D. C. Toedt III and Maretta Comfort Toedt

DRAFT 2015-01-05

An Arbitration Scheduling Order to Get to a Hearing in 12 Weeks, Adapted from the Manual for Complex Litigation, [DRAFT]

D. C. Toedt III and Maretta Comfort Toedt (Our last name is pronounced “Tate”)

1. Introduction

The title of this article might seem oxymoronic; arbitration and litigation are supposed to be different—aren’t they? And complex litigation sounds even further from arbitration. Yet the Federal Judicial Center’s Manual for Complex Litigation (“MCL”), now in its fourth edition (2004), offers numerous practical suggestions for streamlining non-jury cases, distilled from decades of trial judges’ hands-on experience.

Unfortunately, the MCL seems to leave the drafting of an actual scheduling order as an exercise for the reader. This article therefore proposes a set of model provisions, based mainly on the MCL, that could help arbitrators to get many cases, even complex ones, to a hearing in as little as 12 weeks—with “good enough” discovery and dispositive-motion practice, and with less overall expense. Arbitrators typically have authority under relevant arbitration rules to adopt such provisions (many of which are explicitly suggested in arbitration rules).

2. Overview of the scheduling-order provisions

The scheduling order below addresses the following; it’s set up to make it easy for arbitrators to pick and choose which provisions to use and which to omit.

• Disclosures modeled in part on Rule 26 of the Federal Rules of Civil Procedure, which has been refined over the years to help speed up federal-court litigation, and MCL 11.13. This approach is explicitly contemplated in, for example, Rules R22 and P2 of the American Arbitration Association’s Commercial Arbitration Rules (2013).

• Early questioning by the arbitrator, per MCL 11.11 and 11.33, about the parties’ claims and defenses to identify disputed material facts that counsel intend to prove and how they intend to

TOEDT & TOEDT — ARBITRATION SCHEDULING ORDER (ARTICLE) PAGE 1 DRAFT 2015-01-05 prove them. Such questioning should help to identify points for possible stipulation, discovery, dispositive motions, and hearing preparation, and reduce the cost of all of the above.

• “Discovery lite” in the form of the following:

o Voluntary, informal, 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 utilize (1) written questions for more-effective use of time, as well as (2) “conference” interviews of multiple individuals at once.

o Limited requests for production of documents that were not provided in the initial disclosures—subject to approval by the arbitrator. Quick responses are required to keep the process moving; and

o Formal depositions only in exceptional cases for good reason with arbitrator approval, even if counsel agree to them.

• If warranted by the complexity of the case, submission by each party of a written statement of fact and evidence, in accordance with MCL 11.31, 11.33, and 11.641. The statement of fact and evidence will be familiar to fans of Professor James McElhaney, because it’s much like the proof checklist that he urges trial counsel to develop. See, e.g., JAMES W. MCELHANEY, THE TRIAL

NOTEBOOK 128-29 (ABA 2005), excerpt available at http://goo.gl/LHwX6U (books.google.com).

• Dispositive-motion proposals are encouraged, but can be filed only with the arbitrator’s approval.

• Modification of dates or limitations, in most cases, only with approval of the parties’ inhouse representatives—this gives all participants an incentive to keep the case moving.

• Direct testimony at the hearing by written statement, together with oral cross-examination if timely requested. Written witness statements are increasingly used in federal courts’ non-jury trials, because they can significantly reduce the time needed for testimony and eliminate much of the need for depositions. (Hostile witnesses who refuse to provide a written witness statement may be presented in the traditional way.)

• “Baseball”-style arbitration of damages claims and other numerical-type disputes, when agreed by the parties: This can help encourage the parties to get closer to settlement by, in effect,

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• Circulation of 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.

• Appeal to a separate appellate arbitration panel under the AAA’s appellate rules, if so agreed by the parties at the outset of the case.

• Partial retrial of the case in court, also if so agreed at the outset of the case—but with significant incentives for accepting the award, modeled on similar statutory regimes.

3. Incentives

Arbitrators should consider using some of all of these scheduling-order provisions to help neutralize the subtle incentives that can contribute to delay and expense of the arbitration process. Those incentives are largely responsible for arbitration being considered by some to have all the cost and delay associated with litigation, but 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.

(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).

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• 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 1213. (Even the relentless-warrior types mentioned above can fall into this category.)

