The case of Nina McKey, Administratrix of Estate of Ruby Irene Brewer v. National Healthcare Corp et al., out of Tennessee, gives us yet another example of a court declining to enforce arbitration in the nursing home setting when signed by a family member who has not been designated or appointed to sign on behalf of the resident. This case turns on specific Tennessee law but does show the court is looking at other familiar cases from other states. That said, we're curious why there is no discussion of enforcement through arguments such as third party beneficiary status.

In this case, the adult daughters sign the resident into the facility and, in doing so, agree to arbitration. Neither daughter has any written authority to sign on behalf of the resident although all sides admit the resident was incompetent. There is an errant form in the nursing home paperwork that says the adult children could sign for the resident. Both trial and appellate court declined to enforce.

Avoiding a long discourse on Tennessee statutory law, the court decided that the requirements were not met because their statute required physician-confirmation of incompetence and some documentation in the physician's records to that end. None existed here.

The court looked at the Texas decision, In Re Ledet, but declined to follow because Texas has different statutory rules. Likewise, the court found that the Mississippi case of Picayune v. Brown was factually different since, therein, there was a physician note regarding incompetence. No reference was made, however, to Florida's Fourth DCA's decision in Blankfeld v. Richmond Health.

The take-away message appears to be that, depending upon the controlling state statute, the greatest likelihood of enforcing arbitration signed by a statutory surrogate is to have written confirmation from a physician that the resident/ward's is incompetent.

Happy First Monday in October. For those who enjoy watching the U.S. Supreme Court terms, they are open for business as of today. You can keep track of the developments at the SCOTUS blog and other sites.

For alternative viewpoints on the upcoming term, take a look at the articles in the LA Times or the Christian Science Monitor.

Meanwhile, to take you back to your law school days, commemorate the new term by perusing an old friend (enemy?), Pennoyer v. Neff.

Despite the fact that I am a member of the three federal court districts in Florida, I rarely suggest to a client to resort to federal court. Why? The expense of discovery and the needless procedures. It appears I'm not alone.

According to a recent survey of nearly 4,000 lawyers, the process of filing in federal court itself has become a weapon: pleading requirements, immediate discovery demands, new e-discovery, and a "total lack of control over discovery." Case in point, we have a case which was removed from state court to federal court and both sides briefed remand. The trial court still required the parties to go through pro hac vice motion practice, discovery, procedure-related orders, and other demands. And then the judge sits on the remand issue for months -- while I fend off a client who is paying high bills but is seeing no results.

So what can be done about it? Well, no clue yet. The two associations which performed the survey are going to the drawing board with ideas about tailoring the Rules of Civil Procedure based upon the type of case, giving the judge more control over discovery or putting in attorney fee provisions (Note: as a general anecdotal rule, attorney fee statutes/rules INCREASE litigation, not the opposite).

For more reading, check out these two similar ABA Journal articles: "Litigation Too Costly, E-Discovery a ‘Morass,’ Trial Lawyers Say" and "OK, Discovery’s a Problem, But What Can Be Done About It?"

Florida state law and federal law differ on several aspects of compelling arbitration. One example is proving waiver of the right to arbitrate. To prove waiver under federal law requires an inconsistent act plus prejudice. Meanwhile, Florida state law has a hair trigger standard where a (poorly defined) inconsistent act alone can amount to waiver.

Slightly less recognized is the difference between federal and Florida state law as it relates to a right to appeal an order on a motion to compel arbitration.

Here are the rules:

Florida law: Florida Rule of Appellate Procedure 9.130(a)(3)(C)(iv) says that non-final orders which "determine... the entitlement of a party to arbitration" are immediately appealable. While, offhand, we don't recall a recent case discussing the breadth of the rule, an order either granting or denying a motion to compel arbitration can be immediately appealed.

Federal law: we look to the Federal Arbitration Act at 9 USC 16(a)(1)(A) which says that "an appeal may be taken from an order... denying an application under section 206 of this title to compel arbitration." The FAA goes on to say, at 9 USC 16(b): "Except as otherwise provided in section 1292 (b) of title 28, an appeal may not be taken from an interlocutory order— (1) granting a stay of any action under section 3 of this title;(2) directing arbitration to proceed under section 4 of this title; and(3) compelling arbitration under section 206 of this title." Thus, the federal rule only permits an immediate appeal if the trial court denies a motion to compel arbitration. There is no right of immediate appeal if arbitration is granted.

