or voters have been defeated, because the
exclusion of groups such as illegal aliens,
nonvoters, and children could significantly
affect some areas of the country, because some
states have large populations of thes e groups.
Shifting political power away from an area
means fewer legislators to demand a fair share
of government resources for that area.
One such effort to exclude these groups
occurred during the 1866 debates over the
passage of the
FOURTEENTH AMENDMENT and
ultimately led to a congressional vote to
continue basing apportionment on total popu-
lation and to count the “whole number of
persons in each state.” In contrast, state
legislatures have only been required to be based
substantially on population since 1964 (Rey-
nolds v. Sims, 377 U.S. 533, 84 S. Ct. 1362, 12 L.
Ed. 2d 506). In 1968, the U.S. Supreme Court
extended this requirement to municipal govern-
ments (Avery v. Midland County, 390 U.S. 474,
88 S. Ct. 1114, 20 L. Ed. 2d 45).
Apportionment is related to, but is not the
same as, the electoral system and the districting
process: Apportionment is the manner in which
representation is distributed; the electoral system
is the way an individual representative is elected;
and the districting process establishes the precise
electoral boundaries of a representative’s dis-
trict. Apportionment for the U.S. Congress,

county by the geometric mean of successive
numbers of Representatives.
Congress must decide how to treat the
fractional components whenever it reapportions
congressional seats based on new census data.
This decision affects the distribution of only a
few seats in Congress and the
ELECTORAL COLLEGE,
but in closely contested elections, such as the
presidential election of 1876, those seats could
mean the difference between victory and defeat.
(The electoral college is the body of electors of
each state chosen to elect the president and
VICE
PRESIDENT
. Apportionment affects the electoral
college because it influences the number of
electoral votes coming from various areas of the
country.) Each state legislature is responsible for
establishing the district boundaries of the
congressional seats apportioned to the state by
the federal government.
From 1842 to 1911 Congress required that
all congressional districts be of compact and
connecting territory. That stipulation was not
continued after 1912, and by the 1960s the
districts within some states differed greatly in
size. These dispari ties were caused in some cases
by gerrymandering, which is the process of
drawing boundaries for election districts so as to

states, the Supreme Court ruled in Reynolds v.
Sims (377 U.S. 533, 84 S. Ct. 1362, 12 L. Ed. 2d
506) that districts for state legislatures must also
be substantially equal in population. Further
extending the principle, the Court ruled in
Avery v. Midland County (390 U.S. 474, 88 S. Ct.
1114, 20 L. Ed. 2d 45 [1968]) that if county, city,
and town governments elect their representa-
tives from individual districts, the districts must
be substantially equal in population.
Other individuals and states have subse-
quently challenged the method of apportion-
ment used in the United States when that
method has proved unfavorable for them. For
example, in Franklin v. Massachusetts (505 U.S.
788, 112 S. Ct. 2767, 120 L. Ed. 2d 636 [1992]),
Massachusetts and two of its registered voters
filed an action against Secretary of Commerce
Barbara B. Franklin, alleging, among other
things, that the dec ision to allocate overseas
employees was inconsiste nt with the Constitu-
tion. In June 1992 the Court reversed a federal
district court decision in favor of Massachusetts,
ruling that the allocation of overseas federal
employees to their designated home states was
consistent with the usual-residence standard
used in early censuses and served the purpose of
making representation in Congress more equal.
The state of Montana sued the U.S.
COMMERCE DEPARTMENT, following the 1990

proposed statistical sampling of hard-to-count
persons (e.g., racial and ethnic minorities, poor
persons, children, illegal aliens, renters) would
favor large urban areas that were aligned with
the
DEMOCRATIC PARTY. Members of Cong ress
filed suit to block the use of sampling and the
Supreme Court agreed with their position in
Commerce Dept. v. U.S. House of Representatives
(525 U.S. 316, 119 S. Ct.765, 142 L.Ed.2d 797
[1999]). The Court held that the Census Act,
which was first enacted in 1954 (and amended a
number of times), expressly prohibited the use
of sampling to determine populations for
congressional apportionment purposes.
This ruling did not end the controversy over
what constituted sampling. Following the 2000
census, the state of Utah filed suit against the
Commerce Department, alleging that it should
have increased its congressional representation
from three seats to four. According to the
census, the state had achieved a dramatic 30-
percent population growth in ten years. Despite
this growth, the number of representatives in
the state did not increase. North Carolina,
however, did pick up an additional seat through
a statistical method called imputation. This
method permits the Census Bureau to impute,
or estimate, the number of members in a
household after census takers repeatedly try to

