Arbitration News

March 31, 2022:
A federal court entertaining an application to confirm or vacate an arbitration award under section 9 or 10 of the Federal Arbitration Act must have an independent jurisdictional basis.  The court may not "look through" the application and assert jurisdiction merely because the court would have had jurisdiction over the underlying controversy.  The situation differs from an application to compel arbitration, where the language of section 4 of the FAA authorizes look-through jurisdiction.  Badgerow v. Walters, 142 S. Ct. 1310 (2022). 

November 12, 2021:
"Virtually all courts to consider the question, including this court, have concluded that, in contracts between sophisticated parties, incorporation of rules with a provision on the subject is normally sufficient 'clear and unmistakable' evidence of the parties' intent to delegate arbitrability to an arbitrator."  Rohm Semiconductor USA, LLC v. Maxpower Semiconductor, Inc., 17 F.4th 1377 (Fed. Cir. 2021). 

February 22, 2021:
Dallas Court of Appeals confirms that AAA Commercial Arbitration Rule R-47(d)(ii) means what it says: If all parties ask for attorneys' fees, the arbitrator has the power to award attorneys' fees even if such fees would otherwise not be recoverable.  Ninety Nine Physician Servs., PLLC v. Murray, No. 05-19-01216-CV, 2021 WL 711502 (Tex. App. -- Dallas Feb. 22, 2021) (unpublished). 

June 26, 2020:
Texas Supreme Court holds that a defendant's failure to take a permissive, interlocutory appeal from a trial court's order denying a motion to compel arbitration does not preclude the defendant, after losing at trial, from challenging the denial of the motion to compel on appeal from an adverse final judgment.  Bonsmara Natural Beef Co., v. Hart of Tex. Cattle Feeders, LLC, 603 S.W.3d 385 (Tex. 2020).

April 16, 2020:
Houston First Court of Appeals, in an employment dispute, reverses denial of a motion to compel arbitration, finding the dispute arbitrable, even though the employer never signed the arbitration agreement.  SK Plymouth v. Simmons, 605 S.W.3d 706 (Tex. App. -- Houston [1st Dist.] 2020, no pet.). 

April 7, 2020:
Fifth Circuit affirms dismissal of an action against the AAA and two arbitrators, holding that section 10 of the FAA provides the exclusive remedy for complaints of arbitrator bias or corruption.  Tex. Brine Co. v. Am. Arbitration Ass'n, 955 F.3d 482 (5th Cir. 2020).

April 24, 2019:
Supreme Court holds that an arbitration agreement that is ambiguous about class arbitration does not authorize class arbitration, rejecting application of a California contract construction rule (contra proferentem -- a contract should be construed against the drafter) that would lead to a contrary result.  Lamps Plus, Inc. v. Varela, 139 S. Ct. 1407 (2019).

January 8, 2019:
Supreme Court resolves a split in the circuits, holding that courts must give effect to parties' agreement that an arbitrator, and not a court, should decide gateway questions of arbitrability.  Henry Schein, Inc. v. Archer & White Sales, Inc., 139 S. Ct. 524 (2019). 

May 21, 2018:
Supreme Court affirms the validity of arbitration provisions in employment agreements that require individual arbitration of claims (no class treatment), rejecting challenges based on the savings clause in the FAA and the statutory protection for "concerted activities" in the NLRA.  Epic Sys. Corp. v. Lewis, 138 S. Ct. 1612 (2018).

May 11, 2018:
Texas Supreme Court holds that whether the claim of a non-signatory to an arbitration agreement must be arbitrated, as opposed to litigated, is a gateway matter that a trial court, not the arbitrator, must determine.  Jody James Farms, JV v. Altman Group, 547 S.W.3d 624 (Tex. 2018). 

December 18, 2017:
Dallas Court of Appeals affirms dismissal of a motion to vacate an arbitration award because the movant failed properly to serve the motion within the statutory three-month limitaions period.  Craig v. Southwest Securities, Inc., No. 05-16-01378-CV, 2017 WL 6503213 (Tex. App. -- Dallas, Dec. 18, 2017, no pet.) (unpublished). 

May 15, 2017:
Supreme Court holds that the FAA invalidates a Kentucky rule requiring that, for a power of attorney to authorize an agent to enter into an arbitration agreement on behalf of the principal, the power of attorney must expressly state that the agent has the power to waive the principal's rights of access to the courts and trial by jury.  Kindred Nursing Ctrs. Ltd. P'ship v. Clark, 137 S. Ct. 1421 (2017). 

March 2017:
Economic research firm quantifies time and cost benefits of arbitration versus litigation in federal court.

