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With all of the publicity, hubbub, and hype surrounding the Second Circuit’s decision in United States v. Newman and Chiasson, a grant of writ of certiorari at the Government’s request is a foregone conclusion, right? In a word, “no.” The filings on the Government’s motion seeking certiorari make it pretty clear that if you remove the publicity, hubbub, and hype – and consider what the Newman opinion says, and not just what the Government portrays it as saying – the Supreme Court’s normal standards for hearing a case simply are not satisfied. Let me explain.
(The filings on the petition for certiorari can be read here: Petition for Writ of Certiorari in US v. Newman; Newman Opposition to Cert. Petition; Chiasson Opposition to Cert. Petition.
The Government’s entire push for Supreme Court review turns on two arguments: (1) the Second Circuit amended the Supreme Court’s decision in Dirks v. SEC by mandating that a tippee exchange tangible value for tipped material nonpublic information from the tipper, when Dirks says that “gifts” of such information by the tipper to the tippee can be sufficient to create liability; and (2) the Second Circuit’s revision threatens the integrity of the securities markets by undermining investors’ belief in the fairness of those markets. The briefing on certiorari, however, leaves little doubt that the Government cannot (or at least does not) provide support for either of these arguments. Instead, these arguments are based on (i) a reading of the opinion that ignores what the court said, and is not how the courts have treated the Newman opinion since it was issued; and (ii) ipse dixit assertions by the Government about the terrible consequences of Newman on markets and law enforcement, which lack any substantiation.
But beyond this, the briefing makes it clear that Newman simply is not the kind of case that the Supreme Court normally would review, for three reasons: (1) the ruling the Government asks for would not, in fact, change the result – Messrs. Newman and Chiasson will be not be prosecutable in any event because the Government does not seek review of determinative aspects of the Second Circuit opinion that prevent any conviction; (2) the aspect of the Newman decision that the Government does challenge is an evidentiary issue – not an important issue of law – that is limited in its impact, other than in support of the view that the actual evidence presented in a case matters, which the Supreme Court is unlikely to countermand; and (3) the ruling the Government asks for would make it difficult for investors and their advisers to gather and use information in ways the Dirks court sought to protect as critical to the functioning of an efficient marketplace.
Let’s start with what should be the most important issue for a cert. petition: will Supreme Court review actually make a difference in the case. The answer here plainly is that it would not. Why? Well, the Government presents for review only a single question: “whether the court of appeals erroneously departed from this Court’s decision in Dirks by holding that liability under a gifting theory requires ‘proof of a meaningfully close personal relationship that generates an exchange that is objective, consequential, and represents at least a potential gain of a pecuniary or similarly valuable nature.’” Cert. Pet. at (I). But the Second Circuit reversed the convictions of Messrs. Newman and Chiasson for another, totally independent reason: that because this is a criminal case, a conviction required proof that the defendants knew that the information they used to trade securities was obtained through a breach of duty by an insider, and there was no evidence from which a reasonable juror could make such a finding. Because of this, even if the Supreme Court were to agree with the Government on its question presented, the defendants’ convictions would still be overturned. The Supreme Court typically does not accept cases in which its opinion, in effect, becomes an advisory opinion on the law and does not impact the determination of the case before it.
The central legal holding in the court below was that insider trading liability requires a tippee to know that the tipper received a personal benefit. While the government opposed such a requirement in the trial court and on appeal, it does not challenge that ruling now. Instead, the Petition seeks review of a single, fact-based sufficiency determination regarding whether there was a personal benefit in the first place. Notably, the government’s articulation of the question presented addresses only the type of evidence required to prove a personal benefit; it does not implicate the court of appeals’ independent holding that Newman committed no crime because he did not know of the benefit. Accordingly, even if this Court were to agree with the government that the Second Circuit misstated the type of evidence required to support an inference of a benefit, the decision dismissing the indictment on the independent ground that Newman did not know of any benefit would stand.
The government understands, of course, that the Supreme Court does not grant review to issue advisory opinions. To overcome that obstacle, the government proposes that this Court “correct” the Second Circuit’s analysis of what evidence may be used to prove a personal benefit and then remand to the Second Circuit for reconsideration of both the sufficiency of whether there was a benefit and whether Newman knew of the benefit. Pet. 29-31. This attempted sleight of hand is unconvincing. The Second Circuit determined that, “[e]ven assuming that the scant evidence . . . was sufficient to permit the inference of a personal benefit,” the proof was insufficient to establish knowledge of any benefit because the defendants “knew next to nothing” about the insiders or the circumstances of their disclosures, and the government “presented absolutely no testimony or any other evidence that Newman and Chiasson knew . . . that those insiders received any benefit in exchange for such disclosures . . .” . . . . This conclusion was not based on a nuanced view of how personal benefit should be defined; it was based on the utter lack of evidence that the defendants knew of any benefit, however defined, or even the basic circumstances under which the disclosures were made. No decision by this Court on the narrow issue presented for review would change the ultimate disposition of this case.
Newman Cert. Opp. at 1-3.
Let’s turn now to the guts of the Government argument, and show why it fails because it is founded on a reading on the Newman opinion that is inaccurate and misleading.
The court of appeals’ decision is irreconcilable with Dirks. In the guise of interpreting this Court’s opinion, the court of appeals crafted a new, stricter personal-benefit test, stating that “[t]o the extent Dirks suggests that a personal benefit may be inferred from a personal relationship between the tipper and tippee, where the tippee’s trades ‘resemble trading by the insider himself followed by a gift of the profits to the recipient,’ *** we hold that such an inference is impermissible in the absence of proof of a meaningfully close personal relationship that generates an exchange that is objective, consequential, and represents at least a potential gain of a pecuniary or similarly valuable nature.” . . .
This argument should fail because the Supreme Court Justices – and their clerks – should easily see that the Second Circuit decision does not say what the Government argument describes. The Government accepts that the entire discussion of “personal benefit” occurred as the Second Circuit “considered the sufficiency of the evidence that the . . . insiders personally benefitted from disclosing confidential corporate information,” and that in doing so, the court of appeals “acknowledged that in [Dirks, the Supreme] Court stated that ‘personal benefit’ includes reputational benefit and ‘the benefit one would obtain from simply making a gift of confidential information to a trading relative or friend.’” Cert. Pet. at 11 (emphasis added).
The problem was that the Government introduced no evidence showing that in either of the two instances of alleged tipping (involving communications between insiders at Dell and NVIDIA with industry analysts they knew), the tipper either (a) received a tangible benefit in return, or (b) provided the information as a “gift.” Instead, the Government relied on the mere circumstances of the relationship between the alleged tippers and the alleged tippees to provide a sufficient inference of a “gift” to satisfy the breach of duty requirement laid out in Dirks. The Second Circuit rejected this effort because a review of the evidence showed no meaningful relationships between these people that would suggest that the insiders transferred information as an intended “gift” to the analysts.
The actual evidence showed that the relationship between the Dell insider and the analyst he spoke to was no more than that they knew each other at business school, spoke on limited occasions when they both worked at Dell, and that the analyst gave career advice to the insider that was not terribly meaningful. The evidence also showed that the communications between them were consistent with the insider’s job responsibilities to develop relationships with financial firms that could be a source for possible investors, and the insider was never told anyone was trading on information he provided. The NVIDIA insider attended the same church as the analyst he spoke to and sometimes had lunch with him. While the analyst said he sometimes traded NVIDIA stock, he never said he would use information they discussed to trade.
Based on this evidence, the Second Circuit proceeded to try to implement the Dirks duty standard, not revise that standard. As the Newman cert. opposition says: “the Second Circuit’s refusal to accept the mere fact of friendship as per se evidence that a tipper intended to bestow a gift on a tippee is consistent with, and indeed compelled by, Dirks.” Newman Cert. Opp. at 20.
Dirks said that “there may be a relationship between the insider and the recipient that suggests a quid pro quo . . . or an intention to benefit the particular recipient,” but said no more about the parameters of such a relationship. See Dirks, 463 U.S. at 663. The Dirks Court also said that an inference of personal gain to the tipper that would evidence the required breach of duty could flow “when an insider makes a gift of confidential information to a trading relative or friend” (id.), but said nothing about how to determine if such an inference is reasonable, except that such a circumstance could “resemble trading by the insider himself followed by a gift of profits to the recipient.” Id. The Dirks Court left it to lower courts to figure out how best to implement these principles. See id. The Second Circuit plainly was trying to work out when it might be reasonable to conclude that a communication of information is intended as a “gift” based solely on the nature of the parties’ relationship.
The court reinterpreted this Court’s holding that an insider personally benefits when he “makes a gift of confidential information to a trading relative or friend,” . . . to require “proof of a meaningfully close personal relationship that generates an exchange that is objective, consequential, and represents at least a potential gain of a pecuniary or similarly valuable nature.” . . . That holding cannot be reconciled with Dirks, which did not require an “exchange” to find liability for a gift of inside information and did not impose amorphous standards for the relationships that can support liability.
Under Dirks, an inference of a personal benefit to the insider arises in two situations: when the insider expects something in return for the disclosure of the confidential information, or when the insider freely gives a gift of information to a trading friend or relative without any expectation of receiving money or valuables as a result. . . .
The Second Circuit purported to recognize that second form of personal benefit . . . but then rewrote the concept of a “gift” so as to eliminate it. The court held that an insider cannot be liable on a gift theory unless he receives something from the recipient of information “that is objective, consequential, and represents at least a potential gain of a pecuniary or similarly valuable nature” . . . . But such an “exchange” is, by definition, not the same thing as a “gift”; rather, it is a quid pro quo, “something for something.” . . . If the personal-benefit test cannot be met by a gift-giver unless an “exchange” takes place, then Dirks’s two categories of personal benefit are collapsed into one—and the entire “gift” discussion in Dirks becomes superfluous.
The circumstantial evidence in this case was simply too thin to warrant the inference that the corporate insiders received any personal benefit in exchange for their tips. As to the Dell tips, the Government established that Goyal and Ray were not “close” friends. . . . The evidence also established that Lim and Choi were “family friends” that had met through church and occasionally socialized together. The Government argues that these facts were sufficient to prove that the tippers derived some benefit from the tip. We disagree. If this was a “benefit,” practically anything would qualify.
