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An Arbitration Scheduling Order
Drawing on the Manual for Complex Litigation
for Faster, Less-Expensive Awards
D. C. Toedt III and Maretta Comfort Toedt
(Our last name is pronounced “Tate”)
1.
Introduction
Some regard arbitration as the worst of both worlds: essentially the same cost and delay as litigation, along with little or no right to appeal from an adverse decision. See generally, e.g., Thomas J. Stipanowich, Arbitration: The New Litigation, 2010 Ill. L. Rev. 1. One vice president of litigation at a Fortune 250 company recently told one of the authors that, for just those reasons, his
company now prefers bench trials over arbitration.
It wasn’t supposed to be that way. Under typical arbitration rules, such as the American Arbitration Association’s Commercial Arbitration Rules (“AAA Commercial Rules”), arbitrators
generally have authority to conduct proceedings in a streamlined way.
Unfortunately, such rules typically leave the drafting of an actual scheduling order and hearing
plan as an exercise for the reader. That can drastically reduce the likelihood that a busy arbitrator will actually make use of her authority under the rules.
This article therefore proposes a model scheduling order and hearing plan (“Scheduling Order”). It adapts numerous practical suggestions from the AAA Commercial Rules as well as
from the Federal Judicial Center’s Manual for Complex Litigation (“MCL”). Those suggestions
were distilled from decades if not centuries of aggregate hands-on experience by seasoned federal trial judges and commercial arbitrators.
The Scheduling Order sets out a framework for focused discovery, fast-track motion practice,
and sensible hearing management, at what should be far less overall expense. The Scheduling
Order could help arbitrators to get many cases, even complex ones, to a hearing in as little as
12 weeks.
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2.
Highlights of the Scheduling Order
2.1
The Chronology helps everyone focus on the “strike zone”
Chief Justice Roberts famously compared judges to umpires, whose job is to call balls and
strikes, not to pitch or bat. But that’s not an umpire’s only job: When home plate starts to get obscured by dirt on it, the umpire takes a small whisk broom and sweeps off home plate, so that
the strike zone will be clearly visible to all concerned.
In both litigation and arbitration, the “strike zone” is the set of material facts as to which there is
a genuine dispute. In the Scheduling Order below, the function of sweeping off home plate is
served by making counsel prepare and update a “Chronology.” The Chronology is a simple,
consolidated statement of the parties’ factual contentions – in chronological order to the greatest
extent possible – along with supporting evidence, relevant authority, and requested discovery.
Preparation of the Chronology will help counsel and the arbitrator to identify and stay focused
on the issues in dispute. That in turn should significantly reduce the overall time and expense
required for the arbitration – for example, by reducing the need for repetitive briefing and by
giving the arbitrator a head start on writing an award.
(a) The Chronology is not a new thing
The Chronology requirement is nothing new. It’s a variation of longstanding disclosure requirements that apply in both litigation and arbitration:
• Early fact disclosure is familiar to federal-court litigators from their experience with Rule 26 of
the Federal Rules of Civil Procedure.
• Under AAA rules, the arbitrator has authority to require disclosures. See AAA Commercial
Rules P-2(a)(xiii), R-22(a), and R-47(b).
• MCL 11.11 suggests that at the initial pre-trial conference, judges should consider “requiring
counsel in advance to discuss claims and defenses” and “directing counsel to submit a tentative
statement, joint if possible, identifying disputed issues as specifically as possible.”
• MCL 11.13 of the Manual for Complex Litigation states (at 35) that “[e]ffective use of [early
disclosures] without excessive and unnecessary burdens on the parties can streamline the litigation.”
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• MCL 11.33 urges that “[r]ather than accept a statement that defendant ‘was negligent’ or
‘breached the contract,’ the judge should require the attorneys to describe the material facts they
intend to prove and how they intend to prove them” (at 44). It suggests that judges “requiring,
with respect to one or more issues, that the parties present a detailed statement of their contentions, with supporting facts and evidence” (at 46).
• MCL 11.641 likewise recommends that judges “have each party prepare and submit a statement listing the facts it intends to establish at trial and the supporting evidence. The statement
should be informative and complete, but free of argument and conclusions. … Exchanging such
statements may help narrow factual disputes and expedite the trial …."
(b) Good litigators prepare a chronology anyway; they might as well start early
Some counsel won’t want to give up their freedom to proceed at their own pace (especially in
view of their other commitments). These counsel might balk at being directed to do this preparatory work early in the case. And it’s true that MCL 11.641 cautions that detailed, annotated
statements “should not be required routinely … because the substantial amount of work required for their preparation may outweigh the benefits.”
But in most cases, it likely will make sense for counsel to start pulling their case together sooner
rather than later. If nothing else, doing so can help the parties better evaluate their settlement
positions. And, of course, if the arbitration goes to hearing, counsel will eventually have to do all
of that work anyway.
For years, Professor James McElhaney has urged litigators, in every case, to create just such an
annotated Chronology, which he calls a “proof checklist”:
The heart of the trial notebook is the proof checklist …. First, analyze your cause of action. Write down every element you have to prove to keep the judge from granting the
other side’s motion for a directed verdict. Second, under each element, list the evidence
that proves that point. …
James W. McElhaney, Putting the Case Together, ABA Journal, June 2007, at 24,
http://goo.gl/3D5EU8 (ABAJournal.com) (internal quotation marks omitted); see also JAMES
W. MCELHANEY, THE TRIAL NOTEBOOK 128-29 (ABA 2005), excerpt available at
http://goo.gl/LHwX6U (books.google.com).
A joint chronology can be even more useful, in that it can eliminate much expensive duplication
of effort in brief-writing and award-drafting.
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2.2
Direct testimony is mainly by written witness statement
Also under the Scheduling Order, to save hearing time, most direct testimony by “friendly”
witnesses is presented mainly by written statement:

On the stand, each witness adopts and orally recaps the high points of his or her written
testimony.

The witness then can be questioned by opposing counsel and the arbitrator.

Hostile- or third-party witnesses who refuse to provide a written witness statement can
be presented in the traditional way, live or by deposition.
Written witness statements are routinely and extensively used in international arbitrations.
They are also increasingly used in federal-court “bench” trials without a jury, such as the U.S. v.
Apple price-fixing litigation; see United States v. Apple, Inc., No. 12 CIV 2826, slip op. at 5-6 & n.2
(S.D.N.Y. July 10, 2013) (Cote, J.), at http://goo.gl/x1zQf (justice.gov), as well as in a number of
federal judges’ bench rules (Web citations available upon request).
The written-witness-statement procedure is becoming popular because it can:

significantly reduce the time needed for witness testimony at the hearing;

ensure that all desired facts are included in the testimony;

reduce the stress on witnesses (and on counsel too), in part by reducing the need for advance preparation directed to the witness’s “stage performance”;

reduce the chances of awkward moments on the witness stand;

eliminate much of the need for depositions, which would also contribute to reducing the
need for stage-performance witness prep.
The use of written witness statements for direct testimony is the very first suggestion in the
MCL for non-jury trials, which observes that:
… [The witness-statement] procedure … has several advantages. The proponent can ensure that it has made a clear and complete record; the judge and opposing counsel, having read the statement, are better able to understand and evaluate the witness’s testimony; opposing counsel can prepare for more effective cross-examination; and the reduction in live testimony saves time.
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MCL 12.51. See generally John Anthony Wolf and Kelly M. Preteroti, Written Witness Statements—A Practical Bridge of the Cultural Divide, in Disp. Res. J., May-June 2007, available at
http://goo.gl/LoYAuB (Ober.com, accessed Dec. 15, 2014).
Despite the increasing use of written witness statements, some lawyers might bristle at being
directed to provide opposing counsel with such statements for their own witnesses. These lawyers likely would fear that preparation of the witness statements would entail extra expense for
the client, and that the statements would be a gift-wrapped road map for opposing counsel to
use in planning their cross-examination.
Neither of these fears should be an overriding consideration, because:
• It’s an expensive luxury for lawyers to play hide-the-ball in the (often-futile) hope of catching
their opponents off guard at the hearing.
• Counsel calling any witness will always spend time preparing the witness to testify, in deposition and at the hearing. Whether the testimony is expected to be long or short, the extra expense
of reducing the planned testimony to writing is likely to be minimal—and with the added benefit of guaranteeing that the witness won’t botch critical points of direct testimony on the stand
(which should also help to reduce any witness anxiety about testifying).
• Written witness statements should reduce costs even further because some depositions likely
wouldn’t even be requested if opposing counsel were assured that there’d be no surprises when
the witness testified “on direct.” A written statement setting forth the entirety of the witness’s
direct testimony would provide just such assurance.
• A written witness statements will often be less risky for the presenting party than exposing
the witness to a deposition by opposing counsel, whose questions might be more far-ranging
than the written statement’s direct testimony.
2.3
Mini-trial conference call with senior management
after initial written disclosures
Some corporate litigation counsel believe that the most cost-effective procedure for alternative
dispute resolution is the mini-trial to a panel of senior-management representatives of each party. The Scheduling Order accordingly builds in an early mini-trial, by conference call, in accordance with the AAA’s procedures (available at https://goo.gl/Wvir6w), with the arbitrator serving as the panel chair and neutral advisor.
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2.4
Discovery is carefully managed
Under the Scheduling Order, the parties can engage in targeted discovery — guided and
streamlined by the Chronology and the accompanying exhibits and witness statement —
to help them support their factual assertions and identify weaknesses in the other party’s contentions. Specifically:
• Requests for production of documents (that were not provided in the Chronology drafting
process) are permitted by agreement or with advance approval by the arbitrator, to keep costs
down. Quick responses to requests for production are mandated to help keep the process moving.
• Parties may conduct informal, voluntary telephonic, 30-minute interviews of adverse-party
personnel to help identify points that could be stipulated as well as documents of interest. Such
interviews can optionally utilize (1) written questions for more-effective use of time, as well as
(2) “conference” interviews of multiple individuals at once. Interviewing an individual does not
preclude the interviewer from later deposing the individual.
• Depositions are allowed on a case-by-case basis for good reason with arbitrator approval.
• Telephone interviews and depositions may (and preferably will) utilize at least some written
questions, propounded in advance, to reduce the time required.
2.5
Motions are fast-tracked, and mainly done by email
Under the case plan, motions are made, responded to, and decided on an informal fast track by
email. (One of the authors uses this approach, so that motions are typically made, responded to,
and decided, all by email, within one business day.)
Dispositive-motion proposals are encouraged, but can be filed only with the arbitrator’s approval, per AAA Commercial Rule 33, so that the parties won’t incur the expense of briefing
without first discussing whether it makes sense to do so.
Motions to modify deadlines or limitations are approved if agreed to by the parties’ in-house
representatives (in most cases); this gives all participants an incentive to keep the case moving.
