ALTERNATIVE DISPUTE RESOLUTION

FINAL EXAMINATION

Fall 2008

(2 Hours)

1.  (15 points) Critics argue that arbitration is being inappropriately applied to “mass transactions”. Do you agree or disagree with them? They also suggest changes in the laws governing such arbitrations in the interests of fairness. Do you agree or disagree with those suggestions? Do you have others?

2.  (15 points) Alabama law does not permit enforcement of agreements to arbitrate. Purchaser P, located in Texas, and Seller S, located in Alabama, enter into a contract for the sale of beans. The contract contains a broad arbitration clause (i) appointing one Bryant Bear as sole arbitrator, directing that “Mr. Bear shall have complete authority to interpret this agreement and decide his own jurisdiction”, and (ii) designating Alabama law as controlling “in all matters whatsoever regarding each and every provision of this contract and the enforcement thereof”. A dispute arises. P commences arbitration. In due course Mr. Bear decides that Alabama law renders the arbitration clause unenforceable, and washes his hands of the case. S is happy with the decision and with the status quo regarding the beans. P, however, consults you about bringing suit, either in state court in Alabama, or in federal court, to try to get Mr. Bear’s decision vacated and a new arbitrator appointed. He strongly wishes to avoid litigating the substance of his claim, since he hates judges. What do you advise and why?

3.  (15 points) The nation of Berzerkistan is designing a mediation program, which it has never had before, for its civil litigation system. A disagreement has arisen between one group of Designers (Group A) that believes mediators should be chosen for their expertise and experience, and should be firm with the parties and urge them toward the right solution, because after all, the whole purpose of the program is to “Get The Cases Disposed Of Fairly”, and Designer Group B that believes mediation is more about encouraging the parties to reach an agreement, and that the mediator should not substitute his or her judgment for that of the parties. The Berzerkistan civil litigation system is otherwise much like ours, and the Minister of Justice has asked you to present a paper to help her understand the two positions and make the right design decision.

4.  (10 points) Briefly define the following, as used in this course:

o  Polycentric Problem

o  The Farpoint Gambit

o  Caucus

o  Collaborative Law Practice

o  Procedural Arbitrability

o  “Broad” vs. “Narrow” Arbitration Clauses

o  Evident Partiality

o  Reservation Price

o  Unconscionability

o  Intertwining as related to Arbitration

5.  (10 points) John and Sarah enter into a contract under which Sarah will sell and John will buy 100 moose hides per month for $50 per hide. Sarah insists on the following provision:

Any dispute arising out of or relating to this contract shall be subject to negotiation in good faith between the parties. In such negotiation, each party shall disclose to the other (and provide full access to any information necessary to verify) such party’s BATNA.

John asks you for advice about what the consequences of such a provision would be.

6.  (10 points) Please discuss the enforceability of the following dispute resolution agreements:

(a) John and Sarah enter into the agreement described in question 5, but instead of Sarah’s provision, the contract provides that any disputes shall be decided by flip of a coin.

(b) George and Harriet enter into a contract for personal services, with any disputes regarding any matter, specifically including gender discrimination, to be decided by flip of a coin.

7.  (10 points) Manny, Moe and Jack have been working on the Big National Union-Free Railroad. Manny is an engineer, the kind who drives the train. Moe is also an engineer, but the kind who fixes the engines and other machinery on the train, sometimes en route. Jack is a baggage and freight handler in Huntsville, Alabama, where baggage and freight from all over the country change trains. All of them have been sexually harassed, and all have employment contracts with arbitration clauses. They consult you about whether they can bring suit against the railroad and avoid arbitration. How do you assess their chances?

8.  (10 points) Your client is Enormous Motor Co., a manufacturer of heavy SUVs. Its plant is unionized. EM’s Human Resource Director calls you in a panic, saying the Union has just called a strike for the following week and has filed an Unfair Labor Practice charge with the NLRB, all because the company has fired a certain employee. The terms of the collective bargaining agreement that is in place clearly call for arbitration. The HR Director says he has to get this situation under control lest he get fired.What are the key facts you need to know in order to formulate your strategy?

9.  (5 points) The U. S. Supreme Court has held that the question of whether an arbitration clause is enforceable is substance, not procedure, for Erie purposes. If one brings a diversity case in federal court to enforce an arbitration clause relating to an interstate transaction, is the enforceability of the clause determined under state or federal law? Why?

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