We have observed that “[p]ersonal benefit is broadly defined to include not only pecuniary gain, but also, inter alia, any reputational benefit that will translate into future earnings and the benefit one would obtain from simply making a gift of confidential information to a trading relative or friend.” . . . This standard, although permissive, does not suggest that the Government may prove the receipt of a personal benefit by the mere fact of a friendship, particularly of a casual or social nature. If that were true, and the Government was allowed to meet its burden by proving that two individuals were alumni of the same school or attended the same church, the personal benefit requirement would be a nullity. To the extent Dirks suggests that a personal benefit may be inferred from a personal relationship between the tipper and tippee, where the tippee’s trades “resemble trading by the insider himself followed by a gift of the profits to the recipient,” see 643 U.S. at 664, we hold that such an inference is impermissible in the absence of proof of a meaningfully close personal relationship that generates an exchange that is objective, consequential, and represents at least a potential gain of a pecuniary or similarly valuable nature. In other words . . . this requires evidence of “a relationship between the insider and the recipient that suggests a quid pro quo from the latter, or an intention to benefit the [latter].”. . .
United States v. Newman, slip op. at 21-22 (emphasis added and some cites omitted).
Dirks recognized that “[d]etermining whether an insider personally benefits from a particular disclosure, a question of fact, will not always be easy for courts.” 463 U.S. at 664. By characterizing the inquiry as “a question of fact” the Court appreciated that lower courts would need to formulate rules for weighing the evidence in the particular circumstances before them. That is exactly what the Second Circuit did here. The court of appeals’ assessment of what kind of proof would support a factual inference is the type of evidence-based analysis that Dirks recognized would be within the province of the lower courts to develop.
Dirks also recognized that a personal benefit in the form of a gift is not simply a matter of whether a tipper gives inside information to a friend or relative. The Court repeatedly emphasized that it is the purpose of the disclosure that is determinative. E.g., 463 U.S. at 662 “Whether disclosure is a breach of duty therefore depends in large part on the purpose of the disclosure.”). . . . The Court’s focus on the purpose of a disclosure would be undermined if a jury were permitted to infer a personal benefit from the bare fact that two people knew each other. That is because it is not reasonable to presume that the purpose of communicating financial information between casual acquaintances is to provide a gift. Casual acquaintances typically do not give each other the kind of gifts contemplated by Dirks, i.e. the equivalent of the insider trading stock and gifting the proceeds to someone else. On the other hand gifts, especially of money, are much more likely among people who take a deep personal interest in each other’s lives, such as close friends or relatives. The Second Circuit’s evidentiary formulation is thus consistent with the gift theory as articulated in Dirks because it limits the inference of an intentional gift of trading proceeds to circumstances that reasonably support that conclusion.
Newman Cert. Opp. at 20-21.
So, what the Government cert. petition comes down to is a request that the Supreme Court re-examine the evidentiary record to determine whether the agreed-upon Dirks standard was satisfied in this case, even though that issue is not even case-determinative. That’s not the resolution of an important securities law issue, it is an effort to get the High Court to relieve the Justice Department of the embarrassment of being shot down for an overly-aggressive prosecution fueled more by ambition than evidence. That’s not cert.-worthy in my book.
The Government’s last argument in support of certiorari – that absent Supreme Court reversal the securities markets and securities law enforcement will be devastated by the purportedly “new,” limited scope of the insider trading prohibition adopted in Newman – fails for multiple reasons.
First, as discussed above, The Newman court did not limit the scope of the law as stated by Dirks. It tried its best to articulate an evidentiary standard for satisfying the Dirks “personal benefit” standard in the narrow circumstances where there was no quid pro quo from tippee to tipper, and there was no evidence of an intended “gift” from the tipper to the tippee apart from the nature of their relationship.
Imposing a duty to disclose or abstain solely because a person knowingly receives material nonpublic information from an insider and trades on it could have an inhibiting influence on the role of market analysts, which the SEC itself recognizes is necessary to the preservation of a healthy market. It is commonplace for analysts to ‘ferret out and analyze information,’ . . . and this often is done by meeting with and questioning corporate officers and others who are insiders. And information that the analysts obtain normally may be the basis for judgments as to the market worth of a corporation’s securities. The analyst’s judgment in this respect is made available in market letters or otherwise to clients of the firm. It is the nature of this type of information, and indeed of the markets themselves, that such information cannot be made simultaneously available to all of the corporation’s stockholders or the public generally.
Dirks, 463 U.S. at 658-59 (footnotes and cites omitted). Dirks makes it clear that “objective facts and circumstances” must provide evidence of misconduct, especially when we are dealing with communications of information between businesses and analysts. The Newman opinion is a step in the direction Dirks espoused, made with due regard for the fact that communications of the nature involved in Newman provide the foundation for efficient securities markets.
Dirks, 463 U.S. at 656-58 (footnotes and cites omitted).
Finally, at the close of its discussion of Dirks, the Government tips its hand. The Government’s problem is not really with the decision below; it is with Dirks itself. The Government asserts (at 21) that an insider violates his fiduciary duty by disclosing information unless the insider “has a valid business purpose for selective disclosure” or “mistakenly believes that information is not material or is already in the public domain.” But that turns Dirks on its head. Dirks does not require the insider to prove some “legitimate” reason for his disclosure to avoid liability. . . . To the contrary, under Dirks, an insider is not liable unless the Government proves that “the insider personally will benefit, directly or indirectly, from his disclosure. Absent some personal gain, there has been no breach of duty to stockholders.” . . . And the circumstances under which an insider may disclose information without receiving a personal benefit are hardly limited to the two scenarios the Government acknowledges. The Court in Dirks made clear that mistaken disclosures were only an “example” of the type of disclosure that would not constitute a breach. . . . Even disclosures that violate company policy or confidentiality obligations are not necessarily made for the insider’s personal benefit. . . . The Government may wish to pursue prosecutions that go beyond what Dirks contemplated, but that is no reason to revisit precedent that has been on the books since the Burger Court.
Chiasson Cert. Opp. at 19-20.
It seems especially strange that the Government is pursuing this argument in the context of a case with facts that seem so close to the kind of communications that Dirks wanted to protect. The evidence here is that securities analysts were discussing company performance with company officials. That’s what analysts are supposed to do. The evidence is also that for at least one of these companies — Dell — the insider’s job was to stay in touch with, and develop relationships with, market analysts who could ultimately be a source of investors. The communications were not known to be for the purpose of trading. This strikes me as precisely the kind of communications between company insiders and outside analysts that Dirks wanted to enshrine, not attack. It truly seems like it is the Government that is trying to alter Dirks, not the Second Circuit.
The flaws in the Government’s argument in support of granting the writ of certiorari are manifold and serious. One normally expects the Justices and their clerks to recognize this, even when the proponent of the writ is the Government. Yet, it remains possible that all of the brouhaha over the Newman decision – much of which can be traced to the Government’s own hissy fit over losing these cases (which are certainly marginal at best) – will drive the Court towards granting cert. This person’s view is that if this happens, the Government will regret the decision to elevate this case. There is much more potential for downside for the Government than upside, because when the Court further specifies the elements of insider trading fraud under section 10(b) and Rule 10b-5, the Government’s discretion to pursue its favored “equality of information” policies is likely to become more, rather than less, constrained.
This entry was posted in Criminal Securities Prosecutions, Insider Trading, SEC Enforcement, Securities Law and tagged Anthony Chiasson, certiorari, Chiasson, Chiasson cert. petition, Dirks, Dirks v. SEC, insider trading, lawyer, legal analysis, market efficiency, market fairness, Newman, Newman cert. petition, petition for writ of certiorari, Rule 10b-5, scienter, SEC, SEC enforcement, Second Circuit, section 10(b), securities, Securities Exchange Act of 1934, securities fraud, securities litigation, securities markets, U.S. v. Newman, U.S. v. Salman, United States v. Newman, United States v. Salman on September 3, 2015 by Straight Arrow.

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Moab is next set to the bar before Jeremiah the prophet, whom God has constituted judge over nations and kingdoms, from his mouth to receive its doom. Isaiah's predictions concerning Moab had had their accomplishment (we had the predictions Isa. 15 and 16 and the like Amos 2:1), and they were fulfilled when the Assyrians, under Salmanassar, invaded and distressed Moab. But this is a prophecy of the desolations of Moab by the Chaldeans, which were accomplished under Nebuzaradan, about five years after he had destroyed Jerusalem. Here is, I. The destruction foretold, that it should be great and general, should extend itself to all parts of the country (v. 1� 8, and again v. 21�, 34), that spoilers should come upon them and force some to flee (v. 9), should carry many into captivity (v. 12, 46), that the enemy should come shortly (v. 16), come swiftly and surprise them (v. 40, 41), that he should make thorough work (v. 10) and lay the country quite waste, though it was very strong (v. 14, 15), that there should be no escaping (v. 42, 45), that this should force them to quit their idols (v. 13, 35) and put an end to all their joy (v. 33, 34), that their neighbours shall lament them (v. 17�) and the prophet himself does (v. 31, 36, etc.). II. The causes of this destruction assigned; it was sin that brought this ruin upon them, their pride, and security, and carnal confidence (v. 7, 11, 14, 29), and their contempt of and enmity to God and his people (v. 26, 27, 30). III. A promise of the restoration of Moab (v. 48).
I. The author of Moab's destruction; it is the Lord of hosts, that has armies, all armies, at his command, and the God of Israel (v. 1), who will herein plead the cause of his Israel against a people that have always been vexatious to them, and will punish them now for the injuries done to Israel of old, though Israel was forbidden to meddle with them (Deu. 2:9), therefore the destruction of Moab is called the work of the Lord (v. 10), for it is he that pleads for Israel; and his work will exactly agree with his word, v. 8.
II. The instruments of it: Spoilers shall come (v. 8), shall come with a sword, a sword that shall pursue them, v. 2. "I will send unto him wanderers, such as come from afar, as if they were vagrants, or had missed their way, but they shall cause him to wander; they seem as wanderers themselves, but they shall make the Moabites to be really wanderers, some to flee and others to be carried into captivity.'' These destroyers stir up themselves to do execution; they have devised evil against Heshbon, one of the principal cities of Moab, and they aim at no less than the ruin of the kingdom: Come, and let us cut it off from being a nation (v. 2); nothing less will serve the turn of the invaders; they come, not to plunder it, but to ruin it. The prophet, in God's name, engages them to make thorough work of it (v. 10): Cursed be he that does the work of the Lord deceitfully, this bloody work, this destroying work; though it goes against the grain with men of compassion, yet it is the work of the Lord, and must not be done by the halves. The Chaldeans have it in charge, by a secret instinct (says Mr. Gataker), to destroy the Moabites, and therefore they must not spare, must not, out of foolish pity, keep back their sword from blood; they would thereby bring a sword, and a curse with it, upon themselves, as Saul did by sparing the Amalekites and Ahab by letting Benhadad go. Thy life shall go for his life. To this work is applied that general rule given to all that are employed in any service for God, Cursed by he that does the work of the Lord deceitfully or negligently, that pretends to do it, but does it not to purpose, makes a show of serving God's glory, but is really serving his own ends and carries on the work of the Lord no further than will suit his own purposes, or that is slothful in business for God and takes neither care nor pains to do it as it should be done, Mal. 1:14. Let not such deceive themselves, for God will not thus be mocked.