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2.6
The hearing and award are expedited
Given that most direct testimony is provided by written witness statement, much of the hearing
likely can be conducted in a somewhat-informal, almost-conversational style to save time and
clarify testimony.
The arbitrator can choose to circulate a draft final award, to give counsel a chance to comment
before the final award is officially issued: This is modeled on what some California trial courts
do with motion-practice decisions; it’s also suggested by MCL 11.32 for motion practice.
If so agreed by the parties, “baseball”-style arbitration can be used to determine the amount of
damages to be awarded and other numerical-type issues. This can help encourage the parties to
get closer to settlement by, in effect, forcing each party to consider whether the arbitrator might
regard the other party’s position as being the more reasonable of the two.
If so agreed by the parties, the award can be appealed to a separate appellate arbitration panel
under the AAA’s appellate rules, but only if so agreed by the parties at the outset of the case.
Also if so agreed by the parties, the award can be made non-binding until a short period of time
has elapsed, so that a losing party can file suit in court—but with significant incentives to encourage both parties to accept the award. (This provision is modeled on similar statutory
schemes.)
2.7
Major modifications must be approved by parties, not just counsel
The Scheduling Order makes it clear that the arbitration process is owned by the parties; it gives
the arbitrator discretion to require the parties themselves  not just their counsel  to approve
modifications of discovery limitations, postponements of the hearing date, etc. Such a requirement should help to keep costs down and the case moving.
This requirement was inspired by how one Texas arbitrator (not one of the authors) handled an
unopposed request by one party’s counsel for a third continuance of the hearing date. On a conference call in that case, the arbitrator reminded counsel that the request came less than four
weeks before the hearing, which had been established at the outset as the time frame that would
trigger a requirement to pay the arbitrator his standard cancellation fee.
The arbitrator accordingly advised counsel that he would approve the unopposed request for
a third continuance, but only if the parties paid his cancellation fee. At that point, the lawyer
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for the other party, whose client had been listening in on the conference call, announced that his
client now opposed the third continuance request.
The arbitrator accordingly denied the continuance request and left the hearing date as it was—
and the parties settled their dispute on the eve of the hearing date. (The arbitrator in question
has authorized telling the story here but wishes to remain anonymous.)
3.
The goal of the Scheduling Order is to offset
the cost-increasing incentives of arbitration
The Scheduling Order can help to neutralize the subtle incentives that can contribute to delay
and expense of the arbitration process. Berkshire Hathaway’s vice-chairman Charles Munger
has said that “Never a year passes but I get some surprise that pushes a little further my appreciation of incentive superpower. * * * Never, ever, think about something else when you should
be thinking about the power of incentives.” Charles T. Munger, The Psychology of Human Misjudgment, at http://goo.gl/ty2Ogh (law.indiana.edu, accessed Nov. 23, 2014).
Let’s review some of the incentives that can result in creeping expense and delay in arbitration:
• The parties’ business people and their counsel want to win, and probably equally, to avoid
losing. That can incline counsel toward seeking more and more discovery, both to solidify the
client’s case and to get a look at the other side’s cards. As a leading arbitration scholar has observed: “For lawyers accustomed to full-fledged discovery, anything less may seem tantamount
to inviting claims of malpractice.” Stipanowich, supra, at 12 (footnotes omitted).
• Some litigators like to be perceived as relentless warriors, thinking it will impress their clients
and adversaries. These worthies sometimes force opposing counsel to jump through every possible hoop and decline to stipulate anything, even though this increases the expense for all concerned. (To be sure, that’s sometimes due at least in part to client pressure: “an angry client, rather than the attorney, is often the person responsible for an ‘admit nothing’ posture in the litigation.” MCL 11.471.)
• Some lawyers secretly fear going to trial and therefore welcome any excuse for delay. See
Stipanowich, supra, at 12-13. (Even the relentless-warrior types mentioned above can fall into
this category.)
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• Of course, lawyers who bill by the hour stand to benefit economically when arbitrations drag
on.
• An arbitrator won’t want to risk being held by a court to have violated the One Great Rule
of Arbitration: Thou shalt not refuse to hear evidence pertinent and material to the controversy (paraphrasing 9 U.S.C. § 10(a)(3)), because under the Federal Arbitration Act, that’s one of the few
ways to have your award vacated.
• Arbitrators, like lawyers, usually get to bill more when their cases drag on (although they can
be subjected to pressure from arbitration providers, and from the parties, to hold down their
bills).
• An arbitrator’s ability to get hired for future cases can be affected by the recommendations
of the parties’ counsel. The arbitrator will thus be motivated to try to avoid disappointing or
angering either side’s counsel. See Stipanowich, supra, at 13.
• The arbitrator therefore will be inclined to grant counsels’ requests for more discovery, more
time, and more admission of evidence into the record; the arbitrator likewise will be disinclined
to enforce time limits or to grant motions for summary judgment or other early disposition. See
id. at 15. This, despite the arbitrator’s duty, under typical arbitration rules, to expedite the case
and reduce its cost.
The incremental effect of any given delay or expense is often small. But then the months pass
and the bills start mounting up. The parties and their counsel start to blame the arbitration process—even though the delay and expense are largely of their own making.
The provisions of the case plan can help to counteract these incentives and return arbitration to
what it was meant to be and often has been—a faster, efficient way of resolving disputes.
Comments and suggestions are welcome.
D. C. Toedt III (the last name is pronounced “Tate”; the initials stand for Dell Charles) is a member of
the Texas and California bars and of the AAA’s commercial arbitration panel; he arbitrates disputes
about technology license agreements and other intellectual-property matters. Earlier in his career he
was a partner and member of the management committee of Arnold, White & Durkee, a 150-lawyer
national intellectual-property litigation boutique, where he chaired an ABA section’s special committee
that developed a series of case plans based largely on the Manual for Complex Litigation. He is at
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dc@toedt.com; see also www.OnContracts.com/about. Maretta Comfort Toedt, a member of the Texas
and Pennsylvania bars, has been a labor and employment arbitrator for more than 20 years, with
previous practice experience in a Fortune 15 corporation and then in a BigLaw firm. She is board-certified
in labor and employment law in Texas and is a member of the board of governors of the National
Academy of Arbitrators. She is at maretta@toedt.com; see also www.LinkedIn.com/in/marettatoedt.
The authors, who are husband and wife, are based in Houston. They wish to thank their long-time friend
John Burritt McArthur, J.D., Ph.D., a California arbitrator, for his comments on an earlier draft of this
article; any errors or idiocies are of course theirs.
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ABC Inc. v. XYZ Corporation
Arbitration Scheduling Order 1
(annotated)
Case number: 123-4567-89. Date of this Plan: January 1, 20xx. Arbitrator: Jane Doe, duly appointed
in accordance with the parties’ agreement. Case Administrator: Richard Roe of the American Arbitration Association.
Table of Contents
1.
Administration ....................................................................................................................................... 2
1.1 Definitions..................................................................................................................................... 2
1.2 Only the parties themselves can agree to override this Scheduling Order .................................. 3
1.3 Ex parte communications with the arbitrator are prohibited ...................................................... 5
1.4 Confidentiality is required ............................................................................................................ 5
1.5 Case-management calls will take place: Weeks 6 and 10, Tuesday, 11:00 a.m. .. 5
1.6 Stipulations are strongly encouraged (and have limited effect) .................................................. 6
1.7 Motion practice is to be expedited .............................................................................................. 7
1.8 Documents and exhibits are to have consistent numbering ........................................................ 9
1.9 Exhibits will be admitted if not timely objected to ...................................................................... 9
1.10 Exhibits may be streamlined....................................................................................................... 10
1.11 The arbitrator’s notes and files are not available....................................................................... 10
2.
Early initial disclosures ........................................................................................................................ 11
2.1 Background: Early disclosures are required to reduce overall costs ......................................... 11
2.2 Chronology draft exchange begins: Tuesday of Week 2 ................................................. 11
2.3 The arbitrator may offer observations and questions ............................................................... 15
2.4 Written witness statements, excerpted from the Chronology, are required (delete if so agreed
by the parties) ..................................................................................................................................... 16
2.5 Appendix: Suggested disclosures for breach-of-contract disputes ............................................ 18
1
This case plan is based on an experimental scheduling order by D. C. Toedt III and Maretta Comfort Toedt published at [CITE] and available at [LINK].
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3.
Non-binding mini-trial to senior management after initial disclosures ............................................. 20
3.1 The non-binding mini-trial conference call is scheduled for: Thursday of Week 6 ........ 20
4.
Discovery procedures .......................................................................................................................... 20
4.1 Document production may be requested during: Weeks 1 through 7 ........................... 20
4.2 Voluntary telephone interviews may be conducted during: Weeks 1 through 7 ............ 22
4.3 Approved depositions may be conducted during Weeks X through Y ............................. 23
4.4 Subpoenas must state the applicable legal authority ................................................................ 24
5.
The hearing .......................................................................................................................................... 25
5.1 The hearing will begin: Tuesday of Week 12 .................................................................. 25
5.2 A short recess may be taken after opening statements (if any) ................................................ 26
5.3 Live witness testimony is to be expedited.................................................................................. 26
5.4 Each party must prove its claims and defenses.......................................................................... 27
5.5 The arbitrator may make a partial award on partial findings .................................................... 29
5.6 A draft award will likely be circulated for comment .................................................................. 29
5.7 Specified disputes will be decided by “baseball arbitration” (delete if not agreed) ................. 30
5.8 The arbitrator will retain jurisdiction for clarification or remand (delete if not agreed) ........... 31
6.
Post-award matters ............................................................................................................................. 31
6.1 The final award may be appealed within the AAA (delete if not agreed) .................................. 31
6.2 The final award may be partially retried in court (delete if not agreed) .................................... 32
1.
Administration
1.1
Definitions
Unless otherwise indicated:
1.1.1
“AAA Commercial Rules” refers to the Commercial Arbitration Rules (2013) of the American Arbitration Association (the “AAA”).
1.1.2
“Arbitration Law” refers to the (U.S.) Federal Arbitration Act.
1.1.3
“Arbitration Provider” refers to the AAA.
1.1.4
“Case Administrator” refers to the Arbitration Provider’s administrator for this case.
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1.1.5
“Chronology” — see section 2.2.
1.1.6
“Claim,” whether or not capitalized, refers broadly to a claim, counterclaim, cross-claim, and
any other demand for relief or remedy.
1.1.7
“Counsel,” whether or not capitalized, in the case of an unrepresented party, refers to the party
him- or herself.
1.1.8
Deadlines: Unless otherwise directed by the arbitrator, all deadlines and other time periods expire at exactly 5:00 p.m. in the Reference Time Zone (defined below).
1.1.9
[For AAA-managed cases:] The term “filing” a document with the Arbitration Provider refers to:
(a) uploading a PDF copy of the document to the Arbitration Provider’s Web site, and
(b) notifying the Case Administrator and counsel for other parties and, if applicable, the arbitrator, by email, that the document has been filed, preferably with the PDF copy attached (but
see below concerning the confidentiality of email), to allow the recipient to read the document quickly without having to log into the Arbitration Provider’s Web site. Such notification by email satisfies any requirement for service of the document on other parties and the
arbitrator.