Court affirmed the lower court ruling. The
Court, in a 5–4 decision, rejected the idea that
actual enumeration under the Census Clause was
intended as a description of the only methodol-
ogy for counting U.S. citizens. The Court
pointed out that an interest in accuracy was
favored by the Census Bureau, which used
imputation as a
LAST RESORT only after other
methods had failed. The majority also decided
that this method, used as a last resort, was not the
same as sampling. Justice
STEPHEN BREYER noted
that “sampling seeks to extrapolate the features
of a large population from a small one, but the
Bureau’s imputation process sought simply to fill
in missing data as part of an effort to count
individuals one by one.” Moreover, the imputa-
tion method was not the equivalent of statistical
sampling because the two methods were viewed
as distinctly different w hen an amendment to the
Census Act was passed in 1958.
The Commerce Department announced in
2009 that it would not use statistica l sampling
for the 2010 census.
FURTHER READINGS
Bestor, Arthur. “‘Advice’ from the Very Beginning,
‘Consent’ When the End Is Achieved.” 1989. American
Journal of International Law 83 (October).
Corpus Juris Secundum United States, vol. 91, secs. 11–12.

Yarbrough, Tinsley E. 2002. Race and Redistricting: The
Shaw-Cromartie Cases. Lawrence: Univ. Press of
Kansas.
CROSS REFERENCES
Congress of the United States; Voting
APPRAISAL
A valuation or an approximation of value by
impartial, properly qualified persons; the process
of determining the value of an asset or liability,
which entails expert opinion rather than express
commercial transactions.
APPRAISER
A person selected or appointed by a competent
authority or an interested party to evaluate the
financial worth of property.
Appraisers are frequently appointed in
probate and condemnation proceedings and
are also used by banks and
REAL ESTATE concerns
to determine the
MARKET VALUE of real property.
APPRECIATION
The fair and reasonable estimation of the value of an
item. The increase in the financial worth of an asset
as compared to its value at a particular earlier date
as a result of inflation or greater market demand.
APPREHENSION
A reasonable belief of the possibility of imminent
injury or death at the hands of another that
GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION

agreement, sometimes labeled an indenture,
which possesses all the requisites of a valid
contract. If the contract cannot be performed
within a year, it must be in writing, in order to
satisfy the
STATUTE OF FRAUDS,anoldENGLISH LAW
adopted in the United States, which requires
certain agreements to be in writing. The
apprentice, the employer, and, if the apprentice
is a minor, his or her parents or guardians must
sign the apprenticeship agreement. Some jur-
isdictions require explicit consensual language
in addition to the signature or signatures of
one or both parents, depending upon the
applicable statute. The contract must include
the provisions required by law and drafted for
the benefit of the minor such as those relating to
his or her education and training. A breach of
apprenticeship contract might justify an award
of damages, and, unless authorized by statute,
there can be no assignment, or transfer, of the
contract of apprenticeship to another that
would bind the apprentice to a new service.
A person who lures an appren tice from his
or her employer may be sued by the employer,
but the employer cannot recover unless the
DEFENDANT knew of the apprentice relationship.
The apprenticeship may be concluded by
either party for
GOOD CAUSE, where no definite

particular portion of general revenue or treasury
funds for use for a governmental objective.
Federal appropriation bills can originate only in
the House of Representatives as mandated by
Article I, Section 7 of the Constitution. Once an
appropriation law is enacted, a definite amount
of money is set aside so that public officials can
pay incurred or anticipated expenditures. When
a law authorizes funds to be used for a
particular purpose, it is known as a specific
appropriation.
The appropriation of money by an individ-
ual occurs within the context of a debtor-
creditor relationship. If a creditor is owed two
separate debts by the same debtor who makes a
payment without spe cifying the debt to which it
is to be applied, the creditor can appropriate the
payment to either debt.
GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION
APPROPRIATION 341
Appropriation also refers to the physical
taking and occupation of property by the
government or its actual, substantial interfer-
ence with the owner’s right to use the land
according to personal wishes by virtue of the
government’s power of
EMINENT DOMAIN.
This right of an individual to use water that
belongs to the public is embodied in the prior
appropriation doctrine applied in arid western

