A L T E R N A
T I V E . D I S P U T E .
R E S O L U T I O N
An
Introduction to The Use Of Alternative Dispute Resolution to Resolve
Insurance Disputes
Jay E. Grenig*
I. INTRODUCTION
Alternative dispute resolution describes the techniques
or procedures for resolving disputes short of trial in the public courts.
Alternatives to civil litigation are not a new phenomenon.1
However, in recent years the interest in alternative dispute resolution
has increased.2
Non-judicial procedures may be superior in a variety of disputes.
They may be less expensive, faster, less intimidating, more sensitive
to the disputants’ concerns, and more responsive to the underlying
problems.
The first section of this article provides an introduction
to alternative dispute resolution. The second section discusses
the Federal Arbitration Act3
and the McCarran-Ferguson Act.4
The third section examines the use of various alternative dispute resolution
processes in addressing different types of insurance situations.
II. ALTERNATIVE DISPUTE RESOLUTION
A.
Generally
There are a number of voluntary alternative dispute resolution methods
available to facilitate the settlement of disputes or to adjudicate
disputes if settlement cannot be reached. These methods can
be used separately or in combination, and their components can be
modified and mixed to suit the circumstances of the particular case.
B.
Negotiation
Negotiation normally should be considered the first step in attempting
to resolve any dispute.5
It is probably the most frequently used method of dispute resolution.
Negotiation implies joint responsibility and authority for making
certain decisions. Parties to a dispute may utilize negotiation
to solve their problems and disputes directly as between themselves,
without the involvement of a third party.
The
negotiation process is voluntary and non-binding. In negotiation,
two or more disputing parties meet together in good faith to identify
and discuss the issues at hand, present facts and supporting data,
arrive at mutual solutions, and abide by the outcome. Negotiation
continues as long as the parties are willing to exchange views on
settlement.
C.
Conciliation
Conciliation is the process in which a third party brings the disputing
parties together so that the disputing parties can begin to discuss
the issues. It involves the adjustment and settlement of a dispute
in a friendly, non-antagonistic manner. Conciliation may be
used in the courts before trial, with a view towards avoiding trial,
and in labor disputes prior to arbitration.
Conciliation
may be a particularly good choice when emotions are running high,
or when ongoing relationships are involved and the parties’
inability or unwillingness to communicate is a major barrier to resolution.
Conciliation also may be inappropriate where one party has a clear
legal entitlement or where the parties have unequal bargaining power
or sophistication.
The
term “conciliation” is frequently used interchangeably
with “mediation.”6
However, conciliation generally refers to a process less structured
than mediation. In some forms of conciliation, a conciliator
does not take active part in the process or settlement discussions,
while a mediator may actively promote a mutually acceptable settlement.
The conciliator’s primary role is to reduce the parties’
inflammatory rhetoric and tension, open channels of communication,
and arrange for formal negotiations.
Unlike
a mediator, a conciliator sometimes is called upon to make non-binding
recommendations or findings that often concern the factual or legal
issues in dispute. The conciliator also may recommend an appropriate
resolution under the circumstances.7
The finding or recommendation is made to the parties jointly by the
conciliator.
D.
Mediation
Mediation introduces the assistance of a neutral third party -- the
“mediator” -- in attempting to resolve the dispute.8
The mediator’s function is to assist the parties in their negotiations
by helping the parties to define the issues, to overcome barriers
to communication, and to explore alternative methods of resolving
their dispute.9 Mediation enhances
the parties’ ability to communicate with each other. The mediation
process is voluntary; either party can reject further participation
by the mediator at any time in the process. The mediator has
no authority to impose a settlement and does not render a binding
decision. A mediator can clarify the parties’ expectations
by focusing their needs and interests, attempting to diffuse hostilities,
and reducing the adverse impact of emotions. The parties retain
complete control over the process and make their own decisions about
what solutions will work for them.
The mediator usually deals directly with the parties or their representatives.
The mediator endeavors to ensure that each party is evaluating his
or her position realistically. A mediator helps the parties
appreciate the difference between the best alternative to a negotiated
agreement and the worst alternative to a negotiated agreement.
A mediator can facilitate the resolution of a dispute by suggesting
non-monetary benefits that cost the party providing the benefit less
than the value of the benefit to the other. A mediator also
can help parties overcome perceptive differences. By communicating
directly with those persons having settlement authority, a mediator
can reduce the risk of a conflict of interest between a party and
its negotiating representatives. To be most successful in this
regard, a mediator should strive to appear fair and impartial.
Furthermore, the mediator should analyze the disputed issues and prioritize
them in order to facilitate resolution of the dispute.
Some mediators favor party-generated settlement
options and do not suggest settlement terms. They see themselves
primarily as facilitators, digging deep into the interests and feelings
underlying the surface dispute.10
Other mediators will propose settlement options and attempt to persuade
the parties to make concessions. In some cases, the mediator
may be asked to offer an assessment of the probable outcome of the
case in order to facilitate the parties’ more realistic evaluation
of their respective positions.
In evaluative mediation, the mediator decides what the case is worth
and advises how it should be settled. It can be effective in
a situation where the neutral has tried many similar cases or otherwise
knows the case well.
E. Appraisal
Appraisal involves the valuation or estimation of
the value of property by disinterested persons of suitable qualifications.11
It uses expert opinion, rather than explicit market transactions,
in order to ascertain the value of an asset or liability. Appraisals
usually relate to leases, real estate, losses and damages under insurance
policies or purchase and sale agreements. Appraisals involve
questions of value, price, amounts, damages, and other similar areas
of dispute.
The appraiser is selected or appointed by a competent authority to
arrive at a just and true valuation of property. Appraisers
are selected for their special knowledge of the subject matter.
An appraisal may be conducted without formal hearings, and the appraiser
is permitted to make his or her own investigation and to establish
his or her own procedures.
The
appraiser’s decision need not assume any particular form.
However, an appraisal award may be invalid if it is outside the scope
of the issues submitted to the appraiser. An appraisal made
within the scope of the submission is not invalid because the appraiser
was mistaken as to law or fact.12
Appraisal differs from arbitration in that an arbitration
award is the judgment of a tribunal selected by the parties to determine
matters actually in variance between them, whereas an appraisal settles
the price or value of property or aclaim.13
In the appraisal, the appraiser is empowered only to settle the price
or value of the property or claim in issue.
