Reinsurance Focus

Bilbo, a Mississippi resident, and McNally, a Floridian, entered into a joint venture agreement to purchase, renovate, and resell residential property located in Jackson, Mississippi. The agreement contained an arbitration clause. After a dispute arose, Bilbo moved to compel arbitration in federal district court. McNally moved to dismiss on the grounds that the FAA did not apply because the parties’ agreement did not concern “matters of interstate commerce.” The court held that the FAA applied, given that Congress’ power to regulate commerce is broadly construed and that McNally, a Florida resident, agreed to purchase and renovate property in Mississippi, a different state. Bilbo v. McNally, Case No. 12-cv-00502 (USDC S.D. Miss. Nov. 15, 2012).

This post written by Ben Seessel.

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The Supreme Court has accepted certiorari review of two cases involving putative class actions and arbitration. In the first case, American Express Company v. Italian Colors Restaurant, the Court agreed to review the question whether the FAA permits courts to invalidate arbitration agreements on the ground that the agreement precludes class arbitration of federal statutory claims. The court of appeals had invalidated an arbitration provision because it found that the provision effectively precluded plaintiffs from pursuing protections provided by federal antitrust laws. In the Second matter, Oxford Health Plans LLC v. Sutter, the Court agreed to review whether, under Stolt-Nielsen, an arbitrator acts within his powers pursuant to the FAA by determining that parties affirmatively agreed to authorize class arbitration based solely on the use of broad contractual language precluding litigation and requiring arbitration of any dispute arising under a contract.

American Express Co. v. Italian Colors Rest., No. 12-133 (U.S., cert. granted, Nov. 9, 2012); Oxford Health Plans LLC v. Sutter, No. 12-135 (U.S., cert. granted Dec. 7, 2012)

This post written by Ben Seessel.

See our disclaimer.