IV. The sins for which God will now reckon with Moab, and which justify God in these severe proceedings against them. 1. It is because they have been secure, and have trusted in their wealth and strength, in their works and in their treasures, v. 7. They had taken a great deal of pains to fortify their cities and make large works about them, and to fill their exchequer and private coffers, so that they thought themselves in as good a posture for war as any people could be and that none durst invade them, and therefore set danger at defiance. They trusted in the abundance of their riches and strengthened themselves in their wickedness, Ps. 52:7. Now, for this reason, that they may have a sensible conviction of the vanity and folly of their carnal confidences, God will send an enemy that will master their works and rifle their treasures. Note, We forfeit the comfort of that creature which we repose that confidence in which should be reposed in God only. The reed will break that is leaned upon. 2. It is because they have not made a right improvement of the days of the peace and prosperity, v. 11. (1.) They had been long undisturbed: Moab has been at ease from his youth. It was an ancient kingdom before Israel was, and had enjoyed great tranquillity, though a small country and surrounded with potent neighbours. God's Israel were afflicted from their youth (Ps. 129:1, 2), but Moab at ease from his youth. He has not been emptied from vessel to vessel, has not known any troublesome weakening changes, but is as wine kept on the lees, and not racked or drawn off, by which it retains its strength and body. He has not been unsettled, nor any way made uneasy; he has not gone into captivity, as Israel have often done, and yet Moab is a wicked idolatrous nation, and one of the confederates against God's hidden ones, Ps. 83:3, 6. Note, There are many that persist in unrepented iniquity and yet enjoy uninterrupted prosperity. (2.) They had been as long corrupt and unreformed: He has settled on his lees; he has been secure and sensual in his prosperity, has rested in it, and fetched all the strength and life of the soul from it, as the wine from the lees. His taste remained in him, and his scent is not changed; he is still the same, as bad as ever he was. Note, While bad people are as happy as they used to be in the world it is no marvel if they are bad as they used to be. They have no changes of their peace and prosperity, therefore fear not God, their hearts and lives are unchanged, Ps. 55:19.
The destruction is here further prophesied of very largely and with a great copiousness and variety of expression, and very pathetically and in moving language, designed not only to awaken them by a national repentance and reformation to prevent the trouble, or by a personal repentance and reformation to prepare for it, but to affect us with the calamitous state of human life, which is liable to such lamentable occurrences, and with the power of God's anger and the terror of his judgments, when he comes forth to contend with a provoking people. In reading this long roll of threatenings, and meditating on the terror of them, it will be of more use to us to keep this in our eye, and to get our hearts thereby possessed with a holy awe of God and of his wrath, than to enquire critically into all the lively figures and metaphors here used.
I. It is a surprising destruction, and very sudden, that is here threatened. They were very secure, thought themselves strong for war and able to deal with the most powerful enemy (v. 14), and yet the calamity is near, and he is not able to keep it off, nor so much as to keep the enemy long in parley, for the affliction hastens fast (v. 16) and will soon come to a crisis. The enemy shall fly as an eagle, so swiftly, so strongly shall he come (v. 40), as an eagle flies upon his prey, and he shall spread his wings, the wings of his army, over Moab; he shall surround it, that none may escape. The strong-holds of Moab are taken by surprise (v. 41), so that all their strength stood them in no stead; and this made the hearts even of their mighty men to fail, for they had not time to recollect the considerations that might have animated them. It requires a more than ordinary degree of courage not to be afraid of sudden fear.
II. It is an utter destruction, and such as lays Moab all in ruins: Moab is spoiled (v. 15), quite spoiled, is confounded and broken down (v. 20); their cities are laid in ashes, or seized by the enemy so that they are forced to quit them, v. 15. Divers cities are here named, upon which judgment has come, and the list concludes with an et cetera梐nd such like. What occasion was there for him to mention more particulars when it comes upon all the cities of Moab in general, far and near? v. 21�. Note, When iniquity is universal we have reason to expect that calamity should be so too. The kingdom is deprived of its dignity and authority: The horn of Moab is cut off, the horn of its strength and power, both offensive and defensive; his arm is broken, that he can neither give a blow nor prevent a blow, v. 25. Is the youth of the kingdom the strength and beauty of it? His chosen young men have gone down to the slaughter, v. 15. They went down to the battle promising themselves that they should return victorious; but God told them that they went down to the slaughter; so sure are those to fall against whom God fights. In a word, Moab shall be destroyed from being a people, v. 42. Those that are enemies to God's people will soon be made no people.
III. It is a lamentable destruction; it will be just matter of mourning and will turn joy into heaviness. 1. The prophet that foretels it does himself lament it, and mourns at the very foresight of it, from a principle of compassion to his fellow-creatures and concern for human nature. The prophet will himself howl for Moab; his very heart shall mourn for them (v. 31); he will weep for the vine of Sibmah (v. 32); his heart shall sound like pipes for Moab, v. 36. Though the destruction of Moab would prove him a true prophet, yet he could not think of it without trouble. The ruin of sinners is no pleasure to God, and therefore should be a pain to us; even those that give warning of it should lay it to heart. These passages, and many others in this chapter, are much the same with what Isaiah had used in his prophecies against Moab (Isa. 15:16); for, though there was a long distance of time between that prophecy and this, yet they were both dictated by one and the same Spirit, and it becomes God's prophets to speak the language of those that went before them. It is no plagiarism sometimes to make use of old expressions, provided it be with new affections and applications. 2. The Moabites themselves shall lament it; it will be the greatest mortification and grief imaginable to them. Those that sat in glory, in the midst of wealth, and mirth, and all manner of pleasure, shall sit in thirst, in a dry and thirsty land, where no water, no comfort is, v. 18. It is time for them to sit in thirst, and inure themselves to hardship, when the spoiler has come, who will strip them of all, and empty them. The Moabites in the remote corners of the country, that are furthest from the danger, will be inquisitive to know how the matter goes, what news from the army, will ask every one that escapes, What is done? v. 19. And when they are told that all is gone, that the invader is the conqueror, they will howl and cry, in bitterness and anguish of spirit (v. 20); they will abandon themselves to solitude, to lament the desolations of their country; they will leave the cities that used to be full of mirth, and dwell in the rock where they may have their full of melancholy; they shall no more be singing birds, but mourning birds, like the dove (v. 28); the doves of the valley, Eze. 7:16. Let those that give themselves up to mirth know that God can soon change their note. Their sorrow shall be so very extreme that they shall make themselves bald and cut themselves (v. 37), which were expressions of a desperate grief, such as tempted men to be even their own destroyers. Job indeed rent his mantle and shaved his head, but he did not cut himself. When the flood of passion rises ever so high wisdom and grace must set bounds to it, set banks to it, to restrain it from such barbarities. The sorrow shall be universal (v. 38): There shall be a general lamentation upon all the house-tops of Moab, where they worshipped their idols, to whom they shall in vain bemoan themselves, and in all the streets, where they conversed with one another, for they shall be free in communicating their grief and fears and in propagating them; for they see all lost: "I have broken Moab like a vessel wherein is no pleasure, which shall not be regarded and cannot be pieced again.'' That which Moab used to rejoice in was their pleasant fruits and the abundance of their rich wines. The delights of sense were all the matter of their joy. Take away these, destroy their gardens and vineyards, and you make all their mirth to cease, Hos. 2:11, 12. There is great weeping when their plants are transplanted, have gone over the sea (v. 32), are carried into other countries, to be planted there. The spoiler has fallen upon thy summer-fruits and upon thy vintage, and it is this that makes the cry of Heshbon to reach even to Elealeh, v. 34. Take joy and gladness from the plentiful field, and you take it from the land of Moab, v. 33. If the wine fail from the wine-presses, that used to be trodden with acclamations of joy, all their gladness is cut off. Take away that shouting, and there shall be no shouting. Note, Those who make the delights of sense their chief joy, their exceeding joy, since these are things they may easily be deprived of in a little time subject themselves to the tyranny of the greatest grief; whereas those who rejoice in God may do that even when the fig-tree does not blossom and there is no fruit in the vine. These Moabites lost not only their wine, but their water too: Even the waters of Nimrim shall be desolate (v. 34), and therefore their grief grew extravagantly loud and noisy, and their lamentations were heard in all placed like the lowing of a heifer of three years old. The expressions here are borrowed from Isa. 15:5, 6. 3. All their neighbours are called to mourn with them, and to condole with them on their ruin (v. 17): All you that are about him bemoan him, Let him have that allay to his grief, let him see himself pities by the adjoining countries. Nay, let those at a distance, who do but know his name and have heard of his reputation, take notice of his fall, and say, How is the strong staff broken, whose strength was the terror of its enemies, and the beautiful rod, whose beauty was the pride of its friends! Let the nations take notice of this and receive instruction. Let none be puffed up with or put confidence in their strength or beauty, for neither will be a security against the judgments of God.
IV. It is a shameful destruction and such as shall expose them to contempt: Moab is made drunk (v. 26), and he that is made drunk is made vile; he shall wallow in his vomit, and become an odious spectacle, and shalljustly be in derision. Let the Moabites be intoxicated with the cup of God's wrath till they stagger and fall, and be brought to their wits' end, and make themselves ridiculous by the wildness not only of their passions but of their counsels. And again (v. 39): Moab shall be a derision and a dismaying to all about him; they shall laugh at the fall of the pomp and power he was so proud of. Note, Those that are haughty are preparing reproach and ignominy for themselves.
