Margaret Huff Mediation: Tennessee ADR Resources: News/Reports

Legislation: Foreclosure mediation proposed: In TN General Assembly, Senate Bill 3388 and House Bill 3593 would set up a foreclosure mediation program in Shelby County.

Tennessee Access to Justice Commission: Mediation advisory committee

See separate web page for TN ADR Caselaw Update.

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Mediation Advisory Committee for Tennessee Access to Justice Commission. On April 9, 2009, the Tennessee Supreme Court promulgated its new Rule 50, establishing the Tennessee Access to Justice Commission. Among other things, the Rule requires the Commission to encourage the Tennessee Alternative Dispute Resolution Commission and other groups to provide pro bono and reduced rate mediation services.

ABA adopts policy on pre-dispute arbitration clauses in nursing home admission contracts. At its 2009 Mid-Year Meeting the American Bar Association adopted Resolution 111B. It is now the ABA's official policy to support "the enactment of federal, state, and territorial legislation and regulations that oppose the use of mandatory, binding, pre-dispute arbitration agreements between a long-term care facility and a resident of such facility or person acting on behalf of such resident.

ABA has residential foreclosure mediation resources for ADR professionals. The ABA Dispute Resolution Section's Mediation Committee's resource page provides information on foreclosure mediation legislation and programs across the United States.

Arbitration Fairness Act of 2009 pending in Congress. The Senate version of the Arbitration Fairness Act was introduced in April 2009. H.R. 1020 was introduced in the U.S. House of Representatives in February 2009. If passed in Congress, the Act would significantly change the Federal Arbitration Act.

Reporting Requirements for Rule 31 Mediators. The Tennessee ADR Commission adopted the following policy: "Effective January 1, 2008 all mediators listed pursuant to Supreme Court Rule 31 will be required to submit reports as prescribed by the Commission, regarding any mediation beginning on or after January 1, 2008 except as to matters pending in state courts outside of Tennessee and the Federal Court System. Mediators will have 15 calendar days from the date of the last mediation session to submit the report to the AOC. This policy does not affect any other reporting obligation required of a Rule 31 listed mediator." It is noteworthy that this requirement for Rule 31 mediators applies to both court ordered mediations and non-court ordered mediations (sometimes referred to as "private mediations").

The link for submitting reports is www.tncourts.gov/Rule31Report (password required).

ADR Commission Policies. Rule 31 mediators need to know commission policies, as well as the provisions of Tennessee Supreme Court Rule 31. For example, one policy relates to reciprocity:

"If an applicant can satisfactorily demonstrate: (1) that she or he is an approved or certified mediator in good standing with her or his state's equivalent of the Alternative Dispute Resolution Commission of The Tennessee Supreme Court; and (2) that said approval or certification state commission shall permit approval by reciprocity by an applicant from Tennessee with criteria consistent with that established by the Alternative Dispute Resolution Commission of The Tennessee Supreme Court, the Alternative Dispute Resolution Commission of The Tennessee Supreme Court may grant approval of the applicant for the general civil, family law and domestic violence designations."

A compilation of all current ADRC policies is available on the AOC web site.

Appellate mediation rule in TN. A new Tennessee Rule of Appellate Procedure on Appellate Mediation went into effect on July 1, 2009. See additional information on the Margaret Huff Mediation website at ADR Resources: Appellate Mediation.

AAA amends Rules. The American Arbitration Association changed its Construction Industry Arbitration Rules and Mediation Procedures (effective October 31, 2009) its Employment Arbitration Rules and Mediation Procedures (effective November 1, 2009) and Fee Schedule (effective January 1, 2010).

ABA Ethics 20/20 Commission. The next meeting of the Ethics 20/20 Commission is August 5-6, 2010 in San Francisco. Expected topics for upcoming public hearings include outsourcing. The Commission will address a number of issues relating to new technologies and global practice, including international arbitration.

Foreclosure mediation proposed. Senate Bill 3388 and House Bill 3593, which are pending in the Tennessee General Assembly, would extend application of the Tennessee Home Loan Protection Act and set up a foreclosure mediation program in Shelby County. Summaries and other information about S. 3388 and H.B. 3593 are on the legislature's web site.

