What is the Proper Role for Dispositive Motions in Arbitration?

Richard T. Seymour

Richard T. Seymour

Dispositive motions are heavily used in Federal-court litigation, with the result that most unsettled cases are decided on paper, with no opportunity to observe the demeanor of witnesses, and a vanishingly low number of cases have a live evidentiary hearing.  Is this a good idea in arbitration?

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The rules of many arbitration service providers provide for the filing of dispositive motions. For example, AAA Commercial Rule 33 states: “The arbitrator may allow the filing of and make rulings upon a dispositive motion only if the arbitrator determines that the moving party has shown that the motion is likely to succeed and dispose of or narrow the issues in the case.” AAA Employment Arbitration Rule 27 states: “The arbitrator may allow the filing of a dispositive motion if the arbitrator determines that the moving party has shown substantial cause that the motion is likely to succeed and dispose of or narrow the issues in the case.” JAMS Comprehensive Arbitration Rule 18 states: “The Arbitrator may permit any Party to file a Motion for Summary Disposition of a particular claim or issue, either by agreement of all interested Parties or at the request of one Party, provided other interested Parties have reasonable notice to respond to the request.” As these rules demonstrate, the arbitrator often has discretion whether to allow the filing.

How should such discretion be exercised? Arbitrators and the parties can benefit from a functional approach, both in arguing and deciding the question.

To begin, it seems clear to me that there has to be a place for dispositive motions that can save significant time and expense in resolving the matter. I believe arbitrators should unhesitatingly accept dispositive motions that go to “gateway” issues, such as waivers, releases, satisfaction, statutes of limitations, failure to exhaust administrative remedies where that is required, proceeding against the wrong entity, pure legal questions not requiring factual development, and legal questions requiring very limited factual development not impinging on the substantive merits of the claim. These may all help to resolve the matter quickly and save the parties’ time and expense in interviewing witnesses and discovering facts relevant only to the substance of the merits.

At the other end of the continuum are the “trials by affidavit” that plague adjudication in Federal courts, and that have driven many plaintiffs to file their cases in State courts so that their clients will be assured of an actual trial at which their witnesses and adverse witnesses are cross-examined. Lest anyone think I exaggerate, in a 2008 study the Bureau of Justice Statistics of the U.S. Department of Justice released a study that can be found at http://www.bjs.gov/index.cfm?ty=pbdetail&iid=556.

Table 5 in that report found that in 1990, a total of 8,206 employment civil rights cases were filed in Federal court, of which 8.7% were resolved by trial. In 2006, a total of 15,950 civil rights employment cases were filed in Federal court, of which only 3.2% were resolved by trial.

Nationally, the Administrative Office of the U.S. Courts has issued a report that can be found at http://www.uscourts.gov/viewer.aspx?doc=/uscourts/Statistics/FederalCourtManagementStatistics/2014/district-fcms-profiles-june-2014.pdf&page=1.  It shows that, for the twelve months ending June 30, 2014, there were a total of 589 civil and criminal matters assigned for each active judgeship. Of those cases, each active judge disposed of only 18 matters by trial.  Settlements, guilty pleas, and dismissals on the pleadings or by summary judgment disposed of 538 cases.

A very rough study I have been doing for some years shows a reversal rate in summary-judgment cases shows a fairly consistent 30% reversal rate in summary-judgment cases. While some federal judges I know consider a 70% affirmance rate a sign that Rule 56 works, but the standard is whether a reasonable jury could find for the plaintiff or draw inferences for the plaintiff, and 30% of the judges whose cases were appealed got that wrong.

There are an enormous number of reversals in which it is clear that the lower courts were breaking the rules, deciding credibility, and weighing evidence. A few examples, from comments I made to the Advisory Committee on the Civil Rules of the U.S. Judicial Conference, are Mackey v. Shalala, 360 F.3d 463, 468–69 (4th Cir.), cert. denied, 543 U.S. 876 (2004); Robinson v. Sappington, 351 F.3d 317, 330 (7th Cir. 2003); and Wheeler v. Aventis Pharmaceuticals, 360 F.3d 853, 859 (8th Cir. 2004). Recent additions of note are Papelino v. Albany College of Pharmacy of Union University, 633 F.3d 81 (2d Cir. 2011), a Title IX harassment and retaliation case, and Sharp v. Aker Plant Services, Inc., 726 F.3d 789, 797-98 (6th Cir. 2013), an ADEA case.

