* Fall 1997 Issue of Dispute Resolution Magazine is Available - Focus on Public  Policy Disputes
* Student Writing Competition Announced

* FAA Does Not Establish an Exclusive Forum for Suits Seeking to Vacate or Confirm Arbitral Awards
* Employees Covered By CBA Do Not Have To Arbitrate Statutory Claims
* Manufacturer Waived Right to Arbitrate Counterclaims By Pursuing Litigation
* Arbitral Decision Does Not Collaterally Estop Federal Court Proceeding
* Foreign States May Refuse to Enforce Arbitral Awards from Other States    Only on Narrow Grounds
* Court May Compel Arbitration and Stay Proceedings in Title VII Claim
* Ombudsman Office Considered a "Public Office" and Subject to Disclosure
* Attorney Sanctioned For Using Agreement Not to Arbitrate to Abuse Discovery
* Trial Court Wrong in Rescinding Arbitration Clause on Ground of No Meeting of the Minds
* Harassment and Discrimination Claims Arbitrable

Fall 1997 Issue of Dispute Resolution Magazine is Available - Focus on Public Policy Disputes

Selected Articles:   "Multi-Party Public Policy Mediation: A Separate Breed" by Lawrence Susskind; "A Tale of Two Cities: Day Labor and Conflict Resolution for Communities in Crisis" by Lela Love and Cheryl McDonald; "Bingo, Business and Bureaucracy" by Eric Van Loon;  "Using Facilitated Negotiation  to Enhance Political Decision Making" by Chris Carlson; "Negotiating Rules and Other Policies" by Philip Harter; "The Uniform Arbitration Act: Changes in the Wind?" by Timothy Heinsz; "Model Mediation Law Effort Begins".  Dispute Resolution Magazine is published by the ABA-Section of Dispute Resolution.  Nonmembers can obtain single copy (or back issue) for $5 and can subscribe for a year for $35.  Send requests to ABA Service Center, 541 N. Fairbanks Court, Chicago, IL 60611. (312)988-5000. Direct questions to Kyo Suh at:   kyosuh@staff.abanet.org

Student Writing Competition Announced

The ABA section of Dispute Resolution has announced its annual writing competition, which is open to all 2nd and 3rd year law students and any graduate students.  Top prizes are $500 (one each for law students and graduate students respectively).  The deadline for submissions is January 1, 1998.  Students interested in submitting entries should obtain an entry form and competition procedures from: Maureen Brown, Section of Dispute Resolution, American Bar Association, 740 15th Street., NW, Wash. D.C.  2005-1009.  Phone: (202) 662- 1689.  Fax: (202) 662-1683.  Email: maureenbrown@staff.abanet.org

FAA Does Not Establish an Exclusive Forum for Suits Seeking to Vacate or Confirm Arbitral Awards Sutter Corp. v. P & P Industries, Inc. (5th Cir. 10/27/97)  

Manufacturer Sutter claimed that marketer P & P breached their exclusive agency agreement and won in arbitration in Texas.  P & P moved to vacate award in Oklahoma district court; Sutter then moved to enforce the award in Texas.  The Court of Appeals found "permissive" the language in the Federal Arbitration Act providing that the court in the district in which the award was obtained "may" confirm or vacate the award (9 USC secs. 9 and 10).  Thus, since Texas was not the exclusive forum, that court should have granted P & P's motion to transfer to Oklahoma, where the action was first filed. [Full Decision:  Request 297175]

Employees Covered By CBA Do Not Have To Arbitrate Statutory Claims Penny v. UPS (6th Cir. 10/22/97)  

Penny sued UPS under the ADA.  UPS won a summary judgment, but argued on appeal that the courts had no jurisdiction because of an arbitration clause.  The Court of Appeals affirmed UPS's summary judgment, but ruled that the courts had jurisdiction under Alexander v. Gardner-Denver (1974).  Because a union cannot wave an individuals statutory rights, "an employee whose obligation to arbitrate is contained in a collective bargaining agreement retains the right to a judicial determination of his rights under a statute such as the ADA."  The court rejected UPS's reliance on Austin v. Owens-Brockway Glass Container (4th Cir. 1996), and instead agreed with Brisentine v. Stone & Webster Engineering Corp (11th Cir. 1997), and other recent decisions. [Full Decision:  Request 297174]

Manufacturer Waived Right to Arbitrate Counterclaims By Pursuing Litigation PPG Industries, Inc. v. Webster Auto Parts Inc. (2nd Cir. 10/20/97).

PPG sued Webster (and others) in two collection actions; Webster countered with bad faith, unfair trade practices and other claims. Because the arbitration clause covered the counterclaims (but not the collection action), PPG sought arbitration.  However, the court found that PPG had waived its right to arbitration of those claims because: PPG evidenced a preference for litigation by engaging in discovery and filing substantive motions, the challenge to arbitration was delayed (including appeal of the lower court's denial of arbitration), and Webster would have been prejudiced by PPG's successfully pursuing arbitration. [Full Decision: Request 297171]

Arbitral Decision Does Not Collaterally Estop Federal Court Proceeding Taylor v. New York City Transit Authority (S.D.N.Y. 10/7/97)

