November 20, 2012 Articles

Post-Concepcion Push-Back: Challenges to Arbitration

Throughout the history of the Federal Arbitration Act, courts have struggled with scope of jurisdiction and discretion to determine the validity and enforceability of arbitration clauses.

By Peter J. Korneffel and Kathryn R. DeBord

Throughout the history of the Federal Arbitration Act (FAA), courts have struggled with the scope of their jurisdiction and discretion to determine the validity and enforceability of an arbitration clause. With the most recent edicts handed down by the Supreme Court in the 2010–2011 term, culminating in AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011), a court’s discretion is undoubtedly limited under the FAA. The analysis, which is cloaked in the presumption that the arbitration clause is valid, seems to boil down to three primary questions:

First, is the challenge directed specifically to the making of the arbitration clause, or does it relate to the underlying contract (the “container contract”), such that the challenge goes to the arbitrator, not to the court, pursuant to the so-called “separability doctrine”?

Second, if the challenge indeed is directed specifically to the making of the arbitration clause, are there any valid state law contract defenses to the formation of the arbitration agreement?

Third, if state law contract defenses are available, do those defenses discriminate against or have a disproportionate impact on arbitration clauses, such that they are nevertheless preempted by the FAA?

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