“Punitive, Exemplary, “Vindictive,” or “Edifying Damages of Whatever Nature”

One critical arena for the clash of competing visions of arbitration – viewed from one angle as an exercise in adjudication, and yet from another as an exercise in private self-government – is the subject of the present paper – the ability of arbitral tribunals to grant or to withhold awards of punitive damages. As the United States is one of the rare jurisdictions in which such awards are regularly given, it would only be natural that it is the jurisdiction that has experienced the most angst on the subject. In this paper I run through, in a summary fashion, the spectrum of cases in which the problem of punitive damages is likely to arise – focusing on concrete factual patterns, and moving from the fairly straightforward to the highly controverted. These fact patterns include the cases where: The parties have expressly provided by contract that the arbitrators, once they find liability, may award punitive damages, but local courts, on a motion for vacatur, hold that such awards are impermissible; The parties have no express agreement at all conferring on their arbitrators the power to make such awards but the arbitrators proceed nevertheless to do so; The parties have not expressly excluded an arbitral award of punitive damages, but they do include a choice of law clause incorporating the law of a state under which such awards are deemed to be against public policy; The parties have expressly excluded awards of punitive damages and yet the arbitrators proceed nevertheless to render an award that looks very much as if it includes punitives; The parties have expressly excluded the possibility of any arbitral award of punitive damages, and the tribunal has respected such an exclusion and has declined to award them. These latter cases of course raise further questions: whether any contractual exclusion functions as a limit on the authority of the arbitral tribunal, bringing with it the possible consequence of vacatur on the ground of excess of power, and just what is to be understood by “punitive damages” anyway?: The taxonomy of what is “punitive” is obviously a delicate matter, hardly self-evident, and an enterprise that is precarious, unstable, shifting, and easily manipulated. A final section considers the scenario raising the question the transnational implications of a US award: What is likely to be the currency of an American award of punitive damages in other jurisdictions? Civil law jurisdictions traditionally wary of US punitive damage awards do now seem to be displaying somewhat greater receptiveness; a further level of analysis reminds us that when we are faced with an international arbitral award, other interests also come into play to be weighed against any state’s own “public policy”: The structure of the New York Convention exists after all to make effective contractual exercises of private autonomy, at the same time adding to “comity” or courtesy the force of international obligation – both values that embody strong “policy” in their own right. So in a world where privately negotiated arrangements assume a privileged position, and where proponents of the arbitral process pursue their progress towards the ideal of an autonomous system, punitive damage awards are increasingly unlikely to be seen as implicating (in the canonical formulation), fundamental principles of justice or morality or the foundation of a state’s legal order.The Kay Bailey Hutchison Center for Energy, Law, and Busines

“Gap Filling” by Arbitrators

The notion of a contractual “gap” is an evanescent one, which can — and often does — mean everything and nothing. It could perhaps be said that the very notion of a “gap” is simply incoherent — for once we are satisfied that the parties have entered into a “contract,” there can by definition be no “gaps.” Indeed, by its legal definition a “contract” cannot be incomplete. Or perhaps it could be said that, by contrast, there are nothing but “gaps” — that unless the parties have taken the pains to construct an infinite agreement, mapping onto every conceivable state of the world, likely or unlikely, known or unknown — then courts must be free to reconstruct or interpolate.The Kay Bailey Hutchison Center for Energy, Law, and Busines

Gateway-Schmateway: An Exchange Between George Bermann and Alan Rau

What role do national courts play in international arbitration? Is international arbitration an “autonomous dispute resolution process, governed primarily by non-national rules and accepted international commercial rules and practices” where the influence of national courts is merely secondary? Or, in light of the fact that “international arbitration always operates in the shadow of national courts,” is it not more accurate to say that national courts and international arbitration act in partnership? On April 27, 2015, the Pepperdine Law Review convened a group of distinguished authorities from international practice and academia to discuss these and other related issues for a symposium on International Arbitration and the Courts. The issue begins with a transcript of a moderated exchange between Professor Bermann, the Reporter for the American Law Institute’s (ALI) ongoing Restatement (Third) of the U.S. Law of International Arbitration project, and Professor Rau, an ALI-appointed Advisor on the project. Professor Coe poses questions to both scholars that focus on selected issues that are characteristic of matters discussed during the ALI drafting and consultative process, especially so-called “gateway” matters like competence-competence. This exchange revealed several questions on which Professors Bermann and Rau diverged – namely, arbitrability of scope issues, the concept of delegation, and whether an express remedy limitation in a contract should be treated as a limit on a tribunal’s authority. For those interested in the iterative process that creates an ALI Restatement, this is a must read

