OTLA Trial Lawyer Fall 2021

36 Trial Lawyer • Fall 2021 Push and Pull Continued from p 35 the arbitration clause are for the court to decide, unless the parties expressly agree to arbitrate the latter kind of challenges. In Renta-A-Ctr. , the contract at issue was an arbitration agreement that contained a clause delegating arbitrability questions to the arbitrator. The Court applied its prior cases to hold that challenges to the arbitration agreement as a whole were for the arbitra- tor to decide, while challenges to only the delegation clause were for the court. See also Henry Schein, Inc. v. Archer & White Sales, Inc. , 139 S Ct 524 (2019) (when the parties’ contract delegates the arbitrability question to an arbitrator, a court may not decide that question even if the court thinks the defendant’s argu- ment in favor of arbitration is wholly groundless). In Granite Rock Co. v. Int’l Bhd. of Teamsters , 561 US 287 (2010), the Court held the same rubric described in Rent- A-Center applies not only to disputes over the scope and validity of an arbitration clause, but also to disputes over its forma- tion, such as whether (and when) the parties agreed to that clause. See also Gist (describing issues decided by court v. arbitrator under FAA); Citigroup Smith Barney v. Henderson , 241 Or App 65 (2011) (same). Note that, unlike the FAA, under the Oregon Uni form Arbi trat ion Act (“OAA”), which applies to strictly local (not-interstate) contracts, the court decides not only challenges to the arbitra- tion clause itself, but also challenges to the entire contract that contains the ar- bitration clause. Hinman v. Silver Star Grp., LLC , 280 Or App 34 (2016). That is, unless the parties expressly agree to arbitrate challenges to the entire contract. Couch Investments, LLC v. Peverieri , 359 Or 125 (2016). The arbitrability questions mentioned above are what the Court has deemed substantive issues of arbitrability. There are also procedural issues, such as waiver and delay, which the Court has held are for the arbitrator to decide. Henderson ; Industra/Matrix Joint Venture v. Pope & Talbot, Inc. , 341 Or 321 (2006) (apply- ing FAA). The OAA has a similar test, under which waiver and estoppel are for the arbitrator to decide, because they are conditions precedent to arbitration. Livingston . Under both the FAA and the OAA, there is a presumption in favor of arbitra- tion. However, the Court in Granite Rock explained the presumption applies only to the scope of an arbitration clause, not its formation or validity. Even then, the Court held, the presumption applies only where it has not been rebutted by evi- dence that the parties did not intend to arbitrate the dispute at issue. The rule under the OAA is the same. EWEB ; Adair Homes, Inc. v. Dunn Carney Allen Higgins &Tongue, LLP , 262 Or App 273 (2014). Similarly, if the facts bearing on a challenge to arbitration, such as uncon- scionability or intent, are disputed, the court must allow the parties to present evidence on those facts and must decide the factual questions presented to it, Hinman; Couch Investments , and the ap- pellate courts must defer to those find- ings, Harnisch v. Coll. of Legal Arts, Inc. , 243 Or App 16 (2011). Of course, if the facts permit only one reasonable conclu- sion — that the parties did not agree to arbitrate the dispute — then the pre- sumption in favor of arbitration does not apply either. Warren v. Smart Choice Payments, Inc. , 306 Or App 634 (2020) (later contract superseded one that had arbitration clause). Only if the evidence is in equipoise does the trial court resort to the maxim in favor of arbitration. Adair . Appeals from arbitrability rulings Under the FAA, when a court denies a motion to compel arbitration, the de- fendant can immediately appeal that order. Likewise, when the court grants a motion to compel and dismisses the lawsuit in deference to the arbitration, as the defendant wanted, but the court interpreted the arbitration clause differ- ently than what the defendant wanted (such as by permitting class arbitration), the defendant can immediately appeal. Lamps Plus . Under the OAA, an order denying a motion to compel arbitration must be appealed immediately; the defendant cannot wait and later appeal from a gen- eral judgment following trial. Snider v. Prod. Chem. Mfg., Inc. , 348 Or 257 (2010). However, if the defendant misses the deadline for appealing the order denying arbitration, it can simply file a second motion to compel arbitra- tion and appeal the denial of that order. Gozzi v. W. Culinary Inst., Ltd. , 276 Or App 1 (2016), on recons, 277 Or App 384 (2016). What if the plaintiff wants to appeal an order granting a motion to compel arbitration? Under the FAA, the plaintiff must either obtain permission for an interlocutory appeal or wait until after the arbitration concludes and the award is confirmed. The Ninth Circuit has held as much even when the plaintiff dis- misses all claims with prejudice as a result of the order compelling arbitration. Langere v. Verizon Wireless Servs., LLC , 983 F3d 1115 (9th Cir 2020). By con- trast, under the OAA, the plaintiff can appeal the judgment in that circum- stance, as the Oregon Court of Appeals held in Gist . Appeals from arbitration awards The Court has kept challenges to ar- bitration awards to narrow limits. The FAA defines the types of challenges a party may bring against an arbitration award, including when an arbitrator exceeds their powers. An arbitrator does so, for example, if the arbitrator strays from interpretation and application of the parties’ agreement and instead dis- penses the arbitrator’s own brand of justice as a form of public policy, which is what the Court held occurred in Stolt- Nielsen .