"Litigating Dealer Termination Cases in Puerto Rico" article for publication in the Franchise Law Journal

CAB's senior associate Carla Loubriel and I co-authored the article "Litigating Dealer Termination Cases in Puerto Rico" scheduled for publication in the Franchise Law Journal, Vol. 36, No. 4, Spring 2017.

Our article provides a top to bottom coverage of the substantive, procedural, and strategic considerations of litigating claims brought under Puerto Rico's relationship statutes from discussing the most appropriate forum to prosecute or defend the claims through jury trials in the federal court. The article explains the substantive elements of the relevant claims and defenses, discusses the interaction with the Civil Code, examines the differences between Puerto Rico's relationship statutes and the common law, and delves into pin pointing the implications of litigating these claims in Puerto Rico's local courts versus the federal court. We provide an overview of jury trials in Law 75 cases and conclude by sharing practical considerations that influence the litigation of distribution cases in Puerto Rico.

Feel free to contact Carla or this author for an advance copy of the article before publication.

The Franchise Law Journal, the quarterly scholarly publication of the American Bar Association's Forum on Franchising, seeks to inform and educate lawyers and other interested readers by publishing articles, columns, and reviews concerning legal developments relevant to franchising as a method of distributing products or services.

The Role of Arbitration in my Commercial Litigation Practice in Puerto Rico

Ricardo is a founder of Casellas Alcover & Burgos, P.S.C., a commercial litigation boutique in San Juan, Puerto Rico. His eight-lawyer firm handles complex commercial litigation and arbitrations for many Fortune 500 companies, local businesses, and individuals. He has been affiliated to Business Counsel Inc. with both his current firm and a predecessor law firm for almost 20 years.

Below are excerpts of a presentation by the author in Carlsbad, California during May, 2017 to Business Counsel Inc., a network of law firms across the United States and certain foreign countries. Ricardo was asked to lecture on alternative dispute resolution and the resources that his firm can offer to clients that may require an arbitrator in international disputes in Latin America, Spain, and of course, Puerto Rico.

Q. How relevant is mediation and arbitration in dispute resolution today?

A. Very relevant. According to the Federal Judicial Center, 1.1% of 274,262 federal civil cases nationwide in 2015 were tried by a jury to a final judgment. Cases are not being tried either because they settle, they are dismissed by motion practice, or are required to be arbitrated. Arbitration figures prominently today in clearing court dockets.As we all know, Congress enacted the Federal Arbitration Act which embodies a strong federal policy to enforce written arbitration agreements, and because of it, many cases do not end up being tried in court.

Q. Do federal courts in Puerto Rico order mediation in civil cases?

A. Yes. The Local Rules of the federal district court allow the court to order and supervise non-binding mediation. Mediation comes up at the request of a party or the court may suggest and even order mediation as part of a settlement initiative. In the First Circuit Court of Appeals, mediation is mandatory before the briefing process begins.

Q. How relevant is mediation and arbitration in your practice?

A. At least 50% of my litigation practice involves drafting mediation and arbitration provisions in commercial agreements, litigating commercial arbitration disputes at the AAA, and serving as a commercial arbitrator for the AAA’s ICDR Center.

Q. What is the ICDR Center of the AAA?

A. ICDR is the International Center for Dispute Resolution of the AAA. It handles all international (non-domestic) arbitrations. It is managed out of AAA offices in Atlanta and New York. I am on the list of roughly 12 commercial arbitrators of the ICDR from Puerto Rico and when disputes arise in Puerto Rico, I get vetted and appointed from that list.

Q. How and when did you become an arbitrator for the AAA?

A. After my three federal clerkships, I wanted to do some judging myself but in private practice. I also like to write opinions and briefs, so writing awards is natural for me. I got appointed to the Construction Roster of the AAA in 1991 and afterwards to the Commercial Panel. I take annual CLE arbitration courses to stay active and serve as an arbitrator in one or two cases a year.

Q. In what types of disputes have you served as an arbitrator for the AAA?

A. I’ve served in many different types of cases. I’ve served in three-arbitrator panels and single arbitration cases in employment and intellectual property disputes, lender’s liability, Law 75 dealer-manufacturer disputes, consumer-lender disputes, construction cases, breach of contract, and a personal injury tort claim arising in St. Croix, USVI. The dispute in St. Croix required me to apply the laws of the US Virgin Islands which is patterned after the common law.

