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Arbitration > Important Rules (Misc) > Flashcards

Important Rules (Misc) Flashcards

1
Q

2 Questions when determine if a Federal Statute Precludes Arbitration:

A

1) Does text or legislative history show intent to preclude arbitration?

2) Does application of the FAA frustrate the fundamental purpose of the Act?

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2
Q

What claims CAN be arbitrated (non-exhaustive list) 4 things:

A

Securities Claims

Rico Claims

ADEA Claims

Antitrust Claims (probably)

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3
Q

Arbitrability: What will Courts determine?

A

Courts determine GATEWAY issues like SCOPE and VALIDITY…UNLESS those powers are CLEARLY DELEGATED to the ARBITRATOR.

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4
Q

Arbitrability: What will arbitrators hear and rule on?

A

An arbitrator will hear and rule on:

Issues of procedural arbitrability that go to the merits of the case.

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5
Q

Challenges: What is ALWAYS determined by the Court?

A

Contract formation defenses like assent, consideration, and agency.

(all non-party issues)

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6
Q

Challenges: What will be determined by the court when a DELEGATION clause is present?

A

Court will determine if the delegation clause itself is invalid (scope issue) OR if there is no clear and unmistakable intent with the arbitration clause.

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7
Q

Challenges: How does one attack the delegation clause for it to be heard by the court?

A

The delegation clause must be specifically attacked. Merely attacking the arbitration agreement is not enough.

Very hard to do.

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8
Q

Challenges: What will be determined by the court if there is NO DELEGATION clause?

A

Will determine:

Scope of the arbitration agreement (if the agreement covers the particular claim)

If the arbitration agreement violates state or federal law.

(arbitration agreement itself may be attacked).

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9
Q

Challenges: What will ALWAYS be DETERMINED by the ARBITRATOR?

A

Will determine:

If a defense to the enforcement of the contract as a whole is applicable.

(Violates state law, fraudulent inducement, unconscionability of the contract)

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10
Q

What is Alternative Dispute Resolution (ADR)?

A

Ways cases may be decided other than by a judge or trial motion.

Like arbitration.

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11
Q

How does the FAA enforce arbitration?

A

Contracts involving commerce are enforceable and the courts can compel arbitration and appoint arbitrators.

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12
Q

For the FAA to apply, what is needed?

A

Federal Jurisdiction

Like diversity and federal question

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13
Q

What is diversity jurisdiction?

A

2 parties in 2 different places (no “look through”)

Amounts over $75k (“look through” present)

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14
Q

What is Federal Question Jurisdiction?

A

When a state law claim is preempted by federal law (look at whole controversy)

A motion to compel is not enough—court must look at underlying dispute.

Federal Question does not include counterclaims or responsive pleadings.

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15
Q

The FAA reaches to the ____ extent of the ____________ clause.

A

full ; commerce

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16
Q

Rule on how the FAA effects cases moving up to federal courts?

A

The FAA being involved does not mean things easily move up to federal courts (even when an issue is present with a specific section of the FAA)

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17
Q

FAA or State law: what does “Bernhardt: establish?

A

If the contract falls OUTSIDE the scope of the FAA, then STATE LAW on pre-dispute ARBITRATION all apply.

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18
Q

Does the FAA have a preemption provision per se?

A

NO

The FAA has not preemption provision…but the Supremacy clause does.

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19
Q

Supremacy Clause?

A

Federal law is supreme to state law when the laws are in dispute.

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20
Q

What happens if there is preemption present from the supremacy clause?

A

If the supremacy clause preempts state law, then the FAA will apply.

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21
Q

Example of a state law that is preempted by the FAA?

A

Laws which invalidate arbitration agreements.

Categorical rules prohibiting the arbitration of certain claims are also preempted.

Any laws that put arbitration OUTSIDE the footing of regular contract law are preempted.

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22
Q

State law preempted by the FAA (generallY)

A

The FAA preempts state law that has a disproportionate impact on arbitration agreements.

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23
Q

What if the FAA does not govern the arbitration agreement and the claim is in federal court?

A

if the FAA does not govern the agreement, state laws regarding arbitration WILL APPLY in federal court.