• 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 scheduling order below 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.

Dell Charles “D. C.” Toedt III (the last name is pronounced “Tate”) 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 a 150-lawyer national intellectual-property litigation boutique, where he chaired an ABA section’s special committee that developed a series of case- management orders based largely on the Manual for Complex Litigation. He is at [email protected]; 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 has been nominated to become a member of the board of governors of the National Academy of Arbitrators in May 2015. She is at [email protected]; 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 a draft of this article; any errors or idiocies are of course theirs.

ABC Inc. v. XYZ Corporation

Arbitration Scheduling Order1 (annotated)

Case number: 123-4567-89. Date of this order: 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

3.1 Definitions

Unless otherwise indicated:

3.1.1 “Arbitration Law” refers to the (U.S.) Federal Arbitration Act.

3.1.2 “Arbitration Provider” refers to the American Arbitration Association (“AAA”).

3.1.3 “Arbitration Rules” refers to the AAA Commercial Arbitration Rules.

3.1.4 “Case Administrator” refers to the Arbitration Provider’s administrator for this case.

3.1.5 “Claim,” whether or not capitalized, refers broadly to a claim, counterclaim, cross-claim, and any other demand for relief or remedy.

3.1.6 “Counsel,” whether or not capitalized, in the case of an unrepresented party, refers to the party him- or herself.

3.1.7 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 This Order is based on a model order by D. C. Toedt III and Maretta Comfort Toedt published at [CITE] and available at [LINK].

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3.1.8 [For AAA-managed cases:] The term “filing” a document with the Arbitration Provider refers to:

(1.8.a) uploading a PDF copy of the document to the Arbitration Provider’s Web site, and

(1.8.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.

3.1.9 “Reference Time Zone” means Central (U.S.) time, with daylight-savings time as in Chicago.

3.1.10 “Stipulation”—see § Stipulations.

3.1.11 “Week 1” refers to the week in which the initial case-management conference call occurs; Weeks 2, 3, etc., have corresponding meanings.

3.1.12 References to sections are to those of this Order unless otherwise indicated.

3.2 Modifications and waivers of this Order

3.2.1 While it is true that this arbitration proceeding is “owned” and controlled by the parties, it is also true that, when the parties agreed to arbitration, they implicitly stated their desire to avoid the expense and delay of litigation as much as possible. Accordingly, this Order’s limitations on discovery; the hearing date; and other details, were all chosen—in consultation with the parties’ counsel—with that agreed goal in mind.

3.2.2 Consistent with that goal, in the arbitrator’s discretion, the arbitrator may decline to give effect to a proposed modification or waiver of this Order—even if the modification or waiver was agreed to by the parties’ counsel—unless the modification or waiver was approved, 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 inhouse 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. See, e.g., AAA Commercial Rule R21(b), which charges the parties and the arbitrator with “discuss[ing] and establish[ing] a procedure for the conduct of the arbitration that is appropriate to achieve a fair, efficient, and economical resolution of the dispute,” as well as AAA Commercial Rule R23, 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.

This provision was inspired by how, in one arbitration, the arbitrator (who was 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, 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 only if the parties paid his cancellation fee. At that point, the lawyer 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.)

3.2.3 By way of example and not of limitation:

(2.3.a) Because depositions are costly and not always cost-effective, this Order requires the arbitrator’s approval to take depositions, even those depositions that are agreed to by the parties’ counsel.

COMMENT: Typically, arbitration rules severely restrict the parties’ ability to take depositions; see the commentary to § 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.. (2.3.b) Suppose hypothetically that the parties’ counsel, by agreement between them, conducted one or more depositions anyway, without first obtaining the approval of either their clients or the arbitrator. In that situation, the arbitrator has discretion to decline to consider any evidence resulting from the depositions.

COMMENT: See, e.g., AAA Commercial Rule R23(d), under which 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 non-compliance.” (Emphasis added.)

3.2.4 When multiple parties exist on the same side of the case (e.g., multiple claimants or multiple respondents):

(2.4.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 Order under § or waiver was approved, 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.

(2.4.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 scheduling order 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.

3.3 Communications with arbitrator

3.3.1 Except at oral hearings and case-management conference calls, no party or its counsel is to communicate orally with the arbitrator.

3.3.2 The parties are to submit directly to the arbitrator, by email, any correspondence, motions, requests for approval, briefs, etc., that require the arbitrator’s attention, with a copy 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.