V. It is the destruction of that which is dear to them, not only of their summer fruits and their vintage, but of their wealth (v. 36): The riches that he has gotten have perished, though he thought he had laid them up very safely, and promised himself a long enjoyment of them, yet they are gone. Note, The money that is hoarded in the chest is as liable to perishing as the summer-fruits that lie exposed in the open field. Riches are shedding things, and, like dust as they are, slip through our fingers even when we are in most care to hold them fast and gripe them hard. Yet this is not the worst; even those whose religion was false and foolish were fond of it above any thing, and, such as it was, would not part with it; and therefore, though it was really a promise, yet to them it was a threatening (v. 35), that God will cause to cease him that offers in the high places, for the high places shall be destroyed, and the fields of offerings shall be laid waste, and the priests themselves, who burnt incense to their gods, shall be slain or carried into captivity, v. 7. Note, It is only the true religion, and the worship and service of the true God, that will stand us in stead in a day of trouble.
VI. It is a just and righteous destruction, and that which they have deserved and brought upon themselves by sin.
1. The sin which they had been most notoriously guilty of, and for which God now reckoned with them, was pride. It is mentioned six times, v. 29. We have all heard of the pride of Moab; his neighbours took notice of it; it has testified to his face, as Israel's did; he is exceedingly proud, and grows worse and worse. Observe his loftiness, his arrogancy, his pride, his haughtiness; the multiplying of words to the same purport intimates in how many instances he discovered his pride, and how offensive it was both to God and man. It was charged upon them Isa, 16:6, but here it is expressed more largely that there. Since then they had been under humbling providences, and yet were unhumbled; nay, they grew more arrogant and haughty, which plainly marked them for that utter destruction of which pride is the forerunner. Two instances are here given of the pride of Moab:�(1.) He had conducted himself insolently towards God. He must be brought down with shame (v. 26), for he has magnified himself against the Lord; and again (v. 42), he shall be destroyed from being a people, for this very reason. The Moabites preferred Chemosh before Jehovah, and thought themselves a match for the God of Israel, whom they set at defiance. (2.) He had conducted himself scornfully towards Israel, particularly in their late troubles; therefore Moab shall fall into the same troubles; into the same hands, and be a derision, for Israel was a derision to him, v. 26, 27. The generality of the Moabites, when they heard of the calamities and desolations of their neighbours the Jews, instead of lamenting them, rejoiced in them, they skipped for joy. Many, in such a case, entertain in their minds a secret pleasure at the fall of those they had a dislike to, who yet have so much discretion as to conceal it; it is so invidious a thing. But the Moabites industriously proclaimed their joy, and avowed the enmity they had to Israel, triumphing over every Israelite they met with in distress and laughing at him, which was as inhuman as it was impious and an impudent affront both to man, whose nature they were of, and to God, whose name they were called by. Note, Those that deride others in distress will justly and certainly, sooner or later, come into distress themselves, and be had in derision. Those that are glad at calamities, especially the calamities of God's church, shall not long go unpunished.
2. Besides this they had been guilty of malice against God's people, and treachery in their dealings with them, v. 30. They made a jest of the desolations of Judah and Jerusalem, and pretended, when they laughed at them, that it was but in sport and to make themselves merry; but, says God, "I know his wrath; I know it comes from the old enmity he has to the seed of Abraham and the worshippers of the true God. I know he thinks these calamities of the Jewish nation will end in their utter extirpation. He now tells the Chaldeans what bad people the Jews are, and irritates them against them; but it shall not be so as he expects; his lies shall not so effect it. The nation, whose fall they triumph in, shall recover itself.'' Some read it, I know his rage. Is it not so? Is he not very furious against the people of God? And his lies I know also. Do they not do so? Do they not belie them? Note, All the fury and all the falsehood of the church's enemies are perfectly known to God, whatever the pretenses are with which they think to cover them, Isa. 37:28.
VIII. Yet it is not a perpetual destruction. The chapter concludes with a short promise of their return out of captivity in the latter days. God, who brings them into captivity, will bring again their captivity, v. 47. Thus tenderly does God deal with Moabites, much more with his own people! Even with Moabites he will not contend for ever, nor be always wrath. When Israel returned, Moab did; and perhaps the prophecy was intended chiefly for the encouragement of God's people to hope for that salvation which even Moabites shall share in. Yet it looks further, to gospel times; the Jews themselves refer it to the days of the Messiah; then the captivity of the Gentiles, under the yoke of sin and Satan, shall be brought back by divine grace, which shall make them free, free indeed. This prophecy concerning Moab is long, but here it ends; it ends comfortably: Thus far is the judgment of Moab.

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Civil law systems like the German one address jurisdictional questions through inflexible, statutorily-defined grounds of jurisdiction. Courts lack power to dismiss cases for forum non conveniens, and they have no discretion to accept jurisdiction when a valid choice-of-court agreement specifies a different forum. German legal scholars are particularly skeptical towards “flexible” common law jurisdictional doctrines such as forum non conveniens or the reasonableness test. Under German rules, German courts simply have no discretion to ask whether they, or whether another country’s courts, provide the more appropriate forum for a dispute.
Civil law’s traditional dogmatism towards jurisdiction makes a recent German case all the more surprising. In a September 2012 decision, the German Supreme Court refused to enforce a forum-selection agreement between an American company and its German sales agent that provided for exclusive jurisdiction in Virginia. Instead, the Court held that German courts retained jurisdiction over the dispute despite a valid and exclusive choice-of-court clause. The Court’s decision means that US companies doing business in the EU can no longer assume that German courts will honor their forum-selection agreements.
In November 2005, an American company headquartered in western Virginia entered into an agency agreement with a German sales agent. Under the contract, the German agent was responsible for sales not only in Germany, but also throughout the EU. Both parties agreed to resolve all disputes exclusively in courts within the Western District of Virginia. Moreover, the contract contained a choice-of-law clause designating Virginia law as governing law.
Importantly, the contract expressly excluded the agent’s German-law right to a post-termination indemnity. The German Commercial Code (GCC) provides sales agents with a right to demand a substantial settlement after the principal terminates the agency relationship that appears to exceed common law agents’ right to reasonable reimbursement. Under German law, parties may not contractually exclude the agent’s right to post-termination indemnity.
In April 2009, the American principal terminated its German sales agent. The agent filed suit in the District Court of Heilbronn, Germany, for outstanding commissions, damages caused by terminating the agency, and for a post-termination indemnity. When the American company moved to dismiss on the basis of the exclusive forum-selection clause, the German agent countered that the court had jurisdiction in spite of the clause under § 23 of the German Civil Procedure Code (GCPC). Under § 23 GCPC, a German court has personal jurisdiction and venue if the defendant owns assets located within the court’s geographical district. Since the American company had founded a subsidiary in the District of Heilbronn, the agent argued that it owned assets (i.e. the subsidiary’s stock) located within the court’s § 23 GCPC jurisdiction. The court agreed and asserted jurisdiction over the American company.
What makes this case remarkable is that the court asserted jurisdiction despite a perfectly valid forum-selection agreement. § 38 GCPC permits parties to enter into choice-of-court agreements exclusively in favor of non-German courts. Nonetheless, the District Court in Heilbronn as well as the Higher Regional Court of Stuttgart (which heard the case on appeal) refused to enforce the parties’ choice-of-court agreement. Whereas the court in Heilbronn saw its jurisdiction survive the forum-selection clause through § 23 GCPC’s asset-ownership provisions, the appeals court in Stuttgart asserted jurisdiction based on § 21 GCPC that provides general jurisdiction over a defendant anywhere it maintains a registered branch or office. When the American company petitioned the court in Stuttgart for permission to appeal to the German Supreme Court, the Stuttgart court denied its motion. The German Supreme Court then upheld the Stuttgart court’s denial of an appeal and remanded the case to the District Court in Heilbronn.
In favoring their own jurisdiction over the exclusive forum-selection clause, all three courts cited the same policy reason. The forum-selection clause had been coupled with a choice-of-law clause designating Virginia law as governing law. Virginia law contained no right to post-termination indemnity. As a result, the German agent would likely lose his right to claim post-termination indemnity from the American principal.
This was an unpalatable result for several reasons. § 89b GCC, which guarantees agents’ rights to a post-termination indemnity, is Germany’s implementing legislation for Articles 17 and 18 of European Council Directive 86/653/EEC on the Coordination of the Laws of the Member States Relating to Self-Employed Commercial Agents. In 2000, the European Court of Justice held in its famous Ingmar decision that these rules were mandatory rules for purposes of private international law. As a result, principals in non-EU countries may not avoid their application through a choice-of-law clause. The ECJ justified the mandatory nature of commercial agent regulations by stating that Directive 86/653/EEC was not merely designed to protect commercial agents, but instead to ensure the freedom of establishment and the operation of undistorted competition in the internal EU market. Protecting these public policy objectives required prohibiting non-EU principals from contracting out of EU agent regulations whenever they hired sales agents within the EU. Thus, Articles 17 and 18 of Directive 86/653/EEC apply to contracts with EU sales agents even if the agency agreement specifies non-EU law as governing law.
Admittedly, the ECJ in Ingmar was concerned only with a choice-of-law clause, whereas in this case the agency agreement contained a choice-of-law clause coupled with an exclusive forum selection agreement. And generally speaking, mandatory rules’ usual purpose is to override choice-of-law clauses that seek to circumvent national regulations. Through its September 2012 decision, the German Supreme Court has now applied mandatory rules’ “override effect” to choice-of-court agreements. Where the combined effect of an exclusive choice-of-court agreement and a choice-of-law clause is that a foreign court will likely not apply mandatory EU law, the need to enforce mandatory EU law overrides the policy of respecting choice-of-court agreements. As a result, the forum-selection agreement is unenforceable and EU courts may maintain jurisdiction over disputes between the EU agent and its foreign principal. In reaching this result, none of the German courts that looked at the case offered an adequate dogmatic rationale for their approach. It is not clear how mandatory provisions of substantive law can affect an agreement on the appropriate forum for a dispute. Moreover, neither the Higher Regional Court in Stuttgart nor the German Supreme Court saw a need to certify the question to the ECJ under Article 267 of the Treaty on the Functioning of the European Union.
This case is not the first time a European court has cited mandatory provisions as the reason for not enforcing a choice-of-court or arbitration agreement. The German Supreme Court has stated in several decisions that German courts may not relinquish jurisdiction over a dispute if they fear that a foreign court or arbitral tribunal will not apply mandatory rules. Even more closely connected with the present case is a decision rendered by the Higher Regional Court of Munich in 2006. There, a California company hired a German commercial agent. The contract stated that California law governed the agency agreement; it contained an exclusive forum-selection clause in favor of Santa Clara courts; and it also contained an arbitration clause. Sidestepping the question of whether a forum-selection clause was enforceable at all when standing next to an arbitration agreement, the court refused to enforce the forum-selection clause for the same reason the German courts cited in 2012: ceding jurisdiction to Santa Clara courts would permit the California company to eliminate the German agent’s right to post-termination indemnity and damages. Since these rights constituted mandatory EU rules under Directive 86/653/EEC as interpreted by Ingmar, they could not be contracted away in advance through a forum-selection clause. Thus, the forum-selection clause had to be invalidated in the interest of EU public policy.