In contrasting the two, we see that Florida law is quick to find waiver of arbitration (prejudice alone) while it gives either party full access to appeal the outcome of a motion to compel arbitration. That actually gives the party opposing arbitration the benefit of the doubt by proving waiver or taking an appeal to dodge arbitration (so much for "arbitration is favored"). In federal court, on the other hand, it is hard to waive your right to arbitration and there is no room for the party opposing arbitration to appeal when the court orders arbitration. Thus, we find that parties seeking arbitration benefit from the federal rules whereas parties avoiding arbitration get lots of chances under Florida state law.

We pick up this thread from Kimberly M. Adams v. Monumental General Casualty Company, recently decided by the Eleventh Circuit. The underlying case involved the purchase of a truck and two arbitration clauses in both the sales contract and the insurance contract. The trial court granted arbitration and then modified the opinion, taking out any reference to the sales contract. Thus, the district court "was not deciding whether arbitration of Adam's complaint was required under the [sales] contract."

Adams appealed and the 11th Circuit found it had no jurisdiction under the FAA, 9 USC 16(b)(2) which governs the appealability of interlocutory orders regarding arbitration ("an appeal may not be taken from an interlocutory order... directing arbitration to proceed").

The 11th disagreed that the district court had "denied arbitration" under 9 USC 16(a)(1)(B). They held that the trial court had compelled arbitration without deciding whether arbitration was also available under the sales contract.

The holding of Adams in a nutshell: "When a district court compels arbitration of a dispute under one contract and is silent about whether another contract provides for arbitration of the same dispute, section 16(a)(1)(B) is not implicated."

Like the Proposal for Settlement, Florida Statute 57.105 was enacted (and revised) in order to shorten needless litigation. Relative to 57.105, it was a sword against the sometimes-phantom, sometimes-real "frivilous" lawsuits. We rarely see appeals on this Rule and, anecdotally, we doubt many of these are even filed despite the fact that the threat is likely made on a daily basis.

The Fourth District, in Mark Perlman, P.A. v. Ameriquest Mortgage Company, Travelers Casualty and Surety Company of America, Mortgage Information Services, et al., gave us little information about the underlying dispute which resulted in a 57.105 motion filed against the plaintiff and counsel.

Ultimately, the Broward circuit court judge granted sanctions against the plaintiff and plaintiff's counsel for bringing a frivolous case.

The Panel (Stevenson, May, and LaBarga) barely cited the rule and instead relied upon case law that, to sanction a lawyer, the trial court must make an express finding that the claim was frivolous (bad client) AND an express finding that the lawyer was not acting in good faith based upon the representations of his client (bad lawyer). In this case, the second express finding didn't exist. Order reversed.

Again, we do not know the underlying facts of the case or whether there is an issue of right or wrong here. But we do have to tip our hat to the plaintiff lawyer who overcame four other law firms, stretching from Hallandale Beach to Tampa, who were opposing him and seeking fees.

While we are obligated to acknowledge that Sadruddin Babul and Rahmat Barkat v. Golden Fuels, Inc. has contributed, in its own way, to Florida precedent, the true value of this case rests in the fact that two pro se defendants fought at the trial and appellate court and won. Bravo.

Golden Fuels sought to collect on a signed purchase order which indicated that Golden would remove two underground tanks for "purchaser" Petro Mat Convenience Store. It was signed by Messrs. Babul and Barkat, with no indication as to who they are. Golden claims it was never paid and sued the two men; they defended claiming that they were agents of a company. Along the way, Golden won summary judgment. Then the Second DCA (Wallace, LaRose, Canady, and Charles) took it away.

In opposition to Golden's motion for summary judgment, the two men filed an affidavit claiming that they did not sign the purchase order in their individual capacity and that the proper defendant was a Florida corporation. Furthermore, they attached a real estate contract for that company which they both signed as evidence that they were agents of the company.

Golden fired back noting that all payments made were drawn on the men's inidividual bank accounts and that Golden had never heard of the corporation.

It is unclear what swayed the trial court to enter summary judgment. The appellate court, however, noted that the pro se defendants' affidavit properly raised a factual question and that, in interpreting contractual ambiguities, reliance on parol evidence was justified.

