• September 20, 2011

Essentially thoughtless statements like, “It is too long settled and acknowledged as true to be open to serious dispute…” define “orthodoxy.”  (See, e.g., Galileo re heliocentrism.  (Beliefs do not become truths merely by growing old or by consensus.))

What are some orthodoxies in current U.S. litigation? One is that plaintiffs want to avoid arbitration whenever possible.  Why? Because, the orthodoxy tells us, arbitrators have a bias and predisposition to “split the baby.”  That is, there seems to be a conviction (supported by any reliable data?) that meritorious plaintiffs tend to win only 50% of their damages.  Is it so?

Who knows?  This data is hard to collect.  If it were possible to collect and draw conclusions from the data, presumably it would be at large companies and large law firms, perhaps the only sources of sufficiently large sets of data.  This is one competitive advantage of scale.  (If large firms are collecting and analyzing such data, they’re probably keeping it to themselves.)

The Stephenson v. Advanced BioEnergy arbitration award is one datapoint that Dorsey & Whitney LLP and Faegre & Benson LLP can add to their “number crunching,” if they undertake such analysis.

Dorsey (Roy Ginsburg, David Trevor, Marilyn Clark) represented Revis Stephenson, an executive at Advanced Bio Energy, represented by Faegre (Charles Knapp, Anne Zorn, Kyle Fogt).  In a nutshell, Stephenson argued that Advanced Bio made up pretexts to fire him to avoid having to make good on their contract for his compensation for termination, if not “for cause.”

Arbitrator Richard L. Pemberton, in an entertaining, well-written, thorough, and blistering decision awarded Stephenson $1.9 million — almost exactly one half of what he sought in the arbitration against Advanced BioEnergy.

Query: does the resounding win for Stephenson suggest plaintiffs might fare well in arbitrations? Does the fact that the award happened to amount to just about half of what was claimed vindicate the “conventional wisdom”?

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