Not only German courts have reached this conclusion. In the English case Accentuate Ltd v Asgira Inc, a Canadian company (Asgira) appointed Accentuate to distribute its software in the UK. Their agreement named Ontario law as governing law and provided for disputes to be settled by arbitration in Toronto. After the agency relationship ended, Asgira commenced arbitration in Toronto pursuant to the contract. Accentuate nonetheless filed suit in the UK, arguing that the arbitration clause, combined with the choice-of-law clause, deprived it of its right to post-termination indemnity and therefore ran afoul of Directive 86/653/EEC’s mandatory nature. Like the German Supreme Court would do two years later, the High Court in London agreed: an arbitration clause that submits disputes to a forum and a governing law that will fail to enforce mandatory EU law was null and void. As a result, the High Court affirmed English courts’ jurisdiction over the case. Furthermore, the Court declared that the Canadian arbitral award would be unenforceable on grounds of public policy.
These decisions have led to much criticism. Within German jurisprudence, the extent to which mandatory EU rules override valid forum-selection clauses remains highly controversial. Most scholars agree that EU regulations should not automatically invalidate otherwise proper forum-selection agreements; instead, the decision of whether to enforce a forum-selection clause should be dictated by the specific circumstances of the case. The issue presents a peculiar tension. On the one hand, refusing to enforce any forum-selection clause in cases involving mandatory EU rules severely restricts the arbitrability of disputes for no good reason and violates the principle of comitas. On the other hand, forcing parties to litigate in their chosen forum when a court knows that the foreign judgment is unenforceable violates their fundamental constitutional right to access to justice. Scholars agree that the only way to resolve these concerns is by performing a case-by-case assessment of the specific forum-selection or arbitration clause and the enforceability of the foreign judgment or award.
Within this case-by-case method, two distinct approaches have emerged. Under the first, courts resort to international private law rules—in Germany either Article 6 of the Introductory Act to the German Civil Code or Article 21 of the Rome I Regulation—to answer the validity question. Both provisions permit courts to refuse to apply foreign law if doing so would be manifestly incompatible with the public policy (ordre public) of the forum. Applied to forum-selection agreements, a court may refuse to enforce a forum-selection or arbitration clause if doing so would lead to an ordre public violation. Importantly, the constitutional right to access to justice is then considered a fundamental principle of public policy—and this right is violated when a party is forced to litigate in a forum whose judgments cannot be enforced. When it is uncertain that a foreign court will apply mandatory EU rules, it is also uncertain as to whether German courts will enforce its decision. There is a significant chance that parties will have to file a second suit in German courts, resulting in unreasonable costs and excessive delay. Thus, in general, forum-selection or arbitration agreements should be disregarded whenever there is a danger that the foreign forum will not enforce mandatory EU provisions. Only in exceptional circumstances should such agreements remain valid—for example, if a foreign court is known for applying mandatory EU rules.
Alternatively, some scholars argue that § 328 GCPC provides a better framework for reconciling forum-selection clauses and mandatory rules. § 328(1)(4) GCP provides that a German court may not recognize or enforce a foreign judgment that violates Germany’s ordre public. Applied to the validity of forum-selection clauses, it results in the reverse of the first approach: forum-selection clauses are generally valid and parties must litigate in their chosen forum; only in exceptional cases may courts disregard the forum-selection clause in favor of their own jurisdiction.
This second approach aligns with the procedural nature of choice-of-court or arbitration agreements. Public policy exceptions under Art. 6 of the Introductory Act to the Civil Code or Art. 21 of the Rome I Regulation govern substantive law. In contrast, forum-selection clauses and arbitration agreements are procedural devices that, without more, leave the question of governing law to the conflict-of-laws rules of the chosen forum. Moreover, the second approach is more consistent with other ways in which German courts defer to foreign fora. In the context of lis pendens, German courts must examine whether a foreign judgment is likely to be enforceable before issuing a stay in favor of foreign proceedings. If this so-called “recognition prognosis” is positive, the court must treat the foreign suit as if it were a parallel proceeding in another German court. Although Germany usually follows a strict first-filed rule in determining which proceeding has priority, the stay analysis is a logical fit for determining whether a German court should cede jurisdiction in favor of a foreign court. In both the lis pendens and forum-selection agreement contexts, the court must forecast whether a foreign judgment or arbitral award will violate German ordre public under § 328(1)(4) GCPC. This will occur only when a foreign tribunal’s failure to apply mandatory EU rules violates fundamental principles of the European legal system. And not every failure to apply mandatory rules amounts to an ordre public violation—the ordre public exception is interpreted narrowly to encompass only serious violations of particularly fundamental legal principles. Thus, even if a foreign tribunal fails to apply mandatory EU law, its decision will not necessarily rise to the level of an ordre public exception under §328(1)(4) GCPC. In the case of EU sales agents working for American principals, no ordre public violation would occur so long as common law agency and contract remedies offer compensation roughly similar to EU indemnity rights. Furthermore, the question of costs and duration of the proceedings is seen from another perspective. The first approach generally invalidates forum-selection clauses out of fear that EU residents will be forced to litigate in an expensive and burdensome foreign forum. However, § 89b GCC was passed only to guarantee a post-termination claim for indemnity to EU agents; it was not enacted to make sure EU agents never have to leave the EU to litigate their claims. In fact, by agreeing to exclusive forum-selection clauses in favor of US jurisdictions, EU agents expressly assume the risk that they might have to litigate abroad. They should remain bound to their commitment under the principle of pacta sunt servanda.
In the end, both approaches differ on the surface but will only rarely lead to different results. What remains open is whether a court must determine that an ordre public violation is certain to result from foreign proceedings from a perspective ex ante, or whether a readily apparent danger of an ordre public violation is sufficient to invalidate a forum-selection agreement. In the Author’s opinion, courts should compel parties to litigate in their chosen forum unless they can determine with certainty that an ordre public violation will result from the foreign proceedings. Such a rule would not leave EU parties without protection from ordre public violations. If an ordre public violation occurs, the foreign decision is without effect in Germany and the EU party can pursue remedies through a second suit in German courts.
Although the German Supreme Court might have reached the right decision, its judgment is not fully convincing. The relationship between mandatory EU rules and forum-selection clauses remains hazy and ill-defined. The Court also failed to provide any criteria for developing a case-by-case enforceability assessment for forum-selection and arbitration clauses.
In particular, the Court left one very important point open: In the Author’s opinion, whether EU courts should disregard a valid choice-of-court agreement if they fear that a foreign tribunal will not apply mandatory EU commercial agent regulations, was tailor-made for the ECJ since this is a question on the effet utile (practical effect) of Directive 86/653/EEC. And it becomes even more important when one considers other EC Directives that could (one day) be considered mandatory, e.g. consumer protection provisions under 85/577/EEC, consumer credit protections under 87/102/EEC, or products liability regulations under 85/374/EEC. One would hope that, in the future, the ECJ will set high standards for considering the rules contained in a Directive mandatory—which critics of the Ingmar decision argue the ECJ did not do when faced with EU commercial agent regulations. The more mandatory rules exist within the EU, the more tension these rules will create in international litigation and arbitration.
According to most German legal scholars (including the Author), a forum-selection clause, in combination with a non-EU choice-of-law clause, must remain valid and binding unless a court determines with certainty that the foreign decision will be unenforceable due to ordre public violations under § 328(1)(4) GCPC. To make this determination, the court must forecast the law governing the case as well as the legal system at the foreign court or seat of arbitration. In doing so, the German judge must check whether the foreign legal system applies the Restatement (Second) of Conflict of Laws and, as a result, whether the foreign system would thus apply mandatory EU provisions. Moreover, the German judge must take into account the manner in which applicable foreign law compensates an agent after termination and compare it to the agent’s remedies under § 89b of the German Commercial Code. If EU provisions are likely to be applied, or if an agent can expect to receive comparable compensation, the judge should enforce the forum-selection agreement.
Unfortunately, US companies cannot count on German courts to conduct such a detailed assessment of their forum-selection or arbitration clauses. When a forum-selection agreement is paired with a choice-of-law clause designating non-EU law, the more likely result is that German courts will invalidate the forum-selection clause and allow litigation to proceed in Germany. Invalidation becomes even more likely if the parties agree to exclude an agent’s right to post-termination indemnity. Until the ECJ sorts out the impact that mandatory EU rules have on forum-selection and arbitration agreements, US companies will not be able to fully eliminate the legal risks of EU lawsuits. In the meantime, US parties are well advised to carefully draft choice-of-law clauses expressly adopting § 89b GCC (or another EU member state’s implementing legislation for Articles 17 and 18 of Directive 86/653/EEC) as applicable, even if they ultimately choose non-EU law as governing law. They should treat any other mandatory EU regulations that could foreseeably affect their relationships with EU parties in the same manner.
Jennifer Antomo, who studied both in Mainz, Germany, and Athens, Greece, obtained her First Final State Examen (J.D. equivalent) in 2011 at University of Mainz. Currently, she is a Ph.D. candidate at Johannes Gutenberg University of Mainz, Germany.
 German Supreme Court, Sep. 5, 2012 – VII ZR 25/12 = 2013 Internationales Handelsrecht (IHR), 35. Available at: <http://juris.bundesgerichtshof.de/cgi-bin/rechtsprechung/document.py?Gericht=bgh&Art=en&az=VII%20ZR%2025/12&nr=61762>. See also Lars Eckhoff, 2012 Gesellschafts- und Wirtschaftsrecht (GWR), 486 and Patrick Ayad / Sebastian Schnell, 2012 Betriebsberater (BB), 3103.
 See German Commercial Code § 89b(2) (setting the “commercial agent’s average annual remuneration” as the basis for calculating his indemnity claim) and § 89b(1)(2) (stating that the agent’s post-termination settlement is limited to an amount that is equitable).
 District Court Heilbronn, Aug. 16, 2011 – 21 O 33/10 KfH.
 § 23 GCPC is famous in Germany as the so-called “umbrella rule” – forget your umbrella in Germany, and you are forever subject to German courts’ jurisdiction.