1.1.10 “Reference Time Zone” means Central (U.S.) time, with daylight-savings time
as in Chicago.
1.1.11 “Rules” – see AAA Commercial Rules.
1.1.12 “Stipulation”—see § 1.5.
1.1.13 “Week 1” refers to the week in which the initial case-management conference
call occurs; Weeks 2, 3, etc., have corresponding meanings.
COMMENT: This Scheduling Order is set up in terms of weeks beginning with
Week 1; the definition of Week 1 can be adjusted to accommodate the desires of the
parties and the schedules of their counsel.
1.1.14 References to sections are to those of this Scheduling Order unless otherwise indicated.
1.2
Only the parties themselves can agree to override this Scheduling Order
1.2.1
This arbitration proceeding is “owned,” and ultimately controlled, by the parties, as distinct
from the parties’ arbitration counsel. When the parties agreed to arbitration, they implicitly
stated their desire to reduce expense and delay as much as possible while still providing each
side with a fair opportunity to present its case.
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1.2.2
This Scheduling Order has been adopted—in consultation with the parties’ counsel—pursuant
to AAA Commercial Rule R-21(b), which urges the parties and the arbitrator to “discuss and establish a procedure for the conduct of the arbitration that is appropriate to achieve a fair, efficient, and economical resolution of the dispute.”
1.2.3
The arbitrator will generally approve any modification or waiver of this Scheduling Order that
has been agreed to, either in writing or orally at a case-management conference call, by (1) each
party that is a natural person, and (2) an authorized in-house representative of each other party,
for example a management representative or in-house counsel of the party.
COMMENT: The requirement of a party sign-off for modifications of discovery limitations, the hearing date, etc., should help to keep costs down and the case moving.
1.2.4
Otherwise, in the arbitrator’s discretion, the arbitrator may decline to give effect to a proposed
modification or waiver of this Scheduling Order, even if the modification or waiver was agreed
to by the parties’ counsel.
COMMENT: See, e.g., AAA Commercial Rule R-23, which states in part that “[t]he
arbitrator shall have the authority to issue any orders necessary to enforce the provisions of rules R-21 and R-22 and to otherwise achieve a fair, efficient and economical resolution of the case.” See also Thomas J. Stipanowich, Arbitration: The New
Litigation, 2010 Ill. L. Rev. 1.
Under Rule R-23(d), the arbitrator may issue enforcement orders, for example, “in
the case of willful non-compliance with any order issued by the arbitrator, drawing
adverse inferences, excluding evidence and other submissions, and/or making special allocations of costs or an interim award of costs arising from such noncompliance.”
1.2.5
When multiple parties exist on the same side of the case (e.g., multiple claimants or multiple respondents):
(a) Any group of two or more aligned parties may agree in writing to a proxy procedure by
which one party has authority to speak for the other members of that group for purposes of
approving a modification or waiver of this Scheduling Order under § 1.2.3.
(b) A copy of the written proxy-procedure agreement, signed by or on behalf of each member
of the group, is to be served on all other parties and on the arbitrator.
COMMENT: An agreed proxy procedure for approving modifications to the case plan
could take the form of, e.g., requiring a majority vote of the group members on an
issue-by-issue basis; it could also take the form of designating one member of the
group, in advance, to speak for the other group members on one or more particular
issues.
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1.3
Ex parte communications with the arbitrator are prohibited
1.3.1
Per AAA Commercial Rule R-19, except at oral hearings and case-management conference calls,
the parties and their counsel are not to communicate orally with the arbitrator.
1.3.2
Counsel are to submit directly to the arbitrator, by email, any correspondence, motions, requests for approval, briefs, etc., that require the arbitrator’s attention. A copy is to be provided
to the Case Administrator and to all other parties in the same manner, allowing all recipients to
receive the communication at substantially the same time.
1.3.3
The arbitrator may communicate in writing, for example by email, directly with the parties (via
their counsel except in extraordinary circumstances); the arbitrator expects to copy all parties
and the Case Administrator on any written communication that he sends to any party.
1.4
Confidentiality is required
Per AAA Commercial Rule R-23(a), any confidentiality provisions of the AAA Commercial Rules
and/or of the parties’ agreement to arbitrate will apply; if so requested, the arbitrator will consider entering a formal confidentiality order, preferably by agreement.
COMMENT: AAA Commercial Rule R-23(a) expressly gives the arbitrator the power
to enter confidentiality orders. In fact, Rule 23 is even stricter, stating that “The arbitrator shall maintain the confidentiality of the arbitration and shall have the authority to make appropriate rulings to safeguard that confidentiality, unless the parties
agree otherwise or the law provides to the contrary.”
Counsel may wish to consider the confidentiality order in Model Scheduling Order #4
of the Model Case Management Scheduling Orders for Patent Cases published by a
special committee—comprised of experienced litigators and chaired by one of the
authors—of the Section of Intellectual Property Law of the American Bar Association; its model orders are available at http://www.OnContracts.com/ABA-IPL-casemanagement-orders.
1.5
Case-management calls will take place: Weeks 6 and 10, Tuesday,
11:00 a.m.
COMMENT: The specific dates and times are flexible, of course; the 11:00 a.m. time
was selected as a placeholder because it works reasonably well throughout the U.S.
no matter what time zone is used as the Reference Time Zone.
1.5.1
Case-management conference calls will be convened at the dates and times (in the Reference
Time Zone) specified in the heading of this section 1.5, or as otherwise directed by the arbitrator
in consultation with the parties.
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1.5.2
The main agenda for each case-management call will include: (1) status of preparing the Chronology referred to in section 2 below; (2) remaining areas of disagreement; (3) discovery needs;
(4) motions, dispositive and otherwise; and (5) as appropriate, any checklist items stated in the
AAA Commercial Rules.
1.5.3
The arbitrator has discretion to proceed with a scheduled- or duly-noticed call even if a particular party’s counsel are not on the call (in such a case, however, the arbitrator’s preference is
normally to reschedule the call to ensure each party has an opportunity to be heard on all matters discussed or decided).
1.5.4
The arbitrator may direct that one or more in-house counsel and/or “business people” of each
party participate in particular calls as well.
COMMENT: This provision anticipates that the parties might be less resistant to
cost-reducing stipulations if clients, not just counsel, attend particular conference
calls. See MCL 11.471, which suggests: “Since an angry client, rather than the attorney, is often the person responsible for an ‘admit nothing’ posture in the litigation,
consider directing the clients themselves to attend a conference at which the desirability of early stipulations is discussed.” The arbitrator can consider recessing the
conference call to permit counsel and their clients to confer separately, then resume
the conference call to explore possible areas of agreement.
1.6
Stipulations are strongly encouraged (and have limited effect)
COMMENT: This provision is modeled on Fed. R. Civ. P. 36(b) and MCL 11.471.
The MCL observes that:
Attorneys are sometimes reluctant to make any concessions on
behalf of their clients. In such cases, the judge may be able to persuade counsel that, in addition to fulfilling their responsibilities as
officers of the court, they will serve their clients’ interests by
streamlining the litigation through appropriate concessions and
admissions. The refusal by counsel to stipulate to provable facts
almost never results in an advantage through a failure of proof
and usually imposes additional costs on both sides in discovery,
at trial, or both.
MCL 11.473 at 96-97 (emphasis added).
1.6.1
The parties are encouraged to stipulate to as many points of fact and law as possible; for purposes of this arbitration, to “stipulate” means that, for purposes of this arbitration only, the
stipulating party will not dispute, contest, or require proof of the stipulated matter.
1.6.2
A stipulation may be phrased in terms such as “Stipulated,” “Not contested,” “Not disputed,”
“Uncontested,” “Undisputed,” and the like, all with the same effect.
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1.6.3
A stipulation is binding on the stipulating party, except that the arbitrator, on motion, may permit withdrawal or amendment of a stipulation if:
(1) the withdrawal or amendment would promote the presentation of the merits of the
dispute being arbitrated; and
(2) the arbitrator is not persuaded that the withdrawal or amendment would prejudice another party in maintaining or defending the dispute on the merits.
COMMENT: This language is modeled on Fed. R. Civ. P. 36(b); its use is suggested in
MCL 11.471, which states that “[counsel] may be willing to enter early stipulations
if there is provision analogous to that in Federal Rule of Civil Procedure 36(b) for
timely withdrawal from an incorrect stipulation on the basis of newly discovered evidence when no substantial prejudice to other parties would result.”
1.6.4
A party’s stipulation of the truth of an uncontroverted fact does not affect the party’s right to
contest the relevance or probative value of the fact.
COMMENT: This subdivision is adapted from MCL 11.471, which suggests that “[t]he
court can assist the stipulation process by stressing the distinction between conceding the truth of some fact or agreeing not to contest it, and conceding its admissibility or weight…. Indeed, if a party contends that some fact is irrelevant or otherwise
inadmissible, there is more reason to admit to its truth without the exhaustive investigation and discovery that might be warranted for an obviously critical fact.”
1.6.5
A stipulation is subject to any limitation stated in it.
1.7
Motion practice is to be expedited
1.7.1
Simple motions or other requests that require the arbitrator’s approval (e.g., requests for approval of discovery), especially agreed motions or requests, should be made informally by email
to the arbitrator with a copy to all other parties and to the Case Administrator.
1.7.2
The arbitrator expects that many motions will be taken up at one (or more) of the scheduled
case-management calls.
1.7.3
Per AAA Commercial Rule R-33, short, simple proposals for dispositive motions are encouraged,
but to keep costs down, such motions may be filed only with arbitrator approval.
COMMENT: This provision, based on AAA Commercial Rule R-33 (and AAA Employment Rule 27), lets the arbitrator screen proposed dispositive motions before counsel for both sides have to incur the expense of legal research and brief-writing.
1.7.4
Before filing a motion, the movant’s counsel must confer with opposing counsel; the motion
must include a certificate of conference.
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1.7.5
Motions concerning the merits are not to be accompanied by briefs without the arbitrator’s advance approval. Such motions instead are to refer to the relevant discussions in the Chronology
(see section 2.2). Each party is to update its portion(s) of the Chronology to the extent necessary to support its contentions relevant to the motion.
1.7.6
Per AAA Commercial Rule R-33, on motion, the arbitrator will enter a full- or partial summary
award as to any or all issues if it appears that (1) there is no genuine dispute about any material
fact in respect of the issue in question; (2) fairness does not require postponing a decision concerning the issue until the non-moving party has an opportunity to take specified discovery; and
(3) as to that issue, the moving party is entitled to an award as a matter of law.
