Orlofsky ADR Services

Mediation and the Federal Arbitration Act

ABA American Bar Association, Section of Litigation, Alternative Dispute ResolutionThis article was also published by the American Bar Association’s Section of Litigation, Alternative Dispute Resolution Committee.

Mediation and the Federal arbitration actThere is a large and well-developed body of law addressing the question of how a court should determine whether a dispute falls within the scope of an arbitration clause. As commercial agreements more frequently include a requirement that the parties first mediate a dispute before they can either arbitrate or litigate in court, courts will have to deal with the similar question of whether a dispute is subject to a mediation provision.

In Holick v. Cellular Sales of New York, 2013 WL 1336608 (N.D.N.Y. 2013), the court was faced with just such a dispute over whether the plaintiff’s claim was subject to a contractual requirement that the parties mediate before filing a lawsuit. The court chose to treat the issue exactly as if it had arisen under an arbitration provision, relying exclusively on Federal Arbitration Act (9 U.S.C. §4) case law. Thus, the court first decided, based on FAA precedent, that it would apply a summary judgment standard in deciding whether the claim should be mediated, holding a trial only if the facts were not in dispute. Then, in response to the argument that the defendant had waived its right to require mediation, the court, again citing FAA precedent, held that waivers should not lightly be inferred because of the strong federal policy favoring arbitration––the court actually talked about arbitration, not mediation. Next, when it came to interpreting the language of the mediation provision, the court cited FAA precedent for the proposition that “any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration.” Finally, in response to an argument that a statutory claim was not subject to the mediation requirement, the court, again citing arbitration precedent, ruled that a statutory claim had to be mediated unless the statute shows a congressional intent that precluded such a requirement.

The court never once questioned the applicability of arbitration precedent to a contractual mediation requirement. While this provided easy access to a well-established body of federal law, an argument could be made that the FAA addresses only arbitration, not all forms of ADR. With more and more contracts requiring mediation, this will be an emerging area of ADR law.