3.3.3 Simple motions or other requests that require the arbitrator’s approval (e.g., requests for approval of discovery), especially agreed motions or requests, may be emailed to the arbitrator at any time with a copy to all other parties and to the Case Administrator.

3.3.4 The arbitrator may communicate in writing, for example by email, directly with the parties; the arbitrator expects to copy all parties and the Case Administrator on any written communication that he sends to any party.

3.4 Confidentiality

Any confidentiality provisions of the arbitration 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 R23(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 Order #4 of the Model Case Management 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-case-management- orders.

3.5 Questioning of counsel by the arbitrator

3.5.1 The arbitrator is aware of the need for the arbitrator to:

(5.1.a.1) not frustrate the adversarial process or disrupt the presentations of counsel;

(5.1.a.2) be sensitive to the attorney-client relationship;

(5.1.a.3) remain neutral and avoid the appearance of partiality;

(5.1.a.4) not decide any matter until each party has had a fair opportunity to be heard concerning that matter; and

(5.1.a.5) at the same time, manage the pre-hearing and hearing procedures to achieve a fair, efficient and economical resolution of the case.

3.5.2 With those constraints in mind: From time to time during the arbitration, including at the hearing, the arbitrator may question counsel (orally or in writing) about, for example: (1) the parties’ claims and defenses; (2) possible stipulated facts; (3) disputed material facts that counsel intend to prove and how they intend to prove them; and (4) points of fact or law that in the arbitrator’s view might not yet have been satisfactorily addressed.

COMMENT: This provision is drawn from principles stated 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).

Some lawyers might fret that questions by the arbitrator could unfairly “coach” opposing counsel. This modest, hypothetical downside risk must be weighed against the advantages of (1) providing the parties with insight that might be helpful—for example in the mediation required under AAA Commercial Rule R9 and contemplated by AAA Employment Rule 7; 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 arbitrator. (Moreover, the fretting lawyers might themselves be beneficiaries of such “coaching.”)

3.6 Document numbering

3.6.1 Document-based production numbering: To reduce the risk of confusion, each document is to be assigned a single identifying designation for use by all parties for all purposes throughout the case, including depositions (if any) and the hearing. Counsel are to agree on a uniform, document-based, production-numbering scheme for documents exchanged or produced, in which each document receives a single production number as though the document were an exhibit.

COMMENT: The beginning of this section is copied almost verbatim from MCL 11.441 at the top of page 72. Counsel are encouraged to use production numbers 1 through 100 for documents produced by Claimant; production numbers 101 through 200 for documents produced by Respondent; and so on, repeating this alternating cycle as necessary, and adjusting as necessary to accommodate any additional parties. This simple, exhibit-like production numbering scheme should be easy and inexpensive to implement and will be preferable for many cases with comparatively-few documents.

3.6.2 Page-based production numbering: Alternatively, if counsel so agree, the production-numbering scheme may be page-based in “Bates number” style, so that each page of each document is numbered.

COMMENT: In this situation, the production-numbering scheme might be (for example) Claimant using Bates numbers 0001 through 1000, Respondent using Bates numbers 1001 through 2000, etc. This page-based production-numbering scheme reflects the practice suggested in MCL 11.441 at 72 and used by a number of courts for ease of referencing specific pages.

3.7 Exhibits—numbering, etc.

COMMENT: Exhibit lists need not be exchanged because the parties will be exchanging the exhibits themselves from the outset of the case.

3.7.1 Exhibit numbering: Throughout the proceeding, each exhibit is to be uniformly identified (1) by its production number, prefixed with a letter indicating the party or parties offering the exhibit, or alternatively, (2) by the page number of the first page of the document, if a page-based production-numbering scheme is used.

COMMENT: For example, RX-2 would indicate an exhibit produced by Claimant (because the production number, 2, is in the 1 to 100 range) but offered into evidence by Respondent, while JX128 would indicate an exhibit produced by Respondent (because the production number, 128, is in the 101 to 199 range) but offered into evidence jointly by the parties.

The alternative page-based exhibit-numbering scheme is based on a suggestion in MCL 11.441 at 72 (last grammatical paragraph). For example, CX-0105 would refer to an exhibit offered by Claimant whose first page was numbered 0105.

3.7.2 No duplication of exhibits: In the interest of reducing potential confusion, 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).

