April 2022

Friends –

Its been 2 years since my last Newsletter – much too long!  As Spring is beginning to warm the air in Chicago and we’re all emerging from our COVID reclusive lives, its time to renew the Newsletter.  Assisted by an able law student, Michael Pranger (Northwestern Pritzker School of Law candidate for 2023 graduation), I hope to bring you a new edition the first week of each month.

As in the past, I’ll focus on two areas:  corporate governance and alternative dispute resolution (“ADR”).  Additionally, I’ll also include an article or two concerning matters of general interest in my “Interesting Cases/Articles of the Month” section.  I provide a brief summary of each article and a link for you to access and read the article in its entirety if you wish. My hope is that you’ll find one or more of the articles I’ve selected of interest and this Newsletter worthy of your time.

This month, as the first Newsletter after a much too long hiatus, I thought I’d relate my activities during the past several months.  When work and arbitration/mediation activity slowed as we all went into COVID “lock-down,” Beth, my wife and best friend, urged me to write that book that I’ve been talking about for years.  Having too much free time and nowhere to go (read “no excuses”), I went up to my office and actually wrote it.

As many of you know, I’m privileged to be part of the Oxford Programme on Negotiation at the University of Oxford, Saïd Business School.  While at Oxford, I’ve had the opportunity to hear and observe some of the world’s leading negotiation academics and practitioners, and to observe the amazingly talented people who go through the program.  I’ve also been fortunate to have had the opportunity to negotiate deals and disputes facing enormously skilled negotiators in the US, Canada, Asia, and Europe.  From these experiences, I’ve gained a bit of perspective and thought I might have something to add to the negotiation literature.

I’m proud to relate that my book, Negotiation Simplified, went on sale at Amazon.com, Barnes & Noble, and independent book retailers on February 1, 2022.  My goal for the book was to set forth a framework and the analytical process that I’ve observed great negotiators use – to write a book by a negotiation practitioner for the negotiation practitioner.  I’m thrilled to relate the response has been overwhelmingly positive.  The book has been well received by colleagues and independent book reviewers.  In fact, on two occasions in February Amazon.com singled out Negotiation Simplified as their #1 new book in its category.

I’m especially proud of the book’s chapter “Experience Speaks,” which comprises eight real-life negotiation stories written by eight negotiation luminaries illustrating one or more of the principles described in the book.  The eight:

  • Catherine Dixon, Director General of the Chartered Institute of Arbitrators and former CEO of the organization that indemnifies the UK’s National Health Service
  • Victor do Prado, Director of Council and Trade Negotiations at the World Trade Organization
  • Amb. (ret.) David Huebner, former US Ambassador to New Zealand and Samoa
  • Tom Manning, former CEO of Dun & Bradstreet
  • David Rank, former US Acting Ambassador to China
  • Prof. James Shein, Kellogg School of Management, Northwestern University
  • Barbara Weston, Director of Global Trend & Design at Bed Bath & Beyond
  • Valerie White, Executive Director, Local Initiatives Support Corporation, New York City

Unrelated to my book, my arbitration and mediation practice resumed once we all started working via Zoom, Teams, etc., and is growing and doing well.  In January, the American Arbitration Association (“AAA”) included me on its Master Mediation Panel.  Per the AAA, “the Master Mediation Panel is comprised of the top mediators as rated by counsel.  They are selected utilizing a rating committee made up of a diverse group of advocates and in-house counsel representing clients in complex, high stakes disputes.”  I’m honored to be a part of this panel.  I also became a father-in-law in late 2019, and a grandfather in July, 2021!

So much for me.

For the Newsletter’s re-introduction, I present a summary of two recently published studies examining the impact of remote video hearings on arbitration decisions.  The results:  lower awards!  For the non-lawyer governance readers, I present an article addressing corporations and politics – whether corporations have a responsibility to exercise their first amendment right of free speech.  Finally, for articles of general interest, I present two:  one dealing with truth in political advertising and another addressing graphic images in journalism (depicting the war in Ukraine).  I also provide a link to a portion of Ketanji Brown Jackson’s confirmation hearing during which she brilliantly describes how she and many judges decide questions of law, and in particular the application of the principle of “textualism.”  This clip should be of interest to lawyers and non-lawyers alike regardless of your thoughts with respect to the propriety Judge Jackson Brown’s confirmation.