[Latin, One who attends something to view it as
a spectator or witness.] Any person who is given
an absolute power to judge and rule on a matter
in dispute.
An arbiter is usually chosen or appointed by
parties or by a court on their behalf. The
decision of an arbiter is made according to the
rules of law and equity. The arbiter is distin-
guished from the arbitrator, who proceeds at his
or her own discretion, so that the decision is
made according to the judgment of a
REASONABLE
PERSON
.
An arbiter may perform the same function
as an umpire, a person who decides a
controversy when arbitrators cannot agree.
CROSS REFERENCES
Alternative Dispute Resolution; Arbitration.
ARBITRAGE
The simultaneous purchase in one market and
sale in another of a security or commodity in hope
of making a profit on price differences in the
different markets.
In its simplest form, arbitrage is “buying low
and selling high.” In this sense, any trader who
buys something in one market—whether it is a
commodity like grain, financial
SECURITIES such
as stock in a company, or a currency such as the

RISK ARBITRAGE came
into prominence during the 1980s, when
investors began to take advantage of a business
atmosphere encompassing a large number of
company
MERGERS AND ACQUISITIONS. In a merger
GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION
342 APPROVAL
or acquisiti on, one company buys or takes over
another company. When the management of
the targeted company does not want to be
acquired by a particular investor or group of
investors, the merger is called a hostile takeover.
Quite often, the aggressors in such takeovers are
smaller in terms of assets than their targets. A
hostile takeover is usually initiated when
someone believes that the stock of a particular
company is lower than its potential value,
whether because of poor management or
because of a lack of information about the true
value of that company.
One way that hostile takeovers are initiated
is through a device called the cash
TENDER OFFER.
The party attempting to initiate the takeover
announces that it will pay cash for the target
company’s stock at a price w ell above the
current
MARKET VALUE. At this point, risk
arbitrageurs become involved in the game. They

that arranged the financing of many of the
takeovers of the era. In return for a reduced
sentence of three years in prison, Boesky agreed
to pay a $100 million penalty and to cooperate
with the government’s continuing investigation.
Boesky named Drexel employee Michael R.
Milken as a member of the insider trading
network. In 1990 Boesky was released from
prison after serving two years.
FURTHER READINGS
Boesky, Ivan. 1985. Merger Mania. New York: Holt,
Rinehart and Winston.
“Complex Plan of Finance Successfully Navigates Arbitrage
Rules.” 2003. Tax Management Memorandum 44
(February 10).
Steuerle, C. Eugene. 2002. “Defining Tax Shelters and Tax
Arbitrage.” Tax Analysts (May 20).
Stokeld, Fred. 2001. “IRS on the Prowl for Illegal Arbitrage.”
Tax Notes 92 (September 10).
CROSS REFERENCES
Corporations; Securities; Securities and Exchange
Commission.
ARBITRARY
Irrational; capricious.
The term arbitrary describes a course of
action or a decision that is not based on reason
or judgment but on personal will or discretion
without regard to rules or standards.
An arbitrary decision is one made without
regard for the facts and circumstances pre-

administrative procedures created by popularly
elected state and federal legislatures .
One important right recognized in most
administrative proceedings is the right of
JUDICIAL REVIEW. Citizens aggrieved by the actions
of an administrative body may typically ask a
judicial court to review those actions for error.
In establishing the standard by which judicial
courts will review the actions of an administra-
tive body, state and federal legislatures seek to
provide agencies with enough freedom to do
their work effectively and efficiently, while
ensuring that individual rights are protected.
Congress tried to maintain this delicate
balance in the Administrative Procedures Act
(APA). The APA limits the scop e of a reviewing
court’s authority to determining whether the
agency acted arbitrarily and capriciously in
exercising its discretion. 5 USCA § 701. In
making this determination, the reviewing court
will not find that the administrative body acted
arbitrarily unless the agency failed to follow
proper procedures or rendered a decision that is
so clearly erroneous that it must be set aside to
avoid doing an injustice to the parties.
Specifically, a reviewing court must deter-
mine whether the agency articulated a rational
connection between the factual findings it made
and the decision it rendered. The reviewing
court must also examine the record to ensure