3.7.3 Admissibility: All exhibits will be admitted into evidence if not objected to at or before the final scheduled case-management conference call.

COMMENT: This is adapted from a suggestion in MCL 12.13.

3.7.4 Exhibit streamlining: 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.

3.7.5 Highlighting: 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: The tape-flag and highlighting techniques are suggested in John C. Lowe, Making Complex Litigation Clear, in Trial, April 1997, at 46. Mr. Lowe was

an active member of the ABA IPL Section special committee that produced the Model Case Management Orders for Patent Cases cited in the commentary to § Confidentiality.

3.7.6 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.

3.7.7 Filing of exhibits: Exhibits need not be filed with the Arbitration Provider unless otherwise directed or as an exhibit to a motion or other filed document.

3.7.8 Stipulation to summaries of exhibit contents: 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.

3.8 Motion practice

3.8.1 Motions and briefs should be brief, as the name implies; bullet points are preferred.

3.8.2 The arbitrator expects that most motions will be taken up at one (or more) of the scheduled case-management calls.

3.8.3 Short, simple proposals for dispositive motions are encouraged, but such motions may be filed only with arbitrator approval.

COMMENT: This provision is based on AAA Commercial Rule R-33 and AAA Employment Rule 27; the provision lets the arbitrator screen proposed dispositive motions before counsel for both sides have to start doing expensive research and brief-writing.

3.8.4 Before filing a motion, the movant’s counsel must confer with opposing counsel; the motion must include a certificate of conference.

3.8.5 On motion, the arbitrator will grant full- or partial summary judgment 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 judgment 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 be reluctant 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 arbitrator reluctance doesn’t do the parties any favors, though, because it needlessly increases 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 in a multi-million-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 scheduling-order provisions here should significantly lessen the anxiety of summary judgment, because the procedures established by those provisions will help counsel and the arbitrator to ensure they are focusing on important, relevant issues.

3.8.6 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.

3.8.7 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.

4. Pre-hearing preparation

4.1 Stipulations—in general 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).

4.1.1 The parties are strongly 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.

4.1.2 A stipulation may be phrased in terms such as “Stipulated,” “Not contested,” “Not disputed,” “Uncontested,” “Undisputed,” and the like, all with the same effect.

4.1.3 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.”

4.1.4 A party’s stipulation of the truth of an uncontroverted fact does not affect the party’s right to contest the relevance, admissibility, 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.”

4.1.5 A stipulation is subject to any limitation stated in it.

4.2 Case-management calls—Weeks 6 and 9, Tuesday, 11:00 a.m.

4.2.1 Case-management conference calls will be convened at the dates and times (in the Reference Time Zone) specified in the heading of this section Case-management calls—Weeks 6 and 9, or as otherwise directed by the arbitrator in consultation with the parties.

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.

4.2.2 As appropriate, the agenda for each case-management conference call will include, for example, (1) remaining areas of disagreement; (2) discovery needs; (3) possible dispositive motions; and (4) any checklist items stated in the Arbitration Rules.

4.2.3 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).

4.2.4 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.

4.3 Document production may be requested during: Weeks 1 through 4

4.3.1 Introduction: During the time period specified in the heading of this section Document production may be requested during: Weeks 1 through 4, 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 R22(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.

4.3.2 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.

COMMENT: The parties’ in-house representatives should normally be consulted about an expensive or burdensome document production, even if outside counsel agree to it.

4.3.3 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).

4.3.4 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)."

4.3.5 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.

4.3.6 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.

4.3.7 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.

4.3.8 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 (e.g., Dropbox). Parties are reminded that email is not necessarily secure.

4.3.9 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.

4.3.10 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.

4.4 Telephonic interviews may be conducted during: Weeks 1 through 7

COMMENT: AAA Commercial Rule P2(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 Orders cited in the commentary to § Confidentiality. 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.)

4.4.1 During the time period specified in the heading of this section Telephonic interviews may be conducted during: Weeks 1 through , or by agreement at any time, any party may conduct a short, informal interview, each lasting up to 30 minutes, 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 Telephonic interviews may be conducted during: Weeks 1 through . (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 prevent counsel from taking too much time, even if by agreement, and thus unnecessarily increasing costs; it gives 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.