Unless express provision is made for a hearing,
the method of determining the facts in an appraisal is left to the
appraiser.14
The decision may be made without notice to the parties and without
a hearing, unless such notice or hearing is required by an express
provision in the agreement between the parties.15
In addition, the appraisal may be made upon such principles as the
appraiser sees fit to adopt, or upon such evidence as the appraiser
chooses to receive. Appraisers are not required to take an oath
and are not obliged to provide formal notice or to hear evidence.
They usually proceed by ex parte investigation, so long as the parties
are given an opportunity to furnish information and explanation regarding
the matters in issue.16
An appraisal resolves only the specific issues of
actual value or loss or damages. All other issues are reserved
for determination in a more complete and formal hearing on the merits.17
Generally, a dissatisfied party who participates in the selection
of an independent appraiser has no greater right to challenge the
appraiser’s valuations than that party would have to attack
an arbitrator’s award. However, notwithstanding that the award
may be fair on its face, a court may consider the method by which
the appraiser reached his or her decision.18
Where the evidence shows that the appraisal was the result of fraud,
corruption, dishonesty or bad faith, a court is justified in overturning
the appraiser’s determination, even though the appraiser was
selected by agreement between the parties.19
It
should also be noted that a court is without power to enter a judgment
upon an appraisal report as if it were an arbitration award. The proper
remedy is to commence an action involving a complete and formal trial
on the merits.20
F. Arbitration
Arbitration is a method for dispute resolution in which the parties
submit their dispute to an impartial person selected by the parties.21
The parties may use a single arbitrator to hear a dispute or they
may use an arbitration board or panel. The arbitrator makes
a decision following a hearing. In binding arbitration (usually
referred to simply as “arbitration”), the arbitrator’s
decision is final and binding on the parties.
The arbitrator hears evidence from each side and
renders a decision that is normally binding on the parties, as noted
above. The procedure is less formal than a judicial trial.
Unless the parties agree to the contrary, the arbitrator is not bound
to follow the law. Instead, the arbitrator may base the decision
on business custom and practice, technical insight, or broad principles
of equity and justice. Once confirmed, an arbitrator’s
award is enforceable in the same manner as a court judgment.22
The process in non-binding arbitration is the same
as binding arbitration, except that the arbitrator’s decision
is advisory only. If the parties do not accept the decision,
the advisory decision may be used as an aid to resolve the dispute
through negotiation or other means.23
Incentive arbitration is a form of non-binding arbitration in which
the parties agree to the imposition of a penalty on the party who
rejects the arbitrator’s advisory decision and pursues its claim
in court, if that party does not improve its position by some percentage
or formula. The penalties may include payment of attorney fees
in the litigation or payment of the full cost of arbitration.
Compulsory arbitration results when a statute or administrative rule
or regulation requires certain types of disputes to be submitted to
arbitration. In voluntary or contractual arbitration, the parties
mutually agree that an issue may be submitted to arbitration.
The parties either contractually agree to submit future disputes to
arbitration or they agree to submit an existing dispute to arbitration.
G. Mediation-Arbitration
Mediation-arbitration, sometimes referred to as “med-arb,”
is a mixed process that begins as mediation and ends with arbitration
if the mediation is unsuccessful.24
Mediation-arbitration is used most commonly in labor-management disputes.
It is supported by the theory that, under the threat of arbitration,
the participants will try harder to achieve voluntary settlement of
the dispute.
Mediation-arbitration
involves a two-step process. First, a neutral third party mediates
the dispute with the parties in an attempt to reach a voluntary settlement.
Subsequently, if the participants remain at impasse, the neutral renders
a binding decision on the unresolved issues following an arbitration
hearing. Mediation-arbitration is particularly effective when
the participants are of relatively equal bargaining experience; the
efficiency of a combined procedure outweighs the inhibiting effect
of the mediator’s anticipated role change.25
The arbitrator may be the person who conducts the mediation or the
parties may select one person to mediate and another person to arbitrate.
A person who acts as mediator and then as arbitrator is known as the
mediator-arbitrator. Some contend that using the same person
to mediate and to arbitrate is advantageous because the neutral has
more leverage in the mediation process -- the parties know a solution
will be imposed upon them if they do not arrive at one of their own.
Others assert that mediation-arbitration compromises the integrity
of the mediation process and the arbitrator’s neutrality.
The neutral may have received confidential information relevant to
the merits of the dispute in the course of mediation before deciding
the arbitration.
Because of this concern about the integrity of the
process, some agreements provide for one person to mediate and a different
person to arbitrate. However, this remedy is more costly and time
consuming than using the same person as both mediator and arbitrator.
In addition, it does not allow for further attempts to mediate once
the process reaches arbitration.26
However, the use of different persons as the mediator and the arbitrator
is appropriate if the parties are concerned about the perceived bias
of the mediator-arbitrator.27
H. Mini Trials
The mini trial is not a trial, per se. It is a structured dispute-resolution
method in which senior executives of the parties involved in a legal
dispute meet in the presence of a neutral advisor. After hearing presentations
on the merits of each side, these representatives attempt to formulate
a voluntary settlement.28
The mini trial is a form of facilitated negotiation and includes elements
of negotiation and adversarial case presentation.
The mini trial was developed in the corporate setting. Mini
trials are usually employed to resolve disputes that would otherwise
involve lengthy litigation. The senior executives selected to
participate by the parties should hold no direct involvement in the
dispute, lest they feel a need to defend past actions. The more
senior the management representatives, the greater the range of options
available for a constructive solution.
The parties should agree in writing that the mini trial proceedings
are confidential and that no written or oral statement made by any
participant can be used as evidence or an admission in other proceedings.
The fees and expenses of the neutral advisor are borne equally by
the parties. Each party normally is responsible for its own
costs, including legal fees, incurred by participation in the mini
trial. In their written agreement, the parties may alter the
allocation of fees and expenses.
I.
Early Neutral Evaluation
Early neutral evaluation is a court-annexed settlement program used
to assist the parties in developing an approach to the litigation
that focuses on key issues and necessary discovery.29
The parties may hire, or the court may appoint, a neutral evaluator
(such as an attorney), who is highly experienced with the subject
to conduct a review of the matter in dispute.