ruled that the
TRANSPORTATION DEPARTMENT acted
arbitrarily under NEPA, when it failed to
prepare an environmental impact statement,
failed to consider whether its regulations would
have violated air quality limits, and failed to
perform localized analyses for areas most likely
to be affected by increased truck traffic. Public
Citizen v. Department of Transportation, 316 F.
3d 1002 (9th Cir. 2003).
CROSS REFERENCES
Administrative Procedure Act of 1946; Bad Faith; Due
Process of Law; Judicial Review; Relevancy.
ARBITRATION
Arbitration is the submission of a dispute to an
unbiased third person or person s designated by the
parties to resolve the controversy; the arbitration
award is the decision issued after a hearing at
which both parties have an opportunity to be
heard.
The two general types of arbitration are
binding arbitration and non-b inding arbitra-
tion. In binding arbitration, the arbitration
award is usually final, and courts rarely
reexamine it. In non-binding arbitration, the
arbitration award is a recom mendation, and the
parties may choose whether to accept it. In
either type of arbitration, the award is a decision
issued after a hearing at which both parties have
an opportunity to be heard.

tion for certain disputes such as auto insurance
claims, and court decisions have broadened into
areas such as
SECURITIES, antitrust, and even
employment discrimination. International busi-
ness issues are also frequently resolved using
arbitration.
Arbitration in the United States dates back
to the eighteenth century. Courts frowned on it,
though, until attitudes started to change in 1920
with the passage of the first state arbitration law,
in New York. This statute served as a model for
other state and federal laws, including, in 1925,
the U.S. Arbitration Act, later known as the
Federal Arbitration Act (FAA) (9 U.S.C.A. § 1 et
seq.). The FAA was intended to give arbitration
equal status with litigation and, in effect, created
a body of federal law. After
WORLD WAR II,
arbitration grew increasingly important to
labor-management relations. Congress helped
this growth with passage of the
TAFT-HARTLEY ACT
(29 U.S.C.A. § 141 et seq.) in 1947, and over the
next decade the U.S. Supreme Court cemented
arbitration as the favored means for resolving
labor issues, by limiti ng the judiciary’s role. In
the 1970s arbitration began expanding into a
wide range of issues that eventually included
prisoners’ rights,

fashion the terms and rules of the process.
Furthermore, although arbitrators can be law-
yers, they do not need to be. They are often
selected for their expertise in a particular area of
business and may be drawn from private
practice or from organizations such as the
American Arbitration Association (AAA), a
national nonprofit group founded in 1926.
Significantly, arbitrators are freer than judges
to make decisions, because they do not have to
abide by the principle of stare decisis (the policy
of courts to follow principles established by
Contractual Arbitration Clause
Standard Business

ARBITRATION. The Parties agree that any claim or dispute between them or against any agent, employee, successor, or assign of the
other, whether related to this agreement or otherwise, and any claim or dispute related to this agreement or the relationship or duties
contemplated under this contract, including the validity of this arbitration clause, shall be resolved by binding arbitration by the American
Arbitration Association (or name other firm providing arbitration services, e.g., National Arbitration Forum), under the Arbitration Rules
then in effect. Any award of the arbitrator(s) may be entered as a judgment in any court of competent jurisdiction.

