One of the things I have noticed in raising two young children is how both my son and my daughter are much more likely to do what I do than they are to do what I say.

For example, I’ve always encouraged my children to be active, but it wasn’t until I started running that they really started being interested in running themselves. Now, they stage mock races, love their “running shoes,” and ask which foods will make them fast. On the less positive side, when they see me looking at my phone or eating sweets, they want to do the same thing, regardless of what I say is best for them.

Similarly, I had a professor in law school who insisted that we be on-time to class. He explained all the reasons why a habit of punctuality would benefit us in our careers, but then proceeded to be late a number of times himself. He attempted to explain this away, telling us “the partners in the law firm may be late, but that doesn’t excuse lateness from you.” Nevertheless, the students did not seem to respect the professor’s cautionary tale about being late because of the own actions, and it became difficult for him to hold the line he had drawn.

While all of us are human and flawed, the above is a good reminder to me. Our children and our students are watching us, and we are likely to have a bigger impact through our example than through our words.  

As a follow-up to my last post, the comment period on whether Non-Attorney Representatives (NARS), should be allowed to represent investors in FINRA arbitration has now closed.  By my count, fifty-seven different commentators weighed in on the issue.  Although securities industry groups and the plaintiffs’ bar often disagree over the right course, they share concerns about the impact of NARS on the forum.

For example, the Securities Industry Financial Markets Association, an organization that styles itself as “the voice of the U.S. securities industry,” cautioned against allowing NARS to represent investors in the forum, pointing out that “FINRA has no current means to measure or ensure competency, nor respectfully, should it put itself in the business of doing so” for NARS.  The Public Investors Arbitration Bar Association (PIABA), filed an entire report, arguing that FINRA should significantly restrict NARS from representing clients in FINRA’s forum.  The PIABA report also points out that a NAR’s appearance in an arbitration has resulted in an investor receiving no recovery because Kansas law prohibited the representation.  That arbitration award explained that:

The Kansas Supreme Court and the Rules of Professional Conduct have consistently and firmly held non-attorney representatives are not authorized to practice law in its jurisdiction and individuals can only be represented by a lawyer, if they are not representing themselves…

Under FINRA Code of Arbitration Procedure, and as limited by Kansas law, the pleadings are stricken, as neither Cold Spring Advisory Group nor non-attorney Jennifer Tarr can represent Claimant in this arbitration, and even if we were to address the merits, Claimant has not met his burden of proof on any count, so all awards are in favor of Respondents

But Kansas is not the only state that frowns on non-attorney representation in securities arbitration.  The Illinois State Bar Association filed a letter, reiterating its position that “non-lawyers representing parties in FINRA proceedings constitutes the unauthorized practice of law.”  PIABA’s report explains that Alabama, Florida, Louisiana, and Washington have taken the same view.

Still, a real representation problem remains for small cases.  Law school clinics fill some of this gap.  Clinics submitting comments included St. John’s, Georgia State, Cornell, and Pace.  These letters reflect different views, but showcase the value of having law clinics comment in the public’s interest.

And then there is a letter from a New York attorney that has me scratching my head and attempting to figure out my own obligations after reading it.  Jonathan E. Neuman filed a comment letter arguing that FINRA should not restrict NARS from practicing in the forum.  He starts by claiming that his letter should “be accorded some additional weight as [his] comment will be against [his] own interest.”  In the letter he claims that it’s against his interest because “less competition in the forum [leaves] more clients potentially available for [him] to represent.”  He goes on to explain that he has a relationship of some kind with “an NAR firm by the name of Stock Market Recovery Consultants” (SMRC) and that he has “recovered millions of dollars for investors in cases that originally began as SMRC cases.”  If he has recovered millions because of cases sent to him by NARS, it seems unclear that the letter is truly against his interest.  Presumably, he received significant compensation for recovering millions of dollars for investors.  He might also anticipate future cases coming his way.

Yet his letter may be against his interest for other reasons.  The language in it indicates that “SMRC began employing attorneys to handle the arbitration hearings in the event a case could not be resolved.” (emphasis added)  He continues and explains that “SMRC has retained me on a number of occasions to handle hearings in certain of their cases.”(emphasis added). Later in the letter he describes “another case in which SMRC retained me to handle the hearing . . . ”  (emphasis added).  In another instance, he uses less troubling language, referring to “cases that I have taken over from SMRC.” (emphasis added).

