mediator, Susan Schultz calls for the “mediation community to engage in communal reflection” regarding the passage of the bad faith section of Texas HB 2256 which requires the mediator to report “bad faith mediation”. Overall, the bill provides a procedure for mediation of out-of-network health benefit claim disputes. (read more here) In her article, ‘Bad Faith Mediation: Bad News for Mediators’, Ms. Schultz states, “while the new law may be a positive step toward the use of dispute resolution processes generally, it raises particular concerns with its structure of the mediation process” raising the following questions for mediators: “What are the fundamental values of mediation? How do we safeguard these values? What have we done to educate the public/what more could we do? How do we educate legislators and staff members? What are our resources? Are we using them efficiently?” As posted on Disputing (read the post here), Texas mediators operate under the Alternate Dispute Resolution Procedures (Chapter 154) of the Civil Practice & Remedies Code which provides in Section 154.053(c) that “[u]nless the parties agree otherwise, all matters, including the conduct and demeanor of the parties and their counsel during the settlement process, are confidential and may never be disclosed to anyone, including the appointing court.” Reporting bad faith mediation is in direct conflict with the Code under which mediators operate in Texas. Ms. Schultz refers also to the subchapter of the Texas ADR Procedures Act devoted to “impartial third parties”. She asks, “How does the mediator build trust among the parties and maintain impartiality when the mediator is also tasked with reporting bad faith based on each party’s conduct? Making the mediator the watchdog for bad faith is not consistent with impartiality.” What are the next steps in the implementation of HB 2256? The Texas Department of Insurance (TDI) states in its ‘Implementation Plan for the 81st Legislative Session’, it is required to “adopt rules re: complaint form and processing”. TDI held a public meeting on September 9, 2009, regarding rule making for the bill and is working on a draft rule. On its website, TDI provides information regarding ‘Mediation for Out-of-Network Hospital-based Health Care Provider Claims’ and lists eligibility criteria to request mediation. (read more here) The Chief Administrative Law Judge of the State Office of Administrative Hearings (SOAH) is charged with appointing a mediator from a list of qualified mediators maintained by SOAH. Mediators are randomly assigned to cases unless the parties select and agree upon another mediator. (read more here) In the long term, concern with the bad faith section of HB 2256 is that without appropriate feedback from the ADR community, this section may be copied into other bills and may become standard procedure. Ms. Schultz asks, “Questions abound: What should we do?” We welcome your thoughts on the question of the long-term impact of the bad faith section of HB 2256, ways to safeguard the fundamental values of mediation and how to educate the public and legislators/staff members about those values. Technorati Tags: Healthcare, ADR, law, 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.

Yesterday’s post concludes our 2009 Year-End Highlights series. If you missed some of the posts, you can find them here or by following the ‘2009 Year-End Highlights’ link on the right, under ‘Categories.’