This Month’s Articles

Corporate Governance

  • Corporations have the right to free speech. Should they exercise that right?  “Should corporations take public stances on social issues?  Should they make contributions to political action committees or political parties? Under what circumstances do such actions create issues for corporations and their boards?”  These are the questions explored in this article appearing in Directors & Boards

Alternative Dispute Resolution

  • Two academic papers are presented which studied the awards rendered in arbitration hearings conducted via remote video conferencing.  The results:  the awards were lower than those conducted in person.

Articles of General Interest

  • The truth in political advertising: ‘You’re allowed to lie’   National Public Radio’s Domenico Montanaro explores truth in political advertising and the politics behind regulating truth in politics.
  • Graphic images of war and questions about principles of journalism.  When the war in Ukraine broke out, the New York Times published on its front page a grisly image of a family’s death.  The graphic nature of the image, and the editors’ decision to show it, are explored.
  • Judge Ketanji Brown Jackson explains the judicial process when deciding issues of statutory construction, and “textualism” in particular.

I hope you find one or more these articles of interest and this Newsletter worthy of your in-box.


Jim Reiman


Articles / Corporate Governance

Corporate Social and Political Engagement:  An Introduction.  Corporations have the right to free speech. Should they exercise that right?  Alexandra “Alex” Reed Lajoux, Directors & Boards, 2022 First Quarter

In this article Alexandra Reed Lajoux explores corporate political speech and the issues boards should consider when deciding whether and how to exercise their right to speech.

For many years, corporations held the position that it was good business to stay out of politics (at least publicly). However, the U.S. Supreme Court’s decision in Citizens United v. Federal Election Commission caused a radical shift to that way of thinking.  With the Court’s holding that corporations have a right to free speech, and the expanded view of directors’ duties to the enterprise (which includes a corporation’s community) and not just shareholders, corporations must now consider whether they have an obligation to use that right.

Traditionally, corporations avoided political issues subscribing to the belief that engaging in political issues or in political speech violates directors’ fiduciary duty to shareholders or the corporate purpose. Some directors and officers retain this view, but many now embrace the post-Citizens United notion that they should use the voice of the corporation to engage in public discourse.  Interestingly, in the twelve years since Citizens United, political division and activism have massively increased in the United States. These divisions raise the stakes for corporations engaging in political speech—to decide when to speak and how to speak.

There are two preeminent principles for corporations to consider in these deliberations: understand your customers and what they desire from you, and ensure that statements are genuine and mesh with the corporation’s mission.  In following these principles, corporations can maximize the benefits received from these statements. If a corporation were to misunderstand what their customers want from them and make statements that seemed ingenuine, there would be a potential for harm to the corporation as the statement could be extremely off-putting to the corporation’s customers.

The law is now clear—corporations have a right to free speech.  How and when they choose to exercise that right is for each corporation to decide, but in doing so corporations should always consider the desires of their stakeholders and the corporation’s mission and purpose.

Lajoux summarizes the corporate risk/reward dilemma for political engagement as follows:

Potential rewards for political engagement include strengthening reputation with constituents who care about an issue and potential for positive press coverage that can enhance the company’s general brand. Apple, Ben & Jerry’s and Starbucks have affiliated themselves with liberal themes, and their customer base accepts that. Conversely, Chick-fil-A, Goya and Hobby Lobby are known to embrace conservative themes. These affiliations, which are consistent with the branding of the companies, have not harmed shareholders. Note, however, that these prominent examples are all in the consumer discretionary sector. Such a branding strategy might be riskier for companies in other sectors, such as energy or financial services.

Potential risks for social stances include possible negative comments on social media and boycotts by consumers on either end of the political spectrum.  A recent Statistica survey showed that half of the 1,528 consumers polled had at one point or another boycotted a company (or taken other actions against it) for practices seen as unethical. There is also a risk of real or perceived corruption of company leaders. As stated by Transparency International, “corporate political engagement is a significant risk area for bribery and corruption, and public perceptions of lobbying and corporate influence in the political process threaten reputational damage.”


Articles / Alternative Dispute Resolution

Forced Remote Arbitration, David Horton (University of California, Davis – School of Law), Cornell Law Review, Vol. 108, 2022

In this paper Horton reviewed and analyzed more than 70,000 filings from FINRA, JAMS, Kaiser, and AAA, and considered how remote procedures impact win rates, case length, and arbitration fees.  His findings:

“[P]laintiffs who participate in virtual proceedings generally win less often and recover lower damage awards than individuals who arbitrate in person. This “remote penalty” exists in some settings even after controlling for variables such as claim type, pro se status, and the experience of the defendant, the lawyers, and the arbitrators.