I’m scratching my head over whether the relationship seemingly described in the letter is permitted by New York’s ethical rules.  Mr. Neuman is a New York attorney.  New York’s rules govern his practice.  Even if arbitration does not constitute the practice of law in New York, a lawyer providing those services in a setting that is not “distinct from legal services” must follow New York’s ethics rules.  (Rule 5.7) 

There are a few provisions that seem relevant.  The first concerns fees.  Rule 5.4 states that a lawyer “shall not share legal fees with a nonlawyer” subject to certain exceptions.  None of those exceptions seem to apply here.  Although Mr. Neuman claims to have recovered millions because of cases sent to him by SMRC, he nowhere states that he shares any of the fees from those cases with NARS.  The SMRC website provides some information, seemingly indicating that they generally represent clients on a contingency basis:

STOCK MARKET RECOVERY CONSULTANTS generally works on a contingent fee.

We offer a NO  RECOVER NO FEE  alternative to other firms that will typically require a substantial up front retainer with no guarantee of a successful recovery.

The fee situation seems even more puzzling because Mr. Neuman goes on to say that “SMRC does not take any up-front fees from clients.”  If SMRC takes no up-front fees and the ethics rules prohibit Mr. Neuman from sharing fees with SMRC, one wonders how SMRC receives compensation in the instances where SMRC “retains” or “employs” Mr. Neuman to take over.  

The language he uses raises questions about who he views as the client–the NARS firm or the underlying investor.  It’s difficult to tell from his letter and raises questions about professional independence.  There are specific limitations on the ability of lawyers to practice with non-lawyers. Rules 5.4(c) seems particularly relevant.  That provision states:

(c) Unless authorized by law, a lawyer shall not permit a person who recommends, employs or pays the lawyer to render legal service for another to direct or regulate the lawyer’s professional judgment in rendering such legal services or to cause the lawyer to compromise the lawyer’s duty to maintain the confidential information of the client under Rule 1.6.

The issue that has me scratching my head is whether it’s appropriate for Mr. Neuman to be “retained by SMRC” on “their cases.”  By saying that he is “retained” by the NARS, it may be that the NARS retain some role in the representation or otherwise direct or regulate the representation.  The rules do not allow “a person who employs or pays the lawyer to render legal service for another to direct or regulate the lawyer’s professional judgment in rendering such legal services.” (5.4(c)) To be fair, Mr. Neuman does not say that he keeps the NARS informed after he takes over a case or that they have any influence on his representation.  Rule 1.8(f) governs the conflict of interest when someone other than the client pays for representation.  That rule provides that:

A lawyer shall not accept compensation for representing a client, or anything of value related to the lawyer’s representation of the client, from one other than the client unless:
(1) the client gives informed consent;
(2) there is no interference with the lawyer’s independent professional judgment or with the client lawyer relationship; and
(3) the client’s confidential information is protected as required by Rule 1.6.

In theory the dynamics described by Mr. Neuman’s letter would be permissible if he did not share fees with SMRC, clients all consented, Mr. Neuman retained his independent professional judgment, and he protected client confidentiality.

The letter baffles me.  Am I missing something?

Earlier this week, President Trump gave his annual speech on national security. As in the past, he failed to stress human rights (unlike his predecessors) but did allude to cooperation, even with China and Russia, when warranted by geopolitical interests. Over the last several months, he has touted bilateral trade agreements. Coincidentally, my latest law review article on a potential bilateral investment treaty with Cuba came out the same day. As you may recall, Trump recently reversed some Obama-era policies on Cuba over human rights. My article may help his administration reconcile some of the apparent contradictions in his policies. The abstract is below. 

You Say Embargo, I Say Bloqueo—A Policy Recommendation for Promoting Foreign Direct Investment and Safeguarding Human Rights In Cuba

The United States is the only major industrialized nation that restricts
trade with Cuba. Although President Obama issued several executive orders
that have facilitated limited trade (and President Trump has scaled some
back), an embargo remains in place, and by law, Congress cannot lift it until,
among other things, the Cuban government commits to democratization and
human rights reform. Unfortunately, the Cuban and U.S. governments
fundamentally disagree on the definition of “human rights,” and neither side
has shown a willingness to compromise. Meanwhile, although some U.S.
investors clamor to join their European and Canadian counterparts in
expanding operations in Cuba, many have an understandable concern
regarding the rule of law and expropriation in a communist country. Bilateral
investment treaties aim to address those concerns.