COMMENT: As U.S. litigators will immediately recognize, this provision is modeled
closely on Fed. R. Civ. P. 56. Some arbitrators might categorically refuse to grant
summary judgment, even when it seems clearly appropriate, for fear that a court
might find that the arbitrator had “refus[ed] to hear evidence pertinent and material to the controversy” and consequently vacate the award under 9 U.S.C. § 10(a)(3).
Such categorical refusal doesn’t do the parties any favors, because it can needlessly
increase costs and delays for all concerned.
One of the authors recently served on a three-arbitrator panel that granted the respondent’s motion for a “take nothing” summary-judgment award in a multimillion-dollar technology license dispute. Shortly afterwards, the author recounted
this (without identifying details, of course) to a friend who is an experienced business litigator. The friend threw his hands in the air and exclaimed “Hallelujah!”; he
explained that one of the things that frustrated him the most about arbitration was
the seemingly-categorical unwillingness of some arbitrators to grant summary
judgment.
Use of the various hearing-plan provisions here should significantly lessen the anxiety of a summary-judgment award, because the procedures established by those provisions will help counsel and the arbitrator to ensure they are focusing on important,
relevant issues.
1.7.7
Motions in limine (including so-called Daubert motions) will normally be decided by determining
the weight to be accorded to the objected-to evidence, as opposed to determining whether or
not to categorically exclude the evidence.
COMMENT: This practice is favored by some arbitrators because it can help protect
the award from challenges, under § 10(a)(3) of the Federal Arbitration Act, that the
arbitrator failed to consider all pertinent and material evidence.
1.7.8
Briefing- and oral-argument schedules for motions, if any, will be determined on an as-needed
basis, normally in consultation with counsel for the parties.
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1.8
Documents and exhibits are to have consistent numbering
1.8.1
Counsel are to agree on a uniform production-numbering scheme to uniquely identify each
page of each document exchanged or produced.
(a) Optionally (but preferably), an alphabetical prefix may be used in a production page number
to indicate the party that produced the document.
COMMENT: This is a common practice in litigation.
(b) Alternatively, blocks of production page numbers may be allocated to the parties.
1.8.2
Counsel are to agree on a uniform exhibit-numbering scheme to uniquely identify each exhibit.
(a) The exhibit-numbering scheme will preferably allocate blocks of exhibit numbers to each
party; for example, the exhibit-numbering scheme might allocate numbers 1 through 999
to Claimant; numbers 1000 through 1999 to Respondent; etc.
(b) Exhibit numbers may include an alphabetical prefix to identify the party offering the exhibit
into evidence.
COMMENT: This is also a common practice in litigation.
1.8.3
For ease of reference, throughout the proceeding, including in depositions, each exhibit is to be
uniformly identified by all parties for all purposes; counsel are not to offer duplicate exhibits
having different exhibit numbers into evidence.
COMMENT: The prohibition against duplicate exhibits is suggested in MCL 11.441
at 72, last grammatical paragraph, and § 12.13; similar prohibitions are imposed by
some federal-court local rules, e.g., LR-26-3.2 of the U.S. District Court for the Central District of California, at http://goo.gl/wgBVCF (CACD.USCourts.gov).
1.9
Exhibits will be admitted if not timely objected to
1.9.1
All exhibits offered into evidence will be admitted if not objected to at or before the final scheduled case-management conference call. (Admission of an exhibit into evidence, though, does
not mean that the arbitrator will give the exhibit any particular weight, if any at all.)
COMMENT: This is adapted from a suggestion in MCL 12.13.
1.9.2
A party’s failure to object to admission of an exhibit does not affect the party’s right to contest
the relevance or probative value of the exhibit.
COMMENT: This provision is included to help reduce the number of objections
to exhibits.
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1.10 Exhibits may be streamlined
1.10.1 Documents offered into evidence may be (and preferably will be) redacted to eliminate irrelevant matter; likewise, “excerpt” exhibits may be offered into evidence, subject to verification of
their accuracy.
COMMENT: Redaction is suggested in MCL 12.13, fifth bullet point, and MCL 12.32,
first grammatical paragraph.
1.10.2 Any party may mark, with colored tape flags and/or with colored highlighters, particular pages
of a document being offered into evidence. Each party is to consistently use its own color of
tape flag and the same color of highlighter; counsel should agree in advance on color schemes.
Electronic PDF copies may be likewise marked.
COMMENT: These techniques from in John C. Lowe, Making Complex Litigation
Clear, in Trial, April 1997, at 46, available in an e-book at http://goo.gl/Z5ie16 (Amazon.com). Mr. Lowe was an active member of the ABA IPL Section special committee that produced the Model Case Management Scheduling Orders for Patent Cases
cited in the commentary to § 1.4.
1.10.3 Demonstrative exhibits, from any source, are encouraged if it appears they might help the arbitrator understand the evidence. Demonstrative exhibits are to be given their own exhibit numbers and referenced in the relevant statement of facts and evidence.
COMMENT: Adapted from MCL 12.31.
1.10.4 Exhibits need not be filed with the Arbitration Provider unless otherwise directed or as an exhibit to a motion or other filed document.
1.10.5 Counsel are encouraged to stipulate to succinct summaries of the contents of exhibits.
COMMENT: This is based on a suggestion in MCL 12.332 for summarizing deposition testimony.
1.11 The arbitrator’s notes and files are not available
1.11.1 The arbitrator’s notes and files are not a record and will not be made available to the parties.
1.11.2 The arbitrator reserves the right to destroy his notes at any time, including for example upon
the issuance of the award.
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2.
Early initial disclosures
COMMENT: Chief Justice Roberts famously compared judges to umpires, whose job
is to call balls and strikes, not to pitch or bat. But that is not an umpire’s only duty:
As home plate starts to get covered with dirt, the umpire will take a small whisk
broom and sweep off the plate, so that everyone can clearly see the strike zone.
In this Scheduling Order, the whisk-broom function is served by the disclosure requirements, which help the arbitrator and the parties’ counsel to stay focused on
the issues in dispute.
2.1
Background: Early disclosures are required to reduce overall costs
2.1.1
This section 2 sets out a structured approach for the parties to provide early disclosures of their
factual assertions and supporting evidence. Such early disclosures can help to reduce overall
costs by:
(1) reducing the need for discovery;
(2) allowing the parties to tailor their discovery requests;
(3) identifying issues for possible summary disposition;
(4) aiding in settlement discussions and/or mediation; and
(5) helping the parties to focus their other hearing-preparation efforts.
COMMENT: See also the extended discussion of the rationale for such disclosures in
the Toedt & Toedt article.
2.1.2
In directing such disclosures, the arbitrator acts under the express authority of AAA Commercial
Rules R-22(a), R-22(b)(1), and P-2(a)(iii).
2.2
Chronology draft exchange begins: Tuesday of Week 2
COMMENT: If the timing of the Chronology draft exchange is a concern, it can be
adjusted by suitably modifying the definition of “Week 1” in section 1.1.13.
The Chronology requirement is a variation of longstanding disclosure requirements
that apply in both litigation and arbitration:
• Early fact disclosure is familiar to federal-court litigators from their experience
with Rule 26 of the Federal Rules of Civil Procedure.
• Under AAA rules, the arbitrator has authority to require disclosures. See AAA
Commercial Rules P 2(a)(xiii), R 22(a), and R 47(b).
• MCL 11.11 suggests that at the initial pre-trial conference, judges should consider
“requiring counsel in advance to discuss claims and defenses” and “directing counsel
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to submit a tenta-tive statement, joint if possible, identifying disputed issues as specifically as possible.”
• MCL 11.13 of the Manual for Complex Litigation states (at 35) that “[e]ffective use
of [early disclosures] without excessive and unnecessary burdens on the parties can
streamline the litiga-tion.”
• MCL 11.33 urges that “[r]ather than accept a statement that defendant ‘was negligent’ or ‘breached the contract,’ the judge should require the attorneys to describe
the material facts they intend to prove and how they intend to prove them” (at 44).
It suggests that judges “re-quiring, with respect to one or more issues, that the parties present a detailed statement of their contentions, with supporting facts and evidence” (at 46).
• MCL 11.641 likewise recommends that judges “have each party prepare and submit a statement listing the facts it intends to establish at trial and the supporting evidence. The statement should be informative and complete, but free of argument
and conclusions. … Ex-changing such statements may help narrow factual disputes
and expedite the trial …."
2.2.1
On or before the date specified in the heading of this section 2.2 (the “Initial Disclosure Date”),
Claimant is to serve, on the arbitrator and each other party, an initial draft of a written statement (“Chronology”) that conforms to the requirements of this section 2.2.
COMMENT: As noted above, the Chronology requirement rests on the express authority of AAA Commercial Rules R-22(a), R-22(b)(1), and P-2(a)(iii).
The procedure set forth below is adapted from:
2.2.2

MCL 11.33; and

Section 3 of a model procedure by British arbitrator Peter D. Aeberli, available at http://www.aeberli.com/arbitration.htm.
The draft Chronology is to set forth a detailed, step-by-step narration — in short, numbered,
nonconclusory paragraphs, without argumentation, and (to the greatest extent possible) in
chronological order—of each specific (i) evidentiary fact, and (ii) proposition of law, that Claimant asserts:
(1) supports Claimant’s claims as set forth in Claimant’s demand for arbitration, both as to
liability and remedies;
(2) refutes Respondent’s response to the demand for arbitration; and/or
(3) supports Claimant’s affirmative defenses to Respondent’s counterclaims (if any).
In drafting the Chronology, counsel should think in terms of, How would we explain the historical facts, step by step, to an intelligent lay person, without getting too bogged down in immaterial details.
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2.2.3
For each numbered paragraph of the draft Chronology that asserts a fact, that paragraph is to
include or be followed by a disclosure of all evidence  also in short, numbered subparagraphs
where appropriate  that Claimant then expects to offer in support of the asserted fact, including the following:
(1) citations to supporting exhibits, if any;
(2) the identity; employer; job title; and contact information, of:
(A) each individual, if any, whom Claimant then expects to call to testify in support
of that asserted fact; and
(B) each other individual, if any, whom Claimant believes to have knowledge of that asserted fact;
(3) foundational facts, that is, the basis of the first-hand knowledge of each individual identified under subdivision (2);
(4) optionally, one or more requests that Claimant be directed to produce specific relevant
documents or things, or to identify potential fact witnesses, concerning that asserted
fact.
2.2.4
No later than ten business days (the “Disclosure Interval Duration”) after Claimant
serves the initial draft of the Chronology, Respondent is to serve, on Claimant and the arbitrator,
a revised initial draft of the Chronology. The revised initial draft:
(a) is to conform to the same requirements for Respondent’s claims and/or affirmative defenses as are set forth above for those of Claimant, mutatis mutandis (“necessary changes being
made”); and
(b) is to respond, in point-counterpoint fashion, to each statement of fact and each statement
of law made in Claimant’s initial draft, stipulating to as much of the substance of each
statement as is possible.
