Rent-A-Center West v. Jackson I: Petitioner’s Brief

This month is arbitration month on the ContractsProf Blog,as we focus on Rent-A-Center West v.Jackson, currently pending before the U.S. Supreme Court.  As we noted in an earlier post, AntonioJackson brought an action again Rent-A-Center (RAC) claiming racialdiscrimination and retaliatory termination.  RAC sought to compel arbitration and the District Courtgranted its motion to dismiss.  TheNinth Circuit reversed,  findingthat where a party asserts that there was no reasonable assent to an arbitrationagreement because that agreement is both substantively and procedurallyunconscionable, the question of unconscionability is for the court.

The Supreme Court grantedcert., and Petitioner RAC has filed its opening brief, seeking the Supremes’view on the following issue:

Whether a district court or an arbitrator should decideclaims that an arbitration agreement under the Federal Arbitration Act (“FAA”)is unconscionable, when the parties to the agreement have clearly andunmistakably assigned this “gateway” issue to the arbitrator for decision. 

Today, we summarize RAC’s opening brief.  Next week, we will summarize Jackson’sresponse.  Nine amicus briefs have been filed in the case.  Two support Petitioner; seven support Respondent.  

RAC relies primarily on two Supreme Court holdings, First Options of Chicago, Inc. v.Kaplan, 514 U.S. 938 (1995) and AT&TTechnologies, Inc. v. Communications Workers, 475 U.S. 643(1986) which stand for the proposition that where the parties “clearly andunmistakably” agree to delegate the issue of arbitrability tothe arbitrator, their agreement must be honored.  According to RAC, when the Ninth Circuit refused to enforcethe clear language of the arbitration agreement in question,  “itcreated a rule that the whim of a party opposing arbitration was sufficient toerase the words contained in the arbitration agreement,” an approach evidencingthe very  “hostility to arbitration”that the FAA was enacted to remedy. The