After discussing the legal and political barriers to lifting the embargo, I
propose a partial solution to the stalemate on human rights, which will: (1)
facilitate foreign direct investment in Cuba; (2) protect investor interests
through a bilateral investment treaty; and (3) require an examination of
human rights impacts on the lives of Cuban citizens before investors can 
receive the protection of the treaty. 

Specifically, I recommend the inclusion of human rights clauses in bilateral 
investment treaties (BITs) and investor-state dispute mechanisms as a condition precedent 
to lifting the embargo. My solution also requires “clean hands” so that investors seeking relief must
provide proof that their business interests have not exacerbated or been
complicit in human rights abuses, rebut claims from stakeholders that their
business interests have not exacerbated or been complicit in human rights
abuses, or both. Finally, I propose revisions to the 2016 U.S. National Action
Plan on Responsible Business Conduct to incorporate human rights
requirements in future BITs and other investment vehicles going forward.

Anyone with connections to Rex Tillerson is free to pass it on. Happy Holidays to all.

 

Our colleagues and friends at the Burgundy School of Business have informed me about an opportunity to participate in the European Academy of Management (EURAM) conference to be held in Reykjavik, Iceland from June 20-23.  (Note: these dates overlap with the 2018 National Business Law Scholars Conference.)  The Strategic Interest Group on Entrepreneurship (GIS 03) for the EURAM conference has established a sub-track on the “Sharing Economy” at the EURAM 2018 meeting. Djamchid Assadi of the Burgundy School of Business is coordinating this part of the program.

Djamchid is looking for both paper submissions and reviewers for the Sharing Economy sub-track.  Paper submissions are due by January 10 (2:00 pm Belgium time) and applications to serve as a reviewer are due December 31.  (Paper presenters are required to review at least two papers at the conference.)  Information about the conference can be found here.  The reviewer application form is available here.

Please contact Djamchid at Djamchid.Assadi@bsb-education.com if you are interested in submitting a paper.  He can tell you how to designate the paper for GIS 03.  Apparently, in GIS 03, you can declare your interest in the “The Sharing Economy” subtract.  Please feel free to use my name in any communications with Djamchid.

A recent case in Washington state introduced me to some interesting facets of Washington’s recreational marijuana law.  The case came to my attention because it is part of my daily search for cases (incorrectly) referring to limited liability companies (LLCs) as “limited liability corporations.”  The case opens: 

In 2012, Washington voters approved Initiative Measure 502. LAWS OF 2013, ch. 3, codified as part of chapter 69.50 RCW. Initiative 502 legalizes the possession and sale of marijuana and creates a system for the distribution and sale of recreational marijuana. Under RCW 69.50.325(3)(a), a retail marijuana license shall be issued only in the name of the applicant. No retail marijuana license shall be issued to a limited liability corporation unless all members are qualified to obtain a license. RCW 69.50.331(1)(b)(iii). The true party of interest of a limited liability company is “[a]ll members and their spouses.”1 Under RCW 69.50.331(1)(a), the Washington State Liquor and Cannabis Board (WSLCB) considers prior criminal conduct of the applicant.2

LIBBY HAINES-MARCHEL & ROCK ISLAND CHRONICS, LLC, Dba CHRONICS, Appellants, v. WASHINGTON STATE LIQUOR & CANNABIS BOARD, an Agency of the State of Washington, Respondent., No. 75669-9-I, 2017 WL 6427358, at *1 (Wash. Ct. App. Dec. 18, 2017) (emphasis added).  
 
The reference to a limited liability corporation appears simply to be a misstatement, as the statute properly references limited liability companies as distinct from corporations. The legal regime does, though, have some interesting requirements from an entity law perspective. First, the law provides:
 
(b) No license of any kind may be issued to:
 
. . . .
 
(iii) A partnership, employee cooperative, association, nonprofit corporation, or corporation unless formed under the laws of this state, and unless all of the members thereof are qualified to obtain a license as provided in this section;
Wash. Rev. Code § 69.50.331 (b)(iii) (West). It makes some sense to restrict the business to in-state entities given the licensing restrictions that state has, although it is not clear to me that the state could not engage in the same level of oversight if an entity were, say, a California corporation or a West Virginia LLC. 
 
The state’s licensing requirements, as stated in Washington Administrative Code 314-55-035 (“What persons or entities have to qualify for a marijuana license?”) provide: “A marijuana license must be issued in the name(s) of the true party(ies) of interest.” The code then lists what it means to be a  “true party of interest” for a variety of entities. 