 Higher Regional Court Stuttgart, Dec. 29, 2011 and 16 January 2012 = Internationales Handelsrecht (IHR) (2012), 163.
 For Americans, this procedure may seem strange, but it is in fact the Court of Appeals itself that determines whether a party has the right to appeal its decision to the next level. If it denies a motion to permit an appeal that denial – but only that denial, not the merits of the case – can be appealed to Germany’s Supreme Court; see § 522 GCPC.
 German Supreme Court, supra note 1.
 ECJ, Nov. 9, 2000, Ingmar GB Ltd v Eaton Leonard Technologies Inc., Case C-381/98, ECR 2000, I-9325, paragraph 20. See Wulf-Henning Roth, 369 Common Market Law Review 39 (2002) and Rick Verhagen, 51 Int’l & Comp. L.Q. 135 (2002).
 Cf. ECJ, supra note 5, paragraphs 20 et seqq.
 Moreover, the German Supreme Court determined that an ECJ ruling was not necessary for determining whether the choice-of-law clause was entirely invalid, or merely invalid in part. This was an important determination because partial invalidity would have only permitted German courts to hear the agent’s claim for post-termination indemnity, whereas entire invalidity allowed German courts to hear all the agent’s claims. In the end, the German Supreme Court held that invalidity was a question of German law, that the clause was partially invalid, but that its partial invalidity rendered it wholly void. As a result, German courts could properly hear all the agent’s claims against his American principal.
 Decisions of German Supreme Court: Jan. 1, 1961 – VII ZR 180/60; Dec. 12, 1970 – II ZR 39/70; May 5, 1983 – II ZR 135/82; March 12, 1984 – II ZR 10/83; June 15, 1987 – II ZR 124/86.
 Higher Regional Court Munich, May 17, 2006 , 7 U 1781/06 = 2006 Internationales Handelsrecht (IHR), 166.
 See for the problem of conflicting arbitration and forum selection clauses Simone Stebler, Association Suisse de l’Arbitrage (ASA Bull.) 1/2013, 27.
 Queen’s Bench Division,  EWHC 2655 (QB). Cf. Stuart Dutson / Thierry Berger, International Arbitration Law Review, vol. 14 (2001), 73 and Hew R. Dundas, Arbitration, vol. 76 (1) (2010), 159.
 The case is also interesting in terms of arbitration, as it opens the question whether a party can litigate an issue in one state court, invoking the arbitral clause’s invalidity, and at the same time try to enforce the arbitral award in another court. The Canadian court, although Asigra was apparently acting contrary to the award by continuing the dispute in another court, decided that this did not amount to a policy reason for not enforcing the award; Accentuate Ltd v. Asigra Inc, 2010 ONSC 3364; 2011 ONCA 99 (CanLII).
 Regulation (EC) No 593/2008 of the European Parliament and the Council of 17 June 2008 on the law applicable to contractual obligations (Regulation Rome I) for contracts concluded after 17 December 2009 (see Art. 28).
 For this approach see Matthias Weller, Ordre-public-Kontrolle internationaler Gerichtsstandsvereinbarungen im autonomen Zuständigkeitsrecht (Mohr Siebeck 2005), p. 181 et seqq., 319 et seqq.
 Reinhold Geimer, Internationales Zivilprozessrecht (Otto Schmidt, 6th. ed. 2009), paragraph 1770; Giesela Rühl, 2007 Praxis des Internationalen Privat- und Verfahrensrechts (IPRax), 294, 298; David Quinke, 2007 Zeitschrift für Schiedsverfahren (SchiedsVZ), 246, 249 et seq.; Uwe Dathe, 2010 Neue Juristische Online Zeitschrift (NJOZ), 2196, 2197 et seq.
 In an analogy to § 261(3)(1) GCPC, the German lis pendens rule for parallel domestic proceedings. See German Supreme Court, March 20, 1964 – V ZR 34/62.
 Cf. Dathe, supra note 19, 2198: violation of ordre public in case the agent’s commission is below average (“Provisionsdumping”).
 Quinke, supra note 19, 251.
 See also Quinke, supra note 19, 248 et seq.; Rühl, supra note 19, 298; Ayad/Schnell, supra note 1, 3104; Higher Regional Court Stuttgart, supra note 6.
 See Higher Regional Court Munich, supra note 13.
 Cf. Quinke, supra note 19, 252.
 Council Directive 87/102/EEC of 22 December 1986 for the approximation of the laws, regulations and administrative provisions of the Member States concerning consumer credit.
 Roth, supra note 9, 378 ff.; Verhagen, supra note 9, 151 et seqq.; Rühl, supra note 19, 302; Dathe, supra note 19, 2197 et seq.; Robert Freitag / Stefan Leible, 2001 Recht der internationalen Wirtschaft (RIW), 287, 291 et seq.; Ralf Michaels / Hans-Georg Kamann, 2001 Europäisches Wirtschafts- und Steuerrecht (EWS), 301, 305.
 According to the doctrine of comparative impairment or public policy US courts might apply mandatory EU provisions; cf. Rühl, supra note 19, 298. EU courts apply non-EU mandatory provisions pursuant to Art. 9(3) of Regulation Rome I.


BIOTECHPHARMA, LLC, et al., Appellants, v. LUDWIG & ROBINSON, PLLC, Appellee.
Before FISHER and BLACKBURNE–RIGSBY, Associate Judges, and KING, Senior Judge. Albert Wilson, Jr., for appellants. Robert W. Ludwig, with whom Salvatore Scanio, James E. Tompert, and W. Clifton Holmes were on the brief, for appellee. Irvin B. Nathan, Attorney General for the District of Columbia, Todd S. Kim, Solicitor General, Donna M. Murasky, Deputy Solicitor General, and James C. McKay, Jr., Senior Assistant Attorney General, filed a brief for the District of Columbia, amicus curiae, in support of this court's jurisdiction over the present appeal.
Appellants—BiotechPharma, LLC; Converting Biophile Laboratories, Inc.; and Dr. Raouf Albert Guirguis (collectively “BTP”)—are former clients of appellee Ludwig & Robinson, PLLC (“L & R”), a law firm. L & R sued BTP to collect unpaid legal fees, and BTP moved to stay the litigation and compel arbitration. After the trial court denied the motion, BTP brought this interlocutory appeal, arguing mainly that District of Columbia Bar Rule XIII1 obligates L & R to arbitrate the fee dispute. We agree with BTP, reverse the trial court's order, and remand the case with instructions to compel arbitration.
BTP, a biotechnology firm, retained L & R as counsel in March 2011 to help resolve a trade secret dispute. The dispute was settled in May 2012, L & R having billed BTP on a monthly basis during the course of its representation. By June 2012 L & R claimed that BTP owed approximately $1.7 million in outstanding legal fees, disbursements, and expenses. In January 2013 L & R brought suit to collect its fees.
L & R raised several arguments opposing BTP's motion to stay litigation and compel arbitration, although the firm had already acknowledged in its complaint that it “maintains its office and performed work related to this” matter in the District of Columbia. Ultimately, the trial court denied BTP's motion without clearly explaining why. BTP now appeals from that order.
Before reaching the merits of BTP's appeal, we first address a jurisdictional issue raised by L & R. We then consider whether the parties to this case had an enforceable arbitration agreement, and we conclude that such an agreement existed pursuant to D.C. Bar Rule XIII. Finally, we treat (and reject) L & R's claims that Rule XIII is unconstitutional and that this court exceeded its authority by promulgating it.
L & R argues that we lack jurisdiction to hear this interlocutory appeal, despite a provision of the Revised Uniform Arbitration Act (“RUAA”) that states: “An appeal may be taken from ․ [a]n order denying or granting a motion to compel arbitration.” D.C.Code § 16–4427(a) (2012 Repl.). According to L & R, the RUAA cannot serve as our jurisdictional predicate because it violates the Home Rule Act, which prohibits the Council of the District of Columbia from passing a law “with respect to any provision of Title 11 (relating to organization and jurisdiction of the District of Columbia courts).” D.C.Code § 1–206.02(a)(4) (2012 Repl.). Among other things, Title 11 gives this court jurisdiction over appeals from “final orders and judgments of the Superior Court” and interlocutory orders “refusing ․ injunctions.” D.C.Code § 11–721(a) (2012 Repl.). L & R argues that orders denying motions to compel arbitration are not orders “refusing ․ injunctions,” nor do they qualify as appealable orders under any other provision of Title 11. Consequently, L & R asserts that the RUAA has impermissibly expanded this court's jurisdiction, thereby violating the Home Rule Act.
Even if we set aside this extensive history (indeed, even if we set aside the RUAA and the UAA altogether), a second consideration supports our jurisdiction here. This court's 1981 decision in Brandon v. Hines involved an arbitration agreement not subject to the UAA, and we nevertheless concluded that “denials—but not grants—of stays of litigation pending arbitration are appealable interlocutory orders.”4 439 A.2d 496, 507 (D.C.1981). Several years later, in Hercules & Co., Ltd. v. Shama Rest. Corp., this court reaffirmed Brandon's rule and explained that it “will remain the law of the District of Columbia unless and until it is reconsidered en banc or modified by statute.” 566 A.2d 31, 38 (D.C.1989).
Applying Brandon's rule to this case resolves the concern L & R raises regarding the Home Rule Act, for if we may exercise jurisdiction pursuant to the terms of Title 11, then the RUAA's provision for interlocutory appeals works no change to this court's jurisdiction (at least, that is, with respect to orders denying motions to compel arbitration). See Bank of Am. v. District of Columbia, 80 A.3d 650, 660–61 (D.C.2013) (relying on Brandon and recognizing that “[t]his court has exercised jurisdiction of an appeal from an order denying a motion to compel arbitration, concluding that it is a final order, appealable pursuant to D.C.Code § 11–721(a)(1)”).
L & R argues that Brandon was incorrect at the time it was decided because it overlooked binding precedent in John Thompson Beacon Windows, Ltd. v. Ferro, Inc., 232 F.2d 366 (D.C.Cir.1956). However, the John Thompson court dealt primarily with the finality of an order in an independent proceeding.5 Id. at 366–69. By contrast, the Brandon court focused carefully on whether an order refusing to stay ongoing litigation pending arbitration is appealable as an interlocutory order refusing an injunction. 439 A.2d at 497, 500–09 (analyzing D.C.Code § 11–721). Consequently, John Thompson did not control Brandon and does not control here. See Parker v. K & L Gates, LLP, 76 A.3d 859, 864 n. 3 (D.C.2013) (“Because this case arises in the context of an independent proceeding, we have no occasion to consider the appealability of orders compelling arbitration in other contexts.”).