4.4.2 For good reason, 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.

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 L3(f) gives the arbitrator the authority to allocate costs of a deposition (AAA Employment Rule 9 is silent on that point).

4.4.3 To reduce costs, 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.

4.4.4 In telephonic interviews, counsel are encouraged, where practicable:

(4.4.a.1) to provide the individual being interviewed with advance written questions; and

COMMENT: See the text and commentary of § Written questions in oral depositions: Counsel taking a deposition are encouraged to send the deponent advance written questions, with a copy to all other parties. (advance written questions). (4.4.a.2) to conduct the interviews as “conference” interviews with multiple individuals.

COMMENT: See the text and commentary of § 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. (“conference” depositions).

4.4.5 The party arranging any interview is to make reasonable efforts to set a mutually-convenient time for it.

4.4.6 Any party may arrange to record one or more portions of any interview, at its own expense.

(4.6.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.

(4.6.b) No portion of any such recording may be introduced into evidence except (1) for impeachment or rebuttal purposes, or (2) for good cause with the arbitrator’s approval.

4.4.7 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 an authorized deposition (if any) or at the hearing.

4.5 Disclosures are due: Tuesday of Week 4

COMMENT: This section is adopted pursuant to the arbitrator’s express authority, under AAA Commercial Rules R22 and P2(a)(viii), and the arbitrator’s implied authority under AAA Employment Rule 8(e), to direct an exchange of information; it borrows from Rule 26 of the Federal Rules of Civil Procedure and MCL 11.13, which states (at 35) that “[e]ffective use of [mandatory disclosures] without excessive and unnecessary burdens on the parties can streamline the litigation.”

4.5.1 Each party (“disclosing party”) is to serve, on each other party and on the arbitrator—without awaiting a discovery request—the following information, as then best known to or contemplated by the disclosing party or its counsel, as applicable:

COMMENT: This is adapted from Fed. R. Civ. P. 26(a); see also AAA Commercial Rule R22(b)(i). (5.1.a.1) the name and, if known, the address, email address, and telephone number of each individual likely to have discoverable information—along with the subjects of that information—that the disclosing party might use to support its claims or defenses, unless the use would be solely for impeachment;

(5.1.a.2) a copy, marked as an exhibit, of each document, electronically stored information, and tangible thing—and only those documents, etc.—that the disclosing party (A) has in its possession, custody, or control and (B) genuinely contemplates, at that point in time, using to support its claims or defenses, unless the use would be solely for impeachment. Counsel are cautioned not to engage in strategic withholding of evidence, and also conversely not to try to inundate the other side with documents, etc., for purposes of harassment.

(5.1.a.3) a computation of each category of damages claimed by the disclosing party— who must also make available for inspection and copying the documents or other evidentiary material on which each computation is based, including materials bearing on the nature and extent of injuries suffered;

COMMENT: If a case were bifurcated, this requirement normally would not apply in the initial, liability-focused phase of the case. This requirement does not include the carve-out in Fed. R. Civ. P. 26(a), which exempts from disclosure any documents and other evidence that are privileged or protected from disclosure (because the computing party would have to waive privilege in any case in order to rely on the documents and other evidence). (5.1.a.4) any insurance agreement under which an insurance business might be liable to satisfy all or part of a possible judgment based on the award in the arbitration or to indemnify or reimburse for payments made to satisfy the judgment;

COMMENT: See the comment to subdivision a computation of each category of damages claimed by the disclosing party—who must also make available for inspection and copying the documents or other evidentiary material on which each computation is based, including materials bearing on the nature and extent of injuries suffered; above. (5.1.a.5) any other document or thing required by the parties’ agreement or directed by the arbitrator; and

(5.1.a.6) the extent, if any, to which the disclosing party’s initial disclosure does not comply with this section Each party (“disclosing party”) is to serve, on each other party and on the arbitrator—without awaiting a discovery request—the following information, as then best known to or contemplated by the disclosing party or its

counsel, as applicable:, and, with particularity, any factor(s) that the disclosing party believes excuse the non-compliance.

4.5.2 Each party’s disclosure is due as stated in the heading of this section Disclosures are due: Tuesday of Week 4 or as otherwise directed by the arbitrator.

4.5.3 Except for good cause clearly shown, the arbitrator will not consider, in support of a party’s claims or defenses, any exhibit that was not disclosed by that party as part of the party’s disclosure or in response to a request for production of documents.

