Recent Developments in Dispute Resolution
Willamette University, College of Law
Center for Dispute Resolution

January 21, 2007 - January 27, 2007
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THIS WEEK:

1. Arbitration: An arbitration award will be enforced when the arbitrator acted within the scope of his authority, was not being
charged for fraud or dishonesty in making the award, and when he was arguably construing the contract, even if he made a
serious error in interpreting the contract. (6th Cir. (Mich.)).

2. Arbitration: A party may implicitly waive his right to arbitration through excessive delay, expense, or damage to the other party’s
legal position. (N.D Miss.).

3. Arbitration: A seaman’s agreement to arbitrate related claims precludes litigation of re-injury. (5th Cir. (La.)).

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Arbitration: An arbitration award will be enforced when the arbitrator acted within the scope of his authority, was not being
charged for fraud or dishonesty in making the award, and when he was arguably construing the contract, even if he made a
serious error in interpreting the contract. (6th Cir. (Mich.)).

Michigan Family Resources, Inc. v. Service Employees Int’l Union Local 517M, WL 188099 (6th Cir. (Mich.) Jan. 26, 2007).

Service Employees International Union (SEIU) initiated arbitration against Michigan Family Resources, Inc (MFR) after MFR gave
non-union employees a significantly higher cost-of-living increase than union employees. The arbitrator agreed that all employees
should receive the same cost-of-living increase and found in favor of SEIU, and MFR filed a motion to vacate the award. MFR claimed
that the arbitrator’s award did not draw its essence from the agreement because he considered extrinsic evidence to clarify an
ambiguity of the agreement as he read it. The district court granted the motion, but the court of appeals reversed holding that as long
as the arbitrator is even arguably construing or applying the contract and acting within the scope of his authority, the court will not
overturn his award even if he committed serious error. (MS).

Full opinion available online at Westlaw.

Arbitration: A party may implicitly waive his right to arbitration through excessive delay, expense, or damage to the other party’s
legal position. (N.D Miss.).

Alexander v. Easy Finance of New Albany, Inc. WL 188579 (N.D. Miss. Jan 23, 2007).

Six people (Plaintiffs) who had binding arbitration agreements with Easy Finance of New Albany (Easy Finance) joined forty-eight other
people in a class action against Easy Finance for charging excessive fees on loans. Following a nineteen month discovery period Easy
Finance moved to compel arbitration. Plaintiffs claimed Easy Finance’s extensive participation in the litigation amounted to a waiver of
arbitration. The Court held that a party waives its right to arbitration when its participation in the litigation prejudices the non-moving party
in terms of delay, expense, or damage to a party’s legal position. The Court found no prejudice and compelled arbitration based on its
findings that Easy Finance raised its arbitration defense in response to Plaintiffs multiple amended complaints, Easy Finance filed the
motion to compel arbitration immediately following discovery, and Plaintiffs contributed significantly to the delay of the case. (TH).

Full opinion available online at Westlaw.

Arbitration: A seaman’s agreement to arbitrate related claims precludes litigation of re-injury. (5th Cir. (La.)).

Terrebonne v. K-Sea Transport Corporation, 2007 WL 196532 (5th Cir. (La.) Jan. 26, 2007).

Dextel Terrebonne was a seamen on a ship owned and operated by K-Sea Transport Corporation (K-Sea). On November 3, 2000,
Terrebonne was injured while working. The company settled with him for the cost of the medical expenses that he had accrued to date.
Both parties agreed thatfuture related claims would be settled by arbitration. Terrebonne waslater re-injured and attempted to file suit.
K-Sea moved to compel arbitration. Terrebonne argued that the new injury was distinct from the old injury and that the arbitration agreement
was unenforceable because it did not fall under the FAA. The district court disagreed and compelled arbitration. At arbitration, Terrebonne lost,
but was awarded arbitration fees. K-Sea reopened the case to enter judgment from the arbitration. Again, Terrebonne objected. The district
court affirmed the award and the appellate court affirmed the district court. One interesting point, Terrebonne attempted to rely on Swan v. Wilko,
which was overruled by the Supreme Court, claiming that the case that overruled Swan applied only to business contracts. The 5th Circuit
disagreed. (TR).

Full opinion available online at
http://www.ca5.uscourts.gov/opinions/pub/06/06-30041-CV0.wpd.pdf

Spring Editor: Myah Osher
Writers: Todd Heideman, Theodore Reuter, Megan Smith
Faculty Advisors: Richard Birke/A. Lee Jordan

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