Richard W. Millar, Jr.

Millar’s JurisDiction
ADR and the Unruly Lawyer: Bailiffs at JAMS?

ADR, as we all know, stands for Alternative Dispute Resolution. Although I had not thought of this before, I suppose the question is, alternative to what? The answer that would be on the tip of each lawyer’s tongue would be an alternative to the court system.

What about, however, an alternative to a fist fight? As always, a case in point.

One Ric Malik contracted with homeowners to renovate a home in Moorestown, New Jersey. As is all too often the case, a “serious dispute” followed.

The contract provided for arbitration and the case was submitted to the American Arbitration Association pursuant to its rules. Peter Liloia, III, was appointed as the arbitrator. The proceedings were described as “protracted and contentious.” At one point, Mr. Malik’s attorney objected to the actions of one of the homeowners’ attorneys, a Mr. Ruttenberg, and asked Mr. Liloia to remove him. The arbitrator denied that request but did call a brief recess. According to Mr. Malik, Mr. Ruttenberg then utilized the recess to assault him in the lobby. The assault, if it occurred, was not in the room where the arbitration had been held and was not witnessed by Mr. Liloia. Mr. Ruttenberg was subsequently acquitted of assault charges in Westampton Municipal Court.

This time, Mr. Malik did whatever any red blooded American plaintiff would do – he and his wife sued. They did not, however, confine their lawsuit to the allegedly assaulting lawyer but, reflective of their growing disenchantment with the arbitration process, also sued the American Arbitration Association and the Arbitrator Mr. Liloia. In the complaint, they averred that the American Arbitration Association and Mr. Liloia knew of Mr. Ruttenberg’s “dangerous propensities” and failed to exercise reasonable care to control “these tendencies.” AAA and Mr. Liloia moved to dismiss based on arbitral immunity, but the trial court found that they had a duty to control the proceedings and the failure to do so fell outside the scope of that immunity and, therefore, the plaintiffs had pled a viable tort case. The defendants’ motion to dismiss was denied.

The case then went to the Appellate Division of the New Jersey Superior Court which held that immunity applied.

The court held first that the issue of whether statutory immunity applies is a question of law. It found that the New Jersey Arbitration Act equates arbitrators with judges for liability purposes and that an arbitrator or an arbitration association enjoyed the same immunity as a judge. Although the responding plaintiffs attempted to characterize Mr. Liloia’s failure to control Mr. Ruttenberg as “an abdication of his judicial or quasi-judicial authority,” the court stated that “we can think of no more judicial function than controlling the proceedings.” Therefore, the act of calling for a recess and denying the application for a removal was something that fell directly within the adjudicative function of the arbitrator which triggered the applicability of the statutory arbitral immunity. Accordingly, holding that “immunity trumps liability,” the trial court order denying the defendants’ motion to dismiss the complaint was reversed.

If the case had gone the other way, you can visualize the new sign-up forms from the ADR providers. Not only will you be required to identify yourself and opposing counsel, but there will be questions about height and weight and whether any of the counsel have, what might be referred to in the current correct vernacular as, anger management issues, or other dangerous “propensities” or “tendencies.” Some of the more colorful replies will no doubt be posted in the provider’s coffee break rooms. The parties will not only have the ability to select their own arbitrator or mediator; they will also be able to enter their choices for bailiff whose pictures will also no doubt grace provider’s websites and newspaper ads.

Just as Alternative Dispute Resolution has provided a second career for retired judges, it will provide similar opportunities for retired bailiffs and other sheriff deputies.

Perhaps, also, competition will force the providers to follow TSA’s lead and post on their websites the average time it takes to get through their new metal detectors.

Maybe Alternative Dispute Resolution means that, as an alternative to an adjudication of the clients’ disputes, the lawyers will fight it out.

Mr. Millar is a member of the firm of Millar, Hodges & Bemis in Newport Beach. He can be reached at millar@mhblaw.net.