Arbitration and Mediation in San Francisco, CA
Cedric Chao received his Bachelor of Arts degree from Stanford University, concentrating in Economics and graduating with Distinction and Departmental Honors. He received his Juris Doctorate degree from Harvard Law School (1977).
Mr. Chao has successfully completed the training programs offered by the American Arbitration Association for commercial arbitration and for commercial mediation, the training for international arbitration offered by the ICDR, and the accelerated intensive arbitration program offered by the Chartered Institute of Arbitrators.
Prior to launching Chao ADR, PC in May 2019, Mr. Chao worked for 31 years at Morrison & Foerster LLP, the last 29 years as a litigation partner (1983-2013). He began his career at Morrison & Foerster working with the firm's most prominent trial partner, whose group attracted bet-the-company and challenging commercial disputes and white collar criminal defense matters.
During his first 5-6 years as a young partner, Cedric Chao acted as one of the senior partner's two lieutenants running cases on a day to day basis and serving as second chair when the cases went to trial, appellate argument, or major hearing.
Mr. Chao developed his own reputation within and outside the firm, acting as first chair in his own matters which, over time, grew in significance to include five matters where the amount in dispute exceeded $1 billion and many others where the disputed amount was in the hundreds of millions of dollars. In 1996, firm management asked Mr. Chao to establish Morrison & Foerster's international litigation and arbitration practice, which he led and co-led until he lateraled in 2013 to another firm. This practice group steadily gained experience, arbitration by arbitration, and achieved many successful results for the firm's clients. Mr. Chao is proud that members of the practice group have gone on to become successful international arbitration practitioners in their own right.
In April 2013, Mr. Chao lateraled to DLA Piper LLP where he served as the U.S. head of the firm's international arbitration practice until May 2019 when he launched Chao ADR, PC. His practice at DLA Piper mirrored his practice at Morrison & Foerster. DLA Piper, whose global footprint is matched by few firms, provided opportunities to work with clients and colleagues from every continent.
Earlier in his career, Cedric Chao worked as a federal prosecutor in the U.S. Attorney's Office, Northern District of California (1978-81) where he prosecuted federal crimes ranging from drugs and gun offenses to business fraud, and where he first learned how to try cases to juries.
Litigation and Arbitration Practice - Representative Matters
A short list of representative litigation and arbitration matters, including engagements as arbitrator, is listed below.
- Representing one of the largest PRC state owned enterprises, where claimants sought over $7 billion for claims arising from a wind energy venture entered into by the client's US subsidiary and where claimants named non-signatory Chinese companies under alter ego theories and selected 7 of 9 arbitrators. The AAA/ICDR arbitration, governed by Delaware law and seated in Dallas, raises significant jurisdictional, arbitrability, due process and rule of law issues. The $62.9 million award is being challenged in vacatur proceedings and was argued in the U.S. Court of Appeals for the Fifth Circuit in December 2019.
- Represented a large Spanish contractor in an AAA arbitration, seated in San Francisco, against a French supplier of solar tracker equipment in connection with the client's large solar energy installation in Southern California
- Represented a leading U.S. private equity firm in an ICC arbitration, seated in Singapore and governed by Korean law, against another private equity firm and a major Korean bank arising from the sale of the client's minority share in a Korean credit card company
- Represented a leading U.S. biosciences company in its JAMS arbitration, seated in New York, against a Swiss pharmaceutical for breach of the provision to use "best efforts" to commercialize the client's blockbuster drug in all significant markets around the globe per the parties' development and licensing agreement.
- Represented a Fortune 200 U.S. utility/power developer in an ad hoc international arbitration under UNCITRAL rules, seated in New Delhi and under Indian law, brought by the client's Indian business partner seeking $1.2 billion in damages after the U.S. developer withdrew from a large Indian power project. The dispute included ancillary proceedings before the Indian Supreme Court concerning claimant's petition to replace the presiding English arbitrator with an arbitrator from South Asia who would cap his fees at $500 per day. Following favorable rulings in the arbitration and the Indian Supreme Court, the case was settled.
- Represented a political risk insurer in an LCIA arbitration, seated in London, against a policy claim of expropriation arising from regulatory action taken by the government of Argentina that allegedly led to the commercial failure of a large power project.
- Represented a political risk insurer in an ICDR arbitration, seated in London, against policy claims of expropriation and political violence in Colombia, based on government regulatory actions and on disruption of the power grid by terrorist activities, that allegedly led to the commercial failure of a large power project.
- Represented a U.S. technology company in an SIAC arbitration, seated in Singapore and governed by Singapore law, against the company's Asia distributor in connection with the parties' respective obligations under their distribution contract.
