High Court Restricts Judges’ Role in Deciding Arbitration Fairness
National Law Journal—June 21st, 2010
Continuing a strong pro-arbitration bent, the U.S. Supreme Court on Monday made it more difficult for consumers and employees to challenge the fairness of arbitration agreements in court.
In Rent-A-Center, West v. Jackson, the justices divided, 5-4, in holding that an arbitrator, not a district court, will decide whether an arbitration agreement as a whole is unconscionable if the agreement explicitly delegates that issue to the arbitrator and the consumer or employee has failed to challenge the specific delegation clause.
“It greatly limits the ability of consumers and employees to challenge the fairness of arbitration agreements,” said Deepak Gupta of Public Citizen Litigation Group, co-counsel to Antonio Jackson, along with Public Justice and Ian Silverberg of Hardy & Associates in Reno, Nev., who argued the case.
“The kind of delegation clause at issue here is not a common clause, but we can expect those clauses to become much more common,” he said, adding, “The decision is very formalistic, imposing a kind of pleading requirement. If a consumer’s lawyer knows enough to challenge a specific part of the arbitration agreement, they can go to court.”
Read More: National Law Journal