Practitioner's note: many contracts give titles to parties (Buyer, Seller, Purchaser, First Party, etc) but the people filling out the forms forget to fill in all of the blanks. Likewise, signors do not always sign on the right line and/or indicate their status (individual, on behalf of...). Those omissions lead to questions of fact and resolution of ambiguities which will rely on parol evidence. Summary judgment is rarely going to help dig out of that situation.

The Third DCA last week gave practitioners the key to enforcing arbitration in another state when the contract contains a choice of law provision. Somewhat to our surprise, some Florida lawyers wanted a malpractice claim to be heard by an arbitrator outside of Florida.

The underlying case is not terribly important in Default Proof Credit Card Systems, Inc. and Vincent Cuervo et al. v. David Kenneth Friedland; Leslie Jean Lott; Lott & Friedland, P.A.; Sanchelima & Associates, P.A.; Jesus Sanchelima; Raymond Niro; Niro Scavone, Haller & Niro et al. Suffice it to say a company seeking to enforce patents in South Florida hired a Chicago firm which ultimately hired local (Florida) counsel. The contract between the company and the Chicago firm included an arbitration clause and choice of law/venue clause (using Illinois law and Chicago as venue). Suit was brought in Florida federal court but was dismissed. A malpractice claim was brought by the company against lawyers and law firms -- all of whom moved for arbitration in Chicago using Illinois law.

The Third DCA (panel of Green, Suarez, and Cortinas) held that Florida courts are required to enforce choice of law provisions unless (1) it it unjust/unreasonable OR (2) the law of the foreign state contravenes strong Florida public policy. But that's just to get it into another state's court system -- not arbitration. To the contrary, under the Florida Administrative Code, Florida courts do not have the authority to require arbitration where the arbitrator will use the law of another state. In comes the Federal Arbitration Act (FAA), which compels all states to enforce arbitration (including arbitration in a foreign state using their laws) if the contract triggers interstate commerce.

The Court properly noted that interstate commerce was all over the place in this controversy: (1) patent case (federal issue), (2) interstate nature of alleged infringement, (3) representation by lawyers in multiple states, and (4) signatories were in different states.

Bottom line: as long as the choice of law and arbitration provisions are not completely coming out of left field, the moving party needs to invoke the FAA and trigger "interstate commerce," likely by showing there are parties and lawyers involved from multiple states.

Nursing home abuse cases have become a battleground for arbitration-related case law. Here in Florida, there are more appellate decisions deciding whether a long term care case goes to arbitration or litigation than there are opinions interpreting the nursing home statute itself. The fact that the nursing home litigation “boom” has long past yet these arbitration opinions continue to trickle out confirms that the lingering elder law cases still result in fierce legal battles.

Even if you could care less about nursing home law or arbitration, these cases are important since they are interpreting very common durable powers of attorney. A result-oriented decision in one of these long term care cases could skew interpretation of those documents for future cases.

Before we get to the recent case, Carrington Place v. Estate of Crisson, a bit of background on one law firm’s legal strategy to avoid arbitration is warranted. Nursing home admissions typically involve the resident (patient), power-of-attorney, health care surrogate/proxy or a close family member signing the admission agreement. As we’ve mentioned before, there are complex legal arguments over validity when someone other than the power of attorney (POA) signs.

A Tampa area law firm has apparently taken the strategy of still attacking arbitration, even when signed by a POA. In Alterra Healthcare v. Bryant, the Fourth District was called upon to determine that, inter alia, the durable power of attorney document specifically and validly conferred upon the POA the right to arbitrate. In McKibbin v. Alterra Health Care, the Second District found there were limitations in the durable power of attorney which prevented the POA from agreeing to arbitration. Both of those cases involved the same plaintiff firm, which brings us to the present day. What happens if the durable power of attorney document “makes a broad, general grant of authority to the attorney in fact” but does not actually say the words “arbitration” or “waive the right to trial”?

