Dispute Resolution

Retroactive Rights of Action

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By Samuel Beswick, Assistant Professor, Peter A. Allard School of Law, The University of British Columbia I recently suggested on Balkinization that a storm seems to be brewing concerning the place of non-retroactivity doctrine (also called the doctrine of “prospective overruling”) in federal law. Non-retroactivity doctrine attempts to define the temporal scope of novel judgments … Read more

Apologies as Tort Reform — Yonathan Arbel

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Post by Yonathan Arbel

When we wrong others, there is often an expectation—perhaps a moral duty—that we apologize. By apologizing, the wrongdoer asserts ownership of the wrong and acknowledges the wrongness of the act and the moral standing of the victim. It is also said that apologies can help restore the social order disrupted by the wrong.

In recent decades, many scholars have suggested that there should be a place in the law for apologies. And so the idea of ‘apology laws’ – laws that promote and protect the use of apologies – was born. These laws, now found in 36 states, are meant to encourage wrongdoers to apologize without fear of legal repercussions, and they typically apply in private law settings, such as torts and medical malpractice. A paradigmatic example is a doctor who makes a mistake during surgery but, in the absence of a ‘safe harbor’, would be reluctant to apologize for fear that admitting the mistake would foster litigation and count as an admission of liability.  An apology law that makes apologies inadmissible as evidence of fault at trial, as most do, promises to overcome this barrier.

In a new paper, Tort Reform Through the Backdoor: A Critique of Law & Apologies, (Forthcoming S. Cal. L. Rev., 2017), Yotam Kaplan and I are challenging the predominant scholarly disposition favoring laws that create safe harbors for apologies. We argue that in commercial settings—involving insurance companies, large firms, hospitals, etc.—using the law to encourage apologies may undermine tort liability and undercut deterrence. This effect is not necessarily negative—many people believe that the tort system is out of control—but it does mean apology laws are de-facto tort reform. That many states that normally oppose tort reform adopted apology laws was the result of clever marketing and concentrated lobbying efforts by tort reformers who co-opted the legal discourse on apologies to their own ends. Perhaps most notably, Barack Obama and Hillary Clinton—neither of whom is a card-carrying tort reformer—advocated actively for apology laws in an article in The New England Journal of Medicine.

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SIOE 2016 — Dan Kelly

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Post by Dan Kelly

 

The Society for Institutional and Organizational Economics (SIOE) (formerly, the International Society for New Institutional Economics (ISNIE)) is hosting its 20th Annual Conference this week, June 15-17, at Sciences Po in Paris, France.  The conference website includes details on this year’s program and links to abstracts and papers.

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Party Autonomy to Choose a Forum: Philosophical and Historical Justification — Milana Karayanidi

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Student post: Milana Karayanidi

On March 18-19, the Young Comparativists Committee (YCC) of the American Society of Comparative Law (ASCL) hosted its fifth annual global conference at Tulane University Law School. Many scholars presented their papers relating to teaching and writing in comparative law, and more than 100 scholars from 80 countries attended. At the conference, I presented my work on Normative View of Party Autonomy to Choose a Forum in a Comparative Perspective. My paper emphasized the unprecedented rate of recognition of forum selection clauses in international civil and commercial transactions. I discussed theoretical justifications of the principle of party autonomy in choosing jurisdiction, drawing upon Kantian ideas of individual autonomy, non-instrumentalist private law theory accounts, and the increasing dominance of contractual principles within the modern law of civil procedure. In addition, I examined the reasons for limiting party autonomy in view of considerations of equality and certain public interests. Furthermore, I examined the evolution of party autonomy to choose a forum within the national systems of the U.S., Germany and Russia. I argued that some of the rationales behind the historical developments that led to party autonomy recognition in these national systems can be used to justify party autonomy in international dispute resolution.

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Yale Law School’s Seminar in Private Law: Online Dispute Resolution

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Post by Sadie Blanchard, Research Fellow Yale Law School

Last week, Yale Law School’s Seminar in Private Law took up online dispute resolution (ODR). Colin Rule, who created eBay’s and PayPal’s dispute resolution systems and now runs a startup that builds ODR platforms, spoke together with Tom Tyler, a social psychologist who studies how judgments about the justice of procedures impact legitimacy and cooperation.

Rule began by demonstrating an ODR platform he created in cooperation with the Dutch government, and which he presented as a prototype for the future of justice and access to justice. The platform, Rechtwijzer, is for couples contemplating or going through divorce. It provides information about legal options as well as a platform on which couples can collaborate to solve problems, negotiate, and, if necessary, mediate issues such as child custody, alimony, child support, and the division of property.

