Arbitration is meant to be an alternate to litigation. Yet arbitration is itself the subject of much litigation over who must arbitrate, what must be arbitrated, whether and how the arbitration should proceed, and the deference courts must show to arbitration awards. This blog is intended to be a resource for litigators, in-house counsel, arbitrators and anyone else who wants to stay on top of the many thorny issues that arise under the Federal Arbitration Act. Our Bloggers →

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SCOTUS’s Arbitration Docket Contracts

The actual and potential arbitration docket at the Supreme Court contracted in the last week due to three events.

First, SCOTUS made quick work of an appeal from the Hawaii Supreme Court.  Remember when I predicted that the DIRECTV case was going to make it even harder for state courts to find arbitration agreements unenforceable under state law?  Well, that must have been exactly the point.  Because less than a month later, on Jan. 11, SCOTUS granted cert, vacated, and then remanded this series of decisions from the Hawaii Supreme Court.  What helpful instructions did SCOTUS offer to Hawaii’s highest court?  Just this: “further consideration in light of DIRECTV, Inc. v. Imburgia, 577 U.S. __ (2015).”  If history is any guide (see West Virginia, and Missouri), Hawaii will find a safer basis to uphold its initial decision.  That is especially likely in this case, since Hawaii hedged its bets from the get-go, by identifying two bases for not enforcing the arbitration agreement: there was no arbitration agreement; and, if there was, it was unconscionable.

Second, a pending arbitration matter, scheduled to be argued at SCOTUS just next month, settled. It was the California case about whether invalid aspects of an arbitration agreement should be severed.  But, the parties resolved the matter after DIRECTV.

Finally, SCOTUS denied cert in a Texas arbitration decision this week.

What’s still left?  Well, I know of at least one petition in an arbitration case that will be conferenced in coming weeks.  It is this case from West Virginia, a state with a history of bucking the federal arbitration system.  Surely you remember this memorable decision, where the West Virginia Supreme Court called SCOTUS’s arbitration precedent  “absurd” and an “ivory-tower interpretation of the FAA”??!  West Virginia basically invited the same GVR treatment as Hawaii.

Post Script (added 1/15/16): A reader informed me of an interesting second petition for cert in an arbitration case.  In the franchise context, the case presents the question of whether a state can require franchisors to include an addendum to their franchise agreement that negates the arbitration clause in that franchise agreement without running afoul of the FAA.

**Thanks to Mark Kantor and Karl Bayer for being the first to alert me to some of these events.

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