COMMENT: This provision borrows from MCL 11.33 and MCL 11.641.

4.6 Written witness statements for direct testimony are due: Tuesday of Week 5 COMMENT: Much of the text of this section is adapted from AAA Commercial Rule R35 and MCL 12.51; AAA Employment Rule 8(o) also contemplates testimony by affidavit.

4.6.1 All “direct” witness testimony is to be presented by written witness statement except (1) for 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 statement; or (2) for other good reason with the arbitrator’s approval.

COMMENT: The use of written witness statements for direct testimony is the very first suggestion in the MCL for non-jury trials; see MCL 12.51. Written witness statements are increasingly being used for direct testimony in federal-court bench trials, for example in the Apple e-book price-fixing trial. 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). See generally a press release by the Second Circuit Judicial Council and the New York County Lawyers' Association, First- of-Its-Kind CLE Program on Using Affidavits in Lieu of Direct Testimony at Trial (2011), http://goo.gl/msEulX (ca2.uscourts.gov; apparently no longer available on the Web).

Written testimony is expressly provided for by AAA Commercial Rule R35(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. 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, http://goo.gl/LoYAuB (Ober.com, accessed Dec. 15, 2014).

The Manual for Complex Litigation observes that:

… [The written witness statement] procedure—which may be particularly appropriate for expert witnesses, witnesses called to supply factual background, or those needing an interpreter—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.

MCL 12.51 (emphasis added).

Despite the increasing use of written witness statements, some lawyers might balk at providing 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 should be an overriding consideration, because:

• Counsel calling any witness will generally spend time preparing the witness to testify anyway, 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 the direct testimony on the stand (which should also help to reduce any witness anxiety about testifying).

• Costs will be further reduced by the fact that a number of 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 witness statement setting forth the direct testimony would provide just such assurance.

• In the absence of a written witness statement, opposing counsel likely will argue strenuously that the witness should be deposed before testifying at the hearing. That not only would increase the expense for all concerned, it would create a risk for the presenting party that the deposition questioning would lead to opposing counsel getting even more ammunition for possible use in cross-examination at the hearing. While this might be beneficial for the arbitration proceeding as a whole, the presenting party’s counsel might not be happy about it.

4.6.2 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.

4.6.3 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:

(6.3.a.1) the full name and address of the witness;

(6.3.a.2) a summary of the witness’s education;

(6.3.a.3) a summary of the witness’s work history for at least the preceding ten years; and

(6.3.a.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; and

(6.3.a.5) a detailed statement of all the facts to which the witness would testify “on direct” if testifying orally at the hearing, including facts sufficient for foundation;

(6.3.a.6) an affirmation of the truth of the matters stated in the witness statement;

(6.3.a.7) spaces for the witness’s signature and the date and place of signature; and

(6.3.a.8) spaces for execution by a notary public or other official authorized to administer oaths.

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”).

4.6.4 Each witness statement is to be served on the arbitrator and all other parties on or before the date specified in the heading of this section Written witness statements for direct testimony are due: Tuesday of Week 5 as otherwise directed by the arbitrator.

4.6.5 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 a draft of a witness statement, and (2) was neither (A) previously provided to the other party nor (B) provided by the other party.

4.6.6 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 § All “direct” witness testimony is to be presented by written witness statement except (1) for 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 statement; or (2) for other good reason with the arbitrator’s approval..

4.6.7 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.

COMMENT: This designation procedure is based on AAA Commercial Rule R35(a).

4.6.8 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.

4.6.9 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.

COMMENT: This provision is modeled closely on AAA Commercial Rule R35(a).

4.6.10 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.

4.6.11 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. (6.11.a) The witness is to be sworn and to orally adopt his or her written statement; otherwise, the written statement will be disregarded.

(6.11.b)Counsel for the calling party may conduct a brief direct examination in which the witness may summarize his or her written statement.

(6.11.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).

(6.11.d)After the oral direct examination, the witness will be subject to oral cross-examination and redirect examination as usual.

4.6.12 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.

4.7 Statements of fact and evidence are due: Tuesday of Week 6 [Consider deleting this section if it’s not warranted by the case]

4.7.1 Each party is to serve on all other parties, and on the arbitrator, for each claim and each defense that the party asserts, a complete, detailed, written statement of each material fact that the party intends to prove. Each fact is to be individually annotated with citations to supporting evidence. The statement of fact and evidence is to be informative and complete, and free of argument and conclusions.