May 20, 2016:
Texas Supreme Court holds that under the TAA the grounds for vacatur enumerated in the statute are exclusive and manifest disregard of the law is no longer available as a vacatur ground, thus resolving, as a matter of state law, an issue on which the federal circuit courts of appeals (construing the FAA) are split.  Hoskins v. Hoskins, 497 S.W.3d 490 (Tex 2016). 

March 2, 2016:
Fifth Circuit holds that an arbitration agreement in an employee handbook is unenforceable because it did not require that the employer provide advance notice to the employee before terminating the arbitration agreement.  Nelson v. Watch House International, L.L.C., 815 F.3d 190 (5th Cir. 2016).

June 26, 2015:
Texas Supreme Court finds that an arbitration provision in an attorney-client employment contract is enforceable, concluding that the provision is not unconscionable, does not violate public policy, and is not illusory.  Royston, Rayzor, Vickery & Williams, LLP v. Francisco "Frank" Lopez, 467 S.W.3d 494 (Tex. 2015).

May 8, 2015:
Fifth Circuit holds that parties agreed by their conduct to arbitrate an issue of contract formation by briefing the issue before the arbitrator and by disputing the issue throughout the arbitration proceeding, "with the plaintiffs never contesting the arbitrator's authority to decide contract formation until he issued an adverse award."  
OMG, L.P. v. Heritage Auctions, Inc., No. 14-10403, 2015 WL 2151779 (5th Cir. May 8, 2015) (unpublished).

December 19, 2014:
Texas Supreme Court holds that a party does not waive arbitration by filing suit, engaging in limited discovery, moving to transfer venue of a related suit, and waiting nineteen months before moving to compel arbitration.  
Richmont Holdings, Inc. v. Superior Recharge Systems, Inc., 455 S.W 3d 573 (Tex. 2014).

May 23, 2014:
Texas Supreme Court vacates a $125 million arbitration award for evident partiality.  Tenaska Energy, Inc. v. Ponderosa Pine Energy, LLC, 437 S.W.3d 518 (Tex. 2014).

January 8, 2014:
Fifth Circuit rejects a statistical challenge to the enforceability of an arbitration agreement between employer and employee.  Diggs v. Citigroup, Inc., No. 13-10138, 2014 WL 54637 (5th Cir. Jan. 8, 2014) (unpublished).

October 1, 2013:
The American Arbitration Association publishes new Commercial Arbitration Rules, effective October 1, 2013.

June 20, 2013:
Supreme Court holds that an arbitration agreement that waives class arbitration is enforceable under the FAA even when the cost of proving an individual claim far exceeds the potential recovery.  Am. Express Co. v. Italian Colors Rest., 570 U.S. 228 (2013).

March 18, 2013:
Seventh Circuit cautions: "[C]hallenges to commercial arbitration awards bear a high risk of sanctions."  Johnson Controls, Inc. v. Edman Controls, Inc., 712 F.3d 1021 (7th Cir. 2013).

December 5, 2012:
American Arbitration Association publishes an online tool, ClauseBuilder, to assist in the creation of custom arbitration agreements.

  November 26, 2012:
Supreme Court holds than an arbitrator, not a court, should decide a challenge to the overall validity of a contract containing an arbitration clause when the arbitration clause, standing alone, is valid. Nitro-Lift Techs., L.L.C. v. Howard, 568 U.S. 17 (2012).

January 10, 2012:
Supreme Court holds that the FAA requires enforcement of a credit card issuer's arbitration agreement with its customer despite the CROA required language "You have a right to sue . . . ." CompuCredit Corp. v. Greenwood, 565 U.S. 95 (2012). 

December 29, 2011:
Dallas Court of Appeals tacitly approves use of Texas Rule of Civil Procedure 202 to obtain deposition discovery for the purpose of investigating a claim that would be subject to arbitration. Patton Boggs LLP v. Moseley, 394 S.W.3d 565 (Tex. App. -- Dallas 2011, no pet.).

August 4, 2011:
Fifth Circuit sets aside an arbitration award against corporate officers, holding that the officers were not bound by arbitration agreements to which the relevant corporations, but not the officers individually, were parties. DK Joint Venture 1 v. Weyand, 649 F.3d 310 (5th Cir. 2011).

May 13, 2011:
Texas Supreme Court declines to follow Hall Street Associates, L.L.C. v. Mattel, Inc., holding that, under the TAA, courts must enforce an agreement that an arbitration award is reviewable for reversible error and, when such error is present, vacate the award on the ground that the arbitrator "exceeded [his/her] powers." Nafta Traders, Inc. v. Quinn, 339 S.W.3d 84 (Tex. 2011).

April 27, 2011:
Supreme Court approves consumer arbitration agreements that disallow class arbitration, holding that the FAA preempts a California rule that would invalidate such agreements as unconscionable. AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011).