OF ADR IN
SECURITIES and FRANCHISING
State Bar Business Law Section
Committee on ADR
May 15, 2004
1. NASD “Forum” of choice.
Arbitration Code, rules, statistics, etc.
California cases—waiver of “California Ethics Standards for
Arbitrators in Contractual Arbitration”
Number of Arbitration claims filed, requests for mediation, settlement
Types of Securities
Damages awarded in arbitration cases--2003: $132M
Punitive damages awarded in 2003--$30M
CURRENT “ISSUES” IN ARBITRATION OF SECURITIES DISPUTES:
for evidence verses discovery
of record in NASD Central Registration Depository (CRD)
Basis for expungement
Awards verses Stipulated/Consent awards
“Excessive” prearbitration motions
Last minute Postponements “requests”
· Other: NASD Employment disputes and….
1. AAA Forum of Choice. Website: www.adr.org
Others arbitral associations….
CURRENT “ISSUES” IN ARBITRATION OF FRANCHISE DISPUTES:
Many franchise agreements provide for single/multi-step
“voluntary” ADR process before
of arbitration clauses
“arising out of or
relating to this contract”
issues verses Court resolved issues
the courts or arbitrator?
Poweragent Inc. v. Electronic Data Sys.
Inc., 2004 WL 345741 (9th Cir. Feb. 25, 2004)
of arbitration rules—Code of Ethics
for Summary Judgment,
v. Rosenfeld et al 40 Cal. App. 4th 1096
See 2003 AAA “Dispute-Wise Management®--
Improving Economic and Non-Economic
Outcomes In Managing Business Conflicts”
· Class Actions or additional parties?
Garcia v. DirecTV, Inc., No B158570 (Cal. 2d
App. Dist. January 28, 2004)
Will any State statute “control” venue question
notwithstanding contract provision providing for
venue? See, e.g. Cal. B&P Code §20040.5
Role of Federal Arbitration Act (FAA)?
· Fees, Costs, Attorney Fees Recovered?
See Leamon v. Krajkiewcz, (F038025, Calif. Ct. of
Fifth District, filed 2/24/2003), compliance with contractual pre-arbitration
provision, i.e. mediation, required in order to obtain attorney fees?
· Should/does the clause “require” the arbitrator to “follow the law?”
“Manifest Disregard of the Law” standard?
Grounds for appeal in contract?