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February 10, 2021 Practice Points

Supreme Court Denies Cert re Competence-Competence Provision

It was yet another case where the Court held such a provision is a clear and unmistakable standard for determining if the parties had allocated who decides authority over arbitrability issues to the arbitrator.

By Mark Kantor

The U.S. Supreme Court recently denied certiorari in Piersing v. Domino’s Pizza Franchising LLC, Case No. 20-695, yet another case in which the courts have held that a “competence-competence” provision in the chosen arbitration rules satisfies the “clear and unmistakable” standard set out in First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995), for determining if the contract parties had allocated “who decides” authority over arbitrability issues to the arbitrator. 

Of the 12 U.S. Circuit Courts of Appeal, the First, Second, Third, Fourth, Fifth, Sixth, Eighth, Ninth, Tenth, Eleventh, and Federal Circuit Courts of Appeal have all held that agreeing to arbitrate under arbitration rules that permit arbitrators to rule on their own jurisdiction constitutes "clear and unmistakable evidence" allocating that authority to the arbitral tribunal under the First Options test. Only the Seventh Circuit has not yet addressed the issue. See Blanton v. Domino’s Pizza Franchising LLC, Case No. 19-2388, 2020 U.S. App. LEXIS 18975 at *7 (6th Cir. June 17, 2020).

The Court had previously declined to take up the question when originally granting in limited form the certiorari petition in Henry Schein II. That petition was dismissed January 25, 2021, as improvidently granted more than a month after oral argument.

One might conclude that the Court has now clearly signaled its lack of interest in this question in light of the appeals courts’ unanimity, despite the contrary views of some scholars and the ALI’s Restatement of the U.S. Law of International Commercial and Investor-State Arbitration.

Mark Kantor is a member of the College of Commercial Arbitrators in Washington, D.C.

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