The
evaluator appraises the merits of the dispute and makes suggestions
for conducting discovery and obtaining legal rulings to resolve the
case efficiently. The evaluator helps the parties identify areas
of agreement, assess the strengths and weaknesses of their arguments
and their evidence, and devise a plan for sharing important information
and conducting key discovery. The neutral evaluator’s
report may also aid the parties in reaching a settlement. If
the case does not settle, the report remains confidential. The
evaluator then helps the parties to simplify and adapt the case for
more expeditious handling in trial.
III. FEDERAL LAW
Traditionally,
courts refused to enforce agreements to arbitrate.30
The Federal Arbitration Act of 192531
(also referred to as the United States Arbitration Act)32
changed the common law rule. It made a written agreement to arbitrate
specifically enforceable in the federal courts, so long as the agreement
is connected with a maritime transaction or evidences a transaction
involving foreign or interstate commerce.33
By adopting the Act, Congress intended to create a new body of federal
substantive law affecting the validity and interpretation of arbitration
agreements. It also sought to exercise its full range of constitutional
power under the commerce clause in order to make the Act as widely effective
as possible.34
The Act applies in state courts as well as in federal courts.35
The purpose of the Act is to relieve congestion
in the courts and to provide parties with an alternative method for
dispute resolution that would be more efficient and less costly than
litigation.36
It recognizes a strong public policy favoring arbitration of maritime
and commercial disputes.37
The Act intends for the courts to enforce arbitration agreements into
which parties have entered[38] and to place such agreements upon the
same footing as other contracts.39
All doubts as to arbitrability under the Act are construed in favor
of the liberal policy of promoting arbitration.40
Section 4 of the Act, allowing a party to petition
the district court for an order compelling arbitration, does not create
independent federal jurisdiction.41
In order to establish federal jurisdiction, the party seeking to compel
arbitration must demonstrate that, if there were no agreement to arbitrate,
a federal court would have jurisdiction “of the subject matter
of a suit arising out of the controversy between the parties.”42
However,
Section 4 has been interpreted to mean that a federal court has subject
matter jurisdiction over an action to compel or stay arbitration merely
because the underlying claim raises a federal question. A petition
under Section 4 must be brought in state court unless some other basis
of federal jurisdiction exists, such as diversity of citizenship or
assertion of an admiralty claim.43
The Act applies to contracts “evidencing a transaction
involving [interstate] commerce.”44
The Federal Arbitration Act is the only federal statute using the phrase
“involving” to represent an interstate commerce relationship.45
Since the enactment of the Act, federal and state courts have differed
as to when a transaction “involves” interstate commerce
to such an extent that the Act applies.46
In Allied-Bruce Terminix Companies, Inc. v. Dobson,47
the United States Supreme Court held that the words, “involving
commerce,” as used in the Act, are the functional equivalent of
“affecting commerce,” signaling Congress’ intent to
exercise its commerce power to the full. The Court rejected the
“contemplation of the parties” standard, which provides
that the Act applies only if the parties contemplated substantial interstate
activity. The Supreme Court applied a “commerce in fact”
standard, noting that the transaction must have involved interstate
commerce, even if the parties did not conútemúplate an
interstate commerce connection.48
The United States Supreme Court added further clarification
in Prima Paint Corp. v. Flood & Conklin Manufacturing Co.,49
declaring that the Federal Arbitration Act “is based upon and
confined to the incontestable federal foundations of ‘control
over interstate commerce and over admiralty.’”50
The Court rejected the argument that the transactions involving commerce
covered by the Act are limited to contracts between merchants for the
interstate shipment of goods. Acknowledging that the Act articulates
substantive law, the Court determined that the Act applied in diversity
cases because Congress had intended that result. The Court explained,
“Congress may prescribe how federal courts are to conduct themselves
with respect to subject matter of which Congress plainly has power to
legislate.”51
In Southland Corp. v. Keating,52
the United States Supreme Court addressed an additional question about
whether the Act preempts conflicting state anti-arbitration law, or
whether state courts could apply their own anti-arbitration statutes
in pending cases, thereby reaching results different from those reached
in similar federal diversity cases. Declaring that Congress would
not have wanted state and federal courts to reach different outcomes
about the validity of arbitration in similar cases, the Court concluded
that the Federal Arbitration Act preempts state law and is applicable
in both state and federal courts.53
Furthermore, although traditional state law contract
defenses, such as fraud, duress or unconscionability, may apply to invalidate
arbitration agreements without contravening the Act, a court may not
invalidate arbitration agreements under state laws applicable only to
arbitration provisions.54
In Doctor’s Associates, Inc., v. Casarotto, franchisees brought
an action in state court against a franchisor and its agent involving
a dispute under a standard form franchise agreement. The state
trial court stayed the action pending arbitration, and the franchisees
appealed. The Montana Supreme Court reversed, finding that the
arbitration clause was unenforceable under a state statute that conditioned
enforceability of arbitration agreements on compliance with a special
notice requirement not otherwise applicable to contracts generally.55
The United States Supreme Court held that Montana’s
special notice requirement was preempted by the Federal Arbitration
Act.56
The Court explained that, by enacting Section 2 of the Federal Arbitration
Act, Congress precluded states from singling out arbitration provisions
for suspect status, requiring instead that such provisions maintain
the same status as other contracts.57
The Court affirmed that the Montana provision directly conflicted with
Section 2 of the Act because the Montana law conditioned the enforceability
of arbitration agreements on compliance with a special notice requirement
not applicable to contracts generally.58
The Federal Arbitration Act does not mandate arbitration
of all claims. Without an agreement to arbitrate, the Act does
not apply, and the parties are then entitled to a judicial remedy.59
Since arbitration arises through contract, parties are essentially free
to define for themselves what questions may be arbitrated, the remedies
an arbitrator may afford, and the extent to which the decision must
conform to general principles of law.60
However, it has been held that arbitrators are without authority to
decide constitutional issues irrespective of the contractual language.61
The McCarran-Ferguson Act62
exempts certain insurance practices from federal law (including the
Federal Arbitration Act),63
and makes state law supreme.64
An agreement between an insurer and an insured to arbitrate claims arising
out of insurance coverage should be considered as involving the “business
of insurance,” as that term is used in the Act.65
However, there are few cases holding that the arbitration of claims
is or is not the business of insurance.66
There is little case law on the applicability of the
Federal Arbitration Act to individual insurance contracts.67
In addition, much of the insurance business is exempt from otherwise
applicable federal law under the McCarran-FergusonAct.68
In United States v. South-Eastern Underwriters Association,69
the United States Supreme Court determined that, even if an individual
insurance contract could be seen as “local” rather than
“interstate” commerce, the broader business of insurance
nonetheless was interstate commerce.70
Some
courts have upheld the application of the Federal Arbitration Act to
reinsurance agreements.71
Only a few cases involving individual insurance policies have arisen
under the Federal Arbitration Act. Hart v. Orion Insurance Co.72
involved a disability insurance policy. The insurance company
had sought and obtained a court order compelling arbitration.