In summary, Brandon and Hercules remain binding authority and apply to this case. Moreover, the result Brandon commands here is consistent with the long line of cases in which we have exercised jurisdiction over appeals like this one. We have no reason (and, in fact, no discretion) to depart from our precedent. Having determined that we have jurisdiction to decide this appeal, we now turn to the merits of BTP's claim.
BTP argues that the trial court erred in denying its motion to stay litigation and compel arbitration. Because a trial court must grant such a motion where a valid arbitration agreement exists, see D.C.Code § 16–4407(b) (2012 Repl.), the central question before us is whether L & R and BTP had such an agreement.6 This is a question of law that we review de novo. Giron, 35 A.3d at 437. The relevant facts are not in dispute.
1. Was There an Express Agreement to Arbitrate?
2. Was There an Implied Agreement to Arbitrate?
BTP maintains, in the alternative, that an agreement was formed by operation of law when it (the client) requested arbitration.
a. Was This Claim Preserved?
When raising this claim before the trial court, BTP failed to cite D.C. Bar Rule XIII, relying solely on ACAB Rule 8. As we will soon explain, these rules have somewhat different terms. L & R therefore contends that BTP failed to preserve the claim on which it now relies. We disagree. See Tindle v. United States, 778 A.2d 1077, 1082 (D.C.2001) (quoting Salmon v. United States, 719 A.2d 949, 953 (D.C.1997) (“[A]lthough ‘claims' not presented in the trial court will be forfeited ․, ‘parties on appeal are not limited to the precise arguments' they made in the trial court.”).
When moving for a stay of litigation pending the completion of arbitration, BTP quoted ACAB Rule 8(a) (“If the petition is filed by a client, the lawyer is deemed to have agreed to arbitrate․”). It elaborated: “All counsels entering an appearance on behalf of Ludwig are members of the D.C. Bar; therefore, they are all required to proceed to arbitration under the ACAB.” BTP thus identified the principle underlying both rules. There is little risk that L & R, which had earlier proposed arbitration before ACAB, a service provided by the Bar, was misled by BTP's failure to cite Rule XIII.
b. Was There a Valid Request to Arbitrate?
We conclude that a client need not file a formal petition with ACAB in order to request arbitration pursuant to Bar Rule XIII. A formal filing with ACAB certainly would be sufficient to effectuate such a request, but it is not an absolute prerequisite. Here, BTP's counsel informed the trial court that he actually “tried to” file a petition with ACAB. He also said that ACAB “will not accept the petition until [the] Court stays [the] case.”9 Thus, trying to comply with ACAB's requirements, BTP filed a motion in the trial court to stay litigation and compel arbitration.
an appellate court has discretion, in the interests of justice, to consider an argument that is raised for the first time on appeal if the issue is purely one of law, particularly if the factual record is complete and a remand for further factual development would serve no purpose, the issue has been fully briefed, and no party will be unfairly prejudiced.
Plainly, the validity of Bar Rule XIII is a purely legal issue, and we think “the interests of justice” are best served if we address it here. L & R makes many of the same claims raised in Stuart v. Walker, and the merits of that case were never resolved because the court split evenly on the question of jurisdiction. See supra note 3. Thus, L & R raises issues “of continuing importance” and “of great public interest” that deserve our consideration. See Anderson v. Elliott, 555 A.2d 1042, 1045 (Me.1989) (exercising discretion to reach and resolve questions about the validity of Maine's mandatory arbitration system for legal fee disputes). We note that “a remand for further factual development would serve no purpose,” and that “no party will be unfairly prejudiced” by our decision to reach L & R's final arguments. Helen Dwight Reid Educ. Found., 766 A.2d at 34 n. 3.
L & R contends that this court lacked authority to promulgate Bar Rule XIII. Quite to the contrary, this court possesses broad authority to regulate the practice of law, deriving much of this power from the District of Columbia Court Reorganization Act of 1970. A portion of that Act, passed by Congress, provides that “[t]he District of Columbia Court of Appeals shall make such rules as it deems proper respecting the examination, qualification, and admission of persons to membership in its bar, and their censure, suspension, and expulsion.” D.C.Code § 11–2501(a) (2012 Repl.). Beyond this broad statutory grant of authority, the court possesses significant inherent authority as well. In Sitcov v. District of Columbia Bar, we relied upon the “almost universally accepted” proposition “that the highest court in the jurisdiction is imbued with the inherent authority to define, regulate, and control the practice of law in that jurisdiction.” 885 A.2d 289, 297 (D.C.2005) (quoting Brookens v. Comm. on Unauthorized Practice of Law, 538 A.2d 1120, 1125 (D.C.1988)).
Notably, the preamble to the rules we promulgated to govern the District of Columbia Bar cites both the inherent and statutory authority of this court. Taken together, these two sources of authority allow the court to regulate virtually every aspect of legal practice in the District of Columbia, including the substance of fee agreements. See D.C. R. Prof. Cond. 1.5. We readily conclude that this power extends to the subject matter of Bar Rule XIII. See In re LiVolsi, 428 A.2d 1268, 1273 (N.J.1981) (holding that if a court has “authority to control the substance of the [attorney-client] fee relationship, then a power of a lesser magnitude determining the procedure for resolving fee disputes must also be within [the court's] province”).
L & R nevertheless asserts that the rule impermissibly alters the jurisdiction of the D.C. courts, since it requires lawyers to arbitrate fee disputes that they would otherwise litigate in civil actions. Additionally, L & R claims that this court violated the Home Rule Act by vesting judicial authority in the non-lawyer members of ACAB panels and by limiting the scope of judicial review. In making these claims, L & R cites several cases from other jurisdictions where courts have considered the type of judicial involvement or the scope of judicial review that must be afforded as part of a mandatory arbitration process.
Importantly, the formation of any arbitration agreement pursuant to Bar Rule XIII requires a manifestation of assent by both attorney and client. Clients invoke the rule by requesting arbitration. Attorneys submit to the rule by practicing law in the District of Columbia. Provided that Rule XIII is valid, it does not affect the jurisdiction of the D.C. courts or violate the Home Rule Act any more than any other agreement to arbitrate would do.
The rule need not provide for judicial review beyond that which is ordinarily available following arbitration. See D.C.Code §§ 16–4423 to –4424 (2012 Repl.); A1 Team USA Holdings, LLC v. Bingham McCutchen LLP, 998 A.2d 320, 322 (D.C.2010) (concluding that under the RUAA, “this court's review of an arbitration award is still extremely limited”); Schwartz v. Chow, 867 A.2d 230 (D .C.2005) (upholding decision of the Superior Court confirming an arbitration award by ACAB). Whatever quasi-judicial authority may be vested in ACAB (if any), it is limited to fee disputes between members of this court's bar and clients who have voluntarily chosen to submit to the board's determination. Nothing in the Home Rule Act inhibits this court's ability to thus manage the affairs of its bar. This court did not exceed its authority in promulgating the rule.
Although other jurisdictions impose rules similar to D.C. Bar Rule XIII, no such rule has ever been struck down for denying an attorney's right to a jury trial. Rather, it has been held that attorneys give up that right by practicing law in a jurisdiction subject to the challenged rule. See Kelley Drye & Warren v. Murray Indus., Inc., 623 F.Supp. 522, 527 (D.N.J.1985) (holding that “the right to a jury trial can be given up, as parties do when they agree to arbitrate”); Guralnick v. Supreme Court of N.J., 747 F.Supp. 1109, 1116 (D.N.J.1990) (following Kelley Drye ). This court has previously cited that analysis in taking care “to cast no doubt upon the validity of D.C. Bar R. XIII.” Ginberg, 678 A.2d at 551 n. 9 (citing Kelley Drye ).
Federal courts have taken a similar approach in analogous contexts. For example, in Geldermann v. Commodity Futures Trading Comm' n, members of a commodities exchange were required by law to submit “to customer-initiated arbitration.” 836 F.2d 310, 311 (7th Cir.1987). A member company challenged the rule—in part on Seventh Amendment grounds—claiming that “membership alone is not sufficient to constitute consent to arbitration and therefore cannot establish a waiver of its constitutional right to an Article III forum.” Id. at 318. The Seventh Circuit disagreed, explaining that consent to observe all applicable rules and regulations was “a precondition of membership” in the exchange. Id. Accordingly, the court held that the company was “not entitled to an Article III forum” and that “the Seventh Amendment [was] not implicated.” Id. at 324. See also Patten Sec. Corp., Inc. v. Diamond Greyhound & Genetics, Inc., 819 F.2d 400, 402 (3d Cir.1987) (holding that a member of the National Association of Securities Dealers was “bound by its rules ․ under which a customer may compel arbitration”) (abrogation on other grounds recognized by Delgrosso v. Spang & Co., 903 F.2d 234, 236 n. 2 (3d Cir.1990)); Paine, Webber, Jackson & Curtis v. Chase Manhattan Bank, 728 F.2d 577, 580 (2d Cir.1984) (holding that the rules of a stock exchange were “sufficient in and of themselves” to compel a member to submit to arbitration requested by a non-member “whether or not [the rules] are incorporated in a purchase and sale agreement”).
Because an arbitration agreement necessarily embodies a waiver of the right to trial by jury, a determination that there is a valid arbitration agreement here would foreclose any claim L & R might have had to a jury trial. See GTFM, LLC v. TKN Sales, Inc., 257 F.3d 235, 244 (2d Cir.2001) (characterizing the factual premise of a Seventh Amendment claim as “purely hypothetical” where one party to a dispute had exercised its statutory right to compel arbitration); Geldermann, 836 F.2d at 323 (holding that where the parties have consented to arbitration, “the Seventh Amendment simply does not apply”); Cremin v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 957 F.Supp. 1460, 1471 (N.D.Ill.1997) (when “claims are properly before an arbitral forum pursuant to an arbitration agreement, the jury trial right vanishes”). A case-specific waiver of the right to a jury trial is not necessary.
We now turn to whether this court, through Bar Rule XIII, may require such client-initiated arbitration without violating the Constitution. L & R obliquely suggests that the rule places an unconstitutional condition on the privilege of practicing law in the District of Columbia. Again, however, L & R fails to cite a case—and we are not aware of any—where a litigant has prevailed on that theory when challenging a mandatory arbitration system for attorney-client fee disputes. Courts that have considered the issue have held that “[n]o one has an absolute right to practice law,” Kelley Drye, 623 F.Supp. at 527, and “[t]he State may impose reasonable conditions and limitations upon those who wish to exercise th[at] privilege.” Anderson, 555 A.2d at 1050 (Me.1989) (quoting Kelley Drye, 623 F.Supp. at 527).