True party of interest: Persons to be qualified
 
Sole proprietorship: Sole proprietor and spouse.
 
General partnership: All partners and spouses.
 
Limited partnership, limited liability partnership, or limited liability limited partnership: All general partners and their spouses and all limited partners and spouses.
 
Limited liability company: All members and their spouses and all managers and their spouses.
 
Privately held corporation: All corporate officers (or persons with equivalent title) and their spouses and all stockholders and their spouses.
 
Publicly held corporation: All corporate officers (or persons with equivalent title) and their spouses and all stockholders and their spouses.
Multilevel ownership structures: All persons and entities that make up the ownership structure (and their spouses).

Wash. Admin. Code 314-55-035. 

This is a pretty comprehensive list, but I note that the corporation requirements are missing some noticeable parties: directors. The code states, for both privately and publicly held corporations, that all “corporate officers (or persons with equivalent title)” and their spouses and all stockholders and their spouses must be qualified. Directors are not “equivalent” in title to officers. Officers, under Washington law, are described as follows:
 
(1) A corporation has the officers described in its bylaws or appointed by the board of directors in accordance with the bylaws.
(2) A duly appointed officer may appoint one or more officers or assistant officers if authorized by the bylaws or the board of directors.
(3) The bylaws or the board of directors shall delegate to one of the officers responsibility for preparing minutes of the directors’ and shareholders’ meetings and for authenticating records of the corporation.
(4) The same individual may simultaneously hold more than one office in a corporation.
Wash. Rev. Code § 23B.08.400. Directors have a different role. The statute provides:

Requirement for and duties of board of directors.

(1) Each corporation must have a board of directors, except that a corporation may dispense with or limit the authority of its board of directors by describing in its articles of incorporation, or in a shareholders’ agreement authorized by RCW 23B.07.320, who will perform some or all of the duties of the board of directors.
(2) Subject to any limitation set forth in this title, the articles of incorporation, or a shareholders’ agreement authorized by RCW 23B.07.320:
(a) All corporate powers shall be exercised by or under the authority of the corporation’s board of directors; and
(b) The business and affairs of the corporation shall be managed under the direction of its board of directors, which shall have exclusive authority as to substantive decisions concerning management of the corporation’s business.
Wash. Rev. Code § RCW 23B.08.010.
 
The Code, then, seems to provide that directors are, as a group, exempt from the spousal connection. The code separately provides:
 
(4) Persons who exercise control of business – The WSLCB will conduct an investigation of any person or entity who exercises any control over the applicant’s business operations. This may include both a financial investigation and/or a criminal history background. 
Wash. Admin. Code 314-55-035.  This provision would clearly include directors, but also clearly excludes spouses. That distinction is fine, I suppose, but it is not at all clear to me why one would want to treat directors differently than LLC managers (and their spouses).  To the extent there is concern about spousal influence–to the level that the state would want to require qualification of spouses of shareholders in a publicly held entity–leaving this gap open for all corporate directors seems to be a rather big miss (or a deliberate exception).  Either way, it’s an interesting quirk of an interesting new statute.   
 
 
 
 
 
 

HelloFreshBoxClosed

As I earlier noted, I have planned to write on meal delivery kits.  What is a meal delivery kit, you ask?  It is a delivered-to-your-door box of ingredients and recipes for meals.  All of the ingredients (except pantry essentials) needed to produce the meals shown and described in the recipe cards are included in the box.  All the recipient has to do is follow the recipe instructions and produce the meals.  Reviews of meal kits that describe additional features can be found here (July 2017), here (October 2016), here (May 2016), and here (May 2015).

My husband ordered us our first meal kit (from Blue Apron) last year as an anniversary present to me.  The idea (which has worked exceedingly well) was that we would be able to more easily prepare meals together, since I often design meals on the fly and cook based on what I sense is needed.  It’s pretty hard to assign tasks consistently and continuously using my natural method of meal preparation.  The meal kits solved this problem neatly.  So, having found success with Blue Apron, we decided to try a few other brands.  Specifically, we also have ordered meal kits from Plated and Hello Fresh.  In a later post, I plan to offer a review of the kits themselves.  For today, I simply want to describe the services and the market.

