ARBITRATION CASES PENDING IN THE TEXAS SUPREME COURT <ul><li>7 PENDING CAUSES (3 SET FOR JAN.; 1 IN NOV.) </li></ul><ul><li>PERMISSIBLE T. CT ACTION TO AWARD (EAST TEXAS AND BISON) </li></ul><ul><li>MANDAMUS REVIEW OF ORDER COMPELLING; SCOPE OF ARBITRATION PROVISION (GULF EXPLORATION; HUGHES ) </li></ul><ul><li>AVOIDANCE OF ARBITRATION CLAUSE BECAUSE OF FRAUD (FOREST OIL) </li></ul><ul><li>WAIVER OF ARBITRATION RIGHTS BY INACTION (PERRY HOMES) </li></ul><ul><li>UNCONSCIONABILITY OF ARBITRATION PROVISION (IN RE POLY) </li></ul>
East Texas Salt Water Disposal Co. Inc. v. Richard Leon Werline , No. 07-0135 Question Presented: The issue is whether a trial court’s order vacating an arbitrator’s award and directing a rehearing give the court of appeals interlocutory jurisdiction.
Werline worked for the Company as its chief engineer, then as operations manager, and ultimately (at Werline’s request) as Vice President of New Project Development. Within weeks after accepting the vice president’s title, Werline abruptly resigned, accusing the Company of breaching his employment contract. The resulting dispute was put to an arbitrator, who awarded Werline two years’ salary as contractual damages.
The Texas Arbitration Act allows for limited judicial review of arbitration awards. Under the Act’s section 171.088, a trial court can entertain motions to vacate an award. And subject to ruling on any such motion to vacate, the Act’s sections 171.087 and 171.088(c) afford the trial courts further jurisdiction to confirm. Under the jurisdiction so afforded, the lower court in this case concluded that the arbitrator’s award resulted from (1) evident partiality, (2) willful misconduct, and (3) a gross mistake. The trial court granted the Company’s motion to vacate the arbitrator’s award, expressly denied Werline’s competing motion to confirm the award, and granted rehearing before a new arbitrator.
Appellate Jurisidiction: (a) A party may appeal a judgment or decree entered under this chapter or an order: . . . (3) confirming or denying confirmation of an award; (4) modifying or correcting an award; or (5) vacating an award without directing a rehearing. Disagreeing with prior Texas decisions, the Sixth Court found that it had plenary jurisdiction under this statute and reversed (reinstating the arbitrator’s award).
Issue Presented Prior decisions interpreting the Texas Arbitration Act reserve appellate review of arbitration rulings for situations where the lower court’s order effectively concludes the proceeding. The Sixth Court, in contrast, has reviewed and reversed an order that grants rehearing of arbitration, and it has done so merely because the reversed order included a further declaration denying Werline’s motion to confirm the arbitral award. • Did the gratuitous denial of confirmation afford the Sixth Court jurisdiction in this case? • Does the Texas Arbitration Act ever afford appellate jurisdiction over an order that grants a rehearing of arbitration?
If a trial court’s order says that rehearing is granted and confirmation denied, then the Sixth Court would review it. But if the order instead pronounces that rehearing is granted and the arbitration award vacated – a substantively identical result – there would be no review.
Bison Building Materials Ltd. v. Lloyd K. Aldridge , Question Presented: The principal issue is whether an appeal can be taken from a trial court’s order vacating in part an arbitration award without a rehearing
In re Gulf Exploration LLC, et al , No. 07-0055 Question Presented: The principal issues are whether the court of appeals had jurisdiction to review a trial court order compelling arbitration and, if so, whether the appeals court erred by vacating the order on grounds that claims were outside the scope of the arbitration clause.
The Set Up <ul><li>In Re Palacios (2006) </li></ul><ul><li>Mandamus is normally inappropriate to review motions to compel....but </li></ul><ul><li>If you can show “clearly and indisputably” that a district court did not have the discretion to stay the proceedings pending arbitration, mandamus may lie </li></ul><ul><li>“particularly heavy mandamus burden” </li></ul>
Two Step Approach <ul><li>Is there an arbitration provision? </li></ul><ul><li>Do the claims fall within the scope of the provision? </li></ul>
Forest Oil Corp. and Daniel B. Worden v. James Argyle McAllen, et al. , No. 06-0178 Question Presented: The principal issues are (1) whether a disclaimer in a contract bars a claim that an arbitration clause was fraudulently induced; (2) whether reliance on a representation contrary to the contracts was justified; and (3) whether reliance on a representation during settlement negotiations was justified. This case involves personal-injury allegations and death of an endangered rhinoceros that allegedly resulted from radioactive pipe.
Perry Homes, et al. v. Robert E. Cull and S. Jane Cull , No. 05-0882 Question Presented: The principal issues in this arbitration case in which plaintiffs resisted arbitration then invoked their rights to it are (1) whether prejudice must be shown to establish a party waived its arbitration rights and (2) whether a defendant is prejudiced by a plaintiff’s pretrial discovery that would not have been available in arbitration.
City of Rockwall v. Vester T. Hughes , No. 05-0126 Question Presented: The issue is whether Local Government Code section 43.052[i]'s arbitration provision -for disputes over a municipality's failure to act on a petition to include land in a three-year annexation plan - applies when the municipality rejects the landowner's petition.
In re Poly-America L.P., et al. , No. 04-1049 Question Presented: The principal issues in this worker’s-compensation retaliation case are (1) whether an arbitration agreement that limited remedies and required the employee to share arbitration costs is unconscionable and (2) whether the court of appeals abused its discretion by not enforcing a severance provision in the agreement.