Litigation

By: Christopher L. Turner

If you are bringing a legal claim in a Pennsylvania in Common Pleas Court, you should be aware that the counties utilize a compulsory arbitration program containing its own rules and procedures that must be carefully observed.  For example, in Chester County, all civil cases at law where the amount in controversy in each cause of action, exclusive of interest and costs, does not exceed fifty thousand dollars ($50,000.00) and which do not involve title to real property, is to be submitted, heard and decided by a board of arbitrators.

The arbitration program in Chester County is administered by the office of the court administrator and is governed by the Pennsylvania Rules of Civil Procedure and the Chester County Local Rules of Court.  The date, time and place of the arbitration will be assigned by the Prothonotary when an eligible action is commenced.   Some commonly asked questions regarding Chester County’s compulsory arbitration program are addressed below.

Can I object to the matter being submitted for arbitration?

Any party may, for good cause shown, object to the matter being submitted to arbitration by notifying the court administrator in writing with notice to all other parties.  The court administrator is initially charged with making the determination as to the validity of any objection to the arbitration.  Any party dissatisfied with the determination of the court administrator shall have the right to have the matter determined by the assigned judge.

Can I get a continuance of my arbitration date?  If so, how is a continuance requested?

If a continuance of a scheduled arbitration is needed, a request should be submitted to court administration several weeks before the arbitration.  In most cases, such request  will be granted and the matter will be rescheduled.  Further, if the parties have not filed necessary pleadings (such as a complaint and/or answer), the request for a continuance should inform the court administrator that the pleadings remain open.  Parties should always attempt to contact the other parties to the action to determine whether they have an objection to their request for a continuance.

Where are Chester County Arbitrations Held?

All arbitration hearings shall be held in the Courthouse in West Chester, unless the arbitrators and all parties agree otherwise.

Who are the arbitrators for the arbitration and how many will hear my case?

The arbitrators selected by court administration for the arbitration consists of three attorneys admitted to practice law before the Supreme Court of Pennsylvania and actively engaged in the practice of law primarily in Chester County.

Stay tuned for more information regarding compulsory arbitrations including the documents required to be filed in anticipation of the arbitration as well as the dangers of failing to appear at a scheduled arbitration.  Caution is highly recommended in preparing for an arbitration and an attorney should be consulted to help better understand the benefits and burdens of the arbitral process.

Christopher L. Turner

Christopher L. Turner is an associate at Unruh, Turner, Burke and Frees, Christopher practices in the areas of Pennsylvania Civil Litigation, Estate, Wealth and Asset Protection, Orphans’ Court Litigation, and Trust and Estate Administration.  The firm maintains law offices in Malvern, Phoenixville, and West Chester Pennsylvania which serve the Main Line, and many surrounding communities such as Devon, Exton, West Chester, Ardmore and others.

By: Stephen P. Lagoy

The Financial Industry Regulatory Authority (FINRA), which administers the arbitration program to which brokerage customers must bring their complaints, is considering using arbitration panels comprising all “non-industry” members.  Presently, panels must include at least one industry member among the three-person panel.  The remaining member(s) are “public” (i.e. from outside the brokerage industry).  FINRA is now running a pilot program that allows parties to choose an all-public panel.  This move may be in response to public criticism of FINRA’s arbitration program as being too lenient on brokerage misconduct. For more on the FINRA program and how securities arbitration works, see Forexyard News.

If you would like to know more about arbitration and how it may be used effectively as an alternative to court litigation, please call Stephen Lagoy.

By: Stephen P. Lagoy

After initially indicating that terminated dealers would be reinstated through the federally-mandated arbitration procedure or not at all [see blog post: Chrysler and GM Take Different Approaches to Dealer Arbitration], Chrysler now says that it will offer to reinstate 50 of the 789 dealerships it terminated last year.  The auto manufacturer also indicated that there may be more to come when, in a statement issued on March 26, it said ”discussions to find mutually beneficial alternatives to arbitration with other dealers are under way.”  For more on Chrysler’s changing arbitration posture, see CNN article dated March 3, 2010.

For more information, contact Stephen P. Lagoy.

By: Stephen P. Lagoy

Unlike GM, which has notified more than half of its terminated dealers that they will be offered reinstatement without going to arbitration, Chrysler has announced that dealer reinstatement will occur through arbitration, or not at all.  The key difference in the approaches of the two auto manufacturers may lie in the fact that Chrysler was in bankruptcy at the time it closed down the dealerships.  The present Chrysler Group is a new company which emerged from bankruptcy and never had a business relationship with the terminated dealers.  For more on Chrysler’s arbitration posture see this article on motortrend.com.

For an explanation of how the federally-mandated arbitration procedure works, see our earlier blog post  “GM and Chrysler Dealers Can Arbitrate“.

For more information, contact Stephen Lagoy.