The insured appealed, asserting that the arbitration agreement was unenforceable.
On appeal to the Tenth Circuit, the court held that the Federal Arbitration
Act applies whenever interstate commerce is involved. Such involvement
existed in this case by virtue of an interstate delivery of the insurance
policy.73
Congress passed the McCarran-Ferguson Act74
in response to South-Eastern Underwriters.75
The Act is intended to exempt the insurance industry from most federal
antitrust laws and to return to the states some of their regulatory
authority prior to South-Eastern Underwriters. How much authority
Congress intended to return to the states is still unclear.76
In the McCarran-Ferguson Act, Congress ceded to the
states the primary responsibility for regulating the insurance business
and it provided an exemption, under certain circumstances, from application
of federal law.77
In order to establish that an activity is exempt from a particular federal
law, three conditions must be met: (1) the federal law in question
does not specifically relate to the business of insurance; (2) the activity
in question is the “business of insurance;”78
and (3) the application of federal law would invalidate, impair or supersede
state regulation of the activity.79
Since the Federal Arbitration Act does not specifically
relate to the business of insurance,80
the first criterion is readily satisfied in cases involving the Federal
Arbitration Act and insurance disputes. Most controversies regarding
application of the McCarran-Ferguson Act involve the second and third
criteria.81
In determining whether a particular practice is part of the “business
of insurance,” one court has suggested that the following three
factors should be considered:
-
Whether the practice has the effect of transferring or spreading a
policyholder’s risk;
-
Whether the practice is an integral part of the policy relationship
between the insurer and the insured; and
-
Whether the practice is limited to entities
within the insurance industry.82
IV. APPLICATION OF ALTERNATIVE DISPUTE
Resolution
to Insurance Claims
A.
Personal Injury Claims
Many personal injury claims are suitable for alternative dispute resolution.83
If utilized properly and with the right type of claim, alternative
dispute resolution can be important in securing the just, speedy,
and inexpensive determination of a claim. Mediation can be used
to resolve personal injury claims.84
Mediated personal injury claims generally have three characteristics:85
-
the claimant typically is inexperienced in resolving personal injury
disputes;86
- the
negotiations usually only involve the distribution of funds from
one party to the other, and
- the
issue being mediated is largely subjective.
Liability is typically stipulated by the parties
before entering an agreement to mediate a personal injury claim.87
In addition, the issue of who pays for any alleged damages is usually
established before mediation. Thus, the defendant frequently is not
present at the mediation session. The plaintiff, the plaintiff’s
attorney, the defendant’s attorney and an adjuster from the
defendant’s insurer will focus on the issue of damages.
Because the mediation involves a claimant who is probably involved
in a single lawsuit necessitating evaluation, while the insurance
representative may have handled hundreds of similar cases, the mediator
is challenged to bring some balance to the playing field. For
this reason, it may benefit the plaintiff to be represented by a lawyer.
The distributive nature of personal injury disputes requires the mediator
to determine how to facilitate give-and-take when the claim involves
only how much the defendant will pay and how much the claimant will
accept. The subjective nature of the personal injury dispute
involves the claimant’s pain and suffering. The mediator
is challenged to find suitable criteria that will help the parties
place an acceptable value on pain and suffering.
The mediation session usually begins with a joint
session at which both parties provide a brief overview of their issues
and arguments.88
The mediator may then caucus separately with each party to discuss
each side’s concerns. At the mediation session, the plaintiff
may present a settlement package, including all medical records and
billings as well as other records of special damages to provide the
mediator with access to the records as the case is being discussed.
It is important for the mediator to establish communication and rapport
as soon as possible.89
Although distributive interests constitute a large segment of personal
injury mediation, the mediator should help the parties identify the
other interests involved.90
These interests may include the desire for an admission of fault or
an apology.
An unresolved issue of liability often precludes
the use of mediation and requires the use of bindingarbitration.91
Cases involving substantial medical expenses with no objective findings
of injury, and cases involving minor impacts, are often more suitable
to arbitration because the defendant is sometimes reluctant to accept
the claim or the extent of the claim.92
Initially, the parties enter into a written arbitration
agreement, establishing the procedural rules, rules for conduct of
the hearing, powers of the arbitrator, enforceability of the award,
method of selecting the arbitrator, and any other terms and conditions
to arbitration.93
At the arbitration hearing, the parties present material evidence
and cross-examine opposing witnesses.94
Under the rules of the American Arbitration Association, insurers
or claimants start the process by sending the following information
to the nearest AAA office:
The names and addresses of the insurer, the claimant, and their representatives,
along with the telephone numbers of the parties;
-
The insurer’s claim number;
-
A brief description of the claim and the amount involved, and
-
Any additional information that will assist the AAA in arranging
to have the case submitted to arbitration.
Upon receipt of this information, the AAA writes
the other party to explain the program, enclosing a submission form
and a copy of the procedures.95
Within ten days of that letter, an AAA administrator telephones the
party to explain the program further and to answer any questions.
Once the parties have agreed to submit a case to arbitration, they
are asked to complete a submission agreement. By that form,
they are given the option of selecting mediation or arbitration.
The AAA appoints an arbitrator from its panel of neutrals. Following
appointment of the arbitrator, the AAA telephones the parties’
representatives and the arbitrator in order to schedule a convenient
date and time for the hearing.96
The arbitrator looks to the following documents to ensure that the
authority granted is not exceeded and that all issues submitted are
answered:
-
The Insurance Endorsement. The insurance contract states the
amount of coverage, the issues to be arbitrated, the conditions
precedent to recovery, and the time limits within which the insured
must make a claim.
-
The Demand for Arbitration. Most arbitration cases are initiated
when one party demands arbitration. The demand will describe
the issue, how much money is sought, and the applicable policy limits.
-
The Submission to Dispute Resolution. Particularly where the
insurance policy lacks a pre-dispute arbitration clause, the parties
will articulate the issues and the amount involved in a submission
statement.