The full name of the Second District’s September 12 decision is Jaylene, Inc.; Candansk, LLC; Dansk Management, Inc.; Arfind America, Inc.; 1521030 Ontario, Inc.; Arlene Angus Christiansen; Find U. Christiansen; Jacqueline F. Hurt; Barbara Gallagher; Kathleen Sylvia; Lynn Taggart; and Paul John Prybylski v. Deborah Moots, as Personal Representative of the Estate of Ethelwin A. Crisson; ACMC-CNH, Inc.; Senior Management Services, Inc.; and Kimberly Ann Gibb (as to Carrington Place). As that is pretty unwieldy, we’ll refer to it as “Carrington Place v. Crisson.”

In this case, the resident was admitted to the long term care facility after the POA signed the admission agreement which contained an arbitration clause. The “optional arbitration clause” is one which other courts have approved before in Consolidated Resources v. Fenelus and Etting v. Regents Park (known in the long term care industry as the “Prestige Printing agreement”).

The court focused only on the durable power of attorney which was “extremely broad and unambiguous.” It stated, “[m]y Agent shall have full power and authority to act on my behalf. This power and authority shall authorize my Agent to manage and conduct all of my affairs and to exercise all of my legal rights and powers, including all rights and powers that I may acquire in the future.”

The court also focused on the POA’s ability to: (1) collect debt, (2) settle any claim, (3) enter into contracts, and (4) have its powers interpreted broadly. Likewise, there was nothing restrictive in Florida Statute 709.08 (Florida’s version Uniform Durable Power of Attorney Act).

With that, the Panel (Wallace, Kelly and Khouzam) teetered between Alterra v Bryant (POA affirmatively authorized to agree to arbitrate) and McKibbin v. Alterra (limitations on POA restrict ability to arbitrate) and concluded, “[w]e are not prepared to state that a grant of the authority to settle claims includes the authority to consent to arbitration. However, the specific grant of the authority to settle claims in the document under review in this case is consistent with the view that the POA’s broad grant of authority includes the power to consent to arbitration.”

Interestingly, the Crisson Panel sounded disappointed with the McKibbin Panel (per curiam) for not spelling out what the “limitations” were in that prior case. We raised the same frustration in our January 24, 2008 post.

Thus, assuming the trifecta of Bryant, Crisson, and McKibbin are to be read together, it appears that durable powers of attorney which (1) explicitly confer the ability to waive trial/agree to arbitrate or (2) make “a broad, general grant of authority to the attorney in fact” result in the POA being authorized to arbitrate. Those POAs with (undefined) “limitations” may not. Given that most durable powers of attorney are explicit or broad, this decision fills the gap between Bryant and McKibbin with precedent favoring enforcement of arbitration.

To read this decision otherwise – or to more restrictively read powers of attorney – could result in unraveling the otherwise valid actions of a POA. Remember, Florida is home to any number of retirees, many of whom come here with durable power of attorney documents from other states. A court being overly restrictive in its interpretation of POA authority, simply for the result of one case, may lead to poor precedent for broader issues.

Perhaps we will have the benefit of further insight from the Second District in the pending cases of Carrington Place v. Estate of Milo or Jaylene v. Marguerite Steuer…

Florida has traditionally held the door shut on lawyers "retiring" to Florida and then opening shop. Florida has no reciprocity with other states. However, unless a lawyer has multiple cases, pro hac vice admission to courts and arbitration is freely given. Last week, the Florida Supreme Court approved Amendments to the Rules Regulating the Florida Bar, which updated Rule 1-3.11 (Appearance by Non-Florida Lawyer in Arbitration Proceeding in Florida).

The change is, admittedly, only minor and procedural. The applying lawyer must send a verified statement to the Florida Bar and opposing counsel identifying the lawyer's bar number, prior arbitrations in Florida, and any discipline. Previously, the Bar was to receive the lawyer's social security number but that requirement was dropped.

Given the frequency of securities arbitration alone, which often involves out of state lawyers, this is not an unexpected move by the court.

Few businesspeople or lawyers recognize that a sent email can constitute a formal contract. Florida is one of the few states which has a statute on point, thus practitioners need to be wary of the significance of emailed "signatures" and agreements. It's important to realize that an e-contract -- and therefore an "e-arbitration clause" or "e-xculpatory clause" -- can be as valid as their ink and paper brethren.

Here's a quick primer.

The scant case law nationwide has acknowledge four e-signature scenarios: (1) automatic signatures (done by your email program), (2) prompted signatures (also done by your email program), (3) intentionally typed signatures, done by the sender, and (4) uploaded signatures (done by your email program).

