FOR THE RECORD
NRA Scores Win Against Winston & Strawn Over Failed Arbitration and Its Undisclosed Relationship with Arbitrator Who Sent Racist Communications
October 22, 2020 — The NRA today prevailed over Winston & Strawn’s bid to dismiss a lawsuit seeking damages relating to a failed arbitration. The arbitration failed, in part, due to an undisclosed relationship between a Winston partner and former disgraced JAMS arbitrator Hon. Richard Neville (Ret.).
The lawsuit, filed July 29, 2020, in the Superior Court of the District of Columbia, alleges that in a recent arbitration, the NRA discovered on the eve of the final hearing that the arbitrator, Judge Neville, was conducting a secret email discussion group – participated in by a senior partner of opposing counsel, Winston – where lurid white nationalist propaganda was shared and promoted. The communications revealed that Judge Neville shared a close, undisclosed relationship with Winston Partner Terry Grimm, according to the NRA. The NRA brought the action to recover amounts expended during the corrupted arbitration proceeding, and to uncover facts about the extent of the bias that tainted the proceeding.
In an important opinion, dated October 21, 2020, Judge Robert R. Rigsby ruled that the NRA’s claim for unjust enrichment against Winston will proceed. Judge Rigsby writes, “…NRA points out that it ‘has made tens of thousands of dollars in payments to JAMS and incurred additional expenses in connection with the Arbitration,’ which will have to start again and ‘each of [Judge] Neville’s rulings will need to be reconsidered de novo’ and that its expenses for a flawed and incomplete arbitration should be returned.”
The Court concluded that the “NRA has sufficiently stated a claim for unjust enrichment against Defendant Winston” and that “[a]ccordingly, Count II of NRA’s complaint should not be dismissed.”
In recounting the allegations in the NRA’s complaint, Judge Rigsby writes about the material which Judge Neville and his “friends” were discussing, “The article posited notions of Black Americans’ racial inferiority and inability to integrate into American society as the underlying causes of intractable violence and poverty in Black American communities.” [The white nationalist “article” in question – circulated by Judge Neville – purported to originate from the Baltimore Sun but, in fact, originated from a noted hate group.]
“We appreciate the prompt attention of the Court – and look forward to bringing the facts regarding Winston & Strawn’s undisclosed relationship with Judge Neville into full public view,” says William A. Brewer III, partner at Brewer, Attorneys & Counselors and counsel to the NRA. “This is a disturbing record. There should be no place in the legal profession that tolerates such racist communications – or which turns a blind eye to the principles that govern the sanctity of the arbitration process.”
Unfortunately, the opinion also grants JAMS’s motion to dismiss – on grounds that the arbitration organization, which has decried Neville’s communications as racist, nonetheless benefits from arbitral immunity. The NRA will appeal.
“Our client believes that immunity should not apply in these circumstances,” Brewer says. “Companies such as JAMS are commercial enterprises which sell services based upon promises of integrity, consistency and neutrality. We believe that to allow these high-flying businesses to say one thing and then do another is bad for litigants and the profession as a whole.”
The NRA’s legal action has sparked a call for greater oversight, transparency, and accountability surrounding the actions of arbitrators. Crediting the NRA’s lawsuit, on September 8, 2020, the National Employment Lawyers Association (NELA) called for a review of the records of all JAMS’ neutrals, the creation of a more rigorous initial vetting process of arbitrators, and enhanced hiring practices, among other needed industry reforms.