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24
Q

Unconscionability: What makes an arbitration clause or agreement unconscionable?

A

Procedural and Substantive unconscionability must both be present.

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25
Q

Unconscionability: What is Procedural Unconscionability?

A

Inequities in the bargaining process, like when the contract was adhesive or there was a discrepancy in bargaining power.

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26
Q

Unconscionability: What is Substantive Unconscionability?

A

Unfairness of a contract term, or one-sidedness of a contract.

Meaning, the provision at issue is so unexpected or unfair that any party who COULD negotiate would NOT have AGREED.

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27
Q

Enforceability: Which case was overturned?

A

Wilko

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28
Q

Enforceability: Scherk rule:

A

Not enforcing the agreement would frustrate an international agreement.

(Here, what forum governs)

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29
Q

Enforceability: Dean Witter Reynolds rule:

A

State law claims have to be arbitrated even if another claim does not.

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30
Q

Enforceability: General Rule:

A

If one claim is arbitrable, and the other is not, the court must still compel arbitration of the arbitrable claim.

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31
Q

FAA §10 Court can vacate award because: 4 things

A

1) Award was procured by corruption, fraud, or undue means;

2) The arbitrator was corrupt

3) Arbitrators guilty of misconduct

4) the Arbitrators exceed their power.

32
Q

FAA §10: Mitsubishi Rule:

A

If a statutory claim arises out of a contract, then there is no assumption arbitration is not valid

UNLESS

Congress intended that a particular statutory claim IS NOT arbitrable.

33
Q

FAA §10: Shearson/AMEX Rule:

A

The Securities Exchange Act and RICO claims DO NOT preclude arbitration.

34
Q

FAA §10: Rodriguez de QuiJas Rule:

A

Congress must be explicit if it intended for claims filed under a particular act to override the FAA.

35
Q

FAA §10: Rule: The FAA trumps unless…

A

The FAA trumps unless there is a discernible intent that Congress did not want these cases to be preempted from pre-arbitration agreements.

36
Q

2 common arguments as to why arbitration is Unenforceable:

A

1) State law exists making certain arbitration unenforceable (PREEMPTED)

2) Any state law that has an additional requirement to arbitrate an agreement (PREEMPTED)

37
Q

Which cases (unsuccessfully) try to use the “Inherent Purpose” Test?

A

Gilmer
CompuCredit
Epic Systems

38
Q

What to look at when determine arbitrability? (4 things):

A

Validity
Scope
Procedural
Scope

39
Q

Validity: What to ask?

A

Asks if the agreement to arbitrate is valid

(no violations or conflicts, enforceable in contract law)

40
Q

Scope: What to ask? 2 things:

A

Does the agreement cover this dispute?
Did the parties agree?

41
Q

Procedural: What to ask? 2 things:

A

Are the prerequisites met?

Has the right to arbitrate already been waived?

42
Q

Scope: What to determine?

A

Determine what the parties agreed to arbitrate (in light of a strong federal policy favoring arbitration)

43
Q

What is the standard for a Delegation clause?

A

Kaplan: Must be “clear and unmistakeable” evidence (intent) that the parties intended for an arbitrator to determine arbitrability.

44
Q

General Rule on Consent/Assent to arbitration?

A

The same state laws which govern assent in contract law govern arbitration.

45
Q

What 3 ways do non-parties to an arbitration agreement get pulled in?

A

1) Binding a non-signatory to arbitration/agency law principles

2) Equitable Estoppel

3) Claim is so inexplicably intertwined that it joins.

46
Q

5 very general ways non-signories get involved:

A

1) Incorporation by Reference
2) Assumption
3) Agency
4) Veil pricing/ alter ego
5) Estoppel

47
Q

general rule on compelling a non-signatory into arbitration?

A

It is harder for a signatory to compel a non-signatory into arbitration.

48
Q

Which theory pulling a non-signatory into arbitration is heavily tested?

A

Estoppel

49
Q

Estoppel: 2 general rules:

A

1) The party avoiding arbitration is exploiting the agreement

2) The claims are intimately founded in and intertwined with the contract containing the arbitration agreement.

