Arbitration: Court Cases

Supreme Court Decisions #

Shanferoke Coal & Supply Corp. v. Westchester Service Corp., 293 U.S. 449 (1935) #

One Line Summary: power to grant a stay is not conditioned on power to compel arbitration. Existence of arbitration agreement is an equitable defense.

Pull quote (From Majority)
We think the Court of Appeals was clearly right in concluding that there is no reason to imply that the power to grant a stay is conditioned upon the existence of power to compel arbitration in accordance with § 4 of the Act.

Wilko v. Swan, 346 U.S. 427 (1953) #

One Line Summary: The Securities Act overrides the Federal Arbitration Act (the judicial forum is a “a substantial right” and thus non-waivable).

Pull Quote (from majority):
Two policies, not easily reconcilable, are involved in this case. Congress has afforded participants in transactions subject to its legislative power an opportunity generally to secure prompt, economical and adequate solution of controversies through arbitration if the parties are willing to accept less certainty of legally correct adjustment. On the other hand, it has enacted the Securities Act to protect the rights of investors and has forbidden a waiver of any of those rights. Recognizing the advantages that prior agreements for arbitration may provide for the solution of commercial controversies, we decide that the intention of Congress concerning the sale of securities is better carried out by holding invalid such an agreement for arbitration of issues arising under the Act.

Bernhardt v. Polygraphic Co. 350 U.S. 198 (1956) #

TODO

Steelworkers v. Warrior & Gulf Co., 363 U.S. 574 (1960) #

This primarily relates to labor arbitration (e.g. collective arbitration agreement).

One Line Summary: Whether the decision to contract out work is strictly a function of management or is arbitral.

Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 US 395 (1967) #

Pull Quote:

a federal court may not consider a claim of fraud in the inducement of the contract generally, but “may consider only the issues relating to the making and performance of the agreement to arbitrate.” Pp. 388 U. S. 402-404.

Since the claim of fraud here relates to inducement of the consulting agreement generally, rather than in the arbitration clause, and there is no evidence that the parties intended to withhold this issue from arbitration, there is no basis for granting a stay under § 3. Pp. 388 U. S. 406-407.

Analysis #

Recognizing as “broad” a clause requiring arbitration of"[a]ny controversy or claim arising out of or relating to" the agreement Holding that if the making of the arbitration agreement is an issue “the federal court may proceed to adjudicate it”

Holding that contractual language “[a]ny controversy or claims arising out of or relating to this Agreement, or breach thereof” is “easily broad enough to encompass” claim for fraud in inducement of contract

The Prima Paint Court erred, however, in asserting that the FAA’s basis was “confined to” Congress’s interstate commerce and admiralty power. That assertion is flat out wrong: As we have seen, the legislative history shows that Congress placed primary reliance for enacting the FAA on its control over the procedures of the federal courts. 1

Alexander v. Gardner-Denver Company #

One Line Summary: arbitration of a discrimination claim as a grievance in labor union arbitration did not preclude the individual from later asserting the claim in court.

Scherk v. Alberto-Culver Company 417 US 506 (1974) #

Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1 (1983) #

One Line Summary: Established that the FAA applies to actions in state court and a policy of rapid and unobstructed enforcement of arbitration agreements.

Pull Quote (from majority):

Moses H Cone

…any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration…

…unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute…

Section 2 is a congressional declaration of a liberal federal policy favoring arbitration agreements, notwithstanding any state substantive or procedural policies to the contrary. The effect of the section is to create a body of federal substantive law of arbitrability, applicable to any arbitration agreement within the coverage of the act.

Interestingly this was a 6–3 decision, signed by all the liberal justices and to which the conservative justices—Justices Rehnquist, Burger, and O’Connor—dissented. 2

Southland Corp. v. Keating, 465 U.S. 1 (1984) #

One Line Summary: FAA applies to contracts under state law (due to congressional intent)

Core Claim (pull quote)
In enacting § 2 of the federal Act, Congress declared a national policy favoring arbitration and withdrew the power of the states to require a judicial forum for the resolution of claims that the contracting parties agreed to resolve by arbitration.

Analysis #

  1. Joshi, H. (2023). You Have Got to Be Keating Me: Why the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act Is a Good Start. 2023.
  2. Jacobs, B. L. (n.d.). Often Wrong, Never in Doubt: How Anti-Arbitration Expectancy Bias May Limit Access to Justice. ACCESS TO JUSTICE, 62.
  3. Dunham, K. F. (2009). Southland Corp. v. Keating Revisited: Twenty-Five Years in Which Direction. Charleston Law Review, 4, 331. https://heinonline.org/HOL/Page?handle=hein.journals/charlwrev4&id=335&div=&collection= (unread)
  4. Schwartz, D. (2004). Correcting Federalism Mistakes in Statutory Interpretation: The Supreme Court and the Federal Arbitration Act. Law and Contemporary Problems, 67(1), 5–54. https://scholarship.law.duke.edu/lcp/vol67/iss1/2

Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985) #

One Line Summary: Sherman act anti-trust claims arising from an international act are arbitrable.

