9th Circuit to Rehear Arbitrability Case

In the May-July issue, we reported upon a pro-arbitration decision by the 9th Circuit in Nagrampa v MJJ MailCoups, Inc., 401 F3d 1021 (2005) which held that arbitrators are to determine whether an arbitration agreement is unconscionable because it is an adhesion contract-a claim that challenges the contract as a whole. upon June 28, the Circuit said the filled panel will review the Nagrampa decision, which was based upon Prima Paint v. Flood & Conklin Manufacturing, the ruling that created the dichotomy between claims of fraudulent inducement of a contract and claims of fraudulent inducement of an arbitration agreement. (Prima Paint is discussed in the accompanying article upon this page.) According to Internet novels provider ADRWorld.com (an AAA subsidiary), the Trial Lawyers for Public Justice sought review of the Nagrampa ruling, arguing that it was contrary to six previous rulings of the Court. ADRWorld also reported that Dell's brief argued that "a ruling in favor of Nagrampa would call into question the enfbrceability of any arbitration clause that contained a contractual choice of venue or specified an arbitration provider." valley argued that "[s]uch a ruling would be unprecedent and would be contrary to the sturdy public policy in favor of arbitration."

Copyright American Arbitration Association Aug-Oct 2005

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