Davis Wright Tremaine LLP

In an important decision, on December 24, 2009, the Washington Supreme Court held that claims under the Washington Condominium Act (WCA) are subject to arbitration despite provisions in the Act requiring judicial resolution of claims where condominium owners agree to arbitrate disputes in their purchase and sale agreements. The case is Satomi Owners Ass’n v. Satomi, LLC.

Fenwick & West LLP

In Dotson v. Amgen, Inc., a California appellate court confirmed that mandatory arbitration agreements with discovery limitations are enforceable provided that they also give the arbitrator the authority to allow further discovery upon a showing of need. Darrell Dotson, Amgen’s former in-house attorney, challenged the enforceability of the arbitration agreement he signed at inception of employment claiming that its limitation that each party could take only one deposition, and other clauses, rendered the agreement unconscionable. The court rejected Dotson’s argument, citing the California Supreme Court’s prior observation that “discovery limitations are an integral and permissible part of the arbitration process” and the fact the arbitrator retained the discretion to allow additional discovery “upon a showing of need.”

USA
December 2 2009

The Federal Arbitration Act severely limits the authority of courts to vacate or modify arbitration awards. In AIG Baker Sterling Heights, LLC v. American Multi-Cinema, Inc., however, the Eleventh Circuit approved a way of getting around those limits that is available in some circumstances. During the arbitration of a dispute between a landlord and tenant over the amount of taxes owed by the tenant under the terms of the lease agreement, the tenant stipulated that it had not paid taxes for a certain six-month period, but discovered after the arbitration award was entered that it actually had paid taxes for that period. In federal court proceedings to confirm the arbitration award, the tenant persuaded the court to reduce the award by the amount of the taxes paid. The Eleventh Circuit reversed the modification of the award, holding that such relief was unavailable under the strict limitations of the FAA.   

Jorden Burt LLP

USA
November 21 2009

 In Safety National Casualty Corporation v. Certain Underwriters At Lloyd’s, London, — F.3d —-, 2009 WL 3722727 (5th Cir. (La.)), the Fifth Circuit considered en banc the question of whether the McCarran-Ferguson Act caused Louisiana state law to “reverse-preempt” the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the Convention) or its implementing legislation (the Convention Act).