Recent Developments in Alternative Dispute Resolution

• Pages: 231-250
• Date: 01 April 2021
• Published date: 01 April 2021
• Author: Deborah Greenspan,Fredric Brooks,Jonathan Walton,Grace Chamoun
• Subject Matter: Derecho Público y Administrativo

231

* Deborah Greenspan (dgreenspan@blankrome.com) is a partner, Fredric Brooks (rbrooks@

blankrome.com) is of counsel, and Grace Chamoun (gchamoun@blankrome.com) is an asso-

ciate with Blank Rome LLP. Jonathan Walton (jwalton@BatesCarey.com) is an associate

with Bates Carey LLP.

RECENT DEV ELOPMENTS IN A LTERNATIVE

DISPUTE RESOLUTION

Deborah Greenspan, Fredric Brooks, Jonathan Walton,

and Grace Chamoun*

I. Introduction .................................................................................231

II. The Continued Viability of Class-Wide Arbitration

Following the Supreme Court’s Rulings in Lamps Plus

and Stolt-Nielsen v. Varela .............................................................232

III. Courts Addressing Scope and Application of the Interstate

Commerce Exception to the FAA ...............................................239

IV. Enforcement of Agreements by Nonsignatories to Contract ..... 243

V. Waiver of the Right to Arbitrate .................................................244

VI. Grounds for Vacatur of an Arbitration Award .............................247

VII. Remote Alternative Dispute Resolution Takes Center Stage

During the Pandemic ...................................................................248

I. INT RODUCTIO N

This article discusses recent developments in the field of alternative dis-

pute resolution. During the past year, numerous trial and appellate courts

addressed issues presented in the aftermath of recent rulings by the United

States Supreme Court with respect to the pursuit of arbitration on a class-

wide basis and to the applicability of the interstate transportation workers

Tort Trial & Insurance Practice Law Journal, Spring 2021 (56:2)232

exception to the Federal Arbitration Act1 to delivery drivers, ride-share

drivers and others. The article also discusses ongoing developments this

past year in several other significant areas of dispute resolution: enforce-

ment of arbitration agreements by nonsignatories to contracts, waiver of

the right to arbitrate, and grounds for vacatur of an arbitration award.

Finally, the article highlights how the COVID-19 pandemic has impacted

the ADR arena, and the responses and adjustments mediators and arbitra-

tors have made in moving to a remote environment.

II. THE CON TINUED V IABILIT Y OF CLASS-WIDE

ARBIT RATION FOLLOWING TH E SUPREME COUR T’S

RULINGS IN L AMPS PLUS AN D STOLT-NIELSEN V. VARELA

In recent years, the United States Supreme Court has foreclosed efforts

to impose class arbitration on parties to an arbitration agreement in the

absence of a clear contractual basis to do so. In the past year, courts have

addressed continued efforts to avoid those rulings, and the Supreme Court

has declined to re-enter the arena on the issue.

In Stolt-Nielsen S.A. v. AnimalFeeds International Corp.2 and Lamps Plus,

Inc. v. Varela,3 the Supreme Court held that there must be an “affirmative

‘contractual basis for concluding that the part[ies] agreed to [class arbitra-

tion],’” and thus neither an agreement’s silence nor its ambiguity on the

availability of class arbitration “provide the necessary ‘contractual basis’ for

compelling class arbitration.”4 The high Court’s reasoning is premised on

the view that class arbitration “is not only markedly different from the ‘tra-

ditional individualized arbitration’ contemplated by the FAA, it also under-

mines the most important benefits of that familiar form of arbitration.”5

1. 9 U.S.C. §§1 et seq. (“FAA”).

2. 559 U.S. 662 (2010).

3. 139 S. Ct. 1407 (2019).

4. Lamps Plus, 139 S. Ct. at 1415, 1419 (quoting Stolt-Nielsen, 559 U.S. at 684).

5. Id. (citing Epic Systems Corp. v. Lewis, 138 S. Ct. 1612, 1623 (2018); see also Stolt-Nielsen,

559 U.S. at 686-687. The Supreme Court in Lamps Plus explained its reasoning as follows:

In individual arbitration, “parties forgo the procedural rigor and appellate review

of the courts in order to realize the benefits of private dispute resolution: lower

costs, greater efficiency and speed, and the ability to choose expert adjudicators

to resolve specialized disputes.” . . . Class arbitration lacks those benefits. It “sacri-

fices the principal advantage of arbitration—its informality—and makes the pro-

cess slower, more costly, and more likely to generate procedural morass than final

judgment.” . . . Class arbitration not only “introduce[s] new risks and costs for both

sides,” . . . it also raises serious due process concerns by adjudicating the rights of

absent members of the plaintiff class—again, with only limited judicial review. . . .

Because of these “crucial differences” between individual and class arbitration,

Stolt-Nielsen explained that there is “reason to doubt the parties’ mutual consent to

resolve disputes through class-wide arbitration.”

Lamps Plus, 139 S. Ct. at 1416 (citations omitted).