LSST Science Book, Version 2.0

A survey that can cover the sky in optical bands over wide fields to faint magnitudes with a fast cadence will enable many of the exciting science opportunities of the next decade. The Large Synoptic Survey Telescope (LSST) will have an effective aperture of 6.7 meters and an imaging camera with field of view of 9.6 deg^2, and will be devoted to a ten-year imaging survey over 20,000 deg^2 south of +15 deg. Each pointing will be imaged 2000 times with fifteen second exposures in six broad bands from 0.35 to 1.1 microns, to a total point-source depth of r~27.5. The LSST Science Book describes the basic parameters of the LSST hardware, software, and observing plans. The book discusses educational and outreach opportunities, then goes on to describe a broad range of science that LSST will revolutionize: mapping the inner and outer Solar System, stellar populations in the Milky Way and nearby galaxies, the structure of the Milky Way disk and halo and other objects in the Local Volume, transient and variable objects both at low and high redshift, and the properties of normal and active galaxies at low and high redshift. It then turns to far-field cosmological topics, exploring properties of supernovae to z~1, strong and weak lensing, the large-scale distribution of galaxies and baryon oscillations, and how these different probes may be combined to constrain cosmological models and the physics of dark energy.Comment: 596 pages. Also available at full resolution at http://www.lsst.org/lsst/sciboo

Antiinflammatory Therapy with Canakinumab for Atherosclerotic Disease

Background: Experimental and clinical data suggest that reducing inflammation without affecting lipid levels may reduce the risk of cardiovascular disease. Yet, the inflammatory hypothesis of atherothrombosis has remained unproved. Methods: We conducted a randomized, double-blind trial of canakinumab, a therapeutic monoclonal antibody targeting interleukin-1β, involving 10,061 patients with previous myocardial infarction and a high-sensitivity C-reactive protein level of 2 mg or more per liter. The trial compared three doses of canakinumab (50 mg, 150 mg, and 300 mg, administered subcutaneously every 3 months) with placebo. The primary efficacy end point was nonfatal myocardial infarction, nonfatal stroke, or cardiovascular death. RESULTS: At 48 months, the median reduction from baseline in the high-sensitivity C-reactive protein level was 26 percentage points greater in the group that received the 50-mg dose of canakinumab, 37 percentage points greater in the 150-mg group, and 41 percentage points greater in the 300-mg group than in the placebo group. Canakinumab did not reduce lipid levels from baseline. At a median follow-up of 3.7 years, the incidence rate for the primary end point was 4.50 events per 100 person-years in the placebo group, 4.11 events per 100 person-years in the 50-mg group, 3.86 events per 100 person-years in the 150-mg group, and 3.90 events per 100 person-years in the 300-mg group. The hazard ratios as compared with placebo were as follows: in the 50-mg group, 0.93 (95% confidence interval [CI], 0.80 to 1.07; P = 0.30); in the 150-mg group, 0.85 (95% CI, 0.74 to 0.98; P = 0.021); and in the 300-mg group, 0.86 (95% CI, 0.75 to 0.99; P = 0.031). The 150-mg dose, but not the other doses, met the prespecified multiplicity-adjusted threshold for statistical significance for the primary end point and the secondary end point that additionally included hospitalization for unstable angina that led to urgent revascularization (hazard ratio vs. placebo, 0.83; 95% CI, 0.73 to 0.95; P = 0.005). Canakinumab was associated with a higher incidence of fatal infection than was placebo. There was no significant difference in all-cause mortality (hazard ratio for all canakinumab doses vs. placebo, 0.94; 95% CI, 0.83 to 1.06; P = 0.31). Conclusions: Antiinflammatory therapy targeting the interleukin-1β innate immunity pathway with canakinumab at a dose of 150 mg every 3 months led to a significantly lower rate of recurrent cardiovascular events than placebo, independent of lipid-level lowering. (Funded by Novartis; CANTOS ClinicalTrials.gov number, NCT01327846.