It’s been a healthy market from a financing and financial point of view. Accordingly to a TechCrunch article published back in April, “U.S. meal kit delivery startups have raised more than $650 million in venture capital . . . .”  The same article reported that “[m]eal kit companies sold between $1 billion and $1.5 billion in 2016, according to industry estimates from MarketResearch and others.”  Yet, Blue Apron’s initial public offering (“IPO”) was not as successful as all had hoped.  An August 2017 CNBC report noted that the Blue Apron IPO priced on June 29, 2017 after decreasing the expected offering price range significantly (from $15-$17 per share to $10-$11 per share).

Legal claims brought against and by meal kit delivery firms so far seem to be typical of those in any business, based on published reports.  For example, a BuzzFeed News October 2016 article reported on workplace safety and other worker-related issues at Blue Apron.  A brief search on Westlaw relating to the three services we have used revealed a run-of-the-mill wrongful termination action (Hello Fresh), a case involving defamation and interference with business relations (Blue Apron), and a racial discrimination, harassment, and related retaliatory wrongful termination claim (Plated).  In addition, Blue Apron participated in a successful arbitration in the World Intellectual Property Association over the right to the domain name <blue apron.reviews>.

Notably absent?  Customer actions relating to advertising or the food or recipes included in the meal delivery kits.  It may be that these are just not publicly reported or available.  Or it may be that these types of problems are resolved amiably without the need of judicial or alternative dispute resolution processes.

There are, however, a fair number of Better Business Bureau complaints.  This would seem to come with the territory.  For the record (and what it may be worth), Plated fares best in Better Business Bureau ratings.  Hello Fresh comes in close behind, with Blue Apron coming in a distant third.

Have you tried these meal services?  What are your impressions of the business model and the service?  Are they just a passing fad, or will they survive the test of time?  I am interested in your thoughts. 

This week, the Delaware Supreme Court reversed and remanded Chancery’s appraisal determination in Dell et al. v. Magentar Global Event Driven Master Fund et al..  The decision amplified the Supreme Court’s earlier opinion in DFC Global Corp. v. Muirfield Value Partners, LP, et al..

In DFC, the Delaware Supreme Court held that courts entertaining appraisal claims should place heavy emphasis on the deal price, at least for arm’s length negotiations with no apparent flaws.

Dell, however, was a slightly different animal.  Unlike DFC, it involved a management buy-out, which is a scenario rife with potential conflicts of interest.  It was precisely because of these conflicts that the Chancery court refused to accept the deal price, and instead used its own discounted cash flow analysis to determine that the stock was worth more.

On appeal, the Delaware Supreme Court reversed.  Though the Court acknowledged that there may be cause for concern in the MBO context, the Court concluded – based on Chancery’s own findings – that those concerns had been allayed in this particular case due to, among other things, an efficient market for the company’s stock, a robust sales process with full disclosure, and a CEO who was apparently willing to join with any potential buyer.

What was implicit in DFC – and what Dell makes explicit – is that in some ways, the Delaware Supreme Court is using appraisal to recapture ground it gave up in the context of fiduciary duty litigation.

As we all know, after Corwin v. KKR Financial Holdings LLC, 125 A.3d 304 (Del. 2015), a shareholder vote can cleanse a variety of management sins in the context of negotiating a sale of the company.  Though Corwin may have much to recommend it, the chief criticism is that management may be left with little incentive to conduct a robust sales process.  As management is presumably well aware, so long as there’s some kind of premium over market, stockholders may be feel pressured to accept a deal on the table rather than hold out hope that management, if rebuked by an unfavorable vote, will apply their full efforts towards obtaining a better price (especially given customary break up fees).  Corwin provides management with no incentives to do better than the minimum of what the stockholder vote will accept.

In DFC, the Delaware Supreme Court took the first steps toward filling that gap.  By holding that deal price should carry great weight in the appraisal context absent evidence of a dysfunctional sales process, the court provided new incentives for management to obtain the best possible price for stockholders.

What was implicit in DFC is explicit in Dell.  After explaining all the reasons why Dell’s sales process raised no red flags, and even counterbalanced the ordinary concerns that are raised in the MBO context, the court explained: “If the reward for adopting many mechanisms designed to minimize conflict and ensure stockholders obtain the highest possible value is to risk the court adding a premium to the deal price based on a DCF analysis, then the incentives to adopt best practices will be greatly reduced.”