Proposed Amendments to Attorney Ethics Rules. Suggested changes to the Tennessee Rules of Professional Conduct are pending with the Tennessee Supreme Court. On February 18, 2010, the Tennessee Bar Association filed its response to public comments on proposed amendments. The Court set a June 1, 2010 oral argument with the TBA and the Board of Professional Responsibility to address several issues, including the following

RPC 1.6: Confidentiality of Information -" Why is paragraph (a)(3)-which is not contained in the ABA Model Rule 1 -6-needed? Can the TBA provide specific factual examples? Is paragraph (a)(3) too vague for purposes of disciplinary enforcement? Does Comment 8a to RPC 1.9 relate to RPC 1.6(a)(3) and, if so, how do those two items affect each other?"

RPC 1.12. Former Judge or Arbitrator - "The TBA's proposed RPC 1.12, like Tennessee's current RPC 1.12, omits mediators and third-party neutrals from the rule; ABA Model Rule 1.12, however, includes mediators and third-party neutrals. The Court asks the TBA to present argument as to whether Tennessee's RPC 1.12 should include mediators and third-party neutrals and, if so, the effect of such inclusion on the other RPCs."

Advanced Mediation and Advocacy Skills Institute. The ABA Dispute Resolution Section's 8th Annual Advanced Mediation and Advocacy Skills Institute is set for November 11 - 12, 2010, in Ft. Lauderdale FL.

Supreme Court Decides Granite Rock Arbitration Case. In Granite Rock Co. v. International Brotherhood of Teamsters et al., ___ U.S. ___, No. 08–1214 (June 24, 2010) the U.S. Supreme Court decided a case involving employer Granite Rock’s suit seeking damages and an injunction against a 2004 strike. Granite Rock asserted, and the defendant unions agreed, that the district court had federal jurisdiction over the suit under §301(a) of the Labor Management Relations Act (LMRA). The Court’s majority opinion states that the unions argued that a new collective bargaining agreement (CBA) with Granite Rock was “not validly ratified on July 2, 2004 (or at any other time relevant to the July 2004 strike)” by a vote of the local’s members, so the CBA’s no-strike clause did not provide a basis for Granite Rock to challenge the strike. Granite Rock, slip op. at 4. The district court denied the local union’s motion for an order requiring arbitration of the parties’ dispute over the CBA’s ratification date, ruling that the issue of when ratification of the CBA occurred was not subject to arbitration. After a jury concluded that the CBA was ratified on July 2, 2004, the court ordered arbitration of Granite Rock’s breach of contract claims. On appeal, the Ninth Circuit reversed the arbitration order, holding that the ratification date dispute was a matter for an arbitrator to decide under the CBA’s arbitration clause. The Supreme Court determined that the when the CBA was ratified was a contract formation issue in this case, id. at 13, and concluded that the Ninth Circuit erred in characterizing the case as involving whether Granite Rock’s claim to enforce no-strike provisions arose under the CBA. Id. at 18. It held: 1) “the parties’ dispute over the CBA’s formation date was for the District Court, not an arbitrator, to resolve,” id. at 19; and 2) the Ninth Circuit properly declined to recognize a new federal common-law cause of action under LMRA §301(a) for IBT’s alleged tortious interference with the CBA, id. at 22. Two justices dissented on the Court’s first holding, asserting that the parties had agreed to have their ratification dispute resolved by an arbitrator, given the undisputed fact that the parties signed a binding CBA in December that was retroactively effective as of May 2004. The majority of the Court did not consider this because the union had failed to raise the argument at the Court of Appeals and waived it by not raising it in its opposition to Granite Rock’s certiorari petition.

Dodd-Frank Wall Street Reform and Consumer Protection Act Impacts ADR. Several sections of the Act, Public Law No. 111-203, are relevant to ADR professionals. Two key provisions relate to mandatory predispute arbitration agreements. Sections 921 and 1028 give federal government agencies the authority to restrict mandatory pre-dispute arbitration.

First, Section 921, part of TITLE IX (INVESTOR PROTECTIONS AND IMPROVEMENTS TO THE REGULATION OF SECURITIES) Subtitle B (Increasing Regulatory Enforcement and Remedies), of the Act provides:

SEC. 921. AUTHORITY TO RESTRICT MANDATORY PRE-DISPUTE ARBITRATION.

(a) Amendment to Securities Exchange Act of 1934- Section 15 of the Securities

Exchange Act of 1934 (15 U.S.C. 78o), as amended by this title, is further amended by

adding at the end the following new subsection:

`(o) Authority to Restrict Mandatory Pre-dispute Arbitration- The Commission, by

rule, may prohibit, or impose conditions or limitations on the use of, agreements that

require customers or clients of any broker, dealer, or municipal securities dealer to

arbitrate any future dispute between them arising under the Federal securities laws,

the rules and regulations thereunder, or the rules of a self-regulatory organization if

it finds that such prohibition, imposition of conditions, or limitations are in the

public interest and for the protection of investors.'.