By: Nancy J. Glidden

Pennsylvania businesses seeking to minimize class action exposure and generally seeking to enforce arbitration provisions should be aware of a recent decision issued by the Federal District Court for the Eastern District of Pennsylvania, Clerk v. Ace Cash Express, Inc..  Historically, Pennsylvania courts have enforced arbitration provisions in contracts. Recently, the Court (applying Pennsylvania law) added to the body of law which favors enforcing arbitration provisions.

At issue in Clerk was the enforceability of an Arbitration Agreement that was part of a loan transaction, and which mandated submitting all disputes to arbitration on an individual (ie. non-class action) basis.   The Court found the Arbitration Agreement was neither procedurally nor substantively unconscionable, and enforced the Agreement according to its terms – which eliminated all class claims and required Clerk to arbitrate her individual claims.

Significant to the outcome was the fact that the Arbitration Agreement gave Clerk thirty (30) days to opt-out without any adverse effect on the terms of the underlying loan transaction, but Clerk failed to exercise the opt-out.

Clerk is a good read because the analysis it provides concerning the elements necessary for arbitration provisions to survive challenge is useful background when drafting.

Please contact Nancy J. Glidden for more information.

By: Stephen P. Lagoy

Baseball arbitrations (see previous blog posts here and here) have become increasingly rare as the owners and players opt to negotiate a contract rather than place their fate in the hands of an arbitration panel. The only exception thus far this year has been the case of Milwaukee Brewers outfielder Corey Hart. In the first Major League Baseball salary arbitration this year, Hart won his case against the Brewers. The three-member panel of arbitrators awarded Hart the $4.8 million salary he was seeking for 2010. The Brewers had proposed $4.15 million. Under the rules of baseball arbitration, the arbitrators had to pick one proposal or the other — splitting the difference isn’t permitted.

For a very interesting account of the arbitration procedure in Hart’s case, see:

http://mlb.mlb.com

Contact Steve Lagoy for more information on how the arbitration process can help you and your business.

By: Stephen P. Lagoy

The American Arbitration Association reports that more than 1400 auto dealerships have already applied for arbitration under the government-mandated program for terminated dealerships. AAA will assemble panels to decide the cases over the next 6 months but expects that many cases will settle. For more on the reaction of both dealers and manufacturers, see:

http://www.reuters.com/article/idUSTRE60P08H20100126

Contact Stephen P. Lagoy for more information.

By: Stephen P. Lagoy

General Motors is prepared to proceed with a Congressionally-mandated program that will allow 2000 of GM’s closed dealerships to appeal the closure decision through an independent arbitration process. Dealers who want to file for reinstatement must do so through the American Arbitration Association and commence arbitration by Jan. 25. Under the law, decisions must generally be made by June 14. To read more about this arbitration process, see

http://www.detnews.com/20100108 and http://www.detnews.com/20100109

For information on how arbitration can help you, please contact Stephen P. Lagoy.

By: Donald C. Turner

Was your dealership terminated by GM/Chrysler?

The United States Congress, as part of a $1.1 trillion spending bill, has voted to give terminated General Motors and Chrysler dealers the right to challenge their terminations through arbitration. This legislation requires the arbitrator to balance the economic interest of the covered dealership against the economic interest of the manufacturer and the public at large and, on the basis of this balancing, to determine whether the dealership should remain open. Among other things, the arbitrator is to consider the dealer’s profitability over the period 2006 through 2009, the manufacturer’s overall business plan, the dealership’s current economic viability, its satisfaction of the manufacturer’s performance objectives, the length of experience of the covered dealership, and the demographic and geographic characteristics of the dealership’s market territory. Dealers electing to arbitrate must make a decision to do so within 40 days of the effective date of the Act. The Act became effective on December 16, 2009 and therefore the election to arbitrate must be made no later than January 22, 2010 (The 40-day period ends on Sunday, January 24, 2010 so to be safe, the arbitration should be requested no later than Friday, January 22, 2010). As a result, the dealer should, at this time, commence compilation of the evidence and documentation to support why it should be allowed to continue operations.

This arbitration is to be conducted by arbitrators with the American Arbitration Association and will be conducted in a quasi-judicial proceeding. As a result, careful planning and competent counsel (with automotive and arbitration experience) will be critical to success in these arbitrations, please contact if you are an affected dealer, Don Turner to discuss your options.

Also, see an earlier post on the car dealer arbitration process.

By: Stephen P. Lagoy

At this time of year, sports pages are filled with articles about whether or not major league baseball teams have “offered arbitration” to their free agent players. What does this mean and what are the implications of the decision? For a primer on this subject, see http://bats.blogs.nytimes.com/2009/12/01/the-arbitration-decision/. For a discussion of the concept of “baseball arbitration”, see our previous blog entry here.

Please contact Stephen P. Lagoy for more information on ways the arbitration process can help you.