Taylor was dismissed by New York Transit Authority (NYTA) due to his assaulting a co-worker, and suspension twice within the last two years. Taylor disputed the NYTA's version of events regarding the assault, and proceeded to arbitration with a Tripartite Arbitration Board (TAB).  The TAB found Taylor was not wrongfully terminated.  Taylor then sought to bring suit against NYTA for a Title VII discrimination violation.  NYTA moved for summary judgment based on, among other things, the assertion that the arbitral decision rendered by the TAB collaterally estopped Taylor's discrimination claims.  The court stated that an employee who arbitrates a grievance is merely seeking to protect contractual rights. The courts have held that employees who have pursued grievance and arbitration proceedings against their employers did not forfeit their right to bring a Title VII action in federal court.  Therefore, NYTA's motion for summary judgment based on the alleged collateral estoppel effect of the TAB award was denied. [Full Decision Not Available Online: 1997 WL 620843]

Foreign States May Refuse to Enforce Arbitral Awards from Other States Only on Narrow Grounds Saudi Iron and Steel Company v. Stemcor USA Incorporated (S.D.N.Y. 10/17/97)

Saudi entered into a settlement agreement following arbitration reimbursing a third party (IMT) for losses due to a shortfall in the amount of steel delivered to a ship that had been subchartered with IMT. Saudi then obtained arbitration awards in London recouping those losses, as well as interest and costs of arbitration,  from Stemcor, whom Saudi claimed was responsible for the shortfall.  Saudi sought enforcement of the award in court; Stemcor challenged enforcement on the grounds that enforcement would violate US public policy and that the subject matter was not capable of settlement by arbitration (9 USC sec. 201, Article V(2)).  However, the court found Stemcor's arguments without merit. First, the court stated the  rule that "[w]hen an action for enforcement of an arbitral award is brought in a foreign state, ... [that] state may refuse to enforce the award only on the grounds explicitly set forth in Article V of the Convention [on Recognition and Enforcement of Foreign Arbitral Awards]."  Under  the Convention's very narrow public policy exception, an award will be set aside only where it violates the most basic notions of morality and justice.  Furthermore, the subject matter exception is construed narrowly because of the strong judicial interest in encouraging the use of arbitration.  Thus, the court rejected Stemcor's argument that the subject matter exception applied because Stemcor had filed a claim against a third party. [Full Decision Not Available Online: 1997 WL 642566]

**Editor's Note: this case relied upon Alghanim v. Toys "R" Us, reported in Issue # 9714 of this newsletter.  (Full Alghanim Decision: Request 297148)

Court May Compel Arbitration and Stay Proceedings in Title VII Claim Ahing v. Lehman Brothers, Inc. (S.D.N.Y. 10/15/97)

Ahing alleged racial discrimination under Title VII of the Civil Rights Act of 1964.  After an unsuccessful mediation, dates were established for filing of pleadings.  Ahing then filed a motion to compel arbitration and stay the proceedings.  The court recognized that the FAA provides that a written agreement to arbitrate controversies arising out of an existing contract "shall be valid, irrevocable and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract" 9 USC sec. 2.  Under the act, a federal district court may stay proceedings when it is satisfied that the issue before it is arbitrable under an arbitration agreement.  9 USC sec. 3.  The Second Circuit uses a four-part inquiry to determine whether it is appropriate to compel arbitration and to stay proceedings--the court must ask:  1) whether there is an agreement to arbitrate; 2) whether the claims asserted fall within the scope of the arbitration; 3) whether Congress intended any federal statutory claims asserted to be non-arbitrable; and 4) if only some of the claims are subject to arbitration, whether to stay the remainder of the proceedings pending arbitration.  In this case, the test to stay proceedings and compel arbitration was easily met. [Full Decision Not Available Online: 1997 WL 634290]

Ombudsman Office Considered a "Public Office" and Subject to Disclosure State ex rel. Strothers v. Wertheim (Ohio 10/22/97).

The court found that the Citizens of Cuyahoga County Ombudsman Office qualified as a "public office" under R.C. 149.011(A) due to the financial support from public taxation, the public nature of its service, and the control over the office by the county commissioners.  Therefore, under R.C. 149.43, the Ombudsman Office's records are subject to public disclosure. [Full Decision: Request 297176]

Attorney Sanctioned For Using Agreement Not to Arbitrate to Abuse Discovery Wallace v. Investment Advisors, Inc. (Tex.App. 10/8/97)

The court upheld the assessment of sanctions in the amount of $1,850 against an attorney for abuse of discovery procedures and for fraudulently filing a lawsuit.  The attorney entered into an agreement solely for the purpose of compelling deposition of a nonparty who would not consent to deposition voluntarily in an arbitration proceeding.  The agreement provided for dismissal of the pending arbitration claim, filing a lawsuit and issuing process to depose the nonparty, non-suiting the action within 90 days of filing, followed by refiling the claim in the arbitration proceeding.  The court said "this was not real litigation, but was a ruse on the court, which was not legitimate litigation because of its avowed purpose." [Full Decision Not Available Online:  1997 WL 625074]

Trial Court Wrong in Rescinding Arbitration Clause on Ground of No Meeting of the Minds B.L. Hodge Company v. Roxco, Limited (Tenn.App. 10/16/97)

This decision held the parties bound to an arbitration clause of a construction subcontract, overturning the trial court's earlier decision to rescind the contract because "no meeting of the minds" occurred.  The appeals court found no fraud or other factors warranting recission and ordered the matter to arbitration. [Full Decision Not Available Online:  1997 WL 644960]

Harassment and Discrimination Claims Arbitrable Gunby v. The Equitable Life Assurance Co. of the US (Tenn.App. 10/16/97)

The Tennessee court followed the U.S. Supreme Court's Gilmer analysis when it held that plaintiffs' sexual harassment and sexual discrimination claims were subject to arbitration under the parties' agreement. [Full Decision Not Available Online: 1997 WL 634530]

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