2.2.5
No later than the Disclosure Interval Duration after Respondent serves its revised initial draft
of the Chronology, Claimant is to serve, on Respondent and the arbitrator, another revised draft
of the Chronology that responds, in point-counterpoint fashion, to each statement of fact and
each statement of law made in Respondent’s revised initial draft, again stipulating to as much
of the substance of each statement as is possible.
2.2.6
For the avoidance of doubt, in preparing a draft of the Chronology, no party (“drafting party”) is
to modify another party’s statements in the Chronology without the express prior written approval of that other party. Any such modifications must be indicated in “redlining” or other suitable marking.
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2.2.7
Each draft of the Chronology is to be (i) dated, and (ii) numbered as an exhibit in accordance
with section 1.8.
2.2.8
Each drafting party is to produce, with each draft of the Chronology that it serves, copies of the
following (to the extent not already produced), each numbered as an exhibit:
(1) each exhibit cited by the drafting party in the Chronology,
(2) any insurance agreement under which an insurance business might be liable to satisfy
all or part of a possible award in the arbitration or to indemnify or reimburse for payments made to satisfy the award; and
COMMENT: This subdivision borrows from Fed. R. Civ. P. 26(a). If a case were bifurcated, this requirement normally would not apply in the initial, liability-focused
phase of the case.
(3) any other document or thing directed by the arbitrator.
2.2.9
Each drafting party must seasonably supplement or correct its contribution(s) to the Chronology if the drafting party learns that in some material respect those contribution(s) are incomplete
or incorrect, and if the additional or corrective information has not otherwise been made known
to all other parties during the discovery process or in writing.
COMMENT: See, e.g., FED. R. CIV. P. 26(a)(3), setting out requirements for “final” disclosures before trial, as well as FED. R. CIV. P. 26(e)(1), stating requirements for supplementation and correction.
2.2.10 Except for good cause clearly shown or as otherwise provided in this Scheduling Order, the arbitrator will not consider, in support of a party’s claims or defenses:
(1) any factual assertion not set forth in the Chronology (as updated), nor
(2) any witness testimony or exhibit not cited in and provided with the Chronology (as updated).
COMMENT: This provision is based on MCL 11.33, which suggests that when the
parties submit statements of fact and evidence, “the order directing this procedure
should provide that other issues or contentions are then precluded and no additional
evidence may be offered absent good cause” (at 46). See also MCL 11.641, repeating that “evidence not included in the statement should not be permitted at trial.”
2.2.11 In determining the weight to be given to a particular factual assertion or evidence, the arbitrator
may take into account whether the assertion or evidence should have been disclosed earlier.
COMMENT: This provision gives the arbitrator a tool to deal with a party that attempts to “lie behind the log” in disclosing its assertions and evidence.
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2.3
The arbitrator may offer observations and questions
2.3.1
From time to time the arbitrator may, in the arbitrator’s discretion, provide all parties with one
or more (written and/or oral) observations and/or questions about the Chronology and the materials cited in it.
COMMENT: As a neutral with certain expertise, the arbitrator can be helpful in
guiding the parties’ hearing-preparation efforts. This section draws on principles reflected in AAA Commercial Rule P-2(a)(iii), (vi), and (xii) and in MCL 11.11 and 11.33.
The MCL opines that:
Probably the judge’s most important function in the early stages
of litigation management is to press the parties to identify, define, and narrow the issues. … Plaintiffs may assert that substantial discovery must precede issue definition, and defendants may
contend that plaintiffs must first refine their claims. Nonetheless,
the judge must start the process of defining and structuring the issues, albeit tentatively ….
MCL 11.31 (emphasis added). The MCL stresses that:
… Questions should probe into the parties’ claims and defenses
and seek specific information. Rather than accept a statement
that defendant “was negligent” or “breached the contract,” the
judge should require the attorneys to describe the material facts
they intend to prove and how they intend to prove them.
MCL 11.33 (emphasis modified). Moreover, many counsel likely would welcome the
opportunity: (1) to discern, as early as possible, how the arbitrator is tentatively
viewing the case; and (2) to try to correct any perceived errors in the arbitrator’s
understanding, again as early as possible, and in any case before the arbitrator issues a final award that would be essentially unreviewable on its merits.
2.3.2
The purpose of any such questions or observations will be to help the parties to identify disputed- and undisputed points; the arbitrator intends to keep firmly in mind the need to remain
neutral and not to finally decide any matter until each party has had a fair opportunity to be
heard concerning the matter. Any questions or observations are strictly provisional and are subject to reconsideration by the arbitrator in light of evidence and argument duly presented, for
example at the hearing or in motion practice.
COMMENT: Some lawyers might be concerned that questions by the arbitrator
could unfairly “coach” opposing counsel. This modest, hypothetical downside risk
must be weighed against the advantages of (1) providing counsel with helpful insight into the arbitrator’s then-current thinking about the case, and (2) helping
counsel to focus their subsequent work on areas of weakness identified by the arbitrator and on possible areas of misunderstanding or lack of comprehension by the
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arbitrator. (Moreover, the concerned lawyers might themselves be beneficiaries of
such “coaching.”)
2.3.3
Unless the parties expressly agree otherwise in writing, the arbitrator will provide any such
questions or observations to all parties, not just to the party that served the relevant draft of
the Chronology.
2.4
Written witness statements, excerpted from the Chronology,
are required (delete if so agreed by the parties)
COMMENT: Much of the text of this section is adapted from AAA Commercial
Rule R-35 and MCL 12.51; AAA Employment Rule 8(o) also contemplates testimony
by affidavit.
2.4.1
Pursuant to the arbitrator’s authority under AAA Commercial Rule R-35(a), all “direct” witness
testimony is to be presented by written witness statement excerpted from the Chronology, except for the following:
COMMENT: Written testimony is expressly provided for by AAA Commercial
Rule R-35(a) and is clearly contemplated by AAA Employment Rule 8(o) (testimony
by affidavit), as well as in other providers’ arbitration rules, and are a staple of international arbitration and of federal-court bench trials.
(1) at the option of the party calling the witness, a brief “live” oral recap, by the witness,
of key points of the written testimony;
COMMENT: It can be helpful to the arbitrator for a witness to “guide” the arbitrator
through the witness’s written testimony. The witness’s doing so can also help to get
the witness comfortable “on the stand” in preparation for cross-examination.
(2) the testimony of any witness, not employed by or otherwise under the control of the
party presenting the witness’s testimony, who states on the record that he or she refused to provide such a written witness statement; or
(3) other testimony offered “live” for other good reason with the arbitrator’s approval.
2.4.2
Each version of a witness statement provided to another party is to be numbered as a separate
exhibit.
COMMENT: MCL 12.51 calls for written witness statements to be marked as exhibits. Giving separate exhibit numbers to different drafts of a witness statement can
help keep the drafts straight if differences between the drafts become relevant.
2.4.3
Each witness statement is to include the following, in short, separate, paragraphs; each paragraph is to be numbered except those containing spaces for signatures and notarization:
(1) the full name and address of the witness;
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(2) a summary of the witness’s education;
(3) a summary of the witness’s work history for at least the preceding ten years; and
(4) if the witness’s testimony expresses any opinion as an expert, the witness’s C.V. or other
evidence supporting the witness’s qualifications;
(5) all facts and opinions in the Chronology as to which the witness has been identified as
expected to testify;
(6) an oath (or an affirmation, or a declaration under penalty of perjury) of the truth of the
matters stated in the witness statement;
(7) spaces for the witness’s signature and the date and place of signature and
(8) if required by this Scheduling Order or by the law of the place where the witness signs
the statement, a space for a notary certificate.
COMMENT: Some of the provisions above are modeled on Article 4.5 of the International Bar Association Rules on the Taking of Evidence in International Arbitration
(2010) (“IBA Rules”).
2.4.4
Only the final draft of a witness statement need be signed.
2.4.5
Each witness statement is to be served on the arbitrator and all other parties as provided in this
Scheduling Order.
2.4.6
Each party is to serve the other with a copy, marked as an exhibit, of any document or other evidence that (1) is referenced in any version of a witness statement, and (2) was neither
(A) previously provided to the other party nor (B) provided by the other party.
2.4.7
If a party calling a witness to testify does not timely provide a written witness statement for that
witness, then the witness will not be allowed to testify except (1) by agreement; (2) for impeachment or rebuttal purposes; or (3) as provided in § 2.4.1.
2.4.8
Per AAA Commercial Rule R-35(a), if a party submits a written witness statement for a witness,
any party may designate the witness as being required to appear at the hearing. The designating party is to notify the arbitrator and all other parties of its designation no later than ten
business days before the start of the hearing, otherwise, the party will be deemed to have
waived its right to make the designation as to that witness.
2.4.9
A party’s failure to designate a witness as being required to appear at the hearing is not
a stipulation to the truth or admissibility of any part of the witness’s written statement.
COMMENT: This provision is modeled on Article 4.8 of the IBA Rules.
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2.4.10 Per AAA Commercial Rule R-35(a), if a witness does not appear at the hearing after being notified to do so, then the arbitrator may disregard the written witness statement or make such
other order as the arbitrator may consider to be just and reasonable.
2.4.11 The arbitrator will give little or no weight to conclusory assertions or legal arguments in written
witness statements.
COMMENT: This is suggested in Wolf and Preteroti, supra.
2.4.12 If a witness provides a written witness statement and does appear for examination at the hearing, then:
COMMENT: The procedure of this section largely tracks that of MCL 12.51.
(a) The witness is to be sworn and to orally adopt his or her written statement; otherwise, the
written statement will be disregarded.
(b) Counsel for the calling party may (but need not) conduct a brief direct examination in which
the witness summarizes key points of his or her written statement.
(c) The direct examination must be substantially limited to the matters stated in the witness’s
written statement (this will not preclude the calling party’s questioning the witness for purposes of rebuttal or impeachment of another witness).
(d) After the oral direct examination, the witness will be subject to oral cross-examination, redirect examination, and questioning by the arbitrator.
2.4.13 The written statement of a witness who is not designated as being required to appear at the
hearing must be sworn by the witness in the same manner as required by law for an affidavit
(or, if permitted by applicable law, signed under penalty of perjury), otherwise the arbitrator
will not consider the statement.
2.5
Appendix: Suggested disclosures for breach-of-contract disputes
2.5.1
Claimant: Provide the following information for each allegation of breach of contract, in short,
separate, numbered paragraphs.
(a) Identify the allegedly-breached contract.
(b) Identify any other contract (if any) that you believe to be relevant, and explain why.
(c) Explain the general purpose of the contract that was allegedly breached.
(d) For each alleged breach of that contract, explain — in detail —exactly what the breaching
party did, or failed to do, that constituted the breach.
(1) Identify the specific contract clause (or clauses) that you believe were breached.
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(2) Tell the story with all relevant supporting details that you think might help to persuade
the arbitrator: Who. What. When. Where. Why. How.
(3) Be sure to explain the context.
