ALTERNATIVE DISPUTE RESOLUTION FINAL EXAMINATION Fall 2007

(2 Hours)

1. (20 points) Briefly define or describe the following as they relate to ADR, including, where appropriate, the issues surrounding them:

(a) Court-Annexed ADR, (b) The Prisoner’s Dilemma, (c) Collaborative Law, (d) Summary Jury Trial, (e) Early Neutral Evaluation, (f) Arbitrator Immunity, (g) Mediator Immunity, (h) Procedural Arbitrability, (i) “Broad” vs. “Narrow” Arbitration Clauses, (j) Statutory Rights.

2. (20 points) Adam Ant enters into a purported contract with Beyoncé Bee under which Ant agrees to sell Bee his pesticide manufacturing business, with payments over a long period of time, at 78% interest per year. The contract contains a broad, typical arbitration clause, and specifies that the laws of California shall govern the contract generally.

A dispute arises under the contract, and Bee’s guardian—for reasons that will appear in a moment—brings suit against Ant in California state court, making the following claims:

(i) The contract should be rescinded, based upon Ant’s false and fraudulent statement that there were no environmental laws affecting the business;

(ii) The contract is void under California law, which provides that any contract calling for a rate of interest per year higher than 20% is void; and

(iii) Bee is, and always has been mentally deficient, and in fact had a guardian appointed for her recently.

Ant answers that all these matters should be determined by an arbitrator. How should the court rule?

3. (15 points) Bob, who suffered from kidney problems for many years, bought one of Sal’s kidneys from Sal. The sales contract called for arbitration. When a dispute arose over the quality of the kidney, Bob refused to pay. Bob and Sal agreed to arbitrate the matter before a jointly-chosen and well-qualified arbitrator in Alabama, where the contract was signed and where the surgery took place. Bob’s contention was that the contract was

1 of 2 \\nor\3722\VaArb-07\Exam\Exam 2007.doc unenforceable, if not disgusting, based on public policy. Sal’s contention was that unless Bob gave the kidney back, Bob had to pay for it. The case was heard, briefed and argued at great length, and the arbitrator, in a long and considered opinion, decided in Sal’s favor. Bob moved, in the appropriate court, to vacate the award, citing an Alabama statute—unknown to the parties or the arbitrator at the time—declaring contracts for the sale of body parts absolutely void and unenforceable. How should the court rule?

4. (15 points) The text describes five stages of mediation. Please discuss how the 1978 Camp David meetings (described in the reading from former President Jimmy Carter’s “Thirteen Days”) demonstrate (or represent variations from) these stages.

5. (10 points) You have successfully secured an arbitration award that requires your neighbor to stop allowing his hogs to wander onto your property and eat your garden. Nevertheless, your neighbor fails to control his hogs, and they are again enjoying your carrots. What is your remedy?

6. (10 points) Your client, an aspiring 20-year-old ballet dancer, was grievously injured by a chain saw she was (according to her) using in an appropriate manner. She is seeking actual damages, damages for pain and suffering, and punitive damages for her ruined career and ruined life. You and your client have a critical settlement meeting with the other side tomorrow, and your client asks for your advice regarding negotiating strategy. Please compare and contrast the “schools” of negotiating, sometimes broadly referred to as “traditional” and “creative”, as they might apply to this case. If there are other facts you would need to know in order to formulate a strategy, please describe.

7. (10 points) Your law firm has been approached by several customers of Bigbank National Credit Card Co. who believe Bigbank’s form customer agreement is in violation of certain state and federal laws, and that they each have been modestly damaged. Since each individual claim is small, and Bigbank has millions of customers, your firm is considering a combined action of some kind, but does not wish to take the case if there is little chance of success. Bigbank’s agreement contains the following:

“ Any dispute arising under this agreement shall be submitted to arbitration under the Commercial Rules of the American Arbitration Association. Both parties hereby waive any right to a class action or class arbitration.”

Because you have taken a course in ADR, your firm deems you an expert on the question of whether, and how, to proceed with the prospective clients. What are the questions that must be addressed in deciding whether to take the case and, if the firm does take it, how to proceed?

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