An arbitration case upheld by the Arkansas Supreme Court on Thursday included a dissent by Justice Josephine Hart, who derided the settling of disputes through private judges as "eroding the cornerstone of our democracy."
Hart, elected to the high court in 2012, expressed frustration that alternative dispute resolution -- also known as arbitration or mediation -- was usurping the power of the courts as fair referees of disputes.
To assert her point, Hart drew a passage from Harper Lee's novel To Kill a Mockingbird, referring to public courts as "the great levelers."
"In my view, alternatives to judicial resolution of disputes should be anathema to every member of the judiciary," Hart wrote.
But Hart stood alone among her fellow justices, who in a 6-1 ruling upheld the decision of an arbitrator in a dispute between two former business partners. Justice Robin Wynne recused and a special justice sat in.
Defenders of out-of-court arbitration and mediation argue it is a quicker, more efficient way for parties to resolve their disputes -- and that it lightens the caseload on courts.
However, the practice also has come under scrutiny in recent years as a way for corporations to avoid class-action lawsuits.
Darren Lee, president of National Academy of Distinguished Neutrals, said Hart's opinion fit in with a recent trend of discontent among judges.
"It's becoming something of a mission of various judges to make such observations," Lee said in a phone interview Thursday.
Arkansas Bar Association President Denise Hoggard said the organization has lawyers in both courts and arbitration cases, and that each serve "good purposes."
The Arkansas Judicial Council, which represents the state's judiciary, does not have an official stance toward arbitration, said its president, David Guthrie, who is also a circuit judge in El Dorado.
Guthrie echoed Lee's assessment, saying there are a number of judges who share Hart's concerns. But, he said, federal law and U.S. Supreme Court decisions have limited judges' ability to overturn an arbitrator's decision, except in cases of severe misconduct or where the arbitrator exceeds his power.
In her dissenting opinion, Hart wrote that such grounds existed in the case before the high court, because the loser claimed he was protected by Arkansas' whistleblower law.
Two former business associates in a dental-management company, Joshua Kilgore and Robert Mullenax, reached a settlement that included noncompete and non-disclosure clauses after Kilgore left the business in 2013.
The pair agreed to go through arbitration should disputes arise.
After Kilgore bought into a Tennessee company, Mullenax filed an arbitration claim arguing that his former partner violated the noncompete clause. Kilgore in turn alleged to the Arkansas Insurance Department that Mullenax was involved in a kickback scheme, though the claim was unsubstantiated, the high court said.
Mullenax said Kilgore's actions also violated their agreement's nondisparagement clause. The arbitrator awarded Mullenax $136,000 in attorneys' fees and $7,000 for having to defend himself in front of the Insurance Department.
Kilgore appealed, claiming whistleblower protection. He also said the arbitrator did not have the authority to hear the case under the Federal Arbitration Act, because it did not involve interstate commerce. The Supreme Court's decision upheld a Pulaski County Circuit Court ruling to enforce the arbitrator's award.
Hart said the matter would have been cheaper to handle through the courts in the first place. She noted that the $350-per-hour fee of the arbitrator, John Dewey Watson of Little Rock, is far more than the $200 filing fee in circuit court.
Reached Thursday, Watson defended what he said was an easy decision favoring Mullenax's breach-of-contract claim after several days of evidence and testimony.
He noted that both parties had a right to enter into their own contract calling for arbitration, and said the case before the court could not have been decided any other way under state law or the Constitution.
"I didn't make them spend $135,000 in attorneys' fees. They chose to do that," Watson said.
After reviewing Hart's opinion, Lee, of the national arbitrator's group, sent an email saying he had "some sympathy" for her concerns about the mounting costs of arbitration, which he said can almost be as expensive as litigating a matter in court.
However, Lee said he would not say the same about mediation, which he argued was a low-cost alternative.
"Regardless, like the internet, [alternative dispute resolution] is not going away -- the 'market' has spoken, and the market likes mediation & arbitration," Lee wrote in his email.
Participating in the court's majority Thursday was special judge Jason Hendren, who filled in after Wynne's recusal.
Wynne did not explain his reason for recusing in a letter he wrote to Chief Justice Dan Kemp, and his office did not respond to a request for comment Thursday.
A spokesman for the justice told the Arkansas Democrat-Gazette in 2014 that Wynne and Kilgore grew up together. Nursing homes operated by Kilgore and his brother, Ken, were top donors to Wynne's election campaign that year.
Metro on 06/02/2017