Draft 2015-06-15 An Arbitration Scheduling Order Drawing on the Manual for Complex Litigation for Faster, Less-Expensive Awards

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DRAFT 2015-06-15

An Arbitration Scheduling Order
Drawing on the Manual for Complex Litigation
for Faster, Less-Expensive Awards

D. C. Toedt III and Maretta Comfort Toedt

(Our last name is pronounced “Tate”)
  1. Introduction

Some regard arbitration as the worst of both worlds: essentially the same cost and delay as litigation, along 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. One vice president of litigation at a Fortune 250 company recently told one of the authors that, for just those reasons, his company now prefers bench trials over arbitration.

It wasn’t supposed to be that way. Under typical arbitration rules, such as the American Arbitration Association’s Commercial Arbitration Rules (“AAA Commercial Rules”), arbitrators generally have authority to conduct proceedings in a streamlined way.

Unfortunately, such rules typically leave the drafting of an actual scheduling order and hearing plan as an exercise for the reader. That can drastically reduce the likelihood that a busy arbitrator will actually make use of her authority under the rules.

This article therefore proposes a model scheduling order and hearing plan (“Scheduling Order”). It adapts numerous practical suggestions from the AAA Commercial Rules as well as from the Federal Judicial Center’s Manual for Complex Litigation (“MCL”). Those suggestions were distilled from decades if not centuries of aggregate hands-on experience by seasoned federal trial judges and commercial arbitrators.

The Scheduling Order sets out a framework for focused discovery, fast-track motion practice, and sensible hearing management, at what should be far less overall expense. The Scheduling Order could help arbitrators to get many cases, even complex ones, to a hearing in as little as 12 weeks.

  1. Highlights of the Scheduling Order

    1. The Chronology helps everyone focus on the “strike zone”

Chief Justice Roberts famously compared judges to umpires, whose job is to call balls and strikes, not to pitch or bat. But that’s not an umpire’s only job: When home plate starts to get obscured by dirt on it, the umpire takes a small whisk broom and sweeps off home plate, so that the strike zone will be clearly visible to all concerned.

In both litigation and arbitration, the “strike zone” is the set of material facts as to which there is a genuine dispute. In the Scheduling Order below, the function of sweeping off home plate is served by making counsel prepare and update a “Chronology.” The Chronology is a simple, consolidated statement of the parties’ factual contentions – in chronological order to the greatest extent possible – along with supporting evidence, relevant authority, and requested discovery. Preparation of the Chronology will help counsel and the arbitrator to identify and stay focused on the issues in dispute. That in turn should significantly reduce the overall time and expense required for the arbitration – for example, by  reducing the need for repetitive briefing and by giving the arbitrator a head start on writing an award.

(a) The Chronology is not a new thing

The Chronology requirement is nothing new. It’s a variation of longstanding disclosure requirements that apply in both litigation and arbitration:

• Early fact disclosure is familiar to federal-court litigators from their experience with Rule 26 of the Federal Rules of Civil Procedure.  

• Under AAA rules, the arbitrator has authority to require disclosures. See AAA Commercial Rules P‑2(a)(xiii), R‑22(a), and R‑47(b).

• MCL 11.11 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 11.13 of the Manual for Complex Litigation states (at 35) that “[e]ffective use of [early disclosures] without excessive and unnecessary burdens on the parties can streamline the litigation.”

• MCL 11.33 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). It suggests that judges “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).  

• MCL 11.641 likewise recommends that judges “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 …."

(b) Good litigators prepare a chronology anyway; they might as well start early

Some counsel won’t want to give up their freedom to proceed at their own pace (especially in view of their other commitments). These counsel might balk at being directed to do this preparatory work early in the case. And it’s true that MCL 11.641 cautions that detailed, annotated statements “should not be required routinely … because the substantial amount of work required for their preparation may outweigh the benefits.”

But in most cases, it likely will make sense for counsel to start pulling their case together sooner rather than later. If nothing else, doing so can help the parties better evaluate their settlement positions. And, of course, if the arbitration goes to hearing, counsel will eventually have to do all of that work anyway.

For years, Professor James McElhaney has urged litigators, in every case, to create just such an annotated Chronology, which he calls a “proof checklist”:

The heart of the trial notebook is the proof checklist …. 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) (internal quotation marks omitted); see also James W. McElhaney, The Trial Notebook 128-29 (ABA 2005), excerpt available at http://goo.gl/LHwX6U (books.google.com).

A joint chronology can be even more useful, in that it can eliminate much expensive duplication of effort in brief-writing and award-drafting.

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