COMMENT: This requirement borrows much, including language, from:

• MCL 11.11, which 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 11.33, which:

o 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, emphasis added);

o suggests that judges consider “requiring counsel to list the essential elements of the cause of action ….” (at 45, emphasis added);

o suggests that judges consider “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, emphasis added).

• MCL 11.641, which states:

One method used by judges to ensure adequate preparation, streamline the evidence, and prevent unfair surprise is to 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 ….”

(Emphasis added.) It’s true that MCL 11.641 cautions that such detailed, annotated statements “should not be required routinely … because the substantial amount of work required for their preparation may outweigh the benefits.” But counsel will eventually do that work in any case, and for a fast-track arbitration it makes more sense for them to do it sooner. In fact, for years Professor McElhaney has urged litigators, in every case, to create just such an annotated statement of facts, which he calls a “proof checklist”:

“The heart of the trial notebook is the proof checklist,” said Angus, “and there are three steps.

“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); see also JAMES W. MCELHANEY, THE TRIAL NOTEBOOK 128-29 (ABA 2005), excerpt available at http://goo.gl/LHwX6U (books.google.com).

4.7.2 Each party’s statement of facts and evidence is due as stated in the heading of this section Statements of fact and evidence are due: Tuesday of Week or as otherwise directed by the arbitrator.

4.7.3 Each version of statement of facts and evidence provided to another party is to be numbered as a separate exhibit.

4.7.4 The arbitrator may direct that each party mark those parts of the other party’s statement of fact and evidence that the marking party disputes.

COMMENT: This is suggested in MCL 11.33 at 46: “… the statements may be exchanged, with each party marking those parts it disputes ….”

4.7.5 Except for good cause clearly shown, the arbitrator will not consider, in support of a party’s claims or defenses, any evidence that is not included in that party’s statement of fact and evidence.

COMMENT: This provision is based on MCL 11.33, which suggests that when the parties submit detailed 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, which repeats that “evidence not included in the statement should not be permitted at trial.”

4.8 Updates to disclosures, etc., are due: Thursday of Week 8

4.8.1 This section applies to any disclosure or response that this Order requires a party (the “serving party”) to serve on other parties—for example, exhibits; documents produced; witness statements; and, if applicable, statements of fact and evidence.

4.8.2 The serving party must supplement or correct its disclosure or response if the serving party learns that in some material respect the disclosure or response is incomplete or incorrect, and if the additional or corrective information has not otherwise been made known to the 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.

4.8.3 Any such supplementation is due (1) in a timely manner, and (2) in any event at or before the deadline stated in the heading of this section Updates to disclosures, etc., are due: Thursday of Week 8.

4.8.4 All revisions are to be “redlined” or otherwise clearly marked to show changes from the previously-served version.

4.8.5 In assessing the weight of the evidence of record, the arbitrator may take into account the apparent circumstances of such revisions—for example, if it appears that a witness is changing his or her story without good reason or that a party is trying to engage in gamesmanship. (In any such situation, the arbitrator will give both parties appropriate notice and opportunity to be heard concerning the matter in question.)

4.9 Depositions only with arbitrator’s approval

4.9.1 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 L3. AAA Employment Rule 9 leaves the question of depositions up to the arbitrator.

4.9.2 Written questions in oral depositions: Counsel taking a deposition are 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 Orders for Patent Cases cited in the commentary to § Confidentiality.

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.

4.9.3 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.

4.9.4 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.

4.10 Subpoenas

4.10.1 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.

4.10.2 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 Kramer, Document subpoenas to third parties, at http://goo.gl/esq7C (ArbitrationNation.com 2012); and various state arbitration statutes.

4.10.3 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 R11 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.”

4.11 Mediation is scheduled for: Thursday of Week 9

4.11.1 Unless either party opts out, the parties are to mediate the dispute as stated in the heading of this section Subpoenas .

COMMENT: Mediation is required by AAA Commercial Rule R9 unless either party opts out; mediation is also contemplated by AAA Employment Rule 7, which appears to require the parties to agree to it.