-
The Answering Statement. The respondent to a demand for arbitration
may file an answering statement containing the respondent’s
view of the issue.
-
The Arbitration Rules. The arbitration rules provide a basis
for the arbitrator’s rulings and describe the applicable procedures.
After
both sides have had an equal opportunity to present all of their evidence
and arguments, the arbitrator declares the hearing closed. The
arbitrator usually has thirty days from the close of the hearing within
which to render an award.
B. Mass Torts And Class Actions
Unlike settlements of ordinary tort litigation,
mass tort and class action settlements can create a monetary pool
covering numerous claims.97
The settlements frequently are funded by multiple defendants.
Alternative dispute resolution may be effective in resolving disputes
involving such settlements.
Alternative dispute resolution procedures may include
negotiation, mediation or arbitration, or a combination of these.98
In one class action settlement, the parties agreed that class members
would submit their claims to a claim-review process, which included
the right to appeal to a mediator/arbitrator selected from an American
Arbitration Association roster.99
Initially,
a claims determination is made by a claim review team appointed by
the defendant. If a class member is dissatisfied with the claim-review
team’s decision, the class member subsequently may obtain de
novo review of the claim by an independent mediator/arbitrator.
Mediation may be appropriate in resolving mass
torts, including defective products, defective drugs, and environmental
exposure actions.100
Mediation offers a solution to the myriad problems associated with
trying a mass tort case by opening communications between the parties.
The parties should evaluate a case for mediation early in deliberations,
before the parties harden their positions or expend unnecessary funds
on discovery and pretrial motions.
C. Catastrophe-Related Disputes
Every catastrophe, such as earthquake, hurricane,
hailstorm, flood or other event, presents innumerable difficulties
when establishing the amount of the loss. Appropriate alternative
dispute resolution mechanisms in such situations include appraisal,101
arbitration,102
and mediation.103
Appraisal is a suitable method for determining
values.104
Homeowner policies frequently provide that each party selects an appraiser.
The policies require that the appraisers be competent and disinterested
or independent. Categories of persons challenged for lack of
impartiality include public adjusters who formerly represented the
insured on other matters, and accountants who serve to advise the
insured.105
The two appraisers select an impartial umpire.106
Objections to the competence or interest of the appraisers or umpire
should be made promptly or they may be deemed waived.107
The procedures used during appraisals are dependent
upon the appraisers’ discretion. Hearings can be requested and
testimony received together with evidentiary exhibits. The appraisers
should secure all evidence necessary for a complete review and resolution
of the issues. This may include a site inspection and reports
by experts.108
The proceedings are concluded by a written appraisal
award signed by the appraisers and the umpire. If the appraisers
fail to agree on the value of the property and the amount of the loss,
they submit their differences to the umpire. A determination
adopted by any two is binding on the parties.109
An appraisal conducted pursuant to an insurance contract is binding
upon the parties to the contract. However, challenges may lie
regarding:110
-
The qualifications or interest of the appraisers
or umpire;111
-
Bad faith, fraud or mistake;112
-
The failure of an insurer to abide by the appraisal
process and pay the award.113
D. Uninsured and Underinsured Motorist Disputes
One of the most common forms of insurance arbitration
agreements is the arbitration agreement in uninsured or underinsured
motorist coverage of automobile insurance policies.114
Uninsured motorist insurance provides coverage to the insured for
injuries caused by the owner or operator of an uninsured, or sometimes
underinsured, motor vehicle. The amount owed by the insurer
to its insured is determined by an existing right to recover damages
for the injury from the uninsured or underinsured motorist.
If the insured sues the uninsured third-party directly, obtains a
judgment and then collects that judgment from the insured’s
insurance company, the company effectively is made an insurer of the
third-party. However, in that situation the insurance company
has no ability to control the litigation or demand cooperation from
the uninsured motorist. If the insured sues the insured’s
insurance company directly, the company runs the risk that juries
will treat it unfairly.
In order to avoid this problem, the standard automobile
insurance policy attempts to prevent suit by the insured against the
third-party, either by prohibiting such actions explicitly or by providing
that the insurance company will not be bound by a judgment obtained
without its permission in such an action. The standard policy
also includes provision for compulsory and binding arbitration at
the election of either the company or the insured. Most states
permit or require that uninsured motorist claims be resolved by arbitration.
However, when such a requirement is imposed by the legislature as
a matter of binding arbitration, the uninsured motorist may sometimes
challenge the loss of a right to jury trial.115
According
to the California Supreme Court, a trial court has authority to consolidate
an uninsured motorist arbitration proceeding between an insurer and
the insured with the insured’s pending action against third-parties
for all purposes, including trial. Such consolidation ostensibly
avoids conflicting rulings on a common issue of law or fact.116
Few
court decisions have considered whether the Federal Arbitration Act117
applies to arbitrations under uninsured motorist clauses. In
Preziose v. Lumbermen’s Mutual Casualty Co.,118
the Vermont Supreme Court held that the Federal Arbitration Act applied
to an uninsured motorist dispute. The court explained that enforcement
of the arbitration clause in the insurance policy did not invalidate,
impair or supersede the Vermont Arbitration Act or its uninsured motorist
statute. Accordingly, it concluded that the McCarran-Ferguson
Act119
did not bar application of the Federal Arbitration Act to the dispute.
The court observed that there was no provision in Vermont law requiring
a jury trial in uninsured motorist disputes.
A clause within an insurance policy providing that
the damage award will be binding only if it does not exceed the minimum
limit for bodily injury liability specified by law is often characterized
as an “escape hatch”120
or “escape”121
clause. This language is commonplace in automobile insurance
policies.
A number of courts have addressed the validity
of the “escape” clause, sometimes holding that the clause
is void as against public policy.122
The Minnesota Supreme Court found the provision contrary to public
policy and articulated its rationale as follows:
The policy’s arbitration provision, instead
of providing a speedy, informal, and relatively inexpensive procedure
for resolving controversies between the parties--the raison d’etre
of arbitration--instead substantially thwarts those policy goals.