[Additionally,] even though proponents of forced remote arbitration contend that it streamlines cases, the data only partially support this claim. Some remote modes, such as documents only proceedings, seem to save time and money, while others, like video hearings, do not.

The study is academic and its text and analysis dense.  It is not “light reading.”  However, the study and article do provide some of the first objective data addressing the question that those in the arbitral community are facing:  what is the impact of remote hearings on results, and is there a difference in awards rendered when hearings are conducted in person v. remotely?  Horton concludes that there is a difference, and the difference benefits corporations.

When considering the findings summarized in the article’s abstract and quoted above, I note the article’s title “Forced Remote Arbitration,” and specifically the word “forced.” Horton begins his article by relating a 2017 case wherein a judge ordered a pro-se claimant to arbitrate a claim arising under a securities investment account and the account documents the claimant signed to open the account.  He then states:  “Forced arbitration has long been a hallmark of the American civil justice system.”

Contrary to Horton’s implied assertion that arbitrations are forced on unwilling participants, arbitrations are not “forced.”  They are creatures of contract where in the parties agree to arbitrate their disputes.  While one may argue the propriety of arbitration clauses in consumer contracts, and whether such contracts are contracts of adhesion, to label all arbitrations “forced” as Horton appears to do is just not accurate.

That Horton is not a fan of arbitration is further indicated by his discussion of the use arbitration and remote hearings in particular.  Consider this sentence:  “Thus, drafters [of arbitration agreements] are using private dispute resolution to delete a right that individuals possess in court. In addition, my research suggests that this gambit systematically favors businesses.” P. 8.

While data is data and the results of Horton’s analysis may well support the conclusion that there is a disparity in result between in-person hearings and remote hearings, those with a better understanding of statistics and the methodology of Horton’s study need to weigh in and provide their analysis of the objectivity and accuracy of Horton’s analysis and conclusions.

FINRA’s Dispute Resolution Pandemic Response, Kristen Blankley (University of Nebraska), Penn State Law Review, Forthcoming

Prof. Blankley, in a paper to be published by the Penn State Law Review, explores the response of the Financial Industry Regulatory Authority (“FINRA”) to the COVID pandemic and resulting cessation of in-person hearings of disputes.  FINRA was created in 2007 as a result of the merger of the New York Stock Exchange and the National Association of Securities Dealers, and “operates the largest securities dispute resolution forum in the United States.”  Per Prof. Blankley, “[n]early all brokerage firms include pre-dispute arbitration agreements in their customer contracts, and FINRA rules require arbitration at a customer’s request.”

When the United States declared a national emergency due to the coronavirus pandemic, “FINRA made a series of temporary rule changes to continue operations in light of the circumstances.”  Specifically, FINRA postponed “all in-person arbitration and mediation proceedings” and asked “nearly all of its staff to work remotely.”  Prof. Blankley examines FINRA’s response, and in particular the data for win rates in in-person hearings and remote hearings.  Her analysis and conclusions are both thoughtful and measured:  “Some evidence suggests that claimants fare worse in zoom arbitrations than in-person arbitrations, which is a conclusion that should be studied in more detail.”

Prof. Blankley bases her conclusion that evidence exists which suggests a results disparity between in-person hearings and remote video hearings on a report prepared in 2021 by the securities litigation and consulting firm SLCG.

“[T]he report compiles FINRA data and raises serious questions. The report cites FINRA’s own publicly available information showing a 34% claimant win rate in 2020, down from rates from 42% to 45% since 2015.  A 10% decline based on FINRA’s own published data is concerning and deserves additional attention and study. SLGC’s report goes further by examining the awards themselves to determine which hearings occurred in person and which hearings occurred online.  SLGC found that that between May and December 2020, when nearly all arbitrations were remote, investors won only 28.8% of cases.  In those remote hearings, claimants recover only 33.3% of the amount requested, down from 57.3% in 2019, and down at least 20 points compared to any other year since 2015.  In a March 2021 webinar, FINRA’s Richard Barry claimed that SLGC’s report contains methodological deficiencies and responded that the data show little change from year-to-year.”

Prof. Blankley’s paper has yet to be peer reviewed, and she carefully and repeatedly notes that the data “suggests” discrepancies; she does not conclude that it does.  Rather, she concludes that more study is required:

FINRA should study and report on win rate statistics. At this point, a cloud exists over the win rates that can hopefully be explained by a neutral party.


