Page 11 - Alternative Dispute Resolution

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Alternative Dispute Resolution | MONDAY, MARCH 20, 2017 | S11
Serov ex rel. Serova v. Kerzner Int’l Resorts, 2016 WL 4083725, at *3-5 (Sup. Ct. N.Y. Cnty. July 26, 2016).
However, the Second Circuit’s 2016 deci- sion in Brown effectively closed the door to this line of reasoning. Brown construed the Connecticut registration statute as not requiring consent to jurisdiction, identify- ing constitutional concerns that are equally relevant in New York.
First, Brown sought to avoid “creating pre- cisely the result that the [U.S. Supreme] Court so roundly rejected in Daimler”—i.e., “that a corporation was subject to general juris- diction in every state in which it conducted substantial business.” 814 F.3d at 640. As the Second Circuit explained:
It appears that every state in the union— and the District of Columbia, as well—has enacted a business registration statute. If mere registration and the accompany-
Diversity
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ing awareness and encouraging conscious choices to include diversity as a factor in neutral selection. Next came CPR’s Diversity Matters Pledge, allowing companies to state that they recognize the value of diversity and inclusion not only in their workforce, but in providers of services including arbitration and mediation.
In 2015, CPR formed a partnership with LCLD and FINRA, combining LCLD’s Fellows Program and FINRA’s highly regarded arbitra- tion training, as well as mentoring by and networking with skilled CPR neutrals, with the goal of getting diverse neutrals included on rosters offering actual paid work oppor- tunities.
Our Respective Assignments
Law Firms and Senior Partners. Recom- mendations are risky. You place your own rep- utation on the line when you even impliedly endorse another. It may seem the safer route to stick to only the people you already know of and have recommended before.
Try to learn of neutrals that you have not used. What would be the harm when sending out the typical law firm memo asking whether anyone knows a good mediator in a copyright case, to specifically ask about diverse neutrals in that space? Be brave enough to do what your clients have told you they expect you to do in your own firm.
Corporations and General Counsel.
Corporations perhaps play the most impor- tant role here. You need to say not only that diversity is important to you, but to show that it is. Extend your diversity supplier pro- grams to indirect suppliers like mediators and arbitrators and look at metrics. Reassure your outside law firms that you’re serious, and expect to see a real effort.
While many companies offer incentives,
ing appointment of an in-state agent— without an express consent to general jurisdiction—nonetheless sufficed to confer general jurisdiction by implicit consent, every corporation would be subject to general jurisdiction in every state in which it registered, and Daimler’s ruling would be robbed of meaning by a back-door thief.
Id.
Second, the court was uncomfortable with adopting a legal framework under which con- ducting substantial business in a state was insufficient to ground jurisdiction, whereas simply registering to do business, without necessarily performing any business, would suffice. Id. at 640.
Third, the court identified constitutional interests in: (1) providing sufficient notice to a “perhaps unwitting” registrant; and (2) disfavoring extraterritorial assertions of jurisdiction “in circumstances where the
such as greater likelihood of winning busi- ness, or even bonuses, for meeting diversity standards, one CPR member, HP, recently went a step further, announcing that they would actually withhold fees from law firms that failed to comply with diversity require- ments.8
Diverse neutrals need experi- ence to show quality, build their reputations and earn their selections—but, in order to gain that all important experi- ence and develop their skills, they first need to get selected.
ADR Organizations. With greater trans- parency, CPR and our fellow ADR organiza- tions need to intensify our efforts to provide the very best education and mentorship. Next, we need to recruit diverse individuals and get them on our rosters. But, most important, we must utilize our very best efforts to put those diverse candidates on slates; remind decision-makers of the benefits of diversity on the quality of the decision-making process; and then actively encourage the selection of diverse candidates.
Parties. If your opposing party pushes for a diverse neutral, consider it—and your own possible prejudices—with an open mind.
One final major stakeholder is the legal and business community generally. Every one of us, including our future diverse neutrals them- selves, can effect positive change. Whether for ourselves or on behalf of others, we can all initiate or make the introductions that are so critical, help to support substantive training, participate in the networking process, ask to be mentored or (especially if you are a white male) offer to mentor.
state’s interests seem limited.” Id. at 637. Thus, the Second Circuit suggested (but did not rule) that, “at least in cases brought by state residents”—i.e., where the state’s inter- ests are sufficiently great—a “carefully drawn state statute that expressly required consent to general jurisdiction as a condition on a foreign corporation’s doing business in the state ... might well be constitutional.” Id. at 641.