- Represented a Korean semiconductor company in an ICC arbitration, seated in San Francisco, brought against a U.S. semiconductor manufacturer over the licensing of the manufacturer's technology for construction of a state of the art semiconductor fab in Korea.
- Represented a Japanese conglomerate in its dispute with a U.S. golf club manufacturer over the termination of the client's exclusive distribution contract in Japan and over competing claims under a related patent licensing agreement. Had a settlement not been successfully negotiated between the parties, the dispute would have been resolved by arbitration in either Tokyo or the U.S. depending on who first filed an arbitration demand.
- Served as presiding arbitrator on a ICC tribunal, hearing an IT contract dispute between Israeli and PRC parties. The dispute was governed by UK law and was seated in Vancouver.
- Served as sole arbitrator in a SIAC arbitration, seated in Singapore and governed by California law, concerning a distribution contract dispute between a U.S. apparel and sporting goods manufacturer and its former Singapore distributor.
- Served as a co-arbitrator in an ICC arbitration, seated in San Francisco, between a Russian inventor and his U.S. financial backer over their development and financing contract.
- Currently serving in other commercial arbitrations.
- Representing a California technology company in dueling proceedings in the Brazil trial and appellate courts and in U.S. District Court (Northern District of California) arising from the termination of the local distributor for alleged contract breaches and tortuous behavior.
- Representing the City of Oakland in the California state courts against a taxpayer lawsuit under the California Constitution challenging the rates and franchise fees included in Oakland's waste collection and disposal, organics and recycling contracts. Successfully obtained a dismissal in the Superior Court, and now defending that ruling in the Court of Appeal.
- Represented the City of Oakland in U.S. District Court and the Ninth Circuit Court of Appeals in the city's suit against the U.S. Department of Justice (DOJ) that sought to enjoin the DOJ from using the drug forfeiture laws to shut down Oakland's medical cannabis dispensaries operating lawfully under California state law and Oakland's regulatory scheme. During the 3-year proceedings, the DOJ was enjoined from closing Oakland's dispensaries, and, on remand, the DOJ dropped its forfeiture action.
- Represented the former EVP and chief lending officer of a failed banking institution, in connection with her role as a key witness in a U.S. Department of Justice grand jury investigation, an FDIC enforcement proceeding against the bank's officers and managers, and the federal criminal trial of the bank's former COO. The focus of all proceedings was on alleged financial irregularities and misreporting of the same to regulatory authorities.
- Represented one of the world's largest direct sales companies in U.S. District Court against a nationwide class action suit of 3 million former and current distributors. Plaintiffs challenged the client's business model and practices, alleging claims under the federal RICO and state consumer protection statutes and initially seeking damages in the billions of dollars. After five years of litigation in the U.S. trial and appellate courts, and after more than 10 days in mediation, the case successfully settled.
- Represented a holding company in a cross-border insolvency dispute that went to trial in U.S. bankruptcy court in Texas. The dispute centered on whether an insolvent software company with Texas headquarters but operations in multiple countries, had its "center of main interest" in the U.S. or Italy, and which country therefore could assert jurisdiction over the insolvent company's worldwide assets.
- Successfully argued before the California State Court of Appeal that a lawsuit brought against a newspaper client for invasion of privacy and assault should be dismissed under the California Strategic Lawsuit Against Public Participation (SLAPP) statute.
- Argued the successful appeal on behalf of Amway Corp. in In Re Anonymous Online Speakers, 661 F. 3d 1168 (9th Cir. 2010), in which the Ninth Circuit Court of Appeals agreed that corporations injured by anonymous commercial speech can obtain the speakers' identities in discovery under a more relaxed standard than when core protected speech is at issue.
- Represented a Korean chaebol and the descendants of its founder in a highly publicized lawsuit in Los Angeles federal court brought by the alleged illegitimate son of the elderly founder. The plaintiff, alleging he had been kidnapped at age 8 and sent to the U.S. for adoption to deprive him of his identity and inheritance, pled fraud, intentional infliction of emotional distress, and other torts, and sought substantial damages. Following discovery and motion practice, the case was settled to all parties' satisfaction.
- Represented a Japanese car manufacturer and its U.S. subsidiary in Los Angeles federal court against a shareholder derivative action for management's alleged failure to properly oversee and manage the companies to prevent certain commercial irregularities in the U.S. subsidiary's operations.
- Represented an international airport authority in U.S. District Court in a dispute with the general contractor and the concrete subcontractor over the construction of the airport's expanded terminal facilities.
- Represented the owner of a large California geothermal power plant facility in California state court litigation against the general contractor, arising from the alleged defective construction of the power plants.