(4) Don't assume that the arbitrator is familiar with your particular situation.
(e) State whether the arbitrator, in interpreting the breached clause, should take into account
any of the following. If so, explain why, providing all supporting details that you think might
help persuade the arbitrator.
(1) Other clauses in the breached contract;
(2) Clauses in other contracts;
(3) Ongoing practices of the parties;
(4) Industry practices, customs, or usages;
(5) Laws or regulations.
(f) Remedies: State exactly what you believe the arbitrator should do about the alleged
breach(es).
(1) Explain, providing all relevant supporting details that you think the arbitrator should
take into consideration.
(2) If your answer is “order the other party to pay X amount of money,” explain exactly how
you arrived at that amount.
(g) Revise each of the items above so that each item is separately annotated with:
(1) a list stating the name and contact information of each individual (including experts)
who will testify as to that item and what that individual is expected to say (be sure to
indicate “foundation” information). This is a prelude to the preparation of a written
witness statement for each such individual;
(2) a list stating the name and contact information of each other individual known to have
relevant knowledge of that item; and
(3) a list identifying each document or thing that the arbitrator should take into consideration concerning that item (and preferably provide a copy of each document, labeled as
an exhibit).
2.5.2
Respondent: On a point-by-point basis:
(a) State your response to each assertion by Claimant above.
(b) In similar fashion to Claimant’s statement: Identify each additional detail, individual, and
document that you believe should cause the arbitrator to decide differently.
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3.
Non-binding mini-trial to senior management
after initial disclosures
3.1
The non-binding mini-trial conference call is scheduled for: Thursday
of Week 6
3.1.1
In the interest of trying to resolve the dispute amicably as early as possible after the initial disclosure exchange under section 2.2, the parties are to conduct a non-binding mini-trial conference call with representatives of the parties’ senior management on the date stated in the
heading of this section 3.1 or as otherwise agreed.
COMMENT: This is a variation on AAA Commercial Rule R-9, which requires mediation unless either party opts out. Mediation is also contemplated by AAA Employment Rule 7, which appears to require the parties to agree to it.
Some corporate litigation counsel believe that the mini-trial procedure is one of the
best ways of amicably resolving disputes early in the process.
3.1.2
The mini-trial will be conducted by private “Webinar” (to allow all concerned to see exhibits), in
accordance with the mini-trial procedures of the AAA, unless the parties agree otherwise.
3.1.3
The arbitrator will serve as chair and neutral advisor of the mini-trial.
4.
Discovery procedures
4.1
Document production may be requested during: Weeks 1 through 7
4.1.1
Introduction: During the time period specified in the heading of this section 4.1, either by
agreement or with the arbitrator’s prior approval in each instance, any party may request production of specific documents, or of narrowly-focused categories of documents, that are in the
possession, custody, or control of another party.
COMMENT: AAA Commercial Rule R-22(b)(ii) and (iv) and AAA Employment Rule 9
give the arbitrator the authority to direct the production of documents. Under those
rules, though—unlike most U.S. litigation rules—parties are not automatically entitled to document discovery.
4.1.2
Criteria for arbitrator approval: Absent agreement of the parties, the arbitrator expects to
approve only narrowly-targeted requests for production of relevant documents that can be
readily complied with without undue expense, burden, or inconvenience on the part of the
producing party.
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COMMENT: The parties’ in-house representatives should normally be consulted
about an expensive or burdensome document production, even if outside counsel
agree to it.
4.1.3
Redfern Schedule: Counsel proposing document requests for arbitrator approval are to use
the so-called “Redfern Schedule” format, in which requests for documents are listed in a table,
where column A is the text of the request; column B is the requesting party’s justification, if any;
column C sets forth the requested party’s objections, if any; and column D is the arbitrator’s decision on that request.
COMMENT: The Redfern Schedule format is named for its originator, British arbitrator Alan Redfern. See generally, e.g., Michael A. Roche, Document Production Basics for International Arbitration, in American Bar Association Young Lawyer Division, The Young Lawyer, Feb. 2012, at http://goo.gl/Lb8zrS (AmericanBar.org 2012)
(accessed Dec. 11, 2014).
4.1.4
Request numbering: To make it easier to find requests for production of documents in case indexes, each party is to number its requests in a respective single sequence, i.e., without repeating the numbers used on any prior set of requests propounded by that party, regardless of the
party or parties upon whom the same were served. The title of each set of requests is to include the range of numbers thereof and a parenthetical indicating the party to which the requests are propounded. EXAMPLE: “ABC’s Requests for Production of Documents No. 5-8
(to XYZ)."
4.1.5
Deadlines: Counsel are strongly encouraged to agree on deadlines for production of documents
pursuant to an approved request; absent agreement, production is due two business days
after the arbitrator’s approval of the request unless the arbitrator, for good cause, directs otherwise.
4.1.6
Certain objections not waived: A party’s production of particular documents in response to an
agreed- or approved request will not in itself waive (1) any timely-made objection to admissibility of those documents, nor (2) any timely-made objection to production of other documents
that might be responsive to the same request.
4.1.7
Privilege logs, if any, are to be served on the requesting party at the same time as production is
due unless otherwise agreed or directed by the arbitrator.
4.1.8
Production mechanics: Production of documents is to be by email unless impracticable (e.g.,
because of PDF size); where practicable, service of large documents should be by electronic
means. Parties are reminded that email is not necessarily secure.
4.1.9
True copies required: All documents produced must be complete and accurate copies of the
originals; the arbitrator may direct that any original document be presented for inspection.
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4.1.10 Electronic documents: Counsel are strongly encouraged to agree on the form of and procedure
for production of electronic documents (including search terms where applicable). The arbitrator will decide any disagreements in that regard on a case-by-case basis.
4.2
Voluntary telephone interviews may be conducted during:
Weeks 1 through 7
COMMENT: AAA Commercial Rule P-2(a)(viii) contemplates that the arbitrator may
“establish any additional procedures to obtain information that is relevant and material to the outcome of disputed issues.” AAA Employment Rule 9 gives the arbitrator the authority to order discovery. This section is adapted from the Model Case
Management Scheduling Orders cited in the commentary to § 1.4. It tries to address,
in a cost-effective way, one of the most common complaints about arbitration,
namely the restrictions on depositions. (Early telephone discussions also can help
promote early settlement.)
4.2.1
During the time period specified in the heading of this section 4.2, or by agreement at any time,
any party may conduct a short, informal interview, each lasting up to 30 minutes unless otherwise agreed, with each of up to five employees or other individuals under the control of another party to this arbitration, subject to the limitations in this section 4.2. (For convenience,
each such employee or other individual is referred to as an “employee” and the other party to
this arbitration as the individual’s “employer”; such references are not intended to imply that
an actual employment relationship exists.)
COMMENT: The time limit per interview is intended to give interviewing parties an
incentive to get down to business quickly. The limit on the number of interviews is
intended to prevent counsel from going overboard and increasing costs; the limit
provides interviewing parties with an incentive to be selective about the employees
whom they want to interview.
4.2.2
An employer may (1) decline to make one or more specific employees available for such an interview; and/or (2) direct an employee being interviewed not to answer one or more particular
questions. (NOTE: The arbitrator may take any such action by the employer into account in deciding whether to authorize such an employee to be formally deposed.)
COMMENT: This provision gives an employer’s counsel considerable control over
a telephonic interview of an employee by an adverse party. But counsel should keep
in mind that the arbitrator might have the power to order a formal deposition if
necessary. Moreover, AAA Commercial Rule L-3(f) gives the arbitrator the authority
to allocate costs of a deposition (AAA Employment Rule 9 is silent on that point).
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4.2.3
To reduce costs, all such interviews are to be conducted by telephone or other remote electronic means, for example by Internet video conference, unless the parties agree otherwise.
COMMENT: Counsel should consider conducting such interviews by inexpensive
video conference, e.g., using Skype, Zoom.us, GoToMeeting, etc., to gain the
advantages of seeing the person being interviewed.
4.2.4
In telephonic interviews, counsel are strongly encouraged, where practicable:
(1) to provide the individual being interviewed with advance written questions; and
(2) to conduct the interviews as “conference” interviews with multiple individuals.
COMMENT: See the text and commentary of section 4.3.2 (advance written questions for depositions) and section 4.3.3 (“conference” depositions).
4.2.5
The party arranging any interview is to make reasonable efforts to set a mutually-convenient
time for it.
4.2.6
Any party may arrange to record one or more portions of any interview, at its own expense.
(a) The fact that the interview is being recorded must be announced, to all participants in the
interview, at the beginning of the recording; the announcement itself must be recorded.
(b) No portion of any such recording may be introduced into evidence except (1) for impeachment or rebuttal purposes, or (2) for good reason with the arbitrator’s approval after reasonable notice to all other parties.
COMMENT: This clause should make counsel more comfortable about the informal
nature of the telephonic-interview approach.
4.2.7
Neither a party’s questioning of an employee in an interview, nor the party’s declining to question the employee, will preclude that party from subsequently questioning the employee, including asking the same or similar questions as asked during the interview, during (i) an authorized deposition, if any, or (ii) the hearing.
4.3
Approved depositions may be conducted during Weeks X through Y
4.3.1
Arbitrator approval required: In the interest of controlling costs, depositions may be taken only
with the arbitrator’s specific approval for each deposition upon reasonable notice to the other
party and to the deponent.
COMMENT: Depositions are one of the most prominent sources of expense in litigation and arbitration. The AAA Commercial Rules severely restrict the parties’ ability
to take depositions; see Rule L-3. AAA Employment Rule 9 leaves the question of
depositions up to the arbitrator.
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4.3.2
Written questions in oral depositions: Counsel taking a deposition are strongly encouraged
to send the deponent advance written questions, with a copy to all other parties.
COMMENT: This written-questions procedure is not unlike “30(b)(6)” depositions
under the Federal Rules of Civil Procedure. It is adapted from the Model Case Management Scheduling Orders for Patent Cases cited in the commentary to § 1.4.
To save time, if the witness elects to answer the questions in writing and sign the
answers under penalty of perjury, or if the witness adopts the unsigned written answers during oral testimony, then the questions and answers could be attached as
an exhibit to the transcript.
Propounding written questions in advance may help reduce the time needed for
an interview or deposition. A questioning party can serve written questions to get
at least some information from an individual being interviewed in advance. Counsel
for the questioning party can then follow up with oral questions, possibly in a telephone deposition, if desired.
4.3.3
Conference depositions: With prior notice to all other parties and to each individual to be deposed, a party may depose more than one person in the same authorized deposition. In such
a “conference” deposition, the various individuals being deposed may be respectively examined
in person, by telephone or other remote electronic means, or both.
COMMENT: This provision is adapted from a suggestion in MCL 11.423 at 59,
also in MCL 11.453 at 87.
4.3.4
Transcript excerpts as exhibits: All transcript excerpts proposed to be used in the arbitration,
at the hearing or otherwise, are to be marked as exhibits.