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Yale Law School’s Seminar in Private Law: Non-Hierarchical Enforcement in International Relations

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Post by Sadie Blanchard, Research Fellow Yale Law School

Last week, Yale Law School’s Seminar in Private Law considered non-hierarchical enforcement. Oona Hathaway and Scott Shapiro discussed their work on outcasting as a method of law enforcement, and Leif Wenar discussed his new book Blood Oil: Tyrants, Violence, and the Rules that Run the World.

Hathaway and Shapiro describe outcasting as a type of law enforcement that does not rely on physical coercion by official actors within a legal regime. Instead, outcasting relies on “denying the disobedient the benefits of social cooperation and membership.” They find outcasting in orders that are clearly legal orders, such as classic canon law, medieval Icelandic law, and contemporary United States public law. It therefore follows that international law’s heavy reliance on outcasting for enforcement does not render it “not law.”

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Yale Law School’s Seminar in Private Law: The Sociology of International Commercial Arbitration

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Post by Sadie Blanchard, Research Fellow Yale Law School Last week, I introduced a series of blog posts on Yale Law School’s Seminar in Private Law. The Seminar’s first session considered the sociology of international commercial arbitration. Emmanuel Gaillard and Yas Banifatemi of Shearman & Sterling’s international arbitration practice spoke alongside Emily Erikson, a professor of sociology … Read more

Yale Law School’s Seminar in Private Law: Dispute Resolution Beyond the State — Sadie Blanchard

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Post by Sadie Blanchard, Research Fellow Yale Law School

Over the coming term, the Seminar in Private Law at Yale Law School will explore dispute resolution outside the state. Disputes are often resolved through processes that fall outside any previously authorized political structure. Because such processes cannot rely on the state for legitimacy, they owe whatever authority they achieve to their own natures. To better understand this category of dispute resolution mechanisms, the Seminar will bring together scholars in law, the social sciences, and the human sciences and people who practice law, politics, medical research, human rights advocacy, university administration, and commerce to discuss their ideas and experiences concerning such free-standing efforts to resolve disputes.

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Yale Law School’s Seminar in Private Law: Outcomes and Authority in International Investment Law

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Post by Sadie Blanchard, Research Fellow Yale Law School

In the last meeting of the Seminar in Private Law, Jan Paulsson and Diane Desierto reflected on their experience in the field of international investment law and how that experience informs their views of the legitimacy questions facing the field. Participants also considered the theoretical basis of authority of international investment protection and asked about possible deleterious effects of this legal regime. Desierto cut her teeth as a government attorney for the Philippines while it was defending against its first investment treaty claim. She now represents investors and states in disputes and is a top advisor on investment treaties to the Association of South East Asian Nations (ASEAN). Paulsson is one of the most-appointed arbitrators in the field and has represented states and investors in disputes and advised states on treaty design.  

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First Do No Harm: The DIRECTV v. Imburgia Decision — Greg Klass

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Post by Greg Klass

Yesterday the Supreme Court released its decision in DIRECTV v. Imburgia. DIRECTV won. If Amy Imburgia wants to sue DIRECTV under its 2007 contract, she will have to go to bilateral arbitration. Once again: no class action. I think this is the wrong outcome in this case, for reasons I articulated here, here and here, and for many of the reasons Justice Ginsburg gave in her dissent. That said, Breyer wrote a majority opinion that should make critics of the Court’s recent arbitration decisions happy.

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The Supreme Court vs. Contract Law — Greg Klass

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Post by Greg Klass

My last two posts on DIRECTV v. Imburgia [post one, post two] were on relevant rules of construction: (1) the FAA presumption in favor of arbitration and (2) the common law tradition of reading against the drafter. But those rules should come into play only if the Supreme Court agrees with the California Court of Appeal that the phrase “the laws of your state” is, as it appears in the contract, ambiguous. At oral argument several justices explored an alternative holding: finding that “the laws of your state” had only one contractual meaning, and that the California Court of Appeal’s conclusion that it was ambiguous was so unreasonable as to be (presumptively?) hostile to arbitration. This post discusses what it would take to reach such a conclusion, and a few of the weirder things the Justices said at oral argument.

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DIRECTV v. Imburgia and Interpretation vs. Construction — Greg Klass

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Post by Greg Klass

I don’t know whether anyone else has noticed, but many of the Supreme Court’s recent arbitration cases raise the distinction between interpretation and construction. I do not think that the Court, which is not especially strong on contract doctrine, has noticed. But it’s lurking in the background. The distinction is especially relevant to understanding what is going on in DIRECTV v. Imburgia, which I blogged about last week.

If you’re not familiar with the interpretation-construction distinction, here’s Corbin’s summary, from the first edition of his treatise:

By “interpretation of language” we determine what ideas that language induces in other persons. By “construction of the contract,” as the term will be used here, we determine its legal operation—its effect upon the action of courts and administrative officials. If we make this distinction, then the construction of a contract starts with the interpretation of its language but does not end with it; while the process of interpretation stops wholly short of a determination of the legal relations of the parties.

