Tagged: James M. Gaitis

“The following discussion of post-Stolt-Nielsen decisions shows, however, that federal courts have not uniformly applied the Supreme Court’s ripeness test and, instead, sometimes have elected either to ignore the ripeness issue or to apply a more traditional finality and/or functus officio analysis in resolving whether a particular interlocutory arbitral decision is subject to immediate judicial review. As a result, issues relating to finality and functus officio have now become signficantly more complicated by both the advent of ripeness considerations and the propensity of lower federal courts to continue to inject new concepts and analyses into the mix.”

P. Kevin Castel “elected to ignore ripeness issue” altogether…

Source: James M. Gaitis. Finality, Ripeness, and Functus Officio: The Interlocutory Arbitral Award Conundrum. Journal of the ACCL. Vol. 7, No. 2. pg. 29-30. 2013.

“The decision by the Ninth Circuit in Bosack gave rise to divergent lines of authority as between the Eighth and Ninth Circuits, one of which imposed a rather strict standard for establishing the finality of an interlocutory arbitral award and one of which created what was surely the most lax standard for establishing such finality. Taken together, the 2008 decision by the Sixth Circuit in Dub Herring Ford-I and the 2009 decision by the Ninth Circuit in Bosack thus suggested that the possibility of achieving uniform standards among the various federal circuits regarding the applicability of finality and functus officio principles to interlocutory arbitral decisions was illusive at best. The Supreme Court would soon have the opportunity to rectify the ambiguities associated with those issues and would utterly fail to do so.”

Source: James M. Gaitis. Finality, Ripeness, and Functus Officio: The Interlocutory Arbitral Award Conundrum. Journal of the ACCL. Vol. 7, No. 2. pg. 26-27. 2013.

“The key factors to consider when assessing the ripeness of a dispute are: (1) the likelihood that the harm alleged by the party will ever come to pass; (2) the hardship to the parties if judicial relief is denied at this stage in the proceedings; and (3) whether the factual record is sufficiently developed to produce a fair adjudication of the merits.”

Source: Dealer Computer Services, Inc. v. Dub Herring Ford, 547 F.3d 558, 561 (6th Cir. 2008).

“In a 2001 case [Home Ins. Co. v. RHA/Pennsylvania Nursing Homes, Inc., 127 F. Supp. 2d 482, 486 (S.D. N.Y. 2001)], a third federal district court concluded that an interim award that adjudicated only a portion of a damages claim and ordered immediate payment was final and subject to immediate enforcement even though other liability and damages issues relating to the same claim remained outstanding.”

Source: James M. Gaitis. Finality, Ripeness, and Functus Officio: The Interlocutory Arbitral Award Conundrum. Journal of the ACCL. Vol. 7, No. 2. pg. 23. 2013.

“As is often the case when splits in authority develop among the various federal circuits, however, the lack of uniformity did not provide sufficient incentive to bring harmony out of chaos. Rather, in the lead up to Stolt-Nielsen, differing federal courts of appeal not only continued to take divergent courses in addressing those questions but also actually arrived at decisions that further complicated the issues in undesirable ways.”

Source: James M. Gaitis. Finality, Ripeness, and Functus Officio: The Interlocutory Arbitral Award Conundrum. Journal of the ACCL. Vol. 7, No. 2. pg. 19-20. 2013.

“Beginning in the early 1980s and progressing through most of the first decade of the twenty-first century, judicial decisions relating to (1) the question whether a particular interlocutory arbitral decision was final or otherwise subject to immediate judicial review and (2) the effect functus officio principles had on those issues were highly divergent. With one recent exception, prior to the United States Supreme Court’s 2010 decision in Stolt-Nielsen, S.A. v. AnimalFeeds International, Corp., those decisions by lower federal courts were typically based on an assessment of the “finality” of the pertinent arbitral award or decision. The pre-Stolt-Nielsen decisions by lower federal courts nonetheless were marked by varying degrees of inconsistency and confusion, depending on the nature of the matter adjudicated in the interlocutory arbitral decision and, often, on which circuit — or which court within a particular circuit — was involved. The result for arbitrating parties and arbitrators was a lack of predictability following the issuance of interlocutory arbitral decisions, which sometimes were deemed final and subject to immediate judicial review and at other times were deemed preliminary in nature such that the arbitrators were not functus officio with respect to the matters decided.”

There was just something about the 80s and those three consecutive terms in which Republicans controlled the executive branch…

Source: James M. Gaitis. Finality, Ripeness, and Functus Officio: The Interlocutory Arbitral Award Conundrum. Journal of the ACCL. Vol. 7, No. 2. pg. 13. 2013.

“[I]n Section 16(a)(1)(D), which was added to the FAA by amendment in 1988, the FAA mentions only in passing that an appeal may be taken from ‘[a]n order…confirming or denying confirmation of an award or partial award.’ Section 16(a)(1)(D) no doubt came into existence due to the fact that in the early 1980s, various federal courts began to conclude that arbitral awards that were interlocutory in nature were, at least in some instances, subject to immediate confirmation and vacatur proceedings.”

Source: James M. Gaitis. Finality, Ripeness, and Functus Officio: The Interlocutory Arbitral Award Conundrum. Journal of the ACCL. Vol. 7, No. 2. pg. 12-13. 2013

“The domestic arbitration rules of the AAA and the CPR thus grant the arbitrator the authority to issue a broad variety of interim and partial awards and orders, but then fail to attempt to clearly define or differentiate those instruments in any way.”

Source: James M. Gaitis. Finality, Ripeness, and Functus Officio: The Interlocutory Arbitral Award Conundrum. Journal of the ACCL. Vol. 7, No. 2. pg. 5. 2013.

the drafters of the FAA and arbitration institutions have intentionally failed to “meaningfully and comprehensively” address interim and partial final awards. these deficiencies must be remedied by Congress and arbitral institutions like the AAA.

James Gaitis’ Conclusion:

In the final analysis, it is clear that the drafters of the FAA, perhaps understandably, materially failed to give consideration to the application of that statute to interim or partial awards. Arbitration institutions, too, have failed to meaningfully and comprehensively address the issue. The continuing advent of cases of first impression, splits in authority, and obvious misapplications of law all stand in open testament to the fact of these omissions and imply that even more confusion prevails behind the veil of confidentiality that obscures arbitration from the public eye. The time is more than ripe for these deficiencies to be remedied by the legislature and arbitral institutions alike and the arbitration community therefore must take the lead in demanding that result.

Source: James M. Gaitis, The Federal Arbitration Act: Risks and Incongruities Relating to the Issuance of Interim and Partial Awards in Domestic and International Arbitrations. 16 Am. Rev. Int’l Arb. 1, 130-131, 2005.