Articles / General Interest

Articles / General Interest

The Truth In Political Advertising: ‘You’re allowed to lie.’  Domenico Montanaro, National Public Radio (NPR), March 17, 2022

National Public Radio’s Domenico Montanaro offers a thoughtful and candid analysis of political advertising in the US, both the law governing it and the accuracy of advertisers’ claims.  He askes:  “Can candidates simply lie in their paid ads?”  His answer:  “yes.”  Moreover, they actually do!  Montanaro documents his point that blatant falsehoods exist in political advertising with multiple examples.

He then interviews Tom Wheeler, former chair of the Federal Communications Commission under President Barack Obama, who answers questions concerning the regulation of truth and political ads, the politics and legal issues behind the non-regulation, and the different rights of broadcast television stations, cable networks, and social media.  His summary of political advertising:  “Unfortunately, you’re allowed to lie.”

“While the Federal Trade Commission regulates truth in commercial advertising, the FCC does not do the same for political ads.  . . . In fact, various courts have repeatedly upheld the First Amendment right of candidates to essentially say what they want on federally regulated broadcast channels. Local broadcast television stations (think ABC, NBC, CBS) can’t reject ads, even if they’re blatantly false.”

The FCC has attempted to combat this issue by proposing measures that would increase transparency in political advertising.  Currently, entities that sponsor political advertisements can have mysterious names or origins.  At one point, the FCC considered altering disclosure requirements in a way that viewers would actually know who was financing an advertisement. Unfortunately, these proposals were not implemented.

For now, there is no requirement that political advertisements contain truth, and the individuals financing advertising campaigns are free to hide their true identity behind mysterious entities.

NY Times Images Of Slain Ukrainian Civilians Show War’s Toll, David Bauder (AP Media Writer), ABC News, March 7, 2022

On March 7, the New York Times published a large, color photograph above the fold of its front page showing Ukrainian soldiers tending to the bloodied bodies of four people moments after a mortar exploded near them.  The “grisly” image, captured by Lynsey Addario, is an accurate and untouched portrayal of the death and destruction wrought by the Russian attacks in Ukraine.  Nonetheless, it sparked discussion and reflection regarding the propriety of its publication because of its graphic depiction of death.

Journalists and commentators across the political spectrum commented on the photograph and the propriety of the Times’ publication of the image in such a prominent way.  Bauder explores the issue and the Times’ reasoning, noting that news professionals around the world are faced with the difficult task of weighing reader sensibilities against the responsibility of illustrating the reality of the situation.

Though the New York Times was able to provide a graphic content warning when sharing the article on Twitter, this is not feasible for a print newspaper.

In a statement, Meaghan Looram, director of photography for The Times, said the newspaper doesn’t have a “blanket policy for decisions like this,” instead encouraging editors to ask themselves and consult with others on a series of questions that include whether a photo’s news value demands that it be seen. Among the factors Looram says the Times also considers are whether “the photograph portrays the people in a dignified manner, whether it feels exploitative or gratuitous” and whether a decision to run the image would be the same if it came from another country or region.

The Times takes “seriously our duty as journalists to show our readers an unvarnished and accurate account of the world’s events, which are sometimes very difficult to see but necessary to understand,” Looram said.

Here, many feel that the editors made the correct choice—while the image is shocking, it is paramount to show the human cost of war, with hopes that future generations can learn lessons from our mistakes.

Judge Ketanji Brown Jackson, answering questions posed by Sen. Ben Sasse, describes the judicial process that she follows when deciding issues of statutory construction, and “textualism” and “originalism” in particular.

Whether you’re a supporter of the confirmation of Judge Ketanji Brown Jackson to the Supreme Court or not, her responses to the questions of Sen. Ben Sasse explaining how she decides questions of law is a brilliant articulation of the judicial thought process and the principles of “textualism” and “originalism.”  In particular, her explanation of how judges look to the Constitution to answer questions such as whether a cell phone (which was not in the thoughts of the drafters of the Constitution) is subject to search and seizure protection (time stamp 14:15), and her explication of the viewpoints of Justice Scalia’s “originalism” and Justice Breyer’s view of constitutional interpretation is the clearest and most concise of any I’ve ever heard.  Listening to her answers to Sen. Sasse’s questions will give you much deeper and better understanding of the judicial process.