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By loudly stating its convictions before quickly backing down under pressure, the arbitration company JAMS gave itself an unenviable choice: the wrath of plaintiffs lawyers or the ire of the defense bar. “We may reluctantly find it preferable on a policy basis to use mediation and arbitration providers who are more firmly committed to fairness,” wrote Eric Abramson, president of the San Francisco Trial Lawyers Association, in a letter Monday asking JAMS to re-reverse itself. JAMS ignited the controversy in November, declaring it would no longer honor contract clauses that prohibit class actions. After a volley of criticism from corporate clients and their lawyers, JAMS rolled back that policy. All along, JAMS maintained that class action waivers were unfair to consumers, but wanted to avoid appearing biased against defendants. That triggered vitriolic plaintiff bar protests that last week grew into outright threats. The last time SFTLA boycotted an arbitration provider was in 2002. Then, the American Arbitration Association — JAMS’ biggest competitor — was virtually driven out of the mediation business in California. As SFTLA and several other plaintiffs lawyer groups mount an attack that they hope can rival the defense bar’s, the question is whether JAMS can come up with a policy that satisfies all its customers. And behind that question is the greater issue of whether class action policies will affect courts’ views of JAMS’ neutrality. Plaintiffs lawyer Reed Kathrein — a partner with Lerach Coughlin Stoia Geller Rudman & Robbins — says JAMS’ decision to shift its class action policy in response to defense bar input shows that arbitration does not provide a neutral forum for a class of plaintiffs. Kathrein is arguing in a San Francisco Superior Court case — Weber v. Dell, CGC-05-438648 — that his plaintiffs’ class action should not go to arbitration because JAMS may be swayed by corporate clients. “It shows that they’re not neutral — and subject to outside pressure,” he said. Kathrein recently sent a subpoena to JAMS seeking all communications on the class action policy. He plans to subpoena other arbitration providers, too. Complicating matters is the feeling among plaintiffs lawyers that JAMS — whether it allows class actions or not — is the most responsive of the big mediation providers to the plaintiff bar’s concerns. “Traditionally, they have said they are very concerned about the fairness issue and have worked with us to make sure employees who sign mandatory arbitration contracts have due process,” said Janet Hill, the Georgia-based president of the National Employment Lawyers Association. Hill wrote a letter to JAMS last week criticizing its rollback of the class action rule and accusing it of caving in to “financial pressure from the corporate bar.” But she didn’t threaten a boycott and said she’s “hopeful” that a compromise may be reached. “We have to be circumspect in our action,” given JAMS’ generally good relationship with the plaintiff bar, said James Butler, the SFTLA’s president-elect. That circumspection seemed rather blunt in the Monday letter to JAMS CEO Steve Price. “The letter was written in strong language to make sure JAMS and its policymakers know how strongly we feel,” said James Sturdevant, who’s coordinating efforts to stop class action waivers for the SFTLA. He says class action waivers violate JAMS’ standards of providing litigants with the same remedies they would have in court. While the plaintiffs lawyers continue their epistolary assault — JAMS has received at least five letters complaining about the policy shift since March 18 — various courts are preparing to address the issue in multiple contexts. The California Supreme Court last month heard arguments in Discover Bank v. Superior Court (Boehr), S113725. Its decision is expected to address the question of whether class action waivers are legal. But that case may not decide the issue in the federal courts, which so far have issued conflicting rulings. “I was troubled to learn that JAMS reversed its policy,” said David Jones, chairman of the state Assembly Judiciary Committee. “It undermines the general perception of neutrality that’s needed.” Jones said he has no plans to hold hearings on the class action issue specifically, but may do so later. “It may be necessary for a committee in the Legislature to look at it further,” he said. Price and JAMS General Counsel John “Jay” Welch wouldn’t directly address the plaintiff bar efforts Tuesday. In an e-mailed statement, Price wrote, “In administering arbitrations in which a class action preclusion clause is present, JAMS and its arbitrators will apply the law on a case-by-case basis in each jurisdiction.” He seems to think a compromise can be reached. “We look forward to meeting with each of the interested groups to discuss the issue directly,” Price wrote. Plaintiffs lawyers weren’t so sure. “I don’t think we, the plaintiff bar, have any middle ground, and I don’t think the defense bar has been willing to compromise,” said employment lawyer Hill. Cliff Palefsky, a San Francisco employment lawyer and mandatory arbitration critic, agreed. “They’ve got a tough decision,” he said. “Either way they go, they’re going to piss someone off.”

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