COMMENT: This is based on suggestions in MCL 12.331 and 12.332.
4.4
Subpoenas must state the applicable legal authority
4.4.1
Any party requesting the issuance of a subpoena is to serve a copy of the request and the proposed subpoena on all other parties at the same time as the requesting party makes the request
of the arbitrator.
4.4.2
Any subpoena that a party wishes to be issued to a third party for discovery purposes (as opposed to for hearing purposes) must include a prominent citation of the legal authority under
which an arbitrator may issue such a subpoena for that purpose (in part for the purpose of educating the recipient of the subpoena and/or the recipient’s counsel).
COMMENT: Depending on the applicable law, the arbitrator might or might not
have the legal authority to compel third-party testimony or document production
other than at a hearing. See, e.g., section 7 of the Federal Arbitration Act, which is
interpreted differently on this point by various federal courts of appeal. See Liz Kra-
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mer, Document subpoenas to third parties, at http://goo.gl/esq7C (ArbitrationNation.com 2012); and various state arbitration statutes.
4.4.3
In some jurisdictions, arbitrators do not necessarily have authority to issue third-party discovery
subpoenas. For third-party discovery desired in such jurisdictions, upon request by a party (and
after any other party has an opportunity to be heard on the request), on a case-by-case basis
the arbitrator will consider, in the arbitrator’s discretion, conducting one or more special discovery hearings in such jurisdictions.
COMMENT: Special hearings can be useful if applicable law doesn’t give arbitrators
the authority to issue subpoenas for discovery. AAA Commercial Rule R-11 states
that “The arbitrator, at the arbitrator’s sole discretion, shall have the authority to
conduct special hearings for document production purposes or otherwise at other
locations if reasonably necessary and beneficial to the process.”
5.
The hearing
5.1
The hearing will begin: Tuesday of Week 12
5.1.1
The hearing is to take place as stated in the heading of this section 5.1.
COMMENT: See AAA Commercial Rule R-23 and AAA Employment Rule 11.
5.1.2
The arbitrator, in consultation with the parties’ counsel, may determine whether to conduct one
or more issue-specific hearings by conference call (and/or video call) and written evidence.
COMMENT: See:
o
AAA Commercial Rule R-32(a), which authorizes the arbitrator to “direct
the order of proof, bifurcate proceedings and direct the parties to focus their
presentations on issues the decision of which could dispose of all or part of
the case”;
o
AAA Commercial Rule R-23, which contemplates the possibility of multiple
hearings;
o
AAA Commercial Rules R-35 and P-2, which contemplates that witness declarations may replace direct testimony;
o
AAA Employment Rule 8(o), which contemplates that testimony may be
by affidavit.
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5.1.3
In exceptional cases such as illness of a necessary participant, the arbitrator will consider delaying the start of the hearing.
COMMENT: See AAA Commercial Rule R-30 and AAA Employment Rule 24, which
give the arbitrator discretion to postpone “any hearing.”
5.2
A short recess may be taken after opening statements (if any)
5.2.1
The arbitrator will normally direct the parties, in advance, to focus their opening statements on
particular issues or to dispense with opening statements altogether.
COMMENT: If the arbitrator is already familiar with the issues (as is likely), opening
statements might well be largely a waste of time.
5.2.2
The arbitrator may recess the hearing for a brief period after opening statements to permit the
parties and their counsel to explore whether they now wish to discuss settlement.
COMMENT: One of the authors routinely does this at the beginning of a hearing:
She tells the parties, in effect, “I’m here to decide your case, not to try to push you
into settling, but if you want to take a few minutes to talk after the opening statements are finished, we can recess the hearing to let you do that.” She reports that
it’s not uncommon for parties to settle the case completely or at least to narrow the
issues to be addressed at the hearing.
5.3
Live witness testimony is to be expedited
5.3.1
Each party is to make arrangements to schedule the attendance of its witnesses so that the case
can proceed without unnecessary delay.
5.3.2
Each party presenting evidence is to advise the other party in writing of the names of the witnesses who will be called to testify the next day and the order in which the witnesses will be
called.
5.3.3
To reduce costs, the parties are strongly encouraged to agree to use videoconference technology for witness testimony, especially for non-critical matters; in deciding whether to allow such
use absent agreement, the arbitrator will give due weight to the value of witness presence.
COMMENT: Videoconference testimony is suggested in MCL 12.333 at 145-46 and is
contemplated by AAA Commercial Rule R-32(c) and AAA Employment Rule 28. Free
or inexpensive videoconferencing possibilities include Skype, GoToMeeting, and
Zoom.us, among others.
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5.3.4
Expert witnesses are to testify in a “hot tub” group-discussion format to the extent practicable.
COMMENT: “Hot-tubbing” of expert witnesses has been used in a number of proceedings, especially for example in Australian courts; see generally the notes at
http://www.CommonDraft.org/#ArbStreamHotTubCmt. One of the authors recently
found the approach to be quite useful in a “battle of experts” concerning the reliability of polygraph examination results.
5.3.5
In consultation with counsel, the arbitrator may direct that selected fact witnesses likewise testify in a group-discussion format.
5.3.6
The services of a court reporter may be obtained in accordance with AAA Commercial Rule R-28.
5.3.7
Subject to any applicable legal- or ethical constraints, any counsel or other party representative
may interview a consenting witness or prospective witness (“individual”) and discuss the individual’s prospective testimony with him or her.
COMMENT: This provision is modeled on Article 4.3 of the IBA Rules. Legal-ethics
rules might restrict the right of counsel, or someone acting under the direction of
counsel, to interview an employee or other representative of an adverse party.
5.3.8
Copies of exhibits to be used should be available to a witness on the stand and in the hands of
counsel before an examination begins. If voluminous, relevant exhibits can be kept, for example,
in tabbed notebooks stacked on a cart located within easy reach of the witness, counsel can direct the witness to the volume and tab number of exhibits as needed.
COMMENT: This is copied essentially verbatim from MCL 12.32 at 142.
5.3.9
The arbitrator will not instruct a witness to answer “yes or no” to questions that (1) are compound, (2) require the witness to make or accept a characterization rather than testify to a fact,
or (3) are argumentative in form or substance.
COMMENT: This is copied essentially verbatim from MCL 12.35 at 148.
5.4
Each party must prove its claims and defenses
5.4.1
Parties and their counsel are reminded that in arbitration under the Federal Arbitration Act,
it might be even more important for them to “prove up” their cases than it is in court litigation.
This is because, if an arbitrator were to make a mistake in an award, the party harmed would
likely have little or no recourse, as discussed below.
5.4.2
AAA Commercial Rule R-50 precludes an arbitrator from “redetermin[ing] the merits of any
claim already decided.” This is the AAA’s codification of the longstanding doctrine of functus
officio.
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5.4.3
Moreover, under the Supreme Court’s current interpretation of the Federal Arbitration Act,
a reviewing court is virtually powerless to overturn or modify an award, absent the very-limited
circumstances described in sections 10 and 11 of that Act. See Hall Street Associates, L.L.C. v.
Mattel, Inc., 552 U.S. 576 (2008).
(a) In the specific context of a dispute over contract interpretation, the Court said that “convincing a court of an arbitrator's error — even his grave error — is not enough. So long as
the arbitrator was arguably construing the contract … a court may not correct his mistakes.
... The potential for those mistakes is the price of agreeing to arbitration.” Oxford Health
Plans LLC v. Sutter, 569 U.S. ___, 133 S. Ct. 2064, 2070 (emphasis added, citations and internal quotation marks omitted).
(b) The Court has also noted that “[t]he absence of multilayered review [of an arbitration
award] makes it more likely that errors will go uncorrected.” AT&T Mobility v. Concepcion,
563 U.S. 321, ___, 131 S. Ct. 1740, 1752 (2011) (emphasis added).
5.4.4
All this makes it especially important for an arbitrator to take pains to confirm that each party
seeking relief has not merely claimed, but has sufficiently demonstrated, that it was entitled to
such relief, including competent evidence of the specific amounts of damages, attorneys’ fees,
expenses, or other monetary award that it seeks. (For this purpose, “relief” includes affirmative
defenses.)
5.4.5
For an arbitrator to do otherwise would risk undermining confidence in the arbitration process
as a speedy and low-cost way of resolving disputes. That in turn would go against Congress’s intent, in enacting the Federal Arbitration Act, of implementing “a liberal federal policy favoring
arbitration agreements … to achieve streamlined proceedings and expeditious results ….” AT&T
Mobility, 131 S. Ct. at 1749.
5.4.6
To be sure, strict rules of evidence do not apply in arbitration; under AAA Commercial Rule
R-34(a), "[c]onformity to legal rules of evidence shall not be necessary."
5.4.7
Even so, it is still each claimant’s job not merely to assert, but to show, that it is entitled to
the specific relief it seeks. This requirement is reflected in other AAA Commercial Rules:
(a) Rule R-32 directs that “[t]he claimant shall present evidence to support its claim” (emphasis
added).
(b) Likewise, Rule R-31 provides in part that, even in the extreme case where a respondent fails
even to show up, the claimant must still put on evidence; that rule states that “[t]he arbitrator shall require the party who is present to submit such evidence as the arbitrator may require for the making of an award” (emphasis added).
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5.4.8
An arbitrator does have some flexibility under AAA Commercial Rule R-47(a). That rule states
that “[t]he arbitrator may grant any remedy or relief that the arbitrator deems just and equitable and within the scope of the agreement of the parties ….”
5.4.9
Such flexibility, though, cannot take the place of each claimant’s coming forward with evidence
that furnishes sufficient support for the specific relief sought.
5.5
The arbitrator may make a partial award on partial findings
COMMENT: This section is closely modeled on Fed. R. Civ. P. 52. Note that an award
on partial findings is not a summary-judgment award, as discussed in the advisory
committee’s notes on the 1991 amendment to the Federal Rules.
5.5.1
If a party has been fully heard on an issue, and the arbitrator finds against the party on that issue, then the arbitrator may enter a partial final award against the party on any claim or defense
that, under the controlling law, can be maintained or defeated only with a finding in favor of the
party on that issue.
5.5.2
The arbitrator may, in the discretion of the arbitrator, decline to render any award on any claim
or defense until the close of the evidence.
5.5.3
The arbitrator may orally state the reason or reasons for entering an award on the claim or defense on the record after the party has been fully heard.
5.5.4
The arbitrator is to state, in the written award, the reason or reasons for the award on the claim
or defense, which in the discretion of the arbitrator may be amplified or refined from those
stated orally on the record (if any).
5.6
A draft award will likely be circulated for comment
5.6.1
In view of the essentially non-appealable nature of arbitration (as discussed above), the arbitrator may circulate a draft award to counsel for suggestions to correct any perceived misunderstandings, misstatements, or omissions.
5.6.2
Alternatively, the award itself may state that it will become final at a stated time unless it is
withdrawn or modified.