(b) Amendment to Investment Advisers Act of 1940- Section 205 of the Investment

Advisers Act of 1940 (15 U.S.C. 80b-5) is amended by adding at the end the following

new subsection:

`(f) Authority to Restrict Mandatory Pre-dispute Arbitration- The Commission, by rule,

may prohibit, or impose conditions or limitations on the use of, agreements that

require customers or clients of any investment adviser to arbitrate any future dispute

between them arising under the Federal securities laws, the rules and regulations

thereunder, or the rules of a self-regulatory organization if it finds that such

prohibition, imposition of conditions, or limitations are in the public interest and for

the protection of investors.'.

Second, under TITLE X (BUREAU OF CONSUMER FINANCIAL PROTECTION), Section 1028 provides:

SEC. 1028. AUTHORITY TO RESTRICT MANDATORY PRE-DISPUTE ARBITRATION.

(a) Study and Report- The Bureau shall conduct a study of, and shall provide a report

to Congress concerning, the use of agreements providing for arbitration of any future

dispute between covered persons and consumers in connection with the offering or

providing of consumer financial products or services.

(b) Further Authority- The Bureau, by regulation, may prohibit or impose conditions

or limitations on the use of an agreement between a covered person and a consumer

for a consumer financial product or service providing for arbitration of any future

dispute between the parties, if the Bureau finds that such a prohibition or imposition

of conditions or limitations is in the public interest and for the protection of

consumers. The findings in such rule shall be consistent with the study conducted

under subsection (a).

prohibit or restrict a consumer from entering into a voluntary arbitration agreement

with a covered person after a dispute has arisen.

(d) Effective Date- Notwithstanding any other provision of law, any regulation

prescribed by the Bureau under subsection (b) shall apply, consistent with the terms

of the regulation, to any agreement between a consumer and a covered person

entered into after the end of the 180-day period beginning on the effective date of the

regulation, as established by the Bureau.

Additional provisions related to arbitration includes in Section 748 and 919B:

SEC. 748. COMMODITY WHISTLEBLOWER INCENTIVES AND PROTECTION.

The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by adding at the end the

following:

`SEC. 23. COMMODITY WHISTLEBLOWER INCENTIVES AND PROTECTION.

`(n) Nonenforceability of Certain Provisions Waiving Rights and Remedies or

Requiring Arbitration of Disputes-

`(1) WAIVER OF RIGHTS AND REMEDIES- The rights and remedies provided for in

this section may not be waived by any agreement, policy form, or condition of

employment including by a predispute arbitration agreement.

`(2) PREDISPUTE ARBITRATION AGREEMENTS- No predispute arbitration agreement

shall be valid or enforceable, if the agreement requires arbitration of a dispute arising

under this section.'.

. . .

SEC. 919B. STUDY ON IMPROVED INVESTOR ACCESS TO INFORMATION ON

INVESTMENT ADVISERS AND BROKER-DEALERS.

(a) Study-

(1) IN GENERAL- Not later than 6 months after the date of enactment of this Act, the

Commission shall complete a study, including recommendations, of ways to improve

the access of investors to registration information (including disciplinary actions,

regulatory, judicial, and arbitration proceedings, and other information) about

registered and previously registered investment advisers, associated persons of

investment advisers, brokers and dealers and their associated persons on the

existing Central Registration Depository and Investment Adviser Registration

Depository systems, as well as identify additional information that should be made

publicly available.

Finally, the Act requires the board of trade to establish rules and provide facilities for alternative dispute resolution for market participants and intermediaries:

SEC. 735. DESIGNATED CONTRACT MARKETS.

. . .

(b) Core Principles for Contract Markets- Section 5 of the Commodity Exchange Act (7

U.S.C. 7) is amended by striking subsection (d) and inserting the following:

`(d) Core Principles for Contract Markets- . . .(14) DISPUTE RESOLUTION- The board of

trade shall establish and enforce rules regarding, and provide facilities for

alternative dispute resolution as appropriate for, market participants and any market

intermediaries.

A copy of the Act is available on the Library of Congress website.

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Telephone 615.812.5557 Email Margaret Huff Mediation

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