Jurisdiction After ‘Brown’
As in Connecticut, New York’s business registration statute does not explicitly require consent to jurisdiction (although efforts to amend the statute are underway), and the state’s highest court has not definitively construed it to have this effect. Thus, one would expect Brown’s interpretation to apply equally to the New York registration statute. Indeed, this has been the result reached by every New York federal district court decision
As stated in a recent ABA report on cor- porate legal departments, “lack of access to networks, the inability to obtain quality work assignments, and limited opportuni- ties for advancement may be the ‘critical differentiating factors in the career of men and women, and especially women of col- or.’”9 Almost two-thirds of women of color in law firms have previously reported being excluded from formal and informal network- ing opportunities, as compared to only 4 percent of white men.10
Diverse neutrals need experience to show quality, build their reputations and earn their selections—but, in order to gain that all important experience and develop their skills, they first need to get selected. The riddle is circular but not impossible to solve, and those who prevent, or at least fail to support, the latter cannot in good conscious unequivocally demand the former. We can, and must, do better—not out of any sort of charity, but because this next generation of talented individuals is poised to make a real difference, if we will only recognize our roles and do our part.
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1. “Is the Pain Worth the Gain? The Advantages and Li- abilities of Agreeing with Socially Distinct Newcomers,” Katherine W. Phillips, Katie A. Liljenquist and Margaret A. Neale (Personality and Social Psychology Bulletin, Vol 35, Issue 3, pp. 336-50, 2008).
2. “Better Decisions Through Diversity,” Kellogg In- sight (2010).
3. A Current Glance at Women in the Law, American Bar Association (January 2017).
4. National Association for Law Placement, 2016 Re- port on Diversity in U.S. Law Firms.
5. Gender Differences in Dispute Resolution Practice: Report on the ABA Section of Dispute Resolution Prac- tice Snapshot Survey (January 2014).
6. “ADR Business Wakes Up to Glaring Deficit of Diver- sity,” by Ben Hancock (Law.com, 2016).
7. F. Peter Phillips, “Diversity in ADR: More Difficult to Accomplish than First Thought” (Business Conflict Management, 2009).
8. “HP, Mandating Diversity, Will Withhold Fees from Some Firms” (Corporate Counsel, 2017).
9. “Visible Invisibility-Women of Color in Fortune 500 Legal Departments” (ABA Commission on Women in the Profession, 2012)
10. “Visible Invisibility-Women of Color in Law Firms” (ABA Commission on Women in the Profession, 2006)
to have considered the issue since Brown. Famular v. Whirlpool, 2017 WL 280821, at *4-5 (S.D.N.Y. Jan. 19, 2017); Taormina v. Thrifty Car Rental, 2016 WL 7392214, at *6-7 (S.D.N.Y. Dec. 21, 2016); Bonkowski v. HP Hood, 2016 WL 4536868, at *3 (E.D.N.Y. Aug. 30, 2016); Minholz v. Lockheed Martin, 2016 WL 7496129, at *8-9 (N.D.N.Y. Dec. 30, 2016); see also Chat- wal Hotels & Resorts v. Dollywood Co., 90 F. Supp. 3d 97, 105 (S.D.N.Y. 2015) (pre-Brown).
However, even if the New York registration statute were to be amended, or if the Court of Appeals were to rule differently, Brown would still serve to disallow many actions to confirm foreign arbitral awards, given that the Second Circuit was (at most) willing to permit compelling “consent” as a cost of reg- istration in cases brought by state residents. In the future, we expect that foreign award creditors will increasingly rely on asset-based (quasi in rem) jurisdiction. Whether they will be successful is yet to be seen.
New Rule
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historical company information, and confiden- tial documents—often of marginal relevance to a case—has adversely and unnecessar- ily impacted New York’s attractiveness as a commercial litigation forum.” Memorandum from the N.Y.S. United Ct. Sys., John McCon- nell, Request for Public Comment on Proposed Rule of the Commercial Division to Address the Sealing of Court Records, Ex. A (Oct. 12, 2016). Thus, in addition to permitting the sealing of documents relating to trade secrets, which was already an accepted category of information for which sealing is permitted, the Proposed Rule allows for the sealing of confidential busi- ness records or other documents that might negatively impact one of the parties.
Conclusion
The Proposed Rule will be taken up for con- sideration by the Chief Administrative Judge of the Courts of New York State and the Com- mercial Division Advisory Counsel, with a deci- sion likely to come during calendar year 2017. If adopted, the Proposed Rule might provide parties an avenue to maintain the confidential- ity of arbitration awards in connection with confirmation or vacatur motions.2 Indeed, it is not difficult to envision a situation in which a party might successfully argue under the definition of “good cause” contained in the Proposed Rule that business information con- tained in the arbitral award justifies sealing.
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1. The two controlling statutory schemes governing the confirmation or vacatur of awards resulting from ar- bitrations that take place within the state of New York are the Federal Arbitration Act (FAA) and Article 75 of the New York Civil Practice Laws and Rules (CPLR). The FAA does not provide for exclusive jurisdiction in the federal courts such that disputes governed by the FAA may arise in both federal and state courts. A discussion of the applicability of these statutes is beyond the scope of this article.
2. It should be noted, however, that in order to bring a confirmation or vacatur motion in New York state court pursuant to Article 75 of the Civil Practice Law and Rules, the arbitration must have taken place within the State of New York, or the New York court must have ju- risdiction pursuant to CPLR §302.
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