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A New Jersey judge on Nov. 4 lifted his month-old temporary ban on arbitrations run by the American Arbitration Association, finding the plaintiffs had failed to make a case that AAA has a pro-business bias Judge Clarkson Fisher Jr. of Monmouth County, N.J., denied injunctive relief in Casey v. Snap-On Tools Co., C-309-02, a suit by past or present dealers and a former employee of Snap-On Tools Inc. of Kenosha, Wis., who signed contracts agreeing to AAA arbitration. Fisher found the arbitration clauses “facially even-handed” in requiring both sides to arbitrate and allowing both to seek interlocutory judicial relief. The plaintiffs allege that AAA is biased in general toward businesses, which are its steady customers. Snap-On, for one, has used AAA exclusively and paid it millions over a 15-year period, they allege. The plaintiffs charge that AAA encourages companies to use restrictive arbitration clauses, or acquiesces in them, to get their business. Snap-On’s clause unfairly imposes a one-year limitations period, limits discovery to two depositions per side, prohibits joinder, class actions and per quod claims and denies preclusive effect to arbitral findings, plaintiffs allege. They also assail arbitration as costly and AAA “neutrals” as business-oriented. Fisher found a “significant question as to whether plaintiffs could succeed, calling their theories “doubtful” and the facts supporting them “in dispute.” Snap-On lawyer Michael Lampert, a partner with Saul Ewing in Princeton, N.J., said Fisher’s ruling, “validates the arbitration process” and AAA’s “standing … as an informed, objective and impartial body.” Plaintiffs’ lawyer Gerald Marks, who heads a Red Bank, N.J., firm, plans to file a motion to reconsider. He says that he has been contacted by Public Citizen, a consumer-advocacy organization based in Washington, D.C., and he has asked it to file an amicus brief. In May, Public Citizen published a study concluding that forum costs for arbitration are typically many times greater than for litigation. The group is now studying arbitral bias, says spokeswoman Gretchen Denk. Marks says the case has already had an impact. In an Oct. 29 press release, AAA announced that as of Nov. 2 it has capped filing fees and otherwise cut costs in employment cases, based on due process and equity concerns. AAA spokesperson Kersten Norlin, denies a connection, saying the change has been “in the pipeline for a long time,” and notes that AAA made similar cuts for consumer cases earlier this year. AAA’s lawyer, Clyde Szuch, of Pitney, Hardin, Kipp & Szuch in Florham Park, N.J., did not return a call seeking comment.

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