The statute of frauds typically require a writing and a signature by a party against whom enforcement is sought. Common law, in many jurisdictions, refused to acknowledge the legitimacy of electronic contracts and signatures as legally binding. The concern, of course, was fraud but it has become fairly well acknowledged that a signature can be faked on paper just as easily as it can on an e-document.

The Federal E-Sign Act give the same status to electronic records and signatures as to their paper counterparts. The full title is the "Electronic Signatures in Global and National Commerce Act" and is found at 15 USC 7001 (link above). To this end, Florida is one of the few states which adopted the Uniform Electronic Transactions Act (UETA) but applies prospectively only to parties which agree to contract electronically (judged by the context). Florida's version of the UETA is Florida Statute 668.50. There's little to no case law on Florida's UETA, with the exception of the "highly unusual foreclosure case" of Cicoria v. Gazi, which drops a reference to the UETA and faxed documents in footnote 13.

Florida's UETA is not a long statute but be aware the law relates to "transactions" BUT excludes wills, trusts, family law, court orders, and UCC. For that latter category, see Florida Statute 671.201, involving UCC standards for signatures.

Special thanks to Butzel Long summer associates Sarah DeFrain and Lauren Kerr at Wayne State University who gave a Powerpoint presentation in Detroit, Michigan. The portions of their presentation relating to Florida have been reproduced in part here.

What is in a name? That which we call a rose by any other name would smell as sweet.

Every rose has its thorn.

Pick your cliché. The case of John and Elaine Rose and State Farm Mutual Insurance Company v. ADT Security Services, Inc. may become quotable in Florida precedent.

ADT hit a home run securing the enforceability of its home security system service agreement – at least in the First District – and the court was kind enough to provide the actual exculpatory provisions and fraud/warranty waivers for the rest of us to peruse.

The Rose family bought a security system which included a fire alarm. After being struck by lightening, the house “burned to the ground.” The Roses sued claiming that, inter alia, the ADT salesman promised that, with the system, they would “never lose their house to a fire” and that it “would save the lives of the Roses' dog and family...” (State Farm was involved as the subrogation plaintiff and it appears the Roses survived to make the insurance claim; no word on the dog.).

ADT won summary judgment. Appellate court agreed. The ADT service agreement language carried the day.

The trial and appellate courts flat out assumed the Rose's allegations that the ADT salesperson promised them everything. But, for fraud in the inducement, the court held that “a party cannot establish justifiable reliance and may not recover in fraud for an alleged false statement when proper disclosure of the truth is subsequently revealed in a written agreement between the parties.” We'll quote that contract language below.

The ADT contract also knocked out claims of implied warranty of merchantability and implied warranty of of fitness. To overcome the first warranty, the contract must be in writing, conspicuous, and use the magic word, “merchantability.” Fitness warranties are even easier to kill, as the disclaimer simply needs to be in writing and conspicuous. Again, contract language below.

Finally, that same warranty-killing language was deemed to be a clear and unequivocal exculpatory clause.

Without further, ah, ado, here are the contract provisions:

CUSTOMER ACKNOWLEDGES THAT HE/SHE IS AWARE THAT NO ALARM SYSTEM CAN GUARANTEE PREVENTION OF LOSS, THAT HUMAN ERROR ON THE PART OF ADT OR THE MUNICIPAL AUTHORITIES IS ALWAYS POSSIBLE, AND THAT SIGNALS MAY NOT BE RECEIVED IF THE TRANSMISSION MODE IS CUT.... THIS AGREEMENT CONSTITUTES THE ENTIRE AGREEMENT BETWEEN THE CUSTOMER AND ADT. CUSTOMER AGREES THAT ANY REPRESENTATION, PROMISE, CONDITION, INDUCEMENT OR WARRANTY, EXPRESS OR IMPLIED, NOT INCLUDED IN WRITING IN THIS AGREEMENT SHALL NOT BE BINDING UPON ANY PARTY...

UNDER NO CIRCUMSTANCES, SHALL ADT BE LIABLE TO THE CUSTOMER [...] FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY NATURE [...] AND HOWEVER OCCASIONED, WHETHER ALLEGED AS A RESULT FROM A BREACH OF WARRANTY BY ADT, THE NEGLIGENCE OF ADT, OR OTHERWISE.