Two Circuits have called attention to the use of summary judgment as a docket-clearing technique:

  • Gallagher v. Delaney, 139 F.3d 338, 343 (2d Cir. 1998), stated: “The dangers of robust use of summary judgment to clear trial dockets are particularly acute in current sex discrimination cases.”
  • Delgado-Biaggi v. Air Transport Local 501, 112 F.3d 565, 567 (1st Cir. 1997), stated: “As we previously have admonished, the ‘[ten day] notice requirement is not merely window dressing’ and the ‘proper province’ of summary judgment is ‘to weed out claims that do not warrant trial rather than simply to clear a court’s docket.’”
  • Stella v. Town of Tewksbury, 4 F.3d 53, 55 (1st Cir. 1993), stated: “Although summary judgment is a useful shortcut leading to final adjudication on the merits in a relatively small class of cases, its proper province is to weed out claims that do not warrant trial rather than simply to clear a court’s docket.”

What the Federal courts have forgotten is that the legitimacy of a system of adjudication is enormously important to acceptance of its results. There is no substitute for a live hearing at which witnesses testify and are cross-examined, where the factfinder can assess the tone and demeanor of witnesses in drawing factual conclusions. Resolving the vast majority of cases behind closed doors, without a live hearing, does not help the acceptability of a decision.

The Federal courts used to recognize those values. “The court that can see the witnesses, hear their statements, observe their demeanor, and compare their degree of intelligence, is better able than an appellate tribunal to reconcile differences in testimony, or, if that be not possible, to ascertain the real nature of the transaction.” The Quickstep, 76 U.S. 665, 669 (1869). “The occurrence of events, the reasons why these events took place, and the motives of the men who participated in them are drawn in question. The issue of credibility is of great importance. The District Judge had the opportunity to observe the demeanor of the witnesses and to judge their credibility at first hand.” United States v. E. I. du Pont de Nemours & Co., 353 U.S. 586, 646 (1957). One of the leading justifications for the rule against hearsay is that the factfinder cannot assess the demeanor of the declarant. Donnelly v. United States, 228 U.S. 243, 273 (1913). This is the gold standard for decisions on the merits, and was once universally acknowledged as indispensable to the factfinding process. Despite Federal courts’ preference for trials by affidavit, State-court judges and arbitrators have not lost sight of that essential aid to the fair weighing of evidence. That is a powerful reason for claimants to consider arbitration as a potentially desirable forum.

One of the major selling points of arbitration is efficiency: the speed of resolution and the reduction of cost. As an advocate and arbitrator whose practice predates the Supreme Court’s summary judgment trilogy, I can attest to the skyrocketing inflation of discovery needs caused by the boost in summary judgments.

Before the trilogy, few felt it necessary to depose every potential witness because cross-examining the witnesses at trial was sufficient. After the trilogy, parties commonly believe they have to take a lot of depositions because they never knew who the other side would use as affiants in support of summary judgment or in opposition to it, it is important to find out what they would say and see if it was solid or full of holes, and their only chance to do that is in a deposition. To that end, all possible documents have to be vacuumed up and examined, leading to an explosion in requests for production.

The work that used to be done at trial, with a limited expenditure of time and requiring only limited discovery, now has to be done in advance–on a far larger scale–because the parties have to try to foreclose every possible line of attack or defense that might be used in a summary-judgment motion or defense, not just the line of attack that winds up being used at the hearing and can be adequately tested at the trial.

Allowing dispositive motions on the substance of the merits would in fairness require an expansion of the right of the parties to discovery comparable to what has occurred in Federal court. This would remove the existing incentive–although they are not aware of it–of claimants to choose arbitration in order to get a live hearing, delay the hearing in order to accommodate the expanded discovery, and greatly inflate the costs.

To achieve the potential speed and reduction of cost in arbitration, the question of dispositive motions should be addressed early, at the case management conference. There may always be surprises that could fairly lead to a change, and can fairly be addressed if that occurs, but the parties should otherwise be able to plan their discovery with confidence whether they will be trying their cases live or on paper.

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Richard T. Seymour
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I also act as a case mechanic for other attorneys or law firms, and serve as a neutral mediator and arbitrator.

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