- Represented a financial institution in Los Angeles Superior Court against claims of breach of contract, fraud, and elder abuse arising from the actions of a terminated private banker who drained the accounts of an elderly, blind customer who had entrusted management of her accounts to the private banker.
- Brought successful application under 28 U.S.C. section 1782 in U.S. District Court to obtain civil discovery from a U.S. energy company in aid of the defense effort in the second Russian criminal proceedings against Mikhail Khodorkovsky, former CEO of Yukos Oil.
- Successfully defended an individual prosecuted for cultivating 5,600 mature marijuana plants on his remote farm described at the time by law enforcement as the largest marijuana operation in Northern California history. Following one year of on and off negotiations, obtained a sentence of three years in a minimum security institution even though the Federal Sentencing Guidelines then in effect mandated a sentence of over 15 years (in a maximum security institution).
- Successfully sued the U.S. Attorney General and Secretary of State to enjoin them from returning to China a PRC prisoner brought to San Francisco to testify in a heroin-smuggling conspiracy trial, after he revealed that his confessions implicating the Hong Kong kingpins on trial had been coerced by the Shanghai police. Following numerous discovery battles and multiple government motions to dismiss, a 5-week trial, and two trips to the Ninth Circuit Court of Appeals, we obtained a permanent injunction barring the U.S. government from returning the client to China. The federal courts agreed that the U.S. government, in handling the prisoner-witness and in failing to advise the Chinese authorities of U.S witnesses' obligations, was guilty of gross misconduct that "shocked the court's conscience" in violation of the client's substantive due process rights and the court's duty to protect witnesses appearing before it.
A Word About Skill Set
Arbitration. One aspect of an arbitrator's competence is familiarity with the procedures, rules, and customs of arbitration which, particularly for cross-border matters, are distinct from U.S. courtroom procedures, rules and customs. Arbitration has been a major part of Mr. Chao's career, and he is well versed in both domestic and international arbitration.
A second aspect of an arbitrator's competence, which Mr. Chao always focused on when selecting arbitrators, is the arbitrator's experience -- whether gained as an advocate or an arbitrator -- in handling disputes involving complex commercial transactions, technology (when relevant), complex facts, and difficult legal issues. The more at stake, the more important this inquiry. And, because there is no automatic right of appeal in arbitration, and because ordinary errors of law and contract interpretation and mistaken fact findings are generally not grounds for vacatur of arbitral awards, the inquiry whether a potential arbitrator has worked on matters of the appropriate magnitude is key to assuring the parties that their positions and arguments will be understood and appropriately weighed.
A final selection criterion is the arbitrator's temperament and track record for treating the parties with courtesy and respect. Litigation and arbitration are already stressful, and there is no reason to endure an arbitrator who treats parties in a disrespectful or arbitrary manner. It is important for the institution of arbitration that win or lose, all parties feel that they have been "heard," that their arguments have been seriously considered, and that they have been treated with respect.
Mediation. Over his career, Mr. Chao has handled multiple hundreds of commercial disputes, in courtroom and arbitration settings. The substantial majority of those disputes settled before trial, either through Mr. Chao's direct negotiations with opposing counsel, or with the assistance of an outside mediator. He has been through through the mediation process in many disputes, under the auspices of different institutions. In one of Mr. Chao's cases where he led a team defending a putative 3 million member consumer class action with initial demands in the billions of dollars, the parties held over 10 full days of mediation spread over 2 years (while litigation continued) before reaching agreement on a class settlement. The mediator's full arsenal of techniques was used to help the parties bridge the considerable gaps in their positions. Mr. Chao will bring his broad experience as counsel in settlement discussions and mediations to the role of mediator. Mr. Chao is the co-author (with Judge Daniel Weinstein, JAMS) of the mediation chapter in the leading Thomson Reuters treatise Business and Commercial Litigation in Federal Courts (4th ed. 2016).
Consulting. Mr. Chao, drawing on his unusually broad experience, is available to consult. One consulting role is to sit in mock arbitration exercises, analogous to mock jury trial exercises. Since Mr. Chao has been first chair advocate as well as arbitrator in arbitrations that have gone to merits hearing (trial), he is well positioned to provide insights into how an arbitrator might react to a party's written submissions, counsel's openings/closings, and witness testimony, and to offer suggestions from an advocate's perspective on possible ways to strengthen one's presentation.
A second consulting role is assessment of the strength of a client's arbitration position, prior to the filing of a lawsuit or arbitration, and advice on risk mitigation.
Special Master. Where the parties or a court decide it would be helpful to have a special master hear evidence and/or arguments concerning a specific subject, and to prepare written findings and recommendations for the court's consideration, Mr. Chao, as a veteran of many trials, law and motion hearings and discovery disputes, is well positioned to assist.