Terra Extraneus

As everyone knows, Oklahoma but not Texas is in the 10th Circuit. Nevertheless, sometimes a federal court sitting in diversity jurisdiction in Oklahoma, for example, must apply Texas law because of a choice of law provision that is for some reason enforceable. Thus, it may not be all that helpful, as decisions go, for future guidance.

In Rash v J. V. Intermediate, Ltd, the 10th Circuit, under Texas law, held that a forfeiture of the fee owed to an agent is not to be automatically forfeited upon a finding of disloyalty to the principal, but is to be applied only to “clear and serious” violations of fiduciary duty. Not every agency relationship is fiduciary, but the one in this case was considered one by the district court and the 10th Circuit did not disagree.

Moreover, under Texas law, the 10th Circuit required that the forfeiture be considered the other relief accorded to the principal is a significant “equitable factor.” In other words, no double dipping allowed. However, the forfeiture might be appropriate to address damages not otherwise compensated.

This case is one more likely to be misquoted and over extended, and those faced with the typically draconian remedy of forfeiture of compensation should be alert to its limitations.

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I was told that skateboarding was popular in our community and that it was one of the fastest growing sports in the country. I was asked to meet with a group of skateboarders and develop a program for a ministry to young people involved in this sport.

This is not the first time or the first sport that I have seen a sport become the focus of a ministry at a church in which I was a member. The last time, the ball fields and batting cages were for baseball and softball players.

But, I wonder if there will be a different reaction in the church itself. Skateboarders are by nature risk takers and not much on looking or acting conventionally, based on my observations.

In any event, should the church post rules for the activity and if so, what should be the source of the rules? Is there a national organization for the sport that provides amateur rules of conduct for the sport?

Also, baseball and softball was a sport I understood because I understood the rules and the concept of the game. But, what is the point of skateboarding? Is it as evolved as gymnastics for competitive evaluation?

It will be interesting to observe whether the community is willing to view skateboarding as a sport or as a nuisance.

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In an effort to fulfill continuing legal education requirements for one of the states in which I’m licensed, I listened to a two hour panel discussion on this topic. I was struck by the seeming unwillingness of the panelists to actually answer the question. It seemed that the trial lawyers involved were afraid of losing the court system and its importance to their business success, rather than stepping back and looking at trends to see if arbitration might swallow the hallowed jury system.

For example, the panel did not consider the observation they themselves were making, that apparently fewer civil cases were being filed in their state, but that large municipal areas still could not produce a faster jury trial docket. Clearly, such circumstances confirmed that the civil trial system in their state was still under funded. The third branch of government, the court system, still gets less than 1% of all governmental revenues. As a result, the court system does not have the resources to modernize, to create new systems, or to adapt to the post-modern economy.

Arbitration, on the other hand, which is privately funded, can adapt to any type of dispute, anywhere at any time. Its rules can be changed by agreement of the parties to a dispute on the spot. If the parties cannot agree, they can argue to the panel the need for adaptation and the panel can adapt the proceedings to the dispute or simply default to whatever rules are at hand. Courts have no such flexibility.

With these two advantages, private resources versus limited public resources, and adaptability versus rigidity of process, arbitration will eclipse the civil jury trial system wherever contracts govern. Only strangers, without contracts or with contracts that do not contain arbitration clauses, will be left in the court system to work out their disputes.

Trial lawyers might not like it; but, the weight of history during the last quarter century is inescapable.

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