Q. What expertise do you have that qualifies you as an arbitrator?

A. Over 30 years of experience as a commercial litigator and trial-appellate lawyer, particularly in distribution, trade regulation, and antitrust disputes. I’ve served for the AAA for two decades in many different kinds of cases applying federal law, common law, and civil law.

Q. Although you are admitted to practice law in Puerto Rico, does your civil law background qualify you to arbitrate disputes internationally?

A. Yes it does in some jurisdictions. I would be able to serve as an arbitrator in disputes involving the laws of civil code jurisdictions, including Latin American countries and Spain. I suppose that I would be able to serve too in Louisiana that remains a civil law jurisdiction. When we talk about the Civil Law we refer to the law of codes as opposed to the common law of precedents. Both systems have different approaches to dispute resolution.

Q. What do you like the most about serving as an arbitrator?

A. It’s great! It’s like being a judge in private practice. I learn about so many different areas of substantive law, which I find very interesting and rewarding. I am also rewarded by helping parties to solve disputes as efficiently and as quickly as I can. I make it a point to issue written awards within 30 days or less after the closing of an evidentiary hearing. That’s the hallmark of arbitration. What I really find practical for me, is what I learn from the arbitration process that I am able to apply to my own trial practice. I see first hand how the lawyers try the arbitration cases and what makes the presentation of their cases persuasive and what does not work so well.

Q. Do you have examples of things lawyers have done that work and things that don’t work so well?

A. I had a case where defense counsel presented videotaped trial depositions of all the experts. By trial deposition, I mean that the testimony was presented as a direct examination and the opposing party had an opportunity to object and cross-examine. I thought this was cost-effective, saved time, and was helpful. What is more, I didn’t have to order or allow this method of presenting evidence because the lawyers for both sides were civil about it and stipulated to it. I’ve been most persuaded by lawyers that are civil and do not argue or object unnecessarily. One of the best presented cases I’ve presided over was tried by two distinguished lawyers from the bar in St. Croix.

Q. How about a lawyer doing something that didn’t work so well?

A. In a personal injury case, the claimant’s lawyer tried to get his client on direct examination to re-enact an accident to portray the facts as he testified happened. Over respondent’s objection, I allowed the recreation. It was an experiment that did not go so well for claimant because it failed to prove his or her case. It reminded me of when the prosecutor in the O.J. Simpson case had Mr. Simpson try the gloves on for size and the gloves didn’t fit. At best, it was a failed experiment.

Q. What are some of the advantages of arbitration?

A. Privacy and confidentiality of the process. There’s no public record like a court docket. Arbitration awards are rarely published, but some may be available through Westlaw or Lexis. Arbitration agreements may provide for procedural safeguards, like prohibiting punitive damages, the consolidation of disputes or disallowing class action arbitrations, controlling the locale of the arbitration and specifying the qualifications that the arbitrator(s) must have to be appointed. All of these safeguards are designed to minimize financial exposure and risks of liability.
Another benefit is the finality of the arbitration award, but enforcement proceedings in court can take a long time and be as costly as an appeal.

Q. What do critics say about arbitration?

A. It is not without force to argue that arbitration can be as expensive as or more so than litigation. A lot of the costs are related to lawyers trying an arbitration dispute like a court case, with all the usual trappings of discovery and motion practice. There’s now a provision in the AAA Rules permitting the parties to agree to appeal an arbitration award. Some entities like the Economic Policy Institute are of the view that arbitration is pro-business and anti-consumer. See http:www.epi.org/files/2015/arbitration-epidemic.pdf. There’s draft legislation in Congress-the Arbitration Fairness Act- that would prohibit arbitration of certain claims, involving antitrust, civil rights, labor employment, and consumer disputes. It does not appear that it will be passed anytime soon.

Q. Do you recommend arbitration for all disputes?

A. It depends on who is your client. Arbitration agreements serve to protect corporate defendants and add predictability in dispute resolution especially in international disputes where foreign law might apply. On the other hand, consumers and small businesses might prefer a jury trial over arbitration.