The interplay of the separability doctrine and delegation clauses can create a bullseye that only Hawkeye, the OG Avenger with a bow, might have a prayer of hitting. The Missouri Supreme Court provided a nice reminder about this problem in a recent case, State Ex Rel. Newberry v. Jackson, 2019 WL 2181859 (May 21,
validity
No Proof Blind Plaintiffs Aware Of Arbitration Clause, So Discrimination Class Action Proceeds In Court
The First Circuit just faced a fascinating formation issue: if a customer cannot see what she is signing, and no employee reads it to her or ensures she knows there are legal terms, is there a contract? With Justice Souter sitting by designation on the panel, the court answered “no,” and thereby kept a class…
Are Arbitration Agreements With Attorneys Unenforceable? Maine Says Yes (Mostly).
While I was busy writing deep thoughts about arbitration at the end of 2017 (see here and here), courts around the country rudely kept churning out new arbitration opinions. Hmph. So, I have some catching up to do. I start with one that has most captured my attention, Snow v. Bernstein, Shur, Sawyer &…
Fifth Circuit Dances On Head of Arbitration Pin
Demonstrating just how difficult it can be to separate questions about the “formation” of an arbitration agreement from the “validity” of that agreement, the Fifth Circuit found this month that when an argument was applied to two of the parties’ three agreements, it related to their formation, but when the same argument was applied to…
New Jersey Becomes Third Recent State Court to Refuse To Enforce Delegation Clause
In a decision that appears intentionally controversial, the Supreme Court of New Jersey yesterday refused to enforce the delegation clause in a for-profit college’s enrollment agreement in a 5-1 opinion. Morgan v. Sanford Brown Institute, 2016 WL 3248016 (N.J. June 14, 2016). Although the delegation clause had never been specifically challenged by the plaintiffs, as…
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…
Hawaii Finds Arbitration Agreement With "Severe Limitations on Discovery" is Unconscionable
Hawaii issued a bold arbitration decision this month. It applied its state contract law to conclude that the parties did not form a clear arbitration agreement, but even if they did, it was unconscionable because it prohibited both discovery and punitive damages. Narayan v. The Ritz-Carlton Dev. Co., Inc., __ P.3d __, 2015 WL…
Fifth Circuit Finds Parties Can Authorize Arbitrators By Their Conduct
The Fifth Circuit un-vacated an arbitration award last week, holding the district court had wrongly concluded that the court was the proper decision-maker on contract formation. Although courts are presumptively authorized to decide whether an arbitration agreement exists, the Fifth Circuit found the parties altered that presumption by “submitting, briefing, and generally disputing that issue…
2014: The Year of Arbitrator Authority
A lot of interesting arbitration law was made this year, on topics from validity to vacatur, but the banner issue was arbitrator authority. SCOTUS announced that theme for the year with its BG Group decision in March and federal and state courts around the country ran with it. [Warning: this post is a doozy. Get…
Appellate Courts Saving Arbitration Agreements Right and Left
In recent weeks, four federal and state appellate courts have vacated district court decisions that denied motions to compel arbitration. The courts seem to be saying to defendants with arbitration agreements: don’t worry if you lose in the trial court, we will be your Tim Howard and save you from the gaping jaws of litigation. …