5. The hearing will begin: Tuesday of Week 12

5.1 Hearing schedule

5.1.1 The hearing is to take place as stated in the heading of this section The hearing will begin: Tuesday of Week 12.

COMMENT: See AAA Commercial Rule R23 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 R32(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 R23, which contemplates the possibility of multiple hearings;

o AAA Commercial Rules R35 and P2, which contemplates that witness declarations may replace direct testimony;

o AAA Employment Rule 8(o), which contemplates that testimony may be by affidavit.

5.1.3 In exceptional cases such as illness of a necessary participant, the arbitrator has discretion to delay the start of the hearing.

COMMENT: See AAA Commercial Rule R30 and AAA Employment Rule 24, which give the arbitrator discretion to postpone “any hearing.”

5.2 Short recess after opening statements to discuss possible settlement

5.2.1 Before opening statements, the arbitrator may, in the arbitrator’s discretion, announce that, after opening statements, the hearing will be recessed for a brief period 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 Witness testimony

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 R32(c) and AAA Employment Rule 28. Free or inexpensive videoconferencing possibilities include Skype, GoToMeeting, and Zoom.us, among others.

5.3.4 Expert witnesses are to testify in a group-discussion format to the greatest 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 arbitrator will consider whether the expense of a court reporter need be incurred as the hearing date approaches. The parties are free to agree to engage a court reporter, either separately or jointly, in which case the transcript will serve as an official record of the proceeding.

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 Bench briefs

5.4.1 At any time, any party may serve, upon the arbitrator and all other parties, one or more short “bench briefs.”

5.4.2 Each bench brief should briefly outline what the party believes the arbitrator should be looking for in the exhibits and witness testimony and citing applicable law.

5.4.3 Any party may likewise serve a revised version of its bench brief, e.g., to address points made in another party’s bench brief or in testimony at the hearing.

6. Post-hearing matters

6.1 The award

6.1.1 The award will follow the contract and the law; the arbitrator will not act as amiable compositeur or ex aequo et bono unless both of the following are true:

(1.1.a.1) the parties agree that the arbitrator may so act, and

(1.1.a.2) extraordinary circumstances warrant such action by the arbitrator.

COMMENT: This provision is included to reassure those who have heard horror stories about “rogue” arbitrators doing what seems right in their own eyes.

6.1.2 The arbitrator may circulate a draft award to counsel for suggestions to correct any perceived misunderstandings, misstatements, or omissions. Alternatively, the award itself may state that it will become final at a stated time unless it is withdrawn or modified. In either case, a party may suggest corrections in writing; upon written request by a party, the arbitrator will convene a conference call at which counsel can address specific issues stated in the draft- or not-yet-final award.

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).

NOTE: 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).

6.2 Baseball arbitration of specified disputes (delete if not agreed)

6.2.1 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 Baseball arbitration of specified disputes (delete if not agreed).

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.

6.2.2 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").

6.2.3 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).

6.2.4 Each party may include, in its proposed decision, a brief explanation why the arbitrator should select that proposed decision.

6.2.5 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.

6.2.6 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.

6.2.7 Except as provided in § 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., 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.

7. Post-award matters

7.1 Retention of jurisdiction for clarification of award

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.

7.2 Appeal to AAA appellate arbitration panel (delete if not agreed)

INTRODUCTION: This section is adapted from the AAA Optional Appellate Arbitration Rules, which are available at http://goo.gl/PMWo0M (adr.org).

7.2.1 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 Arbitration Rules (“Appellate Rules”).

COMMENT: The parties’ agreement should be documented in writing, e.g., via an exchange of emails among counsel and the arbitrator.

7.2.2 The underlying award is to be, at a minimum, a reasoned award.

7.2.3 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.

7.2.4 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.

7.2.5 If an appeal is timely filed, the decision rendered by the appeal tribunal may be entered in any court having jurisdiction thereof.

7.3 Partial retrial 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.

7.3.1 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. (3.1.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. (3.1.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.

(3.1.c) The challenge action must seek only one or both of:

(3.1.c.1) relief that the challenger sought, but was not granted, from or against the challenge respondent in the arbitration; and/or

(3.1.c.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.

7.3.2 Time is of the essence for each prerequisite set forth in § 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:; 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.

7.3.3 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.

(3.3.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.

(3.3.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.

7.3.4 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:

(3.4.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

(3.4.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.

7.3.5 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.

7.3.6 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:

(3.6.a.1) all costs of court taxed to that challenge respondent in the challenge action; and

(3.6.a.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).

7.3.7 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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