50
Q

What is the Separability Doctrine?

A

Arbitration agreements are separable from the remainder of the contract.

51
Q

Who would determine of the plaintiff ever signed a contract? (court or arbitrator)

A

Court

52
Q

How can a party (who does not want to arbitrate) attack an arbitration provision?

A

May be able to attack due to specific provision like mutuality, limited damages, fee-shifting provisions, or a biased arbitrator.

53
Q

If a party attacks an arbitration provision what would it generally be (1 or 2 things)

A

The arbitration provision is unconscionable.

The arbitration provision keeps one from effectively vindicating their rights.

54
Q

Armendariz: What requirements must be met for an arbitration agreement to be enforceable in an adhesive contract?

A

Must allow a party to vindicate their statutory rights:

Neutrality of arbitrator

Allowance for adequate recovery

Limitations on costs.

55
Q

Will an arbitration agreement be enforceable/unenforceable if it is unilateral in nature (only one party bound)?

A

Unenforceable under Armendariz

56
Q

If the terms of an arbitration agreement are beyond the reasonable expectation of the adhering party, will that arbitration agreement be enforceable/unenforceable?

A

Unenforceable under Broemmer

57
Q

If unfair provisions are present does it automatically make an arbitration agreement unenforceable?

A

No, if the parties are in positions of equal bargaining power it does not matter if there are unfair provisions.

58
Q

Who has to show arbitration is prohibitively expensive?

A

The plaintiff. (Green Tree)

59
Q

Cost Sharing Provisions: Rule from Circuit City Stores:

A

A case by case approach was adopted to determine if cost was too high to enforce.

60
Q

Cost Sharing Provisions: Rule from Morrison

A

There is a Per se BAN on cost splitting.

61
Q

Waiver: If a defendant failed to timely raise a demand which would cause plaintiff substantial costs that defended has ___________ arbitration.

A

Waived (Zuckerman)

62
Q

Waiver: 3 factors Sundance establishes for waiver:

A

Party waives right if:

1) It know of an existing right to arbitration

2) Acted inconsistently with that right

3) Prejudiced the other party through inconsistent acts.

63
Q

Waiver: Sundance generally:

A

Waiver generally requires knowledge of the right to arbitration and actions inconsistent with that right.

64
Q

What is an adhesive contract?

A

Terms are set by one party and the other party has little to no negotiation power in the contract.

65
Q

What type of issue is class action arbitration?

A

gateway

66
Q

When an agreement is silent on class action who make the decision.

A

Supreme Court has states that the arbitrator decides if class action is allowed (under Bazzle)

Conception and Lamps Plus disagree

67
Q

The FAA preempts holdings that class action waivers are ___________.

A

Unconscionable

68
Q

What must you have to move to vacate an arbitration award?

A

You must have federal question or diversity jurisdiction.

69
Q

Where are more motions to vacate filed? (state or federal?)

A

State courts.

70
Q

The standard for vacating is very ______ and requires _____________ proof.

A

high, affirmative

71
Q

When does a court have federal question jurisdiction over a motion to vacate?

A

A court only has federal question jurisdiction if the motion itself raises a federal question. (disagreement with FAA and state law)

72
Q

How to determine if someone has diversity jurisdiction for a motion to vacate?

A

Different parties on the motion.

Amount in controversy found in the amount of the award, amount sought in arbitration, and amount sought if asked to reopen arbitration.

73
Q

Difference in federal question JX and diversity JX for motions to compel v. motions to vacate?

A

We only “LOOK THROUGH” for motions to compel.

74
Q

On a motion to vacate it is ___________ to overturn on an argument of bias from the arbitrator.

A

difficult

75
Q

Can you add in contract more reasons to vacate an arbitration award?

A

No, the court held in Hall Street Associates v. Mattel that parties cannot contract around (including expand) Section 10 and 11’s reasons for vacating.

76
Q

What is the test for manifest disregard?

A

There is an applicable legal prinicple clearly defined and not subject to debate

AND

the arbitrator refused to follow it.

77
Q

Does using manifest disregard of the law apply everywhere as a valid vacated measure?

A

No, there is a circuit split.

Arbitration (1 decks)

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