Kenton Brice, associate with Highland Village’s Kelley Clarke, PLLC Kenton Brice, associate with Highland Village’s Kelley Clarke, PLLC.
It’s difficult enough for a lawyer to convince the U.S. Court of Appeals for the Fifth Circuit to allow a client out of an arbitration clause because of federal policy, and the court’s prior rulings generally favor the alternative dispute resolution process. But try making that argument before an untested Fifth Circuit judge who is serving his first day on the job.
That’s what Kenton Brice was up against on June 2 when he argued Sharpe v. Ameriplan before a Fifth Circuit three-member panel. His clients challenged the enforceability of arbitration clauses after filing a class action suit against a defendant corporation over payment disputes, citing those clauses “cannot be harmonized” with other agreements the defendants had with the plaintiffs.
Brice notes that the Fifth Circuit generally gives deference to the arbitration process and rarely grants those who challenge its relief.
“That was an extreme concern,” said Brice, an associate with Highland Village’s Kelley Clarke, PLLC, who represents several plaintiffs in the proposed class action case before the Fifth Circuit. “They are going to find the federal presumption for arbitration, and they shouldn’t.”
And reading how Fifth Circuit Judge Gregg Costa initially felt about that subject was nearly impossible as the new appellate judge was making his first appearance on an appellate court panel. Costa sat on the panel hearing Ameriplandays after receiving approval by the full U.S. Senate to become President Barack Obama’s first Texan appointee on the appellate court.
“That was his first day to hear oral arguments, I found out,” Brice said. “It was also my first case in front of the Fifth Circuit.”
Brice shouldn’t have worried, because on Oct. 16, the Fifth Circuit issued an opinion granting three out of his four clients relief from lower court orders compelling their lawsuits to arbitration—a process that generally strips a consenting party of its appellate rights. The opinion was written by Costa, who was still a U.S. district judge in the Southern District of Texas awaiting his swearing in as a Fifth Circuit judge when the argument was heard, as the decision notes.
Costa wrote that three of the plaintiffs in the case had agreements with defendant Ameriplan in which any disputes that could not be resolved by nonbinding mediation could be resolved in state and federal courts. Those agreements could not be “harmonized” with a later update to an Ameriplan policy manual that contained an arbitration clause the defendants asserted covered the plaintiffs, Costa wrote.
“For our clients, three out of the four are no longer compelled to arbitration,” Brice said. The decision will also assist the lower court in narrowing the definition of the class, Brice added.
Mike Yanoff, a partner in Dallas’ Thompson Coe Cousins & Irons who represents the defendants before the Fifth Circuit, is not sure whether his clients will ask for a rehearing of the decision. Yanoff argued that all of the agreements in the case can be harmonized through the venue provisions.
“We continue to believe that all of these agreements can be harmonized,” Yanoff said.
As for Costa and his early career opinion, Brice said: “He was great. Good for him. I applaud him.”
Re-posted from: www.TexasLawyer.com