Jones day and Orrick are two American law firms. The legal scholarships established by Zhongda in China were once on the ceiling of foreign institutions' scholarships. Recently, the two law firms have fought in the United States, and the dispute is still ongoing. Let’s see what’s going on. The editor will also introduce some tips for American law while explaining some tips on American law so that everyone can gain something while eating melons.
Causes of the incident
As early as 2020, Zhongda Law Firm filed an arbitration process against former partner Michael Buhler in Washington, DC. Zhongda Law Firm accused Buhler of violating the partnership agreement and fiduciary duty when he negotiated to leave Zhongda and transfer to Orrui. At that time, Buhler represented a Zhongda client in front of an arbitration team including Auri partners. When Buhler's potential conflict was exposed, the Orrui partner withdrew from the arbitration team. But Zhongda's customers were angry and said Zhongda was responsible for additional expenses and delays. Zhongda hopes that its former partner Buhler will pay the fee.
Editor interprets
Simple partner flow, even the entire team's job-changing is extremely normal in the legal world. Zhongda and its former partner Buhler are "conflict of interests". Students who have studied American corporate law know that fiduciary duty is a very core concept of American corporate law. As a partner of a law firm, Buhler has credit business to the law firm and other partners. Buhler also has credit obligations to his clients and needs to be faithful and diligent in practicing lawyers. The situation of conflict of interest is likely to result in a violation of credit obligations. Buhler discussed joining Auri with Auri when he was conducting arbitration on behalf of Zhongda's client, and there was an arbitrator of the arbitration tribunal who was Auri's lawyer, which did seem to be very conflict of interest. No wonder Zhongda’s clients want Zhongda to bear the damage caused by delays in arbitration. Zhongda didn't want to suffer this loss, so he turned around and sued his partner who was going to Aorrui to the arbitration tribunal.
(Michael Buhler: former Zhongda/now Auri, partner in international arbitration business)
Zhongda lost two times
These facts were made public in a ruling of Judge Alfred Irving, the Superior Court of Washington, DC, in a May 2021 ruling. Zhongda applied to the Washington, DC court to enforce the subpoena against Orrui issued by arbitrator and retired federal judge Benson Legg. Judge Irving rejected Zhongda's request, ruling that he has no personal jurisdiction over the California-based Orrui Law Firm, and that the Federal Arbitration Act rules require Zhongda to file a request in federal court. More details about Zhongda’s struggle with former partner Buhler, including Buhler’s counterclaim for claiming $2 million in unpaid revenue, which was subsequently featured in the Global Arbitration Review.
Editor interprets
Zhongda and his former partner are involved in the fight, so how does it involve Auri? Zhongda sued Orrui just to implement the subpoena issued by the arbitrator against Orrui, and forced the Orrui partners to appear in court to testify in the dispute between Zhongda and Buhler. Orui and the relevant partners refused to participate in the testimony and provide relevant information, so Zhongda also sued Orui in court, demanding Orui abide by the requirements of the arbitral tribunal, appear in court to testify and provide relevant evidence. The core of Zhongda's first defeat was "personal jurisdiction." Zhongda sued in a state court in Washington, which said it had no personal jurisdiction over Ori, whose main business is in California; and pointed out that the rules of the Federal Arbitration Act require Zhongda to file a request in federal court. So, in the first round, Zhongda was defeated.
Zhongda asked for help from the San Francisco federal court in August, demanding the execution of the reissued subpoena and asking Orrui to provide evidence.Zhongda said the court had jurisdiction and believed that the arbitrator Legg, who issued the subpoena, planned to hold a hearing in California to hear the testimony of Ori Partners. In a publicly filed acceleration motion, Zhongda asked U.S. District Judge Jon Tigar to speed up the briefing schedule because Legg has set a hearing date in early September. In their opposition book, Orri said that Zhongda created its own so-called emergency by postponing execution applications and a casual hearing date.
The federal court in San Francisco ruled on September 7 that it had no right to comply with the arbitration subpoena. The court said that the federal Arbitration Act rules require that the application for enforcing an arbitration subpoena must be filed in the federal court of arbitration "location" and in this case it is Washington, D.C. Judge Tigar rejected Zhongda’s argument that the arbitration location could be moved to different regions for arbitrator hearings, but the judge acknowledged a Manhattan trial court had the opposite precedent in the 2019 Washington National Insurance Company v Obex Group LLC case, which was confirmed by the Second Circuit Court of Appeals in 2020.
Editor's interpretation of
After the failure of the Washington State Court, Zhongda came to the California federal court to file a lawsuit. I thought to myself, I should sue the right place now, and switch from the state court to the federal court required by the Federal Arbitration Act rules; from Washington to California where your main camp is located. Who would have thought that the federal court in San Francisco, California still said that it has no jurisdiction because the federal court in San Francisco said that you should go to the federal court in the place of arbitration (i.e. Washington, DC) rather than the federal court in the place of witnesses (San Francisco). As things progressed to this point, Zhongda was also very difficult. If you want Arui to appear in court to give a certificate, why can't you find a court that is willing to be in charge of the jurisdiction? Let's continue to look down.
Zhongda's appeal process
In Zhongda's sole public filing against the San Francisco federal court ruling, Zhongda said that the main issue of the appeal would be that the trial judge believes that the execution application must be filed in the area designated as the location of the arbitration, not in the area where the witness was summoned to appear.
So Zhongda appealed to the 9th U.S. Circuit Court of Appeals, the busiest and slowest handling of civil appeals in the United States. 9th Circuit is how busy? According to the U.S. Court Administration Office, the Ninth Circuit ended nearly 1,800 civil cases between September 2019 and September 2020, more than twice the second Circuit (which is in charge of states such as New York and is also very busy). With such a heavy number of cases, the average time from the appeal notice to the final order of the Ninth Circuit was 15.3 months, far behind the second-slowest Tenth Circuit Court (12.1 months).
However, Zhongda doesn't seem to have to wait that long this time. At the end of 2021, the Ninth Circuit Court approved Zhongda's motion to expedite appeals on whether Zhongda can force Orrui to testify in court in arbitration filed by Zhongda against its former partners. The certificate will end in early December and the case will be included in the February schedule. The latest progress in this case is now. The specific disputes in this case involve many issues in arbitration law. Interested friends can continue to pay attention.
Personal opinion
Today's meal ends here. Can Zhongda force Auri to testify in court? It depends on the appeal decision of the Ninth Circuit Court. I hope that while you are happy, you can learn some knowledge points from the editor’s interpretation, such as conflicts of interest, credit business, personal jurisdiction, etc.
