Subscribe to ADR in Georgia Blog

Here is some information regarding how to subscribe to this blog using an RSS feed.

What is RSS feed?

RSS stands for Really Simple Syndication, or Rich Site Summary. Users of RSS content use programs called feed 'readers' or 'aggregators': the user 'subscribes' to a feed by supplying to their reader a link to the feed; the reader can then check the user's subscribed feeds to see if any of those feeds have new content since the last time it checked, and if so, retrieve that content and present it to the user.

Aggregators reduce the time and effort needed to regularly check websites for updates, creating a unique information space or "personal newspaper." Once subscribed to a feed, an aggregator is able to check for new content at user-determined intervals and retrieve the update. The content is sometimes described as being "pulled" to the subscriber, as opposed to "pushed" with email or IM.

This article lists the top ten aggregators for Windows: http://email.about.com/cs/rssfeedreaders/tp/windows_free.htm

This should allow you to access a site feed that will let you know if there are any new posts on the blog. Read more!

Binding Non-Signatories to Arbitral Agreements

Persons who are not parties to the arbitral agreement may be bound by it in certain circumstances, See Yarn & Jones, ADR in GA, 9:14, n. 33 - 34 (2006). Following in line with the strong federal policy favoring arbitration, Georgia courts have established that arbitration will be enforced on non-signatories to an arbitration clause in at least six distinct situations. The six theories of binding non-signatory parties to arbitrate a dispute are as follows:


1. Equitable Estoppel: a non-signatory’s claims arise out of and relate directly to the contract or when the claims are “intimately founded in and intertwined with the underlying contract obligations” then non-signatories are bound to arbitrate.
In re Tom Watson v. BDO Seidman LLP, 2006 WL 1566968, McBro Planning and Development v. Triangle Electrical, 741 F.2d 342.
This also applies in the reverse. Such as when a signatory to a contract with an arbitration clause makes a claim arising out of that contract against a non-signatory, the signatory must arbitrate the claim with the non-signatory. MS Dealer Serv. Corp. V. Franklin, 177 F.3d 942 (11th Cir 1999), Sunkist Soft Drinks, Inc. v. Sunkist Growers, Inc., 10 F.3d 753 (11th Cir. 1993)
2. Corporate Veil Piercing/Alter Ego: Corporate entities are bound when there is a close affiliation, the party has voluntarily participated in particular events giving rise to the controversy, played an active role in the controversy, or when the interests are directly related to and congruent with those of a signatory. Parent companies are bound to arbitrate even if non-signatories when the claims are “inextricably intertwined” and arise out of the same set of facts. The Variable Annuity Life Insurance Company, 2006 WL 1737443, Comvest, L.L.C. v. Corporate Securities Group, Inc., 234 Ga.App. 277 (1998).
3. Agency: An agent who is acting lawfully and within the scope of her authority may bind the principal to arbitrate even when signed in individual capacity and not under seal.
Cochran v. Grand Theater Co., 29 Ga.App 481 (1923)
4. Assumption: A non-signatory party may be bound by the arbitration clause if the contract shows it was intended for a third-party’s benefit and/or the non-signatory ratified the contract under the general principles of contract law (ie. making payment or accepting benefits). Lankford v. Orkin Exterminating Company, 266 Ga.App. 228 (2004).
5. Assignment/Assignee of contract: An assignee of a contract acquires its rights from the assignor and is presumed to know the terms of the contract. M. Homes, LLC v. Southern Structural, 281 Ga. App. 380
6. Incorporation by reference: Where a contract incorporates by reference another contract containing an arbitration clause, a non-signatory is bound to arbitrate. ADC Construction Company v. McDaniel Grading Inc., 177 Ga.App. 223
Read more!

Arbitration Under Fire

The growing use of arbitration agreemeents in contracts with consumers has drawn considerable criticism. Georgia State University College of Law Professor Mark Budnitz has been a leading critic of this trend. Local radio host and consumer advocate, Clark Howard, becomes almost apoplectic when hitting this topic, which he often does. A recent WSB-TV Consumer Investigation segment was highly critical of the arbitral process: A couple brought claims against the builder of their dreamhouse. The construction contract included an arbitration clause, and the arbitrator found against them. The homeowners' legal fees mounted, with the arbitrator alone charging $21,000 (the cost was split between the homeowners and the builder). Not only were the claimants angry at the cost of the process (and the outcome), the builder's lawyer has recommended that his client no longer require arbitration due to the expense. Interviewed for the story, but not commenting on the case at hand, Professor Budnitz commented that an arbitrator is not required to follow consumer protection law (or any law) when he or she decides a case. The American Arbitration Association declined to be interviewed for the story. To watch this WSB-TV Consumer Investigation, click HERE.

I imagine that there is a lot more to the story than could be covered on a short TV segment. For example, were the attorneys familiar with the process and how to maximize its potential benefits for their clients? Regardless, this is damaging PR for a process that is touted for being cheaper than litigation. Moreover, this was a construction arbitration case, a more traditional area for using arbitration.

In a related development, I was approached for a consultation recently on a dispute over the enforcement of an employment arbitration agreement. Non-union employment disputes are another area in which the use of arbitration has exploded and attracted criticism and increased scrutiny. The arbitral agreement in this case requires the employee and employer to split the costs of the arbitration, and the parties are fighting over the enforceability of this provision. The employee says the costs so exceed those of filing a lawsuit that the provision impedes his pursuit of his statutory claims. Usually, employers avoid this attack on arbitration by offering to pay the entire costs, and the AAA employment arbitration rules now require the employer to do so in a case like this. This employer doesn't want to do that, and since the agreement was entered into before the AAA changed its rules on who pays costs, the employer feels that the employee should be bound by the cost-splitting provision. Although the employer recognizes that it is bound to abide by the applicable AAA rules in force at the time of the dispute, it is planning to contest the ability of the AAA to unilaterally change rules that will affect the cost-splitting terms of the arbitral agreement already in force. Read more!

Test Post

Updates:

The D.C. District court recently applied the Buckeye doctrine that a challenge to a contract as a whole is a decision to be made by the arbitrator. Qwest Communications Corp. v. Ansari, 2007 WL 172318 (D.D.C. Jan. 23, 2007).

Georgia House Bill 163 was introduced January 25, 2007. The bill provides that a written agreement documenting a deferred presentment services transaction shall not contain an arbitration clause unless it complies with the AAA National Consumer Dispute Advisory Committee standards.

U.S. Senate Bill 183 was introduced January 4, 2007 and provides for an arbitration option in resolving disputes with the Secretary of Commerce in relation to gas emission reduction credits for corporate average fuel economy standards in passenger vehicles.

U.S. Senate Bill 237 was introduced January 10, 2007 and provides arbitration procedures for aliens filing a complaint of termination from agricultural employment without just cause.

To see more updates to ADR law across the U.S. please see http://adrforum.com/default.aspx. Read more!