24 October 2004

Yet Again, for the Gander

Over at the Perfesser's blawg, he quotes an unnamed "Illinois lawyer" (it wasn't me!) as saying (my ellipses, paragraphing omitted):

You assume that these cases are filed before neutral judges who follow the rule of law…. I represented an insurance company in a class action…. The insurance policy had an arbitration clause, enforcement of which would have effectively ruined the class action. [T]he court of appeals issued a published opinion enforcing the arbitration clause; and it promptly denied the motion for rehearing. In the next ten days, other defense counsel in similar cases filed motions to enforce the arbitration clause. The court of appeals sua sponte vacated its order deyning the motion to rehear; heard argument; and issued an unpublished (and therefore non-precedential) opinion denying enforcement. I can't prove it, but I know what happened: a politically connected lawyer made a phone call.

I follow arbitration enforcement fairly closely; I have my dark suspicions about which matters were being referred to, in which the Court of Appeals had been forced to act by an intervening Illinois Supreme Court opinion; but that's beside the point. I don't even have to defend the elected judiciary in the area around St. Louis, as I think all judicial elections inappropriate and inherently incapable of selecting an impartial bench.

No, I need only point out the black pot and the black kettle here. We have an insurance company that wants to be in front of an arbitrator. Arbitration systems favor the "corporate defendant" over 90% of the time, and are (usually) not empowered to deal with a class action. So, in the end, what we see here is an objection to the other guy's purported forum shopping… in the context of rejecting one's own forum shopping. Now, admittedly, I am no fan of arbitration as it stands when it is preselected before a dispute arises. Arbitration can work well when the parties, after careful consideration of their positions in a live dispute, choose to submit the matter to arbitration. The farther one gets from such a voluntary selection, the worse arbitration works, and the more it favors the party with greater pre-dispute power. This is not to say that arbitrators act in bad faith—I can name three or four arbitrators who should be put in charge of various courts instead of the schmucks we've got. It is only to say that the system operates to predecide a great deal more than one might otherwise suspect.

Bottom line: Don't assume bad faith when a cynical view of enlightened self-interest offers an equally viable explanation, at least absent some concrete evidence. And, when doing so, take a close look at one's own position for analogous problems first.