By permitting resort to the court system for a trial de novo notwithstanding
the absence of any claimed impropriety in the arbitration process
itself, by fostering multiple hearings in multiple forums, by increasing
the costs to the contracting parties, and, by unnecessarily, and
without real cause, extending the time consumed in resolving the
controversy it likewise operates to defeat goals designed to promote
judicial economy and respect for the judicial system.123
Other relevant jurisdictions have concluded there
is no violation of public policy and subsequently enforced these “escape
hatch” provisions.124
The New Mexico Supreme Court offered its rationale for upholding an
“escape” clause as follows:
Our legislature has not expressed its intent
that an arbitration award should be final in cases in which the
parties have provided to the contrary by contract; the [Uniform
Arbitration Act] is supportive of the parties’ right to contract
for arbitration. Further, this Court has consistently held
that “parties to an insuring agreement may contract for and
agree upon any mutually acceptable terms and provisions.”
. . . Although contractual terms and provisions will not be enforced
if they contradict “our public policy, as manifest in positive
law,” . . . we are unable to find that this provision is repugnant
to public policy. As evidenced by the unambiguous terms of
the contract between Bruch and CNA, the parties agreed to settle
by arbitration controversies arising under the uninsured motorist
clause only if the award was less than the minimum limit for bodily
injury liability required by law. As CNA admits, it would
be bound by the decision of the arbitrators to award less than that
amount and would not be entitled to a trial de novo. We strongly
encourage final settlement by arbitration; however, Bruch and CNA
mutually accepted the applicable term of the insurance contract.125
In cases administered by the American Arbitration
Association, the injured person can initiate the claim by serving
a demand for arbitration on the insurance company with copies to the
nearest AAA office.126
The injured individual may designate the place of hearing. If
the insurance carrier objects to the location, the AAA will determine
the location of the hearing.
Uninsured motorist hearings tend to be brief and
informal, affording each side the opportunity to present its case
through the testimony of witnesses and the presentation of exhibits.
A written award must be signed by the arbitrator within thirty days
after the hearing is declared closed. It is not customary for
the arbitrator to explain the reasoning behind the award.127
E. No-Fault Disputes
Unlike arbitration of uninsured motorist claims,
which is based solely upon the agreement of the insurer and the insured
to arbitrate any disputes, no-fault arbitration is afforded by state
statutes.128
No-fault arbitration awards usually contain detailed options.129
New York has special provisions for the arbitration of no-fault motor
vehicle claims administered by the American Arbitration Association.
The New York no-fault arbitration system has its own unique review
procedure. Under the New York procedure, awards can be appealed
to a master arbitrator. Grounds for review include:
-
statutory grounds for vacating an award contained in New York arbitration
law, except failure to follow procedures contained in the New York
arbitration law;
- the
award required an insurer to pay amounts in excess of policy limits;
-
the award in an expedited case was incorrect;
-
an attorney fee awarded by the hearing arbitrator did not accord
with the fee schedule;
-
an AAA award was “inconsistent and irreconcilable”
with a Health Service arbitration award involving the same injuries.130
F. Reinsurance Disputes
Many reinsurance agreements include arbitration
clauses providing that any dispute relating to the agreement will
be resolved by disinterested insurance or reinsurance executives who
must resolve disputes in accord with industry custom and practice.131
A representative arbitration clause provides:
If any dispute shall arise between the reinsured
and the re insurer with reference to the interpretation of this contract
or their rights with respect to any transaction involved, the dispute
shall be referred to three arbitrators. . . . [The] arbitrators
shall consider this contract an honorable engagement rather than merely
a legal obligation; they are relieved of all judicial formalities
and may abstain from following the strict rules of law. The
decision of a majority of the arbitrators shall be final and binding
on both the reinsured and the reinsurer.132
At times, the interplay between the McCarran-Ferguson
Act133
and the Federal Arbitration Act creates issues unique to the insurance
and reinsurance industries.134
Some courts have interpreted their state’s legislative framework
for handling insolvent insurers and reinsures as vesting exclusive
jurisdiction in the state court responsible to oversee the liquidation
or rehabilitation. Using the rationale expressed by these courts,
the McCarran-Ferguson Act bars application of the Federal Arbitration
Act and enforcement of arbitration provisions.135
Other courts have enforced arbitration agreements in reinsurance contracts,
either compelling liquidators or rehabilitators to arbitrate, or enforcing
demands by liquidators to arbitrate.136
Federal courts have applied the Federal Arbitration
Act to reinsurance disputes.137
In Hamilton Life Insurance Co. v. Republic National Life Insurance
Co.,138
the Second Circuit Court of Appeals held that the defendant was bound
to arbitrate a reinsurance dispute under the Federal Arbitration Act.139
However, some federal courts have relied on the McCarran-Ferguson
Act to uphold state statutes or doctrines that do not permit insurance
or reinsurance agreements to include arbitration provisions.140
Parties
to a reinsurance relationship commonly have entered into several different
reinsurance agreements, typically covering different risks or different
time periods.141
Absent the consent of the parties, a court may not order the arbitrations
consolidated.142
This could create a problem of multiple arbitration proceedings between
the same parties.143
G. Title Insurance Disputes
Many title insurance policy forms contain arbitration provisions.
Under a clause used by the American Land Title Association (ALTA),
arbitration can be requested at the option of either the insured or
the insurer when the amount of insurance is $1,000,000 or less.
If the amount of insurance is more than $1,000,000, arbitration can
be invoked only if both the insured and the insurer agree.
The
ATLA arbitration clause provides that arbitrable matters may include
any controversy or claim between the insurer and the insured arising
out of or relating to the policy, any service of the insured in connection
with its issuance, or the breach of a policy provision or other obligation.
The law of the jurisdiction in which the real property is located
applies to the arbitration. Arbitrations under the ATLA clause
are conducted by the American Arbitration Association under its Title
Insurance Arbitration rules.
H. Environmental Insurance Disputes
Increasingly, state and federal courts are establishing mandatory
settlement programs using mediation to resolve environmental insurance
coverage disputes. Similarly, parties themselves are suggesting
mediation in order to quickly resolve environmental disputes.
Arbitration also may be utilized in resolving environmental disputes.
A variety of environmental insurance issues can
be submitted to arbitration. For example, it may be necessary
to determine which of a policyholder’s insurance policies responds
to a covered loss.144
Another issue involves the question whether the term “damages,”
as used in the insurance policy, covers clean-up or response costs
that are sought pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act of 1980145
or similar statutes.146
It may be necessary to determine whether the insured
expected or intended the bodily injury or property damage for which
coverage is sought. There would be no insurance coverage if
the conduct was expected or intended, since coverage is based upon
the happening of an “occurrence” that requires the harm
be neither expected nor intended from the standpoint of the insured.147
Commercial general liability policies contain a number of pollution
exclusions. Alternative dispute resolution may be used to determine
whether an exclusion applies.148
When the parties wish to have some control over
the process and the outcome, mediation149
is the appropriate method of alternative dispute resolution.