Arbitration Clause
A sample arbitration
clause
ILLUSTRATION BY GGS
CREATIVE RESOURCES.
REPRODUCED BY
PERMISSION OF GALE,
A PART OF CENGAGE
LEARNING.

cannot be made lightly. Most frequently,
arbitration is binding, and courts in most
jurisdictions enforce awards. Moreover, binding
arbitration allows little or no option for appeal,
expecting parties who arbitrate to assume the
risks of the process. In addition, arbitration is
subject to the legal doctrines of
RES JUDICATA and
COLLATERAL ESTOPPEL, which together strictly
curtail the option of bringing suits based on
issues that were or could have been raised
initially.
Res judicata means that a final judgment on
the merits is conclusive as to the rights of the
parties and their privies, and, as to them, operates
as an absolute bar to a subsequent action
involving the same claim, demand, or
CAUSE OF
ACTION
. Collateral estoppel means that when an
issue of ultimate fact has been determined by a
valid judgment, that issue cannot be relitigated
between the same parties in future litigation.
Thus, often the end is truly in sight at the
conclusion of a binding arbitration hearing and
the granting of an award.
The FAA gives only four grounds on which
a court may vacate, or overturn, a binding
arbitration award: (1) where the award is the
result of corruption,

AGE DISCRIMINATION claims in
employment are arbitrable (Gilmer v. Inter-
state/Johnson Lane Corp., 500 U.S. 20, 111 S. Ct.
1647, 114 L. Ed. 2d 26). Writing for the
majority, Justice
BYRON R. WHITE concluded that
arbitration is as effective as a trial for resolving
employment disputes. Gilmer led several major
employers to treat all employment claims
through bindi ng arbitration, sometimes as a
condition of employment.
Arbitration clauses have become a standard
feature of many employment contracts. This
factor has led to conflicts concerning the
applicability of these clauses when an employee
seeks to sue an employer for a
CIVIL RIGHTS
violation under Title VII of the Civil Rights Act
of 1964, as amended by the Civil Rights Act of
1991. A provision of this law addressed, for the
first time, the arbitration of Title VII claims .
Section 118 of the act states that the parties
could, “where appropriate and to the extent
authorized by law,” choose to pursue alternative
dispute resolution, including arbitration, to
resolve their Title VII disputes. Since its
enactment, the federal courts have been re-
quired to determine what this clause means in
practice. For example, in the securities industry,
GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION

own enforcement actions against employers and
to seek reinstatement, back pay, and compensa-
tory and
PUNITIVE DAMAGES on behalf of an
employee. Moreover, the ADA makes no excep-
tion for arbitration agreements, nor does it
even mention arbitration. Therefore the EEOC,
which had not signed an arbitration agreement
with the employer, was free to pursue its claims in
court. The Court also concluded that the general
policies surrounding the ADA, and the EEOC
enforcement arm, justified the pursuit by the
EEOC of victim-specific relief. It stated that
punitive damages “may often have a greater
impact on the behavior of other employers than
the threat of an injunction.”
The Supreme Court also has validated the
enforceability of arbitration awards relating to
collective bargaining agreements. In Eastern
Associated Coal Corporation v. United Mine
Workers of American, District 17, 531 U.S. 57,
121 S. Ct. 462, 148 L. Ed. 2d 354 (2000), the
issue involved a labor arbitrator who ordered an
employer to reinstate an employee who had
twice tested positive for marijuana use. The
employer filed a lawsuit in federal court seeking
to have the arbitrator’s decision vacated, argu-
ing that the award contradicted a public policy
against the operation of dangerous machinery
by workers who test positive for drugs.

agreement shall be determined by a court under
federal law. Arbitration provisions in collective
bargaining agreements, however, are exempt
under the act. Although early criticism of the
Arbitration Fairness Act opines that it is anti-
business, other assessments point out that it
does not cover traditional disputes between
sophisticated commercial parties; hence, its
impact in the business realm may be minimal.
An April 3, 2009, decision from the Alaska
Supreme Court supported a limitation on
employment disputes, echoing the sentiment
behind the Arbitration Fairness Act that perhaps
the arbitration of such disputes gives employers
an unfair advantage. In Gibson v. NYE Frontier
Ford, Slip. Op. No. 6355 (Ala. S. Ct. Apr. 3, 2009),
an employee ordered to arbitrate his wage and
hour claim arising under state law consistent with
the terms of an agreement governed by the FAA
sought a declaration that the agreement was
unconscionable. Among other factors, the
GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION
ARBITRATION 347