Robby8900

New Supreme Court ruling

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@BV80 and @Robby8900 I offered my 2 cents in Fist's pinned arb thread back in Feb. Thoughts?

 

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On 2/10/2019 at 3:25 PM, Brotherskeeper said:

 

@fisthardcheese This new SCOTUS opinion, decided on Jan. 8, 2019, might offer some persuasive argument to use when the JDB raises its costs of arb when opposing a MTC. I've added emphasis to some text. I realize this case is about who decides threshold arbitrability--judge or arbitrator--and not about the cost per se of arbitration. What do you think? 

HENRY SCHEIN, INC. v. ARCHER & WHITE SALES, INC. 586 U. S. ____ (2019)

"We must interpret the Act as written, and the Act in turn requires that we interpret the contract as written. When the parties’ contract delegates the arbitrability question to an arbitrator, a court may not override the contract. In those circumstances, a court possesses no power to decide the arbitrability issue. That is true even if the court thinks that the argument that the arbitration agreement applies to a particular dispute is wholly groundless.

That conclusion follows not only from the text of the Act but also from precedent. We have held that a court may not “rule on the potential merits of the underlying” claim that is assigned by contract to an arbitrator, “even if it appears to the court to be frivolous.” AT&T Technologies, Inc. v. Communications Workers, 475 U. S. 643, 649–650 (1986). A court has “‘no business weighing the merits of the grievance’” because the “‘agreement is to submit all grievances to arbitration, not merely those which the court will deem meritorious.’” Id., at 650 (quoting Steelworkers v. American Mfg. Co., 363 U. S. 564, 568 (1960)). That AT&T Technologies principle applies with equal force to the threshold issue of arbitrability. Just as a court may not decide a merits question that the parties have delegated to an arbitrator, a court may not decide an arbitrability question that the parties have delegated to an arbitrator."

[snip]

Third, Archer and White says that, as a practical and policy matter, it would be a waste of the parties’ time and money to send the arbitrability question to an arbitrator if the argument for arbitration is wholly groundless. In cases like this, as Archer and White sees it, the arbitrator will inevitably conclude that the dispute is not arbitrable and then send the case back to the district court. So why waste the time and money? The short answer is that the Act contains no “wholly groundless” exception, and we may not engraft our own exceptions onto the statutory text. See Exxon Mobil Corp. v. Allapattah Services, Inc., 545 U. S. 546, 556−557 (2005).

[snip]

Fourth, Archer and White asserts another policy argument: that the “wholly groundless” exception is necessary to deter frivolous motions to compel arbitration. Again, we may not rewrite the statute simply to accommodate that policy concern. In any event, Archer and White overstates the potential problem. Arbitrators can efficiently dispose of frivolous cases by quickly ruling that a claim is not in fact arbitrable. And under certain circumstances, arbitrators may be able to respond to frivolous arguments for arbitration by imposing fee-shifting and cost-shifting sanctions, which in turn will help deter and remedy frivolous motions to compel arbitration. We are not aware that frivolous motions to compel arbitration have caused a substantial problem in those Circuits that have not recognized a “wholly groundless” exception. In sum, we reject the “wholly groundless” exception. The exception is inconsistent with the statutory text and with our precedent. It confuses the question of who decides arbitrability with the separate question of who prevails on arbitrability. When the parties’ contract delegates the arbitrability question to an arbitrator, the courts must respect the parties’ decision as embodied in the contract."

 

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As I stated in @Brotherskeeper's linked post above, I think this new ruling has some good arguments that can be used to also apply to the "too expensive" or "equity" argument some attorneys are now trying to make against arbitration.  The case above is not speaking directly of costs, but the same logic of "not able to add exclusions not written into the statute" should apply, IMO.

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I, believe, this is a good case to throw into a MTD as the courts lack jurisdiction to render judgment on the merits which must be submitted to a arbitrator to decide.

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