Arbitration150
may be appropriate when factual or damage related issues are the major
focus of dispute and legal issues hold minor importance.151
On the other hand, a minitrial152
may be appropriate in complex cases, where a formal hearing is necessary
to present their cases properly, but the parties wish to retain control
of the outcome.
I. Marine Insurance Disputes
Alternative dispute resolution likewise can be
effective in resolving marine insurance disputes. In particular,
arbitration may be appropriate because it is relatively efficient
and affords the opportunity to utilize an arbitrator with expertise
in marine insurance matters. Arbitration has been used to resolve
such marine insurance disputes as whether an insured should contribute,
in general average, to the insurer’s costs of salvaging the
insured’s boat which sunk because the insured’s uninsured
fish net and other fishing equipment were salvaged in the same operation
that had raised the boat.153
A contract of protection and indemnity insurance
covering a vessel between an American insured and a foreign insurer
is a maritime contract. The Federal Arbitration Act154
requires enforcement when a maritime contract has an arbitration clause,
despite the McCarran-Ferguson Act.155
The court in Triton Lines explained that the McCarran-Ferguson Act
was inapplicable because a disputed claim is not the “business
of insurance.”
J. Force-Placed Insurance Disputes
Force-placed insurance programs protect a lender’s
interest in collateral from loss or damage. They are commonly
used by lending institutions which finance automobile purchases.156
Under a force-placed insurance program, a borrower is required to
maintain insurance on the collateral supporting the loan and to provide
the lender with the right to “force-place” insurance on
the collateral, should the borrower allow the insurance coverage to
lapse.
In recent years, consumer finance suits have attacked
the validity of charges imposed on borrowers by force-placed insurance
programs. Alternative dispute resolution may be appropriate
in resolving “force-placed” disputes. Arbitration,
in particular, can provide swift settlement of claims and enhance
customer relations.157
IV.
CONCLUSION
Society does not and should not rely exclusively on the courts for resolving
disputes. Other non-judicial procedures may be superior when addressing
a variety of disputes. These non-judicial mechanisms may be less
expensive, faster, less intimidating, more sensitive to the disputants’
concerns, and more responsive to the underlying problems.
Alternative dispute resolution can provide an efficient and economical
procedure for resolving insurance disputes. In that regard, alternative
dispute resolution complements the judicial system. As the cost
of litigation rises and courts become increasingly congested, private
litigants turn to alternative dispute resolution with greater frequency
to manage unavoidable disputes. Alternative dispute resolution
may be appropriate particularly where the parties desire privacy, limited
discovery, jury avoidance, preservation of relations, or reduction of
costs.
ENDNOTE
*
This article is adapted from Jay Grenig, Alternative Dispute Resolution
With Forms (2d ed. 1997) published by West Group. BACK
1
See, e.g., Warren Burger, Isn’t There a Better Way?, Annual
Report on the State of the Judiciary (1982); Frank Sander, Varieties
of Dispute Processing, 70 F.R.D. 79 (1976). BACK
2
For
a discussion of the historical development of alternatives to formal
adjudication, see Jerold S. Auerbach, Justice Without Law? (1983).
BACK
3
9 U.S.C. § 1 et seq.
BACK
4
15 U.S.C. §§ 1011-1015. BACK
5
See generally Gerald Williams, Legal Negotiation
& Settlement (1983). BACK
6
See
Steven J. Burton, Combining Conciliation With Arbitration of International
Commercial Disputes, 18 Hastings Int’l & Comp. L. Rev. 637,
638 (1995) (“conciliation” is often called “mediation”
in the United States). BACK
7
Michael B. Shane, The Difference Between Mediation
and Conciliation, 50 Disp. Resol. J. 31 (July 1995). See Erik
Langeland, The Viability of Conciliation in International Disputes
Resolution, 50 Disp. Resol. J. 34 (July 1995) (conciliation differs
from mediation: in conciliation the neutral evaluates the dispute
and then strives to construct a just resolution that is proposed to
the parties for their approval or rejection, while in mediation the
mediator’s role is to facilitate resolution of the conflict
by the parties, not to suggest solutions).
BACK
8 For
a detailed discussion of medication, see Jay E. Grenig, Alternative
Dispute Resolution With Forms (2d ed. 1997) (“Grenig”),
ch. 7. BACK
9
See generally Kimberlee Kovach, Mediation: Principles
and Practice (1994); Robert Coulson, Professional Mediation of Civil
Disputes (1984). BACK
10
Richard
C. Reuben, The Lawyer Turns Peacemaker, ABA J. 55, 59 (August 1996).
BACK
11
See also Grenig, supra note 8, § 13.21 (use
of appraisal in insurance disputes).
BACK
12
Cf. Jordan Marsh Co. v. Beth Israel Hosp., 118 N.E.2d
79 (Mass. 1954).
BACK
13
Franks v. Franks, 1 N.E.2d 14 (Mass. 1936).
But see Cal. Code of Civ. Proc. § 1280(a) (agreements for “valuation
and appraisal of property and similar proceedings” are treated
as agreements for arbitration). BACK
14
Sorrells & Co. v. Ancona Co., 145 N.E. 564 (Mass.
1924). BACK
15
See Harmon v. Schwartz, 242 A. 2d 490 (Md. 1968).
BACK
16
See City of Omaha v. Omaha Water Co., 218 U.S. 180
(1910) (appraisers not rigidly required to confine themselves either
to matters within their own knowledge or those submitted to them formally
in presence of parties). BACK
17
In re Delmar Box Co., 309 N.Y. 60, 127 N.E.2d 808
(1955). BACK
18
Dimson v. Elghanayan, 19 N.Y.2d 316, 280 N.Y.S.2d
97, 227 N.E.2d 10 (1967). BACK
19
Nelson v. Maiorana, 478 N.E.2d 945 (Mass. 1985).
See Helzel v. Superior Court of Alameda County, 123 Cal. App. 3d 652,
176 Cal. Rptr. 740 (1981). BACK
20
Hollander v. Kessler, 14 N.Y.2d 646, 249 N.Y.S.2d
431, 198 N.E.2d 600, aff’d, 15 N.Y.2d 586, 255 N.Y.S.2d 257,
203 N.E.2d 646 (1964). BACK
21
For
a more detailed discussion of arbitration, see Grenig, supra note
8, chs. 3-6. BACK
22
See id., §§ 6.1-6.29. BACK
23
See id., § 2.56 (discussion of fact-finding).