Part of Mitsubishi trilogy which allowed arbitration to hear statutory claims.

Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213 (1985) #

TODO

Perry v. Thomas, 482 U.S. 483 (1987) #

TODO

Shearson/American Express Inc. v. McMahon, 482 U.S. 220 (1987) #

Part of Mitsubishi trilogy which allowed arbitration to hear statutory claims.

Rodriguez de Quijas v. Shearson/American Express Inc., 490 U.S. 477 (1989) #

Part of Mitsubishi trilogy which allowed arbitration to hear statutory claims.

Gilmer v. Interstate/Johnson Lane Corp. 500 U.S. 20 (1991) #

One Line Summary: An ADEA3 claim can be subjected to compulsory arbitration.

Mr. Gilmer, the Court held, would not be harmed by the agreed-upon switch to arbitration because his arbitrator would be bound to follow substantive federal age-discrimination law, and the procedures unilaterally set up by the employer to govern the arbitration proceedings were not unfair. There was no inequality of bargaining power, in part because Mr. Gilmer was an “experienced businessman”. 4

Pull Quote from Dissent (pg 42):

When the FAA was passed in 1925, I doubt that any legislator who voted for it expected it to apply to statutory claims, to form contracts between parties of unequal bargaining power, or to the arbitration of disputes arising out of the employment relationship. In recent years, however, the Court “has effectively rewritten the statute,” and abandoned its earlier view that statutory claims were not appropriate subjects for arbitration.

Analysis #

Gilmer takes the positive attributes of labor arbitration, involving institutional parties on both sides and procedural rules mutually negotiated by employers and unions, and apparently equates them with the entirely distinct mandatory-arbitration process. [feedagger]

First Options of Chicago v. Kaplan #

TODO

Allied-Bruce Terminix Cos. v. Dobson 513 US 265 (1995) #

One Line Summary: contracts requiring arbitration is applied to all disputes involving commerce even though it isn’t interstate

  • Court Opinion (Court Listener) (unread)
  • Oyez
  • Majority Author: Stephen G. Breyer (unread)
  • Concurrence: Sandra Day O’Connor (unread)
  • Dissents: Scalia, Clarence Thomas (unread)

Twenty state attorneys general as amici curiae argued that Southland should be overruled. 5

“I do not believe that proper application of stare decisis prevents correction of the mistake.”

— Justice Scalia, dissenting.

Doctor’s Associates, Inc. v. Casarotto, 517 U.S. 681 (1996) #

One Line Summary: The FAA must also inquire whether it singles out arbitration or treats arbitration provisions with ‘suspect status’

Pull Quote (from syllabus):
Montana’s first-page notice requirement, which governs not “any contract,” but specifically and solely contracts “subject to arbitration,” conflicts with the FAA and is therefore displaced by the federal meas- ure. Generally applicable contract defenses, such as fraud, duress, or unconscionability, may be applied to invalidate arbitration agreements without contravening § 2, see, e. g., Allied-Bruce, 513 U. S., at 281, but courts may not invalidate arbitration agreements under state laws applicable only to arbitration provisions

The Montana Supreme Court had two justices who refused to sign on to the order remanding the case from the Supreme Court of the United States to the state trial court. 6

Wright v. Universal Maritime Service Corp., 525 U.S. 70, 80-82 (1998) #

TODO

14 Penn Plaza LLC v. Pyett, 556 U.S. 247, 255 & n.4 (2009) #

TODO

Stolt-Nielsen S. A. v. AnimalFeeds Int’l Corp., 559 U.S. 662 (2010) #

TODO

Green Tree Financial Corp. v. Bazzle 539 U.S. at 444. #

One Line Summary: The question of whether a contract forbade class arbitration qualified as one of procedural arbitrability within an arbitrator’s adjudicative scope.

  • Court Opinion (unread)
  • Oyez
  • Plurality Author: Stephen G. Breyer
  • Concurrence: John Paul Stevens (in part)
  • Dissents: William H. Rehnquist, joined by Justices Sandra Day O’Connor and Anthony M. Kennedy

Green Tree Financial Corporation-Alabama v. Randolph, 531 US 79 (2000) #

One Line Summary: An arbitration agreement that is silent on arbitration costs and fees is not unenforceable

Circuit City v. Adams (2001) #

One Line Summary: Maxim of ejusdem generis7 applies to FAA exclusion of any other class of workers”. Legislative history was not relevant to interpreting the statute.

