The Supreme Court of the United States recently concluded that Kentucky’s “clear-statement” rule violates the Federal Arbitration Act (FAA) by singling out arbitration agreements and treating them differently from other contracts. The Kentucky Supreme Court had held that the arbitration agreements at issue were invalid because the individuals who entered into the agreements did so under a power of attorney, and the powers of attorney at issue did not specifically entitle the representatives to enter into an arbitration agreement. The Kentucky Supreme Court reasoned that, because the Kentucky Constitution declares the rights of access to the courts and trial by jury…
Posts tagged as “arbitration”
The U.S. Court of Appeals for the Fourth Circuit held that a creditor’s arbitration agreement contained unenforceable choice of law provisions rendering the entire agreement unenforceable. Accordingly, the Fourth Circuit affirmed the trial court’s order denying the creditor’s motion to compel arbitration. A copy of the opinion in James Dillon v. BMO Harris Bank, N.A. is available at: Link to Opinion. The borrower applied for and received a “payday loan” through the lender’s website. The lender was wholly owned by a Native American tribe. To complete the loan transaction, the borrower was required to sign an agreement containing a choice…
The Court of Appeals of Maryland, the state’s highest court, recently held that a debt collector waived its contractual right to arbitrate the claims against it when it chose to litigate the collection action outside of arbitration. The Court also held that a finding of prejudice was not required under Maryland law to find waiver of the right to arbitrate. A copy of the opinion in Cain v. Midland Funding, LLC is available at: Link to Opinion. A consumer opened a credit card account in 2003. The account agreement contained an arbitration provision that permitted either party to elect mandatory,…
The U.S. Court of Appeals for the Second Circuit recently confirmed that, in the Second Circuit, an arbitration agreement is no longer binding where the intent of the parties was to arbitrate with only a specific arbitrator and that arbitrator is unavailable. A copy of the opinion in Moss v. First Premier Bank is available at: Link to Opinion. The borrower took out payday loans from an online payday lender. The payday lender relied on banks to serve as middlemen to debit the customer’s account. Two banks each debited the borrower’s account for one payday loan. When the borrower applied for…
The U.S. Court of Appeals for the Eleventh Circuit recently held that a party challenging an arbitration agreement containing a delegation clause – requiring threshold determinations, such as whether an arbitration agreement is enforceable, to be made by an arbitrator – must challenge the delegation clause specifically, and not simply the agreement as a whole. A copy of the opinion is available at: Link to Opinion. The plaintiff, a Georgia resident, responded to a television advertisement for short-term loans by applying for the $1,000 loan using his computer. The lender was a South Dakota limited liability company located on Indian…