BACK
24
See generally Sherry Landry, Med-Arb: Mediation with
a Bite and an Effective ADR Model, 63 Def. Couns. J. 263 (1996). BACK
25
Jay Folberg & Alison Taylor, Mediation: A Comprehensive
Guide to Resolving Conficts Without Litigation 268 (1984). BACK
26
See Bartel Bartel, Comment, Med-Arb as a Distinct
Method of Dispute Resolution: History, Analysis, and Potential, 27
Willamette L. Rev. 661, 666 (1991). BACK
27
But see Dean G. Pruitt, Solutions Not Winners: Community
Mediators Help Neighbors, Families and Ex-lovers Solve Their Problems
Without Going to Court, Psychol. Today Dec. 1987, at 58 (study revealed
that, when different persons used as mediator and arbitrator, participants
were less creative and mediators appeared less interested in sessions).
BACK
28
See Grenig, supra note 8, ch. 8 (detailed discussion
of minitrials). BACK
29
For a discussion of court-annexed dispute resolution,
see id., ch. 18. BACK
30
See discussion of common law arbitration in Grenig,
supra note 8, § 3.4. See Volt Info. Sci., Inc. v. Board
of Trustees of Leland Stanford Jr. Univ., 489 U.S. 468, 474 (1989).
See generally Jones, Historical Development of Commercial Arbitration
in the United States, 12 Minn. L. Rev. 240, 240-62 (1928) (discussing
history of judicial approach to arbitration provisions). BACK
31
9
U.S.C. §§ 1-301. See generally Charles Alan Wright
et al., Federal Practice and Procedure: Jurisdiction § 3569 (2d
ed. 1984). BACK
32
See, e.g., Southland Corp. v. Keating, 465 U.S. 1
(1984). BACK
33
9 U.S.C. § 2. See Wright, supra note 31.
See also Allied-Bruce Terminix Cos. v. Dobson, 513 U.S. 265 (1995);
Moses H. Cone Mem. Hosp. v. Mercury Const. Corp., 460 U.S. 1 (1983);
Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 220 (1985), on remand,
760 F.2d 238 (9th Cir. 1985) (when Congress passed the Arbitration
Act in 1925 it was “motivated, first and foremost,” by
a desire to change this anti-arbitration rule); Bernhardt v. Polygraphic
Co. of Am., 350 U.S. 198, 201-02 (1956) (Act applicable only when
agreement involves a maritime transaction or interstate or foreign
commerce). BACK
34
Allied-Bruce Terminix Cos. v. Dobson, 513 U.S. 265
(1995); Mittendorf v. Stone Lumber Co., 874 F. Supp. 292 (D. Or. 1994);
Associated Metals & Mins. Corp. v. The Steamship Mihalis Angelos,
234 F. Supp. 236 (S.D.N.Y.1964). BACK
35
See discussion of preemption in Grenig, supra note
8, § 3.24. See Allied-Bruce Terminix Cos. v. Dobson, 513
U.S. 265 (1995); Southland Corp. v. Keating, 465 U.S. 1, 15-16 (1984).
BACK
36
Scherk v. Alberto-Culver Co., 417 U.S. 506, reh’g
denied, 419 U.S. 885 (1974); Wilko v. Swan, 346 U.S. 427 (1953). BACK
37
Gilmer v. Interstate/Johnson Lane Corp., 500 U.S.
20 (1991); Perry v. Thomas, 482 U.S. 483 (1987), on remand, 246 Cal.
Rptr. 156 (Cal. Ct. App. 1988). BACK
38
Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213,
220 (1985). BACK
39
Volt Info. Sci., Inc. v. Board of Trustees of Leland
Stanford Jr. Univ., 489 U.S. 468, 474 (1989). BACK
40
AT&T Techs., Inc. v. Communications Workers of
Am., 475 U.S. 643 (1986). BACK
41
Moses
H. Cone Mem. Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 25 n.32 (1983);
Gibraltar, P.R., Inc. v. Otoki Group, Inc., 104 F.3d 616 (4th Cir.
1997) (dispute over ownership of trademarks did not present federal
question but was merely a contract dispute). BACK
42
9 U.S.C. § 4; Gibraltar, P.R., Inc. v. Otoki
Group, Inc., 104 F.3d 616, 618 (4th Cir. 1997). BACK
43
Westmoreland Capital Corp. v. Findlay, 100 F.3d 263,
268 (2d Cir.1996) (federal courts do not have subject matter jurisdiction
over action to compel or stay arbitration, even when petition raises
a statute of limitations defense and underlying claim involves federal
question). See Prudential-Bache Sec., Inc. v. Fitch, 966 F.2d
981, 986-88 (5th Cir. 1992) (federal securities law claims in underlying
state court dispute could not provide required independent basis for
federal jurisdiction in separate federal action seeking to compel
arbitration of dispute under Federal Arbitration Act). BACK
44
9 U.S.C. § 2. See generally Isham R. Jones,
III, Note, The Federal Arbitration Act and Section 2’s “Involving
Commerce" Requirement: The Final Step Towards Complete Federal
Preemption Over State Law and Policy, 1995 J. Disp. Resol. 327. BACK
45
Allied-Bruce
Terminix Cos. v. Dobson, 513 U.S. 265 (1995). BACK
46
Scott R. Swier, Note, The Tenuous Tale of the Terrible
Termites: The Federal Arbitration Act and the Court’s Decision
to Interpret Section Two in the Broadest Possible Manner: Allied-Bruce
Terminix Companies, Inc. v. Dobson, 41 S. D. L. Rev. 131, 133 (1996).
BACK
47
513 U.S. 265 (1995). BACK
48
Allied-Bruce Terminix Cos. v. Dobson, 513 U.S. 265
(1995) (Court recognized “multi-state nature” of defendant
and fact that termite-treating and house-repairing material used by
defendant came from outside forum state). BACK
49
388 U.S. 395. BACK
50
388 U.S. at 405 (quoting H.R.Rep. No. 96, 68th Cong.,
1st Sess., 1 (1924)). BACK
51
Prima Paint Corp. v. Flood & Conklin
Mfg. Co., 388 U.S. 395, 405 (1967). BACK