Attorneys Weigh in on US Supreme Court Rejection of Coffee Beanery Case
WASHINGTON DC – After Monday’s U.S. Supreme Court decision denying The Coffee Beanery petition to hear its case, attorneys on both sides weigh in on why it was rejected. Deepak Gupta, counsel for Public Citizen Litigation Group representing the franchisees, said, “We are thrilled that the court denied Coffee Beanery’s cert petition (writ of certiorari).” He asserts that the court order speaks for itself. “The reasons that we gave in our brief of opposition were more than sufficient for the court to deny cert.” But he said the main reason is that there is no real split in the federal courts of appeal. “That’s why the Supreme Court takes cases,” he explained.
William L. Killion of Faegre & Benson takes the opposite view in representing Coffee Beanery, saying, “Obviously, I am disappointed [in the ruling] and I think the Supreme Court should have resolved what I think is a clear split in the circuits over the question of the status of “manifest disregard” as a ground for vacating an award. All I can figure is that they must have decided to let it percolate in the circuit courts a bit.” Killion doesn’t think there are any other cases squarely before this court where they would resolve this particular issue.
Gupta somewhat agrees. He said this signals that the Supreme Court is leaving it to the lower courts to refine the standards of reviewing arbitration awards. He said one of the points they made in their opposition brief is that it is really important that there be some kind of safety valve for people who find themselves on the losing end of arbitration, because of all the problems related to it. He explains, “Arbitrators are selected by companies who are repeat players, and the individual often does not get a fair shake. So, it’s very important that the courts be able to review those awards.” Gupta said that’s ultimately what the Coffee Beanery case was about in the Supreme Court.
Will this Supreme Court decision have an impact on the Arbitration Fairness Act (H. R. 1020), which would give a franchisee the ability to decide after a dispute whether they wanted to go through arbitration or not?
Killion doesn’t think so. “I suppose someone could say it’s still an unresolved issue, but I don’t know how that plays out in whether arbitration is or isn’t a good thing for franchisees, and whether we should or shouldn’t have—from some people’s perspective—federal legislation that makes it non-applicable to franchising.” Killion doesn’t view franchisees as consumers, saying they are not the same as people who buy computers at Dell. “They certainly aren’t a “class,” he said.
But Gupta asserts that on the legislative end, the arbitration process needs to be reformed. “What happened to my clients Deborah Williams and Richard Welshans is an outrage. It is a tragic story about the flaws in the mandatory arbitration system.” He said Williams testified before Congress about what happened to them and she will probably testify again.
“The Arbitration Fairness Act is not about whether or not there is arbitration. It’s about whether or not people have a choice in the matter. And, it’s about whether or not franchisees are going to be forced into arbitration by companies that have more bargaining power. “That is really the question that Congress is going to have to decide,” Gupta declared.
Karl V. Fink, Pear, Sperling, Eggan & Daniels, representing The Coffee Beanery said he did not wish to make comment.
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