Posts Tagged ‘Arbitrability’

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What does the Arbitration Fairness Act of 2009 Have to Say About Commercial and Industry Arbitration Involving Sophisticated Parties? (Part IIIC)

April 11th, 2009 Arbitrability, Authority of Arbitrators, Legislative Developments, United States Supreme Court 1 Comment »

Part IIIC:  Is the Narrow Construction Sustainable?

Introduction

In Part IIIB  (here) we discussed in general terms the “Narrow Construction” of the Arbitration Fairness Act of 2009 (the “Fairness Act”), which would limit the scope of Proposed Section 2(c) to situations where the party resisting arbitration claims that the arbitration agreement requires predispute arbitration of consumer, franchise, employment or statutory civil rights disputes.   We also set forth the five premises on which the Narrow Construction is based.  This Part IIIC addresses the validity of those premises.  [Because this post  frequently refers to Proposed Section 2 and its subsections, we have reproduced at the end the pertinent parts of Proposed Section 2.]

 The Narrow Construction is fairly complex.  A court choosing it would have to determine each of its five premises to be valid.  In addition, the validity of Premise 3 is interlinked to that of Premise 5:  Premise 3 is easier to accept when viewed without regard to Premise 5 and Premise 5 is harder to accept when viewed in isolation from Premise 3.  If a court believes that Premise 3 is reasonable, but has reservations about its validity, when it considers Premise 3 in conjunction with Premise 5, it may conclude that both are invalid.  But if it is confident that Premise 3 is valid, that confidence might lead it to conclude that Premise 5 is valid.  These are important considerations that a party advocating one construction or the other should take into account in structuring its argument.   Continue Reading »

Some Interesting Questions Raised by the Pyett Decision

April 7th, 2009 Arbitrability, Authority of Arbitrators, Legislative Developments, United States Supreme Court 4 Comments »

On April 4 we reported on 14 Penn Plaza LLC v. Pyett, ___ U.S. ___ (2009) (Thomas, J.) (available here), as did many others last week.  Professor Sarah Cole of the ADR Prof Blog  published a thoughtful and well-written piece on Pyett (available here), which raised some interesting questions.   For example, Professor Cole observed that “if the Arbitration Fairness Act passes, it would not surprise me to see a subsequent effort to overturn the Pyett decision.”   As discussed in a series of posts we are publishing on the Fairness Act (Part I available here), the Act would render arbitration agreements falling within the scope of the FAA invalid and unenforceable to the extent they require predispute arbitration of consumer, employment, franchise and statutory civil rights disputes.  Continue Reading »

What does the Arbitration Fairness Act of 2009 Have to Say About Commercial and Industry Arbitration Involving Sophisticated Parties? (Part IIIB)

April 6th, 2009 Arbitrability, Authority of Arbitrators, Legislative Developments Comments Off on What does the Arbitration Fairness Act of 2009 Have to Say About Commercial and Industry Arbitration Involving Sophisticated Parties? (Part IIIB)

Part IIIB:  Interpreting Proposed Section 2(c) Narrowly

Introduction

In Part IIIA we discussed what we call the “Broad Construction” of the Arbitration Fairness Act of 2009, and showed how the Act could be construed to abrogate in all commercial disputes:  (a) the doctrine of severability; and (b) deferential review under the Federal Arbitration Act (“FAA”) of arbitrator determinations of arbitrability in cases where the parties clearly and unmistakably submit arbitrability questions to the arbitrators (the “Own Jurisdiction Rule”).  In this Part IIIB and in Part IIIC we discuss the “Narrow Construction”, which would limit the scope of Proposed Section 2(c) to situations where the party resisting arbitration claims that the arbitration clause requires predispute arbitration of consumer, franchise, employment or statutory civil rights disputes.   Continue Reading »

14 Penn Plaza LLC v. Pyett: A Step Toward Bringing Federal Labor Law Arbitrability Rules in Line With Their FAA Counterparts?

April 4th, 2009 Arbitrability, Authority of Arbitrators, United States Supreme Court 2 Comments »

On April 1 the United States Supreme Court decided 14 Penn Plaza LLC v. Pyett, ___ U.S. ___ (2009) (Thomas, J.), an interesting case that highlights some of the differences between labor arbitration governed by the National  Labor Relations Act (“NLRA”) and arbitration governed by the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq. (the “FAA”).  The question before the Court was whether “a collective bargaining agreement that clearly and unmistakably requires union members to arbitrate [Age Discrimination in Employment Act (“ADEA”)] claims is enforceable as a matter of federal law.”  Slip op. at 25.  Reversing the United States Court of Appeals for the Second Circuit, the Court said “yes.”  See slip op. at 25.   Continue Reading »

What does the Arbitration Fairness Act of 2009 Have to Say About Commercial and Industry Arbitration Involving Sophisticated Parties? (Part II)

March 26th, 2009 Arbitrability, Legislative Developments Comments Off on What does the Arbitration Fairness Act of 2009 Have to Say About Commercial and Industry Arbitration Involving Sophisticated Parties? (Part II)

Part II:  Why the Fairness Act May Breed Litigation

In Part I of this multi-part post we provided some general background on the Fairness Act and said it was likely to generate litigation over the allocation of power between courts and arbitrators in commercial arbitration proceedings involving sophisticated, commercial entities.  In this Part II we briefly discuss why litigation will likely occur if the Fairness Act becomes law.  Continue Reading »

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