Thus, the substitution of appraisal litigation for fiduciary litigation is near complete:  improving upon deal price in the context of appraisal may be impossible unless something went wrong in the sales process (at least for the sale of a public company without a controlling stockholder).  In this way, the Delaware Supreme Court ensures that there remain incentives for directors to use best practices when negotiating deals, while avoiding some of the pathologies that have infected fiduciary duty litigation.  See Charles Korsmo & Minor Myers, The Structure of Stockholder Litigation: When do the Merits Matter?, 75 Ohio St. L.J. 829 (2014).

The question remains, however, whether Delaware made the right call.  Commenters have argued that the threat of appraisal results in higher deal prices; those salutary effects may be mitigated under the new standards.  It is not clear how proficient courts are at detecting the kinds of subtle distortions in a sales process that might result from even mild degrees of director self-interest, lack of expertise, or distraction – indeed, commenters have argued that it is precisely because appraisal can avoid these inquiries that makes it such an effective remedy. 

Recently, the International Olympic Committee (IOC) announced that Russia will be banned from the 2018 Winter Games for systemic doping. 

If you have not watched Icarus (on Netflix) on this topic, I recommend it. The documentary starts slowly, and the story-line is a bit disjointed, but the information uncovered about state-sponsored doping in Russia is fascinating and depressing.  Even if you are not a sports fan, you may be interested in the parts in the documentary related to the alleged involvement of the Russian government. 

It has been a busy semester, but I am working (slowly) on a journal article on morality clauses in sports contracts. Doping is often specifically mentioned in these contracts, and doping is a sad reality in many sports. Doping also betrays, I think, improper prioritization. While we are starting to see more attention paid to courage and compassion in sports, “winning” has often been promoted as the top priority. Hopefully we will see more people (and  countries) who compete with passion, but also with integrity.  

Thank you to the BLPB for the chance to write some for the platform. Reading the BLPB has informed my work, and it has kept me up to speed on breaking developments.  For readers that don’t know me, I’m at the University of Nevada, Las Vegas.  My teaching and scholarship focus on business, securities, and professional responsibility issues.

On that note, the Financial Industry Regulatory Authority (FINRA) now considers a live securities and professional responsibility issue.  It has a request for comment out about whether non-attorney representatives (NARS) should continue to represent persons in FINRA’s arbitration forum.  States approach unauthorized practice in different ways.  Florida has vigorously policed the unauthorized practice of law.  New York, on the other hand, has allowed NARS to represent persons in arbitration. 

There may be good reason to be concerned about representation quality from non-attorney advocates.  The New York Times covered the issue in 2010, profiling Stock Market Recovery Consultants, an outfit that represents investors in securities arbitration.  The Times pointed out that one of the firm’s principals “pleaded guilty in 2004 to insurance fraud in a million-dollar scam involving jewelry.”  Another one of the firm’s principals suggested that the Times speak with an attorney that had represented a defendant against them:

Mr. Lapin offered a lawyer who has opposed him on several cases — Michael Schwartzberg of Winget, Spadafora & Schwartzberg — to vouch for his performance. He vouched thusly: “Dealing with Mr. Lapin and his operation is one of the most frustrating experiences I’ve ever dealt with.” Mr. Schwartzberg said the claims that Stock Market Recovery Consultants files — before it has fully investigated the case, and using passages cut and pasted from previous claims — sometimes don’t even get the client’s name right. When it comes to settling, he added, “It’s like hondling at a flea market with these guys: ‘I got these shirts 3 for 10, but for you, 3 for 5.’ ”

FINRA has begun to post comments that it has received.  One arbitrator reports that “experiences with NARS have, without exception, been negative: NARs have been discourteous to everyone and made numerous baseless objections and irrelevant arguments, resulting in unnecessarily long and unpleasant hearings.”  Perhaps shedding light on NARS’s practice quality and attention to detail, an oddly-formatted letter takes the opposite position and contends that “[w]hen we restrict, FINRA or State or other, the rights to an effective ADR process in which would impede the intended purpose; we spit in the face of SCOTUS and the American people.”   Another arbitrator and commentator memorably relates his experience encountering a claim that was “heavy on legal jargon” and “significantly short of the factual allegations needed to state a claim.”  The arbitrator assumed the pleading had “been prepared by a singularly incompetent lawyer.”  When he discovered it was a NAR, he reached out to the state bar. 

For those interested, the FINRA comment period closes on December 18th.  

Sometimes, it can be difficult to distinguish between consumer protection and protectionism for attorneys. To be sure, booting NARS out of the forum will mean that attorneys get more cases.  It should only be done if NARS have not delivered competent representation.