5.6.3
In either case:
(a) A party may make written suggestions for correction, with a copy to all other parties.
(b) Upon written request by a party, the arbitrator will convene a conference call at which
counsel can address specific issues.
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COMMENT: This idea adapts a practice of some California judges, who issue tentative rulings in advance of motion hearings, which is also suggested in MCL 11.32
at 44.
Circulation of a draft or not-yet-final award can be useful because:
1. In many arbitrations, the right of appeal is extremely limited. Having the arbitrator circulate a "draft" award might well be the parties' only shot at correcting (what
they regarded as) errors in the award. See, e.g., Hall Street Associates, L.L.C. v. Mattel, Inc., 552 U.S. 576, 128 S. Ct. 1396 (2008), in which the Supreme Court ruled that
an appeal of an award rendered under the Federal Arbitration Act could be appealed only on the specific grounds stated in 9 U.S.C. § 10. (Some states’ laws permit enhanced appeal if agreed by the parties.)
2. Many arbitrators are justifiably reluctant to base an award on information not
obtained at the hearing. If an arbitrator wanted to do so, circulating a draft award
would be one way to comply with the law in some states requiring that the arbitrator disclose the information to all parties and give them an opportunity to meet it.
See, e.g., CAL. CODE CIV. P. 1282.2(g).
3. Once a final award is issued, under the doctrine of functus officio, the arbitrator
will likely have little or no power to alter the award. See, e.g., Bosack v. Soward,
586 F.3d 1096, 1103 (9th Cir. 2009), where the court noted that the doctrine "forbids an arbitrator to redetermine an issue which he has already decided" (internal
quotation marks and citation omitted). The Eighth and Ninth Circuits have held,
however, that an award not expressly stated to be final is not subject to functus officio. See id. at 1103 (citing and following Eighth Circuit decision).
5.7
Specified disputes will be decided by “baseball arbitration”
(delete if not agreed)
5.7.1
The parties have agreed that disputes about the amount of damages and other numerical issues
are to be decided using baseball-style arbitration (also known as last- or final-offer arbitration)
in accordance with this section 5.7.
COMMENT: Baseball arbitration "is designed to produce a settlement, not a verdict." Thomas Gorman, The Arbitration Process -- the Basics, in Baseball Prospectus
(Jan. 31, 2005), http://goo.gl/Qh1l (BaseballProspectus.com). When parties agree
to baseball arbitration, the arbitrator must choose between the competing awards
proposed by the parties. That constraint forces each party, in submitting its proposed award, to think hard about how the arbitrator sees the case and whether the
arbitrator will regard the other party's proposed award as “closer to the pin.” That,
in turn, greatly improves the odds that the parties will reach an agreed settlement.
The parties’ agreement to baseball arbitration should be documented in writing,
e.g., via an exchange of emails among counsel and the arbitrator.
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5.7.2
Each party is to provide the arbitrator and the other party with a written proposed decision disposing of the stated issue or issues (each, a "proposed decision").
5.7.3
The arbitrator may specify a deadline for submitting a proposed decision (ten business days after the end of the hearing if not otherwise agreed or directed).
5.7.4
Each party may include, in its proposed decision, a brief explanation why the arbitrator should
select that proposed decision.
5.7.5
In the interest of speeding up settlement discussions at the hearing, the parties are encouraged,
but not required, to exchange proposed decisions while their representatives are still at the
place of the hearing.
5.7.6
The arbitrator may advise the parties, no more than once, that in the arbitrator's view, neither
proposed decision should be selected (preferably explaining why); in that case, the arbitrator
will allow the parties time in which to submit revised proposed decisions.
5.7.7
Except as provided in § 5.7.6, the arbitrator will select, without modification, the one proposed
decision that the arbitrator regards as most-closely matching the decision that the arbitrator
would render.
5.8
The arbitrator will retain jurisdiction for clarification or remand
(delete if not agreed)
The arbitrator will retain jurisdiction for purposes of (1) clarifying the award and, (2) if necessary, deciding any issues remanded to the parties for determination (for example, specific remedies) as to which the parties were unable to agree on remand.
6.
Post-award matters
6.1
The final award may be appealed within the AAA (delete if not agreed)
INTRODUCTION: This section is adapted from the AAA Optional Appellate AAA
Commercial Rules, which are available at http://goo.gl/PMWo0M (adr.org).
6.1.1
The parties have agreed that (1) the final award and (2) any other award that the arbitrator designates as an appealable award (each, an “underlying award”) may be appealed pursuant to the
AAA’s Optional Appellate AAA Commercial Rules (“Appellate Rules”).
COMMENT: The parties’ agreement should be documented in writing, e.g., via
an exchange of emails among counsel and the arbitrator.
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6.1.2
The underlying award is to be, at a minimum, a reasoned award.
6.1.3
The underlying award will not be considered final until after the time for filing the notice of appeal pursuant to the Appellate Rules has expired with no party filing such a notice.
6.1.4
Appeals must be initiated within 30 days of receipt of the underlying award, as defined by
Rule A-3 of the Appellate Rules, by filing a notice of appeal with any AAA office.
6.1.5
If an appeal is timely filed, the decision rendered by the appeal tribunal may be entered in any
court having jurisdiction thereof.
6.2
The final award may be partially retried in court (delete if not agreed)
INTRODUCTION: Under U.S. federal law, a party dissatisfied with an arbitration
award might well have only a limited right to appeal or otherwise contest the award
on its merits and/or on procedural grounds, even if the parties had previously
agreed otherwise. Some practitioners see this as a significant disadvantage of arbitration, even a fatal one.
To try to remedy that problem, this provision briefly delays the binding effect of an
arbitration award. The intent is to give a dissatisfied party a short period of time in
which to commence a non-jury court action to retry the dispute—with cost-shifting
provisions to encourage the dissatisfied party to accept the award instead.
6.2.1
The parties have agreed that the final award will not be binding, and the relevant part or parts
of the dispute may be adjudicated de novo in a court of competent jurisdiction, if all of the following conditions are met:
COMMENT: The parties’ agreement should be documented in writing, e.g., via
an exchange of emails among counsel and the arbitrator.
(a) A party to the arbitration that desires to challenge some or all of the final award (the “challenger”) must give notice of its challenge to each other party, effective no later than
10 business days after the issuance of the award, setting forth a short and plain statement of the challenge showing that the challenger is entitled to relief.
COMMENT: The 'short and plain statement' requirement is modeled on that of
Rule 8 of the [U.S.] Federal Rules of Civil Procedure; see also the [U.S.] Supreme
Court's holdings on this point in its Iqbal and Twombly cases. The requirement is included here in case the rules of procedure in the court in which the challenge action
is filed do not require such a statement.
(b) The challenger must duly file and serve an action (the "challenge action"), in a court
of competent jurisdiction, against one or more other parties to the arbitration (each,
a "challenge respondent"), no later than 30 days after the issuance of the award.
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(c) The challenge action must seek only one or both of:
(1) relief that the challenger sought, but was not granted, from or against the challenge respondent in the arbitration; and/or
(2) a declaratory judgment (or comparable action by the court) that a challenge respondent
is not entitled to relief that was granted against the challenger in the final award.
6.2.2
Time is of the essence for each prerequisite set forth in § 6.2.1; for the avoidance of doubt,
IF: A challenger, for any reason, does not meet all such prerequisites as to a given challenge respondent; THEN: The final award will automatically become binding between that challenger
and that challenge respondent, without further action by any individual or organization.
6.2.3
Any “applicable limitation period,” as defined below, is to be extended until the challenge filing
deadline to the extent necessary to permit filing of the challenge action.
COMMENT: It's entirely possible that a demand for arbitration was filed in time
to comply with an applicable statute of limitations, but that the limitation period
expired while the arbitration was pending. This clause expressly addresses that possibility by extending the limitation period from the date of the (timely) arbitration
demand until the challenge filing deadline.
(a) For this purpose, the term "applicable limitation period" refers to any limitation period
whose expiration did not preclude asserting a claim for relief in arbitration, but would preclude filing the challenge action.
(b) Against the possibility that applicable law does not permit the above extension of the applicable limitation period, the relevant challenge respondent separately and expressly agrees
not to assert the expiration of the applicable limitation period as a defense to the challenge
action.
6.2.4
To reduce the cost of the challenge action and duplication of effort, any challenger or challenge
respondent may file a motion—and may represent to the court that the motion is joined by all
other parties to the challenge action—requesting that the court take one or more of the following actions:
(a) admit into evidence some or all of the record in the arbitration hearing, in the general form
of a joint appendix in an appeal under the [U.S.] Federal Rules of Appellate Procedure (or as
otherwise required or permitted by applicable law or rules), without regard to any objection
made at the arbitration hearing or in the challenge action; and/or
(b) deem the non-binding final award of the arbitrator to be the report of a master who was
appointed, with the consent of the parties, to hold trial proceedings and recommend findings of fact, with the same effect as stated in Rule 53(f) of the [U.S.] Federal Rules of Civil
Procedure.
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6.2.5
Neither party will be entitled to discovery in or concerning the challenge action except by leave
of the court for good cause as shown by clear and convincing evidence.
6.2.6
With respect to any given challenge respondent, IF: The final judgment in the challenge action,
from which no further appeal is taken or possible, is not at least 20% more favorable to the challenger than the arbitration award; THEN: The challenger must pay or reimburse that challenge
respondent for:
(1) all costs of court taxed to that challenge respondent in the challenge action; and
(2) all reasonable expenses, including for example reasonable fees and -expenses for attorneys and expert witnesses, incurred by that challenge respondent in both the arbitration and the challenge action (including without limitation in all appeals from the judgment in the challenge action).
COMMENT: The cost- and expense-shifting provisions of this clause are similar to
those of, e.g., Fed. R. Civ. P. 68 (offers of judgment; shifts costs only, not attorneys'
fees); Ariz. Rev. Stat. § 12-133(I) (the letter in parentheses at the end is I, capital
"eye") (relates directly to trial de novo of arbitrations); Fla. Stat. § 44.103 (ditto); Ga.
Code Ann. § 9-11-68 (offer of judgment; shifts both court costs and attorneys' fees);
N.J. Court Rule 4:58 (ditto); Tex. Civ. Prac. & Rem. Code ch. 42 (ditto).
6.2.7
To the greatest extent not prohibited by applicable law, EACH PARTY PERMANENTLY, VOLUNTARILY, KNOWINGLY, AND IRREVOCABLY WAIVES any right it may have to trial by jury of the
challenge action or any related issue.
COMMENT: This waiver of a jury trial should be enforceable even in states such as
California and Georgia, which prohibit advance waivers of the jury-trial right.
(A party seeking to enforce the waiver might try to argue that state-law prohibitions
of jury-trial waivers were pre-empted by the Federal Arbitration Act.)
* * *
This order continues in effect unless and until amended by subsequent order.
[Arbitrator name], arbitrator
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