(Note: under “General Terms,” the agreement disclaimed implied warranties of merchantability and fitness).

The First District (Thomas, Webster, Van Nortwick) issued an opinion in Jacksonville Golfair, Inc. v. Gary S. Grover, Rita Grover and Sys-Jax, Inc. which held that a proposal which resolved claims and counter-claims involving one of several parties. There was no instructions as to what would procedurally happen if the Proposal was accepted.

We're actually a bit surprised it took several large paragraphs to resolve this appeal. The Court properly noted that the Proposal identified the offeror, offeree, claims to be resolved, amount and conditions. Thus, it was procedurally sufficient. The Court then noted that Proposals do not have to resolve the entire case or even all of the claims between the relevant parties. Our reading, of this and other cases, is that a defendant sued in a 4-count Complaint could serve four different Proposals for Settlement (one per count).

Much like the Fourth DCA ruled in Palm Beach Polo Holdings, Inc. v. Madsen, Sapp, Mena and Rodriguez, the relevant Statute and Rule for Proposals do not require a statement as to how the settlement will be "procedurally consummated." It certainly makes the most sense to insert a non-monetary terms of dismissal with prejudice, but under the (shaky) Statute/Rule authority, it isn't required.

A conflict has arisen between the First District and Second District which makes wading into the pool of Proposals for Settlement all the more chilly and murky.

As of April 2008, in Clements v. Rose, the First District found that, in a dog bite case, a Joint Proposal for Settlement to a husband and wife was valid since it stated the amount attributable to each and conditioned settlement on joint acceptance. That seemed simple; indeed, it is common practice to serve a joint proposal if you want two opposing parties to both accept and, on the other hand, you serve two completely separate Proposals (one to each opposing party) if one can settle without the other.

Along comes Attorney's Title Insurance Fund, Inc. v. Joseph W. Gorka and Laurel Lee Larson, where the Second Disctrict (Silberman, Villanti, and Wallace) found that a joint proposal was invalid because the "joint acceptance" conditional term prevented one party from being able to freely evaluate and accept.

Although it wasn't spelled out in the decision, Rule 1.442(c) is not clear if joint proposals require joint acceptance. Arguably, this would make sense otherwise you would just serve one Proposal to each opposing party. In a recent Florida Supreme Court decision, it was noted that each defendant should be able to evaluate the proposal and should be able to settle the suit knowing the extent of their responsibility. Along those lines, the recipient should be able to "independently evaluate and decide." The suggestion here is that one recipient might not have that freedom and independence if the other recipient refuses to pay.

Again, although not brought up in the case, the Second DCA brings to the surface the notion that a plaintiff could sue a deep pocket defendant and then a pauper defendant. Thereafter, the plaintiff could serve a joint proposal for settlement, which requires joint acceptance, and attribute $1 to the "rich" defendant and $1 million to the "poor" defendant. The poor defendant could never pay the million dollars and, lacking the pauper's acceptance, the rich defendant would be stuck facing the $1 Proposal. That could create an abusive situation. Anecdotally, one we haven't seen...

Of note, recall the Clements case was a bit of a mess where even the court could not figure out the reason for the appeal. Nonetheless, the Second DCA took it upon itself to call a direct and express conflict. No cases that we know of exist out of the Third and Fourth DCAs, although I suspect there are some cases involving joint Proposals in those jurisdictions.

Arguably, this case just threw every pending joint proposal for settlement in the State into question. Until this is resolved, be wary of Joint Proposals for Settlements, particularly in the undecided Third and Fourth Districts...

Every once in a while, we detect a "tone" in court opinions, suggesting that the judges are not particularly happy with arguments, parties or lawyers. A supporting indicator of the court's displeasure is when lawyers are identified by name in the opinion.

We sense that tone as we read the recited names of various lawyers in Lisa Panepucci v. Honigman Miller Schwartz & Cohn, LLP, a recent Sixth Circuit opinion. That case hits many "hot button" social and law firm issues such as sex and pregnancy discrimination; maternity leave for the birth of adopted children; women lawyers achieving partner status; lawyers billing over 2500 hours a year; lawyers penalized for NOT billing over 2500 hours per year(*); and the (traditionally secret) internal mechanisms of law firms.

