Supreme Court Hearing Three Arbitration Cases in October

On October 3rd the Court heard oral arguments in New Prime, Inc. v. Oliveira, asking whether  FAA section 1, which excludes certain transportation “workers” from the FAA’s reach, applies to independent contractors, in addition to the employees, of a transportation company.  Ogletree Deakins writes: “Given the justices’ seeming alignment with Oliveira at the oral argument, it is anticipated that the Supreme Court will ultimately issue a decision allowing truck drivers and others independent contractors in the transportation industry to avoid arbitration.”

In late October the Court will hear Lamps Plus, Inc. v. Varela in which the Ninth Circuit held the agreement permitted class arbitration.

The Court will also hear Henry Schein v. Archer & White Sales, Inc. This contract provided for arbitration of all disputes, except claims for injunctive relief and involving intellectual property rights. Plaintiff sought injunctive relief and argued the case should be litigated, but defendants argued the arbitration agreement sends to the arbitrator any questions about the arbitrability of some or all of the case. The Fifth Circuit ruled that the court should decide arbitrability, and affirmed denial of the motion to compel arbitration.

The National Law Review provides a more detailed discussion of the issues.

Arbitration Clause in Lawyer's Contract with Client

A law firm's contract with its client said either side could opt for binding arbitration to settle a fee dispute or “any other dispute that arises out of or relates to this agreement or the services provided by the law firm.”  Despite this clause, the client sued the firm and three lawyers for malpractice. The First Circuit affirmed the district court in enforcing the arbitration clause and dismissing the case.

Read more in the National Law Journal about Bezio v. Draeger

An analysis by Jeff Mason contrasts this First Circuit Bezio case with a Ninth Circuit case, Smith v. JEM, 2013 WL 6570899 (9th Cir. Dec. 16, 2013), affirming a district court holding that the arbitration clause was unconscionable under Washington state law that makes arbitration clauses material provisions in attorney retainer agreements and, as such, enforceable only if “fully disclosed.”   Jeff Mason asks if The Easiest Arbitration Agreement to Avoid May Be the One Between Attorney and Client and "Are lawyers’ clients really such a special group of consumers that their arbitration clauses should be held to different standards?"  See also  Hodges v. Reasonover, 103 So. 3d 1069 (La. 2012) (placing special hurdles to enforcement of lawyer-client arbitration clauses).