“The interest of the States in regulating lawyers is especially great,” and they “have broad power to establish standards for ․ regulating the practice of professions.” Goldfarb v. Virginia State Bar, 421 U.S. 773, 792 (1975). This includes the right to establish and enforce rules governing the reasonableness of attorney fees. See D.C. R. Prof. Cond. 1.5. When promulgating Bar Rule XIII, this court sought to provide an informal and efficient means of resolving attorney-client fee disputes, which are one of the principal sources of public dissatisfaction with the legal system. See Anderson, 555 A.2d at 1049. Because clients are at a significant disadvantage in litigating those disputes, the rule protects their ability to present meritorious claims and defenses, and, we believe, thereby fosters public confidence in the bar. See id.; see also In re LiVolsi, 428 A.2d at 1272, 1280. Thus, regulation “in the area of fee disputes” is “critically important.” Nodvin v. State Bar of Ga., 544 S.E.2d 142, 145 (Ga.2001) (quoting In re LiVolsi, 428 A.2d at 1272).
There was a valid agreement to arbitrate pursuant to D.C. Bar Rule XIII and the trial court should have enforced it. Accordingly, we vacate the trial court's order denying BTP's motion to stay, and remand the case with instructions to enforce the arbitration agreement.
1. Although popularly known as “D.C. Bar Rule XIII,” this is actually a rule of this court, adopted “for the government of the Bar and the individual members thereof.” Preamble, Rules of the District of Columbia Court of Appeals Governing the Bar of the District of Columbia.
2. The UAA stated that “[f]or purposes of writing an appeal ․ [a]n order denying an application to compel arbitration” would “be deemed final.” D.C.Code § 16–4317(a) (2001). Unlike the RUAA, the UAA did not provide for appeals from orders granting motions to compel arbitration. See id.
3. L & R's jurisdictional arguments implicate many of the issues raised in Stuart v. Walker, which this court recently heard en banc. 6 A.3d 1215 (D.C.2010), vacated, 30 A.3d 783 (D.C.2011) (en banc). However, Stuart dealt with an order granting (rather than denying) a motion to compel arbitration. 6 A.3d at 1215. The en banc court was evenly divided on the question of jurisdiction and failed to render an opinion. See Stuart v. Walker, No. 09–CV–900 (D.C. Feb. 16, 2012) (en banc) (unpublished judgment).
4. In Brandon, a contractor appealed a trial court order that denied his motion to confirm an arbitration award, vacated the award, and directed the parties to trial. 439 A.2d at 497. In deciding that the order was immediately appealable under Title 11 as an order dissolving an injunction, the court found it necessary to first determine that orders denying motions to compel arbitration should be treated (for purposes of appeal) as orders refusing injunctions. Id. at 500–09.
5. An independent proceeding is an action “in which a request to order arbitration is the sole issue before the court.” Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79, 87 (2000). John Thompson involved an independent proceeding because a seller had filed suit for the sole purpose of seeking enforcement of an arbitration agreement. 232 F.2d at 366–67. The trial court denied the seller's initial motion to compel arbitration, and the seller appealed before the trial court could complete a statutorily prescribed process for summarily trying the issue. Id. at 367. On appeal, then, the jurisdictional question was whether the order appealed from represented the final resolution of the independent proceeding. Id. at 367–69. Although neither party argued the order at bar was injunctive, the court considered and rejected that possibility in cursory fashion. Id. at 369. In doing so, the court based its brief analysis on the federal jurisdictional statute, 28 U.S.C. § 1292 (1952). Id. HHHThus, John Thompson is distinguishable not only because it arose in a different procedural setting, but also because it dealt with a different jurisdictional statute than the one at issue here.
6. Before reaching the question of whether there was an agreement to arbitrate, L & R would have us hold that there was not even a dispute to arbitrate. See Reed Research, Inc. v. Schumer Co., 243 F.2d 602, 604–05 (D.C.Cir.1957) (relying on theory of “an account stated” to hold that no genuine issue of material fact precluded summary judgment). However, BTP's first filing in this case avers that the company “disputes the amount of attorney's fees sought” by L & R. This statement is enough to establish the existence of a dispute. To compel arbitration, a party need not produce evidence of a dispute sufficient to survive a motion for summary judgment. Friend v. Friend, 609 A.2d 1137, 1139 (D.C.1992).
7. By specifying that an attorney “shall be deemed to have agreed to arbitrate” when the client requests it, Bar Rule XIII empowers clients to unilaterally require arbitration, but the rule does not give lawyers the same prerogative. In fact, ACAB Rule 8(b)(ii) specifically notes that for clients, the arbitration service offered by ACAB “is voluntary. If the client does not agree to arbitrate, the ACAB cannot compel the client to do so.” Thus, L & R's two offers to arbitrate did not trigger mandatory arbitration.
8. In support of this reading, L & R notes Rule XIII's statement that arbitration “shall be pursuant to such reasonable rules and regulations ․ as may be promulgated from time to time by” the D.C. Bar and ACAB. But Bar Rule XIII specifically provides flexibility in attorney-client arbitration arrangements, stating that “arbitration shall be before” ACAB “[u]nless the attorney and client agree otherwise.” Because ACAB is not the exclusive forum for arbitration, its rules do not necessarily limit the ways in which an arbitration agreement can be formed.
9. ACAB Rule 4 states that “[i]f there is a pending lawsuit in a court about a fee dispute and the client files a petition involving the same fee dispute with the ACAB ․, the ACAB will not retain jurisdiction nor will it proceed to adjudicate the fee dispute unless the lawsuit is dismissed or stayed.” But there may have been some misunderstanding between ACAB personnel and counsel for BTP. In another case, ACAB explained its rule in plain terms, informing litigants that a “fee dispute [may] not continue in two parallel forums.” Louis Fireison & Assocs., P.A. v. Alkire, 6 A.3d 945, 953 (Md.Ct.Spec.App.2010).
10. Perhaps other types of filings or communications will qualify as a request for arbitration under Bar Rule XIII. We do not decide this question.
11. L & R argues that even if an arbitration agreement exists, this court should nevertheless affirm on the ground that BTP, through conduct, waived its right to arbitration. We do not consider this argument because our case law clearly states that questions of waiver are “decided by the arbitrator, not the court.” Menna v. Plymouth Rock Assur. Corp., 987 A.2d 458, 465 (D.C.2010); see Woodland Ltd. P'ship v. Wulff, 868 A.2d 860, 865 (D.C.2005). We likewise reject L & R's claim that an implied arbitration agreement necessarily fails for lack of mutuality. Because the agreement is formed by operation of law, it need not (and, indeed, cannot) exhibit all the hallmarks of an ordinary contract.
12. This determination is consistent with our holding in Ginberg v. Tauber, where an attorney sued his client under a quantum meruit theory, seeking the reasonable value of legal services the attorney had provided. 678 A.2d 543, 544–46 (D.C.1996). There was no retainer agreement, but the client acknowledged that he owed the attorney a reasonable fee. Id. at 549. As a result, “the only issue [to be determined] ․ was what was a reasonable fee under the circumstances.” Id. at 550. The court held “that where it is undisputed that the client owes the attorney some fee for his legal representation, but there is no agreement concerning how the amount will be determined ․, the trial court, not the jury, determines the amount of fee to be paid.” Id. at 548. In short, Ginberg concluded, “the amount of the fee, unless the amount is fixed by the contract, is ․ for the court to determine.” Id. at 551 (emphasis added). Here, the parties executed fee agreements, and L & R asserts that its legal fees are, in fact, fixed by contract.
13. Some state courts have held that their respective state constitutions do not guarantee a jury trial for attorneys litigating fee disputes. See, e.g., Shimko v. Lobe, 813 N.E.2d 669, 675, 678–81 (Ohio 2004); Anderson v. Elliott, 555 A.2d 1042, 1043, 1049–50 (Me.1989). These cases do not address the Seventh Amendment question presented here since the “Amendment applies only to proceedings in courts of the United States, and does not in any manner whatever govern or regulate trials by jury in state courts.” Minneapolis & St. Louis R.R. Co. v. Bombolis, 241 U.S. 211, 217 (1916). However, “like other provisions of the Bill of Rights,” the Seventh Amendment is “fully applicable to courts established by Congress in the District of Columbia.” E.R.B. v. J.H.F., 496 A .2d 607, 610 n. 6 (D.C.1985) (citing Pernell v. Southall Realty, 416 U.S. 363, 370 (1974)).
14. Moreover, BTP and L & R signed retainer agreements in 2011 and 2012. “[L]aws in effect at the time of the making of a contract form a part of the contract ‘as fully as if they had been expressly referred to or incorporated in its terms.’ “ Double H Hous. Corp. v. Big Wash, Inc., 799 A.2d 1195, 1199 (D.C.2002) (quoting Farmers & Merchs. Bank of Monroe v. Fed. Reserve Bank of Richmond, 262 U.S. 649, 660 (1923)). Applying this principle of law in a case similar to this, the Maryland Court of Special Appeals held that D.C. Bar Rule XIII had been implicitly incorporated into a retainer contract and that the attorney who executed it had “agreed to arbitrate a fee dispute with [his client] upon her request.” Fireison, 6 A.3d at 953–54.
15. On this score as well, our conclusion is consistent with analogous federal case law. In Geldermann—described above—the law compelling arbitration for members of the commodities exchange was upheld despite the claim that if a member company “was to continue in business, [it] had no choice but to accept the” rule. 836 F.2d at 317. See also Koveleskie v. SBC Capital Mkts., Inc., 167 F.3d 361, 366, 368 (7th Cir.1999) (holding that it was not unconstitutional for an employer to require an arbitration agreement as a “take-it-or-leave-it” condition of employment, in part because “[t]he right to an Article III forum is waivable”).
16. L & R also raises an argument that it has styled as an equal protection claim. The firm asserts that Bar Rule XIII is “vastly overinclusive” because “it routes to arbitration oft-times complex matters.” L & R does not explain how the complexity of some attorney-client fee disputes works any deprivation of equal protection under the law. In our view, the suggestion that this fee dispute is too complex for ACAB is simply another facet of L & R's due process claim, which we have already rejected.