Applied Underwriters Captive Risk Assurance Company, Inc. v. Citizens of Humanity, LLC, et al.
Arbitration JusticiabilityDoctri
Whether a general choice-of-law clause in a contract that contains an arbitration agreement should incorporate state substantive law without incorporating state rules limiting arbitration
QUESTIONS PRESENTED “Congress adopted the [Federal] Arbitration Act in 1925” because “courts were unduly hostile to arbitration.” Epic Sys. Corp. v. Lewis, 138 S. Ct. 1612, 1621 (2018). Over 75 years later, “judicial antagonism toward arbitration” continues to “manifest[] itself in a great variety of devices and formulas.” Jd. at 1623 (internal quotation marks omitted). In Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52 (1995), to prevent choice-of-law clauses from transforming into an anti-arbitration “device,” the Court held that, where a contract contains both a general choice-of-law clause and an arbitration provision, the choice-of-law clause “encompassles] substantive principles that [the chosen state’s] courts would apply, but not ... special rules limiting the authority of arbitrators.” Id. at 64. And in Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63 (2010), to avoid judicial hostility toward the delegation of questions of arbitrability to arbitrators, the Court held that the FAA requires a litigant to mount a challenge that is “specific to [an arbitration agreement’s] delegation provision” in order to avoid the enforcement of that provision. Id. at 74. The Court below contravened both of these mandates. The questions presented are: 1. Whether a general choice-of-law clause in a contract that contains an arbitration agreement should be read, consistent with the Federal Arbitration Act and this Court’s decisions, to import state substantive law without importing state rules impairing li QUESTIONS PRESENTED—Continued arbitration, as ten federal courts of appeals and nine state courts of appeals have held, or whether a general choice-of-law clause should be read to incorporate both state substantive law and state arbitration principles, including those barring or otherwise evincing hostility to arbitration, as four state courts of appeals and one federal court of appeals have held. 2. Whether a litigant may avoid the enforcement of a contractual clause delegating questions of arbitrability to the arbitrator merely by stating that the litigant’s objections to arbitration—which must ordinarily be resolved by the arbitrator—apply equally to the delegation clause itself.