Laying Down the Law - Chapter 13 - The Reasoned Arbitration Award in the United States: Its Promise, Problems, Preparation and Preservation
John Burritt McArthur has been serving as an arbitrator since 1994. He has 23 years of experience as an arbitrator, 34 years as a trial lawyer in state and federal courts around the country, and is licensed to practice in Texas, California, and Alaska as well as in a variety of federal courts. He was a Partner at Susman Godfrey LLP, worked for Hosie McArthur LLP for several years, and today has a solo practice that combines arbitration practice with complex commercial trials. He has major litigation and arbitrator experience in five main areas: Energy, Oil and Gas, Electricity; Contract and Tort Business Disputes, including UCC Disputes; Antitrust; Investment Disputes, Fiduciary and Joint Venture Claims, Securities and Insurance. Mr. McArthur's broad work experience is equally suited to business and commercial arbitrations. He has represented plaintiffs and defendants in large, often highly technical commercial cases throughout his career. He has handled federal and state court cases, arbitrations, cases in MDL proceedings and class actions. His clients have ranged from some of the world's largest corporations, including Aetna and British Petroleum, to Alaska native corporations, States, individuals and small businesses. Mr. McArthur has been acknowledged for his litigation experience by his peers. He is currently chair of the LCA's International Institute on Natural Resources, Energy and Environmental Law. He has long held an "av" rating from Martindale-Hubbell. He is a member of the Million-Dollar and Multi-Million-Dollar Advocates Forum. He has published dozens of articles on legal issues, including on energy issues, arbitration, case management, various aspects of deregulation, and antitrust. He has also served as an expert in energy cases.
A statement of his arbitration philosophy can be found at http://www.johnmcarthurlaw.com/arbitration.htmz.
Chapters Nine–Fourteen: How to write a reasoned award. The six chapters in Part Three, the book’s longest section, discuss how to write reasoned awards. They are written primarily, of course, for arbitrators. Because these chapters propose standards for writing adequately reasoned versions of the award’s various sections, they can also assist parties and their counsel when they are considering challenging awards for lack of reasons, or considering defending them against such attacks. The chapters should help courts weighing the merit of attacks that claim the award needed to say more than it did as well.Chapter Thirteen reviews the ins and outs of establishing the law.
from Chapter 13. Laying Down the Law
The law is often de-emphasized in arbitration awards in the United States, in contrast to its treatment in judicial opinions, which frequently discuss questions of law lovingly and intricately. Awards can slight the law even when part of the arbitrating parties’ dispute is over points of law.
As an example of the common arbitral disregard of the law, none of the twelve awards in Appendix A and only two of the eight in Appendix B that address the merits, the Award of Arbitrators underlying Murchison Capital Partners, L.P. v. Nuance Communications, Inc. and the Award of Arbitrator in Thames v. Woodmen of the World Life Insurance Society, make serious efforts to describe the elements of the causes of action, and not even the most detailed, the Murchison award, makes any effort to discuss the elements of whatever defenses were pled.
It is little surprise that exercises in legal minimalism characterize most of the awards in Appendix A. They were selected, after all, because they were not reasoned.
A majority of the Appendix A awards are so brief that they have no room for legal analysis. Even those that are slightly more than a page or two long, but still are relatively brief, use the added space to tempt readers with a few facts, rather than any taste of the law. Indeed, even the four awards in Appendix A with some heft pay scant attention to legal analysis. No Appendix A award systematically lists the elements of the claims or of the defenses.
More surprising, however, is how rarely the awards in Appendix B, selected because they do a creditable job of providing reasons, make an effort to provide a coherent legal framework by discussing the elements the movant had to prove on each claim, counterclaim, defense, and remedy. These omissions had costs. The lack of a basic citation, or even reference to a party brief that indicated the law upon which claims were predicated, created room for the unnecessary appeal over whether the arbitrator applied Alabama law to state-law claims in the otherwise very well-drafted award in Forrest v. Waffle House, Inc., as did a similar lack of any reference to whatever punitive-damages standard the arbitrators applied in Sarofim v. Trust Company of the West.
Even the award in Murchison Capital Partners, L.P. v. Nuance Communications, Inc., an award that most consistently lists the elements of claims and contains a unique combination of a full narrative reasoned award and a complete set of findings and conclusions, did not identify the disputed elements of every potentially dispositive claim, counterclaim, defense, and remedy. That it listed the elements of the claims did not protect it against a challenge and remand when it omitted to mention one of two damage models, an omission that almost certainly would have been corrected had the arbitrators been thinking systematically about the elements of each remedy as well as of each claim. Section B discusses the way that even some of the best awards, which were well reasoned in the main part, were not reasoned enough on the law.