TV Judge’s Case Goes to U.S. Supreme Court

Some folks resolve their disputes by going on TV, where they also get paid and enjoy their 15 minutes of fame (or infamy). But what does a TV judge do to resolve disputes and, perhaps, gain notoriety? Take his case to the U.S. Supreme Court!

TV trials are really arbitrations. The parties sign an arbitration agreement to resolve their disputes on TV. The shows pay each party so, reportedly, no one is actually out any money. One participant or the other may walk away with more than the other, or even all the money. The loser gets rid of the claim and, more importantly, is a loser on national TV. (Hey, people agree to eat worms, get caught cheating on their mates or to getting “punked,” proving some people will do anything to get on TV.)

TV’s “Judge Alex” is a male version of “Judge Judy” (only prettier). Allegedly, Florida State Judge Alex Ferrer, gave up his real judge gig in 2002, to try his luck on TV, though the help of promoter Arnold Preston, who claims Judge Alex agreed to pay him 12% of his income. After Judge Alex made the big time he decided he did not have to pay Preston because Preston was not a registered talent agent under California law. Preston claims he is a manager, not an agent, and does not have to be registered.

As the battle began, Preston says an arbitration agreement in the contract between the two governs how disputes must be decided. Judge Alex claims a California Commission must first decide whether the contract is even legal.

The case may not be as scintillating as Judge Alex’s own cases, including episodes such as “Deli Defamation,” “Pool Shark Blues” or “Mover’s Smash Up,” aired in 185 syndicated markets. However, legal scholars say the case is important enough for the Supreme Court to decide because the outcome affects whether the Federal Arbitration Act preempts (has more force) than the State of California’s laws regulating talent agents.

The Supreme Court Justices have not decided the case, but heard “oral arguments” this week. In reality, “oral arguments” are when the Justices grandstand as they grill the lawyers on their positions. Not much different than TV justice shows, really, except “The Supremes” do not allow cameras – or not yet.

The justices do not appear to be buying Judge Alex’s argument. “I used to teach contract law,” Justice Antonin Scalia said, “and I am sure that when you say you’ll arbitrate, it means you won’t litigate.” A postponement to let the California Commission decide “virtually destroys the value of arbitration,” stated Justice David Souter, “They don’t want to go to arbitration eight to 12 months later, they want to go now.” Justices Ginsburg and Kennedy scoffed at Judge Alex’s attorney for contending it was “undisputed that Preston was an unlicensed agent.”

What’s really at stake? The U.S. Chamber of Commerce and various a trade associations have weighed in to oppose Judge Alex. They say a state court must not interfer with arbitration, which they consider a faster and cheaper alternative to litigation. Many believe that argument is just code for “we do not want plaintiffs to have their cases decided by a jury of their piers.”

Consumer advocates in Congress are now attempting to outlaw arbitration clauses in consumer contracts, including agreements with stockbrokerage firms. Yet, it appears the U.S. Supreme Court is not wavering in its almost universal support of arbitration agreements over the past 20 years. Meanwhile, it is odd that Judge Alex, who himself arbitrates disputes daily, would be the poster child for avoiding arbitration agreements.

The securities fraud speicialists at Shepherd Smith and Edwards law firm have represented thousands of investors in securities arbitration against hundreds of securities firms, including all major U.S. stock brokerage firms. Our experienced attorneys and staff assist investors who have lossed in securities and other investments based on the wrongdoing of investment brokers and advisors or their firms. If you or someone you know might be a victim of such conduct, contact Shepherd Smith and Edwards for a free case evaluation by one of our attorneys.

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