In 2009, the United States Court of Appeals for the Fifth Circuit decided the following arbitration-related cases: In Cont’l Airlines, Inc. v. Air Line Pilots Ass’n, No. 07-20835 (5th Cir. Jan. 13, 2009) the court concluded that the district court had no statutory authority to reverse a reinstatement order issued by the System Board of Adjustment and that its order cannot be sustained on grounds of public policy. In Agere Systems Inc. v. Samsung Electronics Co., Ltd., No. 07-40984 (5th Cir. Feb. 18, 2009) the court held that the question of arbitrability should be decided by an arbitrator. In Citigroup Global Markets Inc. v. Bacon, No. 07-20670 (5th Cir. Mar. 5, 2009) the court held that the Federal Arbitration Act (FAA) provides the exclusive grounds to vacate arbitral awards and rejected the doctrine of “manifest disregard” of the law. (read more here and here) In Geraldine Nicholas v. KBR, Inc., No. 08-20140, (5th Cir. Mar. 15, 2009) the court affirmed the district court’s ruling denying an employee’s motion to compel arbitration of a contract dispute with her former employer because she waived her right to arbitrate when she substantially invoked the judicial process to the prejudice of her employer. (read more here) In Woodmen of the World Life Insurance Society/ Omaha Woodmen Life Insurance Society v. JRY, No. 08-30405 (5th Cir. Mar. 23, 2009) the court held that tort claims fell within an arbitration agreement. (read more here) In Nat’l Resort Mgmt v. Cortez , No. 08-10805 (5th Cir. Mar. 31, 2009), the court cited Hall Street v. Mattel and Citigroup v. Bacon, stating that “the number of grounds for challenging an arbitration award has been substantially reduced.” In Graves v. BP American Inc., No. 08-40575 (5th Cir. May 6, 2009), the court held that non-signatories plaintiffs were bound by the arbitration agreement between decedent and his employer. (read more here) In Symetra Life Ins. Co. v. Rapid Settlements Ltd., No. 08-20248 (5th Cir. May 11, 2009), the court held that arbitration cannot be used to circumvent procedural requirements of the Texas Structured Settlement Protection Act and affirmed the district court’s refusal to confirm an arbitration award. (read more here) In Green v. Service Corporation International, No. 08-20607 (5th Cir. June 2, 2009) the court held that a company did not waive its right to arbitration by participating in administrative proceedings initiated by the employee and affirmed the district court’s confirmation of an arbitration award. (read more here) In Saipem America v. Wellington Underwriting Agencies Limited, No. 08-20247 (5th Cir. June 9, 2009) the court held that an International Chamber of Commerce (ICC) arbitral tribunal did not exceed its powers and affirmed the confirmation of the arbitral award. (read more here) In Petroleum Pipe Americas Co., v. Jindal Saw Ltd., No. 08-20461 (5th Cir. July 9, 2009) the court held that a party waived its right to arbitrate by waiting one year after the suit was filed before seeking to compel arbitration. (read more here) In El Paso Corporation v. La Comision Ejecutiva, No. 08-20771 (5th Cir. Aug. 6, 2009) the court held that section 1782 (Assistance to Foreign and International Tribunals and to Litigants Before such Tribunals) does not apply for a discovery motion for use in a private international arbitration. (read more here) In ENSCO International Inc. v. Certain Underwriters at Lloyd’s et. al., No. 08-10451 (5th Cir. Aug. 12, 2009) the court held that a contract containing a choice of law and forum clause effectively waives the right to remove to federal court under the New York Convention. (read more here) In Jones v. Halliburton Co., No. 08-20380 (5th Cir. Sept. 15, 2009) the court held that claims for (1) assault and battery; (2) intentional infliction of emotional distress; (3) negligent hiring, retention and supervision of employees involved in a sexual assault; and (4) false imprisonment are not related to the plaintiff’s employment contract and refused to compel arbitration. (read more here and here; Guest-Post by F. Peter Phillips is here) In Theriault v. FIA Card Services, N.A., No. 09-30233 (5th Cir. Oct. 8, 2009) the court confirmed a credit card dispute arbitration award issued by the National Arbitration Forum. (read more here) In Uniited Forming, Inc. v. Faulknerusa, LP, No. 09-50073 (5th Cir. Oct. 27, 2009) the court reaffirmed that the FAA provides the exclusive grounds to vacate arbitral awards after Hall Street v. Mattel. (read more here) In Dealer Computers Svc v. Old Colony Motors, No. 09-20049 (5th Cir. Nov. 19, 2009) the court held that the payment of a deposit for an arbitration was a procedural matter for the arbitrators to decide. (read the case summary here and the commentary by Professor Alan Scott Rau here) In The Householder Group v. Caughran , No. 09-40111 (5th Cir. Nov. 20, 2009) the court affirmed the lower court’s decision to confirm the arbitral award, despite challenge based on evident partiality and actual bias. (read more here) Technorati Tags: arbitration, ADR, law

The U.S. Supreme Court has granted certiorari to Jackson v. Rent-A-CenterWest, Inc. , No. 07-16164 (9th Cir. Sept. 9, 2009). The question presented is whether a district court is in all cases required to determine claims that an arbitration agreement subject to the Federal Arbitration Act (“FAA”) is unconscionable, even when the parties to the contract have clearly and unmistakably assigned this “gateway” issue to the arbitrator for decision. Find Professor Sarah Cole’s commentary on the Ninth Circuit opinion here. Stay tuned to Disputing for more legal developments! Technorati Tags: law, ADR, arbitration