Wrongful Arbitration

NCO has backed off their stalking horse position of prospective Axiant acquirer. Could it be that it just would not pass the 'smell test?'

The other day, purely on a lark, the Wall Street Journal landed in my lap. Lo and behold, the venerable business paper re-detailed the Minnesota State Attorney General Lori Swanson's allegations against the National Arbitration Forum. Her action resulted in the Forum agreeing to pull out of credit card arbitration nationwide.

Some new tidbits emerged from the Journal's writeup. Notably, the uncharged hedge fund manager "New York financier J. Michael Cline" went on safari to save tigers, and funded successful dotcoms.

The final paragraphs in the Journal's page 1 story quotes a Houston-area arbitrator James Carmody, who concluded the "...vast majority of cases the credit-card company wins because in the vast majority of cases, the person ran up the debt on the card."



We're sorry Mr. Carmody, but that is not the law. Arbitrators are supposed to follow the law, just like everyone else. If you don't like the law, then change it by way of legislation. And we're happy you're not stamping Arbitration Awards anymore for the National Arbitration Forum.

Wrongful Arbitration Based Litigation Fought Tooth and Nail to the State Supreme Court

The California Supreme Court today declined to hear the appeal of this case today.

This was a case of a NAF arbitration award carried to the extreme. Komarova was pursued in the courthouse by MBNA debt collectors, all the way to the Supreme Court!

Governor Arnold Schwarznegger Vetoes Senator Ellen Corbett's SB 641

What does this mean? Simply, the California State Bar can't bill for dues from active attorneys. 12 years ago, (1997) then Governor Pete Wilson also vetoed the State Bar funding bill. The result of that years veto was mass layoffs by 1998, and 260 out of 450 employees cut were from the complaint/enforcement/prosecution department. There was a call for voluntary dues payments, and some biglaw players stepped up to the plate and paid. But it wasn't enough.

Both Governors, Wilson and Schwarznegger, cited the increased political plays by the bar in the veto justification. This is usually a routine annual funding bill. The State Bar Act of 2009 failed because of massive ongoing power plays, that continue unabated. The California State Bar is supposed to be a consumer protection agency, and the Bar's operation is to regulate and discipline.

Senator Corbett Expands Her California Consumer Protection, courtesy of the Arnold

There's bigger irony here as well. The sponsor of SB 641, Senator Corbett, was also the sponsor for the so-called Corbett Bill, which became a California statute 1281.96. This is the law requiring consumer arbitration providers to make quarterly public disclosures of the results of their activities. As we all know now, the disgraced National Arbitration Forum staffed their allegedly-impartial arbitrators from the ranks of the California State Bar. Yet, our initial investigations yield no state bar actions against these arbitrators. The California Bar sat on their hands as the National Arbitration Forum arbitrators rubber-stamped away.

California Bar Members. Are They Above the Law?

You have to wonder just how stacked the deck was in the NAF arbitrations. The big-time NAF arbitrators claim lengthy careers, spanning decades. Yet they continued their rubber-stamp of 'Arbitration Award' on tens of thousands in claims from the likes of FIA/Bank of America, Chase, and others. This resulted in the banks receiving hundreds of millions of dollars in Arbitration Awards.

Just how ethical is an NAF arbitrator? Try Lawyer for Sale. Hello State Bar.
How can the arbitrators NOT HAVE KNOWN the extent of the wrongful arbitration cancer? Basic tenets of law were ignored by these long-time officers of the court. There is no credible argument that can explain how an arbitrator can rubber stamp 50 Arbitration Awards in a day, and have actually reviewed evidence, let alone have read the claims presented to them. The arbitrators, unfettered by the State Bar of California, took the law into their own hands. It was a classic pay for play.

If you have an Arbitration Award, how impartial was your arbitrator? Was he or she a member of the California State Bar? Put a complaint in! and cc it to us as well.

The San Francisco City Attorney's Office, led by Dennis Herrera, filed suit against the National Arbitration Forum March 24, 2008. According to http://thehill.com/homenews/house/60793-rep-kucinich-flap-reveals-sensitivity-of-contacts-with-courts-prosecutors, all the filings and discovery are under a 'protective order' issued by an Francisco Superior Court Judge Richard Kramer.

This is the standard behavior pattern of billionaires and movie stars, and those that don't want any raking through the muck. See Case Number: CGC-08-473569.

Read the protective order here.