OTLA Trial Lawyer Fall 2021

30 Trial Lawyer • Fall 2021 By Christina Stephenson OTLA Guardian By Phil Goldsmith OTLA Guardian M ost of what follows flows from the work we have done in two recent cases in the Oregon appellate courts. 1 These cases illuminate several concepts that can be used in appropriate situations to thwart efforts to compel arbitration. Always fight formation in court Never presume a valid contract to arbitrate has been formed. If you can make formation challenges, you should be able to take your fight to court. In a case we both worked on, the agreement at issue included provisions the defendant refused to honor, demon- strating the defendant had not mani- Christina Stephenson Phil Goldsmith fested an intent to be bound. Further, the purported agreement was missing essential terms as it incorporated by reference the rules of a defunct organiza- tion. These were fertile ground to chal- lenge the formation of the agreement. The U.S. Supreme Court has long held “[a]rbitration is a matter of contract and a party cannot be required to submit any dispute which he has not agreed so to submit.” AT & T Technologies, Inc. v. CommunicationsWorkers of America , 475 US 643, 648 (1986). The FAA was not enacted to force parties into arbitration. Rather, it was enacted to enforce valid, voluntary agreements to arbitrate. See, e.g., EEOC v. Waffle House, Inc. , 534 US 279, 294 (2002). Crucially, the policy favoring arbitra- tion is irrelevant in deciding whether an arbitration contract was formed. Granite Rock Co. v. International Brotherhood of Teamsters , 561 US 287, 301 (2010) (di- recting courts to “apply[] the presump- tion of arbitrability only” to “a validly formed and enforceable arbitration agreement”). Our argument is, when a purported agreement to arbitrate is at issue, the first step is for the court to determine wheth- er the parties entered into any arbitration agreement at all. If — and only if — the court finds a valid agreement exists, the court may proceed to a second step. See Henry Schein. Inc. v. Archer &White Sales, Inc., 139 S Ct 524, 530, 202 L Ed 2d 480 (2019) (“To be sure, before referring a dispute to an arbitrator, the court de- termines whether a valid arbitration agreement exists…”) First, though, the court must find a valid agreement to arbitrate. In examining whether a valid agree- ment was formed, consult state law principles of contract formation. See 9 USC sect. 2 (an arbitration agreement “shall be valid, irrevocable, and enforce- able, save upon such grounds as exist at law or in equity for the revocation of any contract”). Often, with careful analysis, you’ll find a defect you can bring to the court. The emperor’s new clause In Rent-a-Center West v. Jackson , 561 US 63 (2010), Justice Scalia succeeded in creating a thicket for those challenging See The Challenge p 32 THE CHALLENGE ARBITRATION CLAUSES IN EMPLOYMENT AND CONSUMER CASES