  • Oyez
  • Majority Author: Anthony M. Kennedy
  • Dissents: Stevens (joined by Ginsburg, Breyer) and Souter

Preston v. Ferrer, 552 U.S. 346 (2008) #

Buckeye Check Cashing, Inc. v. Cardegna, 546 US 440 (2006) #

One Line Summary: challenges to legality of contract with an arbitration clause must be determined by the arbitrator in the first instance.

  • Wikipedia
  • Oyez
  • Majority Author: Antonin Scalia
  • Dissents: Clarence Thomas

Granite Rock Co. v. International Brotherhood of Teamsters #

One Line Summary: the presumption that a dispute is arbitrable should only be applied where it derives legitimacy from, a judicial conclusion that arbitration is what the parties intended

  • Oyez
  • Majority Author: Clarence Thomas
  • Dissents: John Paul Stevens, Sonia Sotomayor

Rent-A-Center West v. Jackson, 561 US 63 (2010) #

One Line Summary: arbitrator will determine the enforceability of the agreement (as opposed to disputing existence of arbitration).

Hall Street Associates, L.L.C. v. Mattel, Inc., 552 US 576 (2008) #

One Line Summary: FAA is exclusive and contract can’t expand scope of review to the judiciary

Pull Quote:

But whatever the consequences of our holding, the statutory text gives us no business to expand the statutory grounds

The footnotes are also interesting since they give more history as to the federal statute.

AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011) #

Core Question: does FAA preempt state law on enforcement of arbitration on availability of class-wide relief

Pull Quote (from syllabus):

Because it “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress,” Hines v. Davidowitz, 312 U. S. 52, 67, California’s Discover Bank rule is preempted by the FAA. Pp. 4–18

Marmet Health Care Center, Inc. v. Brown, 565 U.S. 530 (2012) #

TODO

American Express Co. v. Italian Colors Restaurant, 570 US 228 (2013) #

One Line Summary: The FAA does not permit courts to invalidate clauses that mandate individual arbitration

Epic Sys. Corp. v. Lewis, No. 16-285, 2018 WL 2292444, at *26 (2018) #

Core Finding: Section 7 (29 U.S. Code Chapter §7) of the NLRA does not conflict or supersede FAA arbitration. Such waivers are enforceable.

Pull Quote

As a matter of policy these questions are surely debatable. But as a matter of law the answer is clear. Congress has instructed federal courts to enforce arbitration agreements according to their terms—including terms providing for individualized proceedings.

Consolidated with: Ernst & Young LLP v. Morris and National Labor Relations Board v. Murphy Oil USA, Inc.

Kindred Nursing Ctrs. Ltd. P’ship v. Clark, 137 S. Ct. 1421 (2017). #

The Kentucky Supreme Court determined that individuals holding power of attorney for another cannot enter into mandatory arbitration agreements. Because the Kentucky Supreme Court singled out arbitration contracts, The United States Supreme Court reasoned that the decision conflicted with the FAA and thus could not stand

One Line Summary: The FAA preempts any state rule discriminating on its face against arbitration

Ernst & Young LLP v. Morris (Docket 16-300) (2018) #

NLRA did not override FAA.

  • Related to Epic Systems Corp. v. Lewis
  • Related to National Labor Relations Board v. Murphy Oil USA, Inc.

17-988 Lamps Plus, Inc. V. Varela (2019). #

Under the Federal Arbitration Act (FAA), an arbitration agreement that is ambiguous as to the availability of class arbitration does not manifest sufficient consent by the parties to submit to class arbitration. In a 5-4 opinion authored by Chief Justice John Roberts, the Court held that the arbitration agreement between Varela and his employer, Lamps Plus, which contained only general language commonly used in arbitration agreements, did not provide the necessary contractual basis for compelling class arbitration.

17-340 New Prime Inc. V. Oliveira (01/15/2019), (Supreme Court 2019) #

One Line Summary: The court decides if FAA applies. 9 U.S. Code §1 exemptions apply to “agreements to perform work” not just employment agreements.

Henry Schein, Inc. v. Archer & White Sales, Inc., 586 U.S. (2019) #

One Line Summary: when the parties’ contract delegates the arbitrability question to an arbitrator, a court may not override the contract.