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SCOTUS, Arbitration and Contra Proferentem — Greg Klass

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Post by Greg Klass

The Supreme Court heard oral argument yesterday (October 6th) in DIRECTV v. Imburgia (full transcript here). The case involves the meaning of “the law of your state” in an arbitration clause. DIRECTV argues that it means “the law of your state as limited by preempting federal law,” whereas the plaintiffs argue that it means “the law of your state without regard to any preempting federal law.” Because the phrase does not appear in a choice of law clause, the plaintiff’s have a decent argument for their reading—or that the words read in light of the contract as a whole are at least ambiguous. The reasons are complicated, but if the phrase means what DIRECTV says, then the arbitration clause kicks in and the plaintiffs lose their class action. If it means what the plaintiffs say, their class action remains in state court.

DIRECTV has argued that if the words “the law of your state” are ambiguous, the presumption in favor of arbitration means that they win. That would be a very weird result.

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Property and Contract at a Legal Acme? Stare Decisis and the Supreme Court — John Golden

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Post by John M. Golden

In Kimble v. Marvel Entertainment, LLC, No. 13-720, slip op. (U.S. S. Ct. June 22, 2015), the U.S. Supreme Court kicked off a momentous week with an opinion highlighting the importance of stare decisis.  More particularly, the justices grappled with whether to overrule a half-century-old holding “that a patent holder cannot charge royalties for the use of his invention after its patent term has expired.”  Id. at 1.  A six-justice majority chose to stick with the prior holding despite what the majority conceded to be a “broad scholarly consensus” criticizing this precedent on economic grounds.  Id. at 13.  In explanation of the decision, Justice Kagan wrote, inter alia, that (1) “[r]especting stare decisis means sticking to some wrong decisions”; (2) precedent involving interpretation of a statute has “enhanced force” compared to, say, precedent involving an interpretation of the U.S. Constitution; and (3) precedent involving property or contract rights, such as the patent law precedent in question, is further “superpowered” “because parties are especially likely to rely on such precedents when ordering their affairs.”  Id. at 7-10.  Indeed, according to the Court, “considerations favoring stare decisis are ‘at their acme’” in “‘cases involving property and contract rights.’”   Id. at 9 (quoting Payne v. Tennessee, 501 U.S. 808, 811 (1991) (Rehnquist, C.J.)).

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A Frolic Of His Own — Anthony J. Sebok

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Post by Anthony J. Sebok

As I noted in my last post, some common law jurisdictions are still guided by an anachronistic hostility to the sale of lawsuits to strangers.  But some, like Wisconsin, are much more liberal.  For a proponent of the free alienability of litigation, liberal regimes pose a special challenge, which has to do with limits.  When should the sale of lawsuits be limited?  How should the rules governing limitations be designed?

Recently Judge Richard Posner decided a case where he found, under Wisconsin law, a reason to set aside the sale of a lawsuit.  The facts led him to quote Karl Marx and William Gaddis, and the case, Carhart v. Carhart-Halaska Int’l, LLC, 2015 U.S. App. LEXIS 9497 (7th Cir., June 8, 2015), is worth reading for Posner’s sly commentary on what appears to be at first just another example of lawyering that is, as the British say, too clever by half.

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Waiver and Arbitration of Tort Rights (continued) — Keith Hylton

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Post by Keith Hylton

In my last contribution to this blog, I discussed the different implications of waiving legal rights in standard one-on-one litigation and class action scenarios.  I noted predispute waivers can be socially desirable in both settings, but the danger of welfare-reducing waivers is greater in the class action scenario.

Let me take some time to elaborate here.  One of the basic results of the economic theory of litigation is that the private and social incentives to litigate diverge – this point was demonstrated in an article by Steve Shavell. In other words, an individual may have an incentive to file a tort claim in a setting where society’s welfare would be greater if litigation were prohibited.  This proposition does not depend on people being uninformed or suffering from various judgment biases; it holds when litigants are rational and fully informed.

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Should There be a Federal Policy on Arbitration? — Aditi Bagchi

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Post by Aditi Bagchi

The Federal Arbitration Act can be read merely to protect arbitration clauses from hostile judges.  That is, it may merely require neutrality with respect to arbitration.  Alternatively, it can be understood, together with the slew of federal cases overturning allegedly ‘hostile’ state decisions, as affirmatively friendly to arbitration.

In the recent 7th Circuit decision, Andermann v. Sprint Spectrum L.P, Judge Posner takes the former view.  He observes that it is not clear that arbitration should be preferred, but more importantly, there is no reason to treat arbitration terms differently than other contract terms.  Whatever Posner’s ultimate view about the utility of arbitration, he appears more committed to a strong default of neutral enforcement of contract without reference to public policies that might favor or disfavor particular terms.  As long as parties formally agree on arbitration, arbitration carries the mantle of freedom of contract.

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