Arbitration Unconscionability Comes to the Supreme Court (Web)

The U.S. Supreme Court on Friday agreed to hear a case that could determine the limits of arbitration unconscionability.

The docket for Rent-A-Center, West Inc. v. Jackson, No. 09-497, can be found here.

The petitioner, a loan company and furnishings retailer that leases furniture, appliances and electronic equipment (for information, go here), asked the Court to decide whether a federal district court is “in all cases required to determine claims that an arbitration agreement subject to the Federal Arbitration Act . . . is unconscionable, even when the parties to the contract have clearly and unmistakably assigned this ‘gateway’ issue to the arbitrator for decision.”

The case is expected to be argued be before the term ends in June: The Court set a Feb. 23 deadline for petitioners’ briefs, and a March 25 deadline for respondent’s reply.

The case is expected to be argued be before the term ends in June: The Court set a Feb. 23 deadline for petitioners’ briefs, and a March 25 deadline for respondent’s reply.

The matter is an employment case; Rent-a-Center says that the Ninth Circuit acknowledged that the agreement the petitioner sought to arbitrate “clearly and unmistakably assigned the question of contract validity to the arbitrator.”

“However,” the Rent-a-Center brief continues, “in reversing the order to arbitrate, the court held that the mere allegation that an arbitration agreement is unconscionable required the district court, and not the arbitrator, to determine that issue, notwithstanding the parties’ express agreement to the contrary.” (Emphasis is the petitioner’s.)

Scotusblog has links to the Ninth U.S. Circuit Court opinion in the matter as well as the briefs and an amicus filing, here.

Philip J. Loree Jr. has an excellent analysis on his blog, here.

–Russ Bleemer, Editor, Alternatives