Southwest Airlines Co. v. Saxon, 142 S. Ct. 1783 (2022) #

One Line Summary: employees who are “physically loading cargo directly on and off an airplane headed out of State” are within 9 U.S. Code §1 exemption

Viking River Cruises, Inc. v. Moriana, 20-1573 (2022) #

Core Issue (pull quote)

whether the Federal Arbitration Act, 9 U. S. C. §1 et seq., preempts a rule of California law that invalidates contractual waivers of the right to assert representative claims under California’s Labor Code Private Attorneys General Act of 2004, Cal. Lab. Code §2698 et seq he FAA preempts the rule of Iskanian insofar as it precludes division of PAGA actions into individual and non-individual claims through an agreement to arbitrate. Pp. 7–21. Decision: https://www.supremecourt.gov/opinions/21pdf/20-1573_8p6h.pdf

The court also predicted what the california courts would rule in a similar case (alolf) SCOTUS predicting Adolph

Coinbase v. Bielski, 599 U.S. ___ (2023) #

One Line Summary: In federal courts - a pending interlocutory appeal of a motion to compel requires staying court proceedings

Argent Trust Company v. Harrison 23-30 (pending petition) #

Issue: Whether a participant in a plan governed by the Employee Retirement Income Security Act who asserts statutory claims under that statute can be compelled, pursuant to a binding arbitration provision, to submit his claims to individual arbitration.

New Prime Inc. v. Oliveira 139 S. Ct. 532 (2019) #

Bissonnette v. LePage Bakeries Park St., LLC #

Petition For A Writ Of Certiorari - question to be presented
Presented Question: To be exempt from the Federal Arbitration Act, must a class of workers that is actively engaged in interstate transportation also be employed by a company in the transportation industry?
Decision - Pull Quote
A transportation worker need not work in the transportation industry to fall within the exemption from the FAA provided by §1 of the Act

Oxford Health Plans LLC v. Sutter, 133 S. Ct. 2064, 2071 (2013) #

TODO

DIRECTV, Inc. v. Imburgia, 136 S. Ct. 463, 464 (2015). #

One Line Summary: Explicit statement about governance by “Federal Arbitration Act” overrides statement that the entire arbitration provision was unenforceable if the “law of your state” made class-arbitration waivers unenforceable.

ScotusBlog

Badgerow v. Walters 596 US _ (2022) #

One Line Summary: Federal courts do not have subject matter jurisdiction to confirm or vacate an arbitration award under section 4.

Oyez

Morgan v. Sundance, Inc. 596 US _ (2022) #

One Line Summary: courts cannot create arbitration-specific procedural rules

Core Claim (pull quote):

This Court granted certiorari to resolve the split over whether federal courts may adopt an arbitration-specific waiver rule demanding a showing of prejudice. Held: ….erred in conditioning a waiver of the right to arbitrate on a showing of prejudice. The text of the FAA makes clear that courts are not to create arbitration-specific procedural rules …

Analysis #

See Rosencrants for detailed analysis.

National Labor Relations Board v. Murphy Oil USA, Inc. #

One Line Summary: TODO

  • Wikipedia: TODO (unread)
  • Court Opinion (Court Listener): TODO (unread)
  • Court Opinion (pdf): TODO (unread)
  • Oyez: TODO (unread)
  • Majority Author: TODO (unread)
  • Concurrence: TODO (unread)
  • Dissents: TODO (unread)

Pull Quote (from TODO ):

TODO

Bissonnette v. LePage Bakeries Park St., LLC (2023) #

Smith v. Spizzirri, U.S., No. 22-1218 (2024) #

One Line Summary: Whether 9 U.S.C. § 3 requires the court to stay a lawsuit pending arbitration or if they have discretion to dismiss.

Coinbase, Inc. v. Suski #

One Line Summary: If a second contract is silent but the parties already have an existing contract, the court decides if the second contract is subject to arbitration.

SCOTUSBlog Case File SCOTUSBlog Explanation

Non Supreme Court Federal Cases #

California Supreme Court Cases #

Adolph v. Uber Techs., Inc., No. S274671, 2023 WL 4553702 (Cal. July 17, 2023) #

California Non-Supreme Court Cases #

Ochoa v. Ford Motor Co. (In re Ford Motor Warranty Cases) #

Quote: “FMC could not compel arbitration based on plaintiffs’ agreements with the dealers that sold them the vehicles. Equitable estoppel does not apply because, contrary to FMC’s arguments, plaintiffs’ claims against it in no way rely on the agreements.”