In this case, the Plaintiff was a female partner at a 200+ lawyer firm who, in 1999, was entering "in excess of 2500 [billable] hours." The next year, as she underwent fertility treatment, she dropped to 1900 hours and the firm, likewise, dropped her pay. She popped back up to 2300 hours in 2001 but, in 2002, she asked to take the firm's stated 12-week maternity leave during the time when her soon-to-be-adopted child would be born. According to her, the senior partner "did not agree with her taking so much time off."

The Plaintiff raises some interesting discrimination claims about the internal practices of law firms. In this situation, she claims that females were "denied client business development opportunities, were not given clients on the same basis as male attorneys, and were not given the opportunity to 'inherit' clients on the same basis as male attorneys." We have no idea whether that is true in this particular case. That said, and as an aside, these are common concerns in law firms and, sadly, I have heard a female colleague in another law firm voice these same complaints as recently as last month.

The Plaintiff in this case, however, had signed a Partnership Agreement which had an arbitration clause. According to that clause, all disputes "arising under or relating to" the Partnership Agreement were to go to the AAA Commercial Panel. Do sex and pregnancy discrimination claims go to arbitration?

Yes, said the Sixth Circuit. As many courts have noted, "arising under or relating to" is typical broad language (we prefer "arising from or relating to" but there's no case law indicating one is broader than the other). The Court noted, "[w]hen the arbitration clause is broad, only an express provision excluding a specific dispute or the most forceful evidence of a purpose to exclude the claim from arbitration will remove the dispute from consideration by the arbitrators." Indeed, the Court even made a stinging remark that, "wisely, [the Plaintiff] does not dispute that employment discrimination claims may not be subject to mandatory arbitration."

As we typically see, the Plaintiff claimed she was bringing a tort claim which had nothing to do with the Agreement and made no reference to it; the Court noted that disputes over her compensation, particularly when it was to be compared to others' compensation, meant the claim had to "relate" to the Agreement.

The Plaintiff also took a shot at the AAA Panel, claiming that the commercial panel were experts in commercial law -- not employment law -- which suggested that employment claims were never contemplated. This appears to be more creative than persuasive as the federal court declined "to indulge in the presumption that the parties and arbitral body conducting a proceeding will be unable or unwilling to retain competent, conscientious and impartial arbitrators."

A quick nod to our friends at Hinshaw & Culbertson for their lead to this case.

* For the uninitiated, there are approximately 260 weekdays per year. Assuming 12 hour work days, no holidays, no vacations, no lunches, no sick days, and 100% billable productivity, there are approximately 3,120 available working hours. We admit, lots of us work on weekends.

We’ve certainly been enjoying the new iPhone 3G and, after wading through all of the reviews and testing out the App Store, we figured it was time to see what Herculean terms we had agreed to in order to bask in the clean white glow of the iPhone screen.

At least superficially, AT&T seems to have put together quite the friendly end user agreement. Our initial, if only, criticism is that the alternative dispute resolution terms are placed at pages 13-17 of an 18 page agreement (small booklet pages). I don't recall how/when they gave it to me and I didn't sign the book. So there may be some procedural unconscionability issues to contend with.

Here’s the basics of the AT&T/iPhone ADR:

• 30-day rescission period
• 100-written notice of dispute of bill or “you will have waived your right to dispute the bill.” Curious to see if this stands.
• Binding Arbitration with a small court claim exception
• “Arbitrators can award the same damages and relief that a court can award.”
• AT&T pays all costs, unless the case is frivolous
• Disputes before, after or arising from or relating to the service are arbitrated
• Parties agree there is interstate commerce and the FAA applies
• AAA Consumer Rules apply
• For disputes under $10k, arbitration can be done on the documents alone and via phone
• If the consumer is awarded $5,000/maximum available in small claims, AT&T will pay the greater of those amounts plus DOUBLE your attorney’s fees. That’s called the “attorney premium.”
• If there are later revisions to the arbitration agreement via bill-stuffers, you can reject them.
• No class action.

We’ve seen telephone companies take a hit on some unfriendly arbitration agreements however this one seems fair. Perhaps its just the rosy glow left over from our iPhone experience. We will wait to see if a disgruntled customer (and his lawyer gunning for that “premium”) can pick away at these terms. Until then, seems friendly enough.