One of the most confounding doctrines in federal arbitration jurisprudence is the severability doctrine. The U.S. Supreme Court has held, since Prima Paint in 1967, that courts must enforce arbitration clauses within contracts, even if the entire contract is invalid or unenforceable. (Most non-arbitration geeks don’t believe me when I tell them that’s the law.)
Prima paint
Kardashians Kept Out of Arbitration (and other recent arbitration news)
Just three weeks into the year and already my pile of arbitration cases is a skyscraper! So, I will cover a lot of ground in this update.
First, the headline. Kimberly, Kourtney, and Khloe Kardashian moved to compel arbitration, although they were not signatories to the arbitration agreement. Kroma Makeup EU v. Boldface Licensing +…
Class Rep Can Opt Out of Arbitration for All (And Other Recent State Court Anomalies)
Continuing last week’s theme of “States Gone Wild,” here are three more oddball summer decisions from state supreme courts. All of them find interesting paths around federal case law (IMHO).
Georgia Says Class Complaint Is Deemed Arbitration Opt Out For All Class Members
In Bickerstaff v. SunTrust Bank, 2016 WL 3693778 (Ga. July 8,…
Ninth Circuit Refuses To Enforce Arbitration Clause In Sham Franchise Agreement
A short new opinion from the Ninth Circuit may run counter to long-standing Supreme Court precedent. In Casa Del Caffe Vergnano v. Italflavors, 2016 WL 1016779 (9th Cir. Mar. 15, 2016), the court refused to enforce an arbitration agreement in a contract that the parties admitted signing, because the parties simultaneously signed a second…
January Arbitration Update: Effective Vindication, Class Arbitration, and FAA Preemption
Lots of interesting arbitration law has been made already in 2016, so here is a roundup from the first four weeks of the year. As a teaser, courts have breathed life into the effective vindication doctrine, found arbitrators cannot determine the availability of class actions, and found state laws not preempted. More surprisingly, state courts…
SCOTUS Slaps Sooners With Severability Doctrine
On Monday, the United States Supreme Court reminded the Oklahoma Supreme Court who is boss when it comes to the Federal Arbitration Act. In Nitro-Lift Technologies, LLC v. Howard, 2012 WL 5895686 (U.S. Nov. 26, 2012), SCOTUS declared “It is a matter of great importance [] that state supreme courts adhere to a correct…
A Hypothetical Illustrating The Thin Line Between Formation Challenges and Validity Challenges
Building off last post’s discussion of the Solymar case, and the surprisingly fuzzy line between challenges to the formation of contracts containing arbitration provisions and challenges to the validity of those contracts, here is a hypothetical for you to consider. (Why a hypothetical? Because it is spring break, and spring break reminds me of law…
Severability Squared: Can Invalid Provisions Within an Arbitration Agreement Be Severed?
Do you remember the moment when you first encountered the concept of arbitrating arbitrability? Just the phrase is mind-bending! It took me a while to wrap my head around the idea that parties could separately agree to arbitrate the question of whether they really had to arbitrate. Well, here’s a similar mind-bender: how does state…
Has The Parade of Predicted Horribles From Rent-A-Center Come To Pass?
Just over a year has passed since the U.S. Supreme Court applied the severability doctrine in Rent-A-Center, West Inc. v. Jackson, 130 S. Ct. 2772 (2010), in such a way that Justice Stevens and three others dissented, raising the specter of “infinite layers of severability” and a parade of arbitrability horribles. A review of…