District Court Cases #

Parm v. Nat’l Bank of Cal., N.A., 835 F.3d 1331 #

TODO

INETIANBOR v. CASHCALL INC (2014) #

TODO

Parnell v. Cashcall, Inc. #

TODO

Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Bobker, 636 F. Supp. 444 (S.D.N.Y. 1986) #

Defines manifest disregard for the law (in the 2nd circuit)

Engalla v. Permanente Medical Group, Inc. 43 Cal. Rptr. 2d 621 (Cal. Ct. App. 1995) #

TODO

In re: TikTok Inc. Consumer Privacy Litigation, Case No. 1:20-cv-04699 #

TODO

Abernathy v. DoorDash, Inc., 438 F. Supp. 3d 1062 #

One Line Summary: mass arbitration is not sufficient to get out of arbitration agreement

TODO

Zenia Chavarria v. Ralphs Grocery Company, 733 F.3d 916 (9th Cir. 2013) #

TODO Pull Quote (from syllabus):

Pull Quote (from syllabus):

The policy was procedurally unconscionable because it was a condition of applying for employment and was presented on a “take it or leave it” basis. In addition, its terms were not provided to the plaintiff until three weeks after she had agreed to be bound by it. Specifically, the policy’s arbitrator selection process would always produce an arbitrator proposed by the defendant in employee-initiated arbitration proceedings; the policy precluded institutional arbitration administrators, which have established rules and procedures to select a neutral arbitrator; and the policy’s arbitrator-fee-apportionment provision would have the effect of pricing employees out of the dispute resolution process

Armstrong v. Michaels Stores, Inc., 59 F.4 th 1101, 1014 (9th Cir. Feb. 13, 2023). #

Morgan teaches that there is no strong federal policy favoring enforcement of arbitration agreements.

Analysis #

TODO

Richards v. Ernst & Young, LLP, 11-17530, 2013 WL 4437601 (9th Cir. Aug. 21, 2013). #

TODO
  • Status: Effectively Reversed by Morgan 9 TODO

Harrison v. Envision Holding Management Inc. Board of Directors, et al., No. 22-1098 (United States Court of Appeals for the Tenth Circuit). (2023) #

Pull Quote:

by prohibiting a claimant such as Harrison from obtaining any form of relief that would benefit anyone other than himself, prevents the effective vindication of the statutory remedies outlined in § 1132(a)(2). In other words, the effect of Section 21 of the Plan, if enforced, would be that participant/claimants such as Harrison would be left without any guarantee that a suit seeking the statutory remedies set forth in § 1132(a)(2) would ever be filed by the DOL (and, in turn, that those statutory remedies would ever be available).

arb that precludes ERISA plan-wide relief under Section 502(a) not enforceable TODO

Ting v. AT & T, 182 F. Supp. 2d 902 (N.D. Cal. 2002) #

TODO

Espin v. Citibank, N.A. (E.D.N.C.) #

  • Statement Of Interest Of The United States Of America

    Section 4042(a)(3) allows plaintiffs in this case to participate in an SCRA class action in federal court notwithstanding their previous agreement to individual arbitration, regardless of when the SCRA violations are alleged to have occurred. The United States respectfully urges the Court to deny Defendant Citibank, N.A.’s motion to compel arbitration of the SCRA claims.

  • Order on Motion To Compel Arbitration

Writ of Certiorari #

HomeServices of America, Inc., et al., Petitioners v. Scott Burnett, et al. #

Status: Certiorari rejected

California #

In re Uber Technologies Wage and Hour Cases #

Status: Certiorari rejected

One Liner: The People and the Labor Commissioner are not parties to those arbitration agreements.

Footnotes #

  1. Schwartz Supra pp 36 5 ↩︎

  2. Stone, K. V. W. (2023). Arbitration—From Sacred Cow to Golden Calf: Three Phases in the History of the Federal Arbitration Act. 23. pp 126 ↩︎

  3. The Age Discrimination in Employment Act of 1967 ↩︎

  4. Reginald Alleyne. (2003). Arbitrators’ Fees: The Dagger in the Heart of Mandatory Arbitration for Statutory Discrimination Claims. 6. ↩︎

  5. Schwartz, D. (2004). Correcting Federalism Mistakes in Statutory Interpretation: The Supreme Court and the Federal Arbitration Act. Law and Contemporary Problems, 67(1), 5–54. https://scholarship.law.duke.edu/lcp/vol67/iss1/2 pp 10 ↩︎ ↩︎

  6. Reuben, R. C. (1996). Western Showdown: Two Montana judges buck the U.S. Supreme Court. ABA Journal, 82(10), 16–16. https://www.jstor.org/stable/27839725 ↩︎

  7. Rules of Statutory Construction and Interpretation §16 ↩︎

  8. Justice SCALIA joins all but footnote 7 of this opinion. ↩︎

  9. Need to double check this. ↩︎

June 23, 2024
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