Well, the Florida arbitration blog has another interesting post today. It concerns a Missouri case where a court refused to compel arbitration of a wrongful death case against a nursing home. According to that case, since the Missouri wrongful death statute creates a new cause of action in favor of the decedent’s statutory beneficiaries, and it is not a cause of action that the decedent could have had prior to his/her death, the statutory beneficiaries could not be forced to arbitrate their wrongful death claim against a nursing home, notwithstanding the fact that the decedent signed the nursing home admission form, which in turn contained an arbitration clause. (link to a .pdf of the opinion here) In Texas, of course, we also have a wrongful death statute which sets forth statutory beneficiaries who have the claim; Texas wrongful death claims, in other words, do not belong to the estate of the decedent. Therefore, the Missouri court’s logic ought to apply here in Texas as well. Simply put, since a living person cannot have a wrongful death claim, that person cannot agree to arbitrate one. The decedent’s survival claims would be a different issue, of course, since those belong to the estate. I suppose we could have a situation where the wrongful death claims are tried but the survival claims must be arbitrated (assuming it’s an FAA case and the TAA’s strict personal injury arbitration requirements are preempted). Or we could have a situation where nursing homes require that potential residents round up all their potential wrongful death beneficiaries (in Texas, parents, spouse and children of the deceased) and make them sign the arbitration clause before admission. It’s an interesting issue, and I do not know of a Texas case specifically addressing it, although I suppose if I had a quiet moment today I could actually look. Technorati Tags: arbitration, ADR, law

Embarrassingly, the always excellent Florida Arbitration Law blog has scooped us on a Texas state appellate court decision on arbitrability. Instead of recapping their summary of the Beaumont opinion on whether or not participation in litigation discovery waives a potential right to compel arbitration, we’ll just give you a link and direct you to their commentary. The Beaumont Court, by the way, in part bases its decision on the Texas Supreme Court’s decision in Vesta, about which we blogged back when it was handed down. In that opinion, the Supreme Court refused to find waiver despite much more involved litigation participation than that found in the Beaumont case. Interestingly, a dissenting Justice in the Beaumont case distinguishes between sheer volume of work done and the type of work done when conducting the waiver analysis. He notes that having filed a motion to dismiss on the merits and lost, the defendant should not then be able to move to compel arbitration to get another bite at the apple in a different forum, which seems to be an important point not precluded by Vesta. Technorati Tags: arbitration, ADR, law

Today the Fifth Circuit released its en banc opinion (link is to .pdf file) in the Positive Software case (background on case here and here). The long-awaited opinion, written by Judge Jones, sets out the rule, in the Fifth Circuit, for when a court (employing the FAA) must vacate an arbitral award based on an arbitrator’s failure to disclose a possible conflict. As we wrote in a CLE paper back in May 2005, the Fifth Circuit had not, until recently, clarified its position on a rift among the circuits as to what to make of a 1968 Supreme Court case describing when an arbitral award can be overturned based on the “evident partiality” of an arbitrator who failed to disclose a prior relationship with a party. In May 2006, the Fifth Circuit ruled that a failure to disclose any relationship between an arbitrator and a party or attorney before him or her could be grounds for vacatur, since the failure to disclose in and of itself “might have conveyed an impression of possible partiality to a reasonable person.” In other words, possible partiality, rather than evidence of actual bias, was the test, as that opinion interpreted the 1968 Commonwealth Coatings case. Since 1968, courts have resisted the holding in Commonwealth Coatings, choosing to treat the opinion as a plurality. As the Texas Supreme Court explained: Although Justices White and Marshall joined fully in Justice Black?s opinion for the Court, some lower federal courts have purported to see a conflict between the two writings. By treating Justice Black?s opinion as a mere plurality, they have felt free to reject the suggestion that ‘evident partiality’ is met by an ‘appearance of bias,’ and to apply a much narrower standard. Burlington Northern Railroad Co. v. TUCO, 960 S.W.2d 629, 633-34 (Tex. 1997). Today, the en banc Fifth Circuit joined those courts and reversed the first Positive Software opinion in favor of a more forgiving standard, finding that “the better interpretation of Commonwealth Coatings is that which reads Justice White’s opinion holistically.” In other words: “in nondisclosure cases, an award may not be vacated because of a trivial or insubstantial relationship between the arbitrator and the parties to the proceeding,” even if that relationship is not disclosed by the arbitrator. Judge Reavley, in his dissent (he had written the initial opinion), writes that Commonwealth Coatings actually means what it says, and that it ought to be followed as Supreme Court precedent. Judge Wiener’s dissent reminds us of the critical point that a requirement that an arbitrator disclose every relationship does not necessarily mean that a disclosed relationship can warrant disqualification. Instead, the requirement is simply that the arbitrator fully disclose; “trivial” relationships, even if they must be disclosed, may well not justify disqualification of the arbitrator. However, since arbitration is a creature of contract between the parties, it is the parties, and not the arbitrator, who ought to be able to decide whether or not a relationship is trivial. That is no longer the rule in the Fifth Circuit, however. Positive Software Solutions, Inc. v. New Century Mortgage Corp., ___ F.3d ___ (5th Cir. 2007). Technorati Tags: arbitration, ADR, Fifth Circuit, law

We are big Macintosh evangelists around here. I’ve used a Mac in my personal life since 1990, and Karl has used them here at the office as long as I can remember. For a small firm like ours they make total sense, since they do not break and allow technical amateurs like us to run our own servers, website, blog, email, etc. So, needless to say, Karl and I were both extremely excited when Steve Jobs and Apple announced the iPhone earlier this week. The iPhone, which will not be released until this summer, will be Apple’s version of the blackberry or treo or other handheld “smartphone”. It will be a cellphone/mp3 player/web browser/camera/mini-computer. It was executed in typical Apple fashion, which means it looks beautiful, has a stunning GUI, and will probably be buggy until version 2 or so. In other words, Apple hopes it will be to smartphones what the iPod is to mp3 players. Problem is, and this is where the lawyers come in, in 2000 Cisco Systems purchased a company which had, back in 1996, obtained a registration for the iPhone trademark from the USPTO. Apple, of course, knew this, and apparently attempted to acquire Cisco’s mark for years. Cisco was unwilling to license or sell it, since it was using it, according to them in direct competition with the product Apple launched earlier this week. According to a lawsuit (link is to .pdf file) Cisco filed yesterday, Apple and Cisco were on the verge of working out a deal which would have allowed Apple to use the mark when Apple quit returning calls and launched the product anyway. This irritated Cisco; we’ll leave it to you to read their petition. In an interesting twist, since Apple could apparently not obtain a trademark from the PTO for iPhone in the normal manner, given that Cisco got there first, the company, via a wholly-owned subsidiary called “Ocean Telecom Services LLC,” registered the mark in March in Trinidad and Tobego. Ocean Telecom then filed an application to register the mark as a foreign mark, in other words asking for a simultaneous registration. I do not know what legal effect this will have on Cisco’s case. Given that we read both legal blogs (“blawgs”) and technology blogs around here, it has been interesting to see the fallout from both perspectives. Consensus seems to be that this is simply a stunning display of Steve Jobs’ hubris. Perhaps most exciting about all of this is Cisco’s on approach to managing the press surrounding their lawsuit. Cisco’s general counsel has his own blog and posted his version of the whole story. Whether or not it’s a truthful account, it feels candid and it thus gives the blogger, and hence the company, credibility, at least within the blogging community. For what it’s worth, numerous blogs have embraced Cisco’s version of events, simply because its GC posted candid-feeling comments free from typical press-conference mealy-mouthed verbiage (see, for example, posts from Scoble and Dave Winer). Finally, two other common comments: 1) given the ferocity with which Apple has defends its own i_____ trademarks, Apple’s behavior clearly irritates many who are watching this story; and 2) iPhone is kind of a lousy name for this product anyway – the whole point of the device is the fact that it functions as much more than a phone. It will be interesting to see how the litigation shakes out. Selfishly, I certainly hope Cisco is not successful in enjoining the release of a product I really want to buy, although it certainly seems that Apple is wantonly infringing on their mark. I am most interested, however, to see what, if any, impact the bloggers are able to have on the perception of those of us who love Apple’s products but are sometimes wary of their corporate approach (thank goodness, for example, their products’ generally high quality means we are not often at the mercy of their awful customer service). As a lawyer, Apple’s involved attempts to obtain rights in the mark acknowledge, it would seem, their acceptance that Cisco’s ownership of the mark is (or ought to have been) an impediment to what they want to do with it. Perhaps the timing of the release has something to do with it. Announcing a product that is not ready to ship for six months is highly unusual for Apple; perhaps they simply assume that they can get something hammered out by the time they’ve actually built a mess of the things. Or, maybe they are happy to just sell their iPhone in Trinidad and Tobego (and the other myriad nations where they’ve also registered the mark). At any rate, one would think the company has too much invested now to risk not working out some kind of deal, but I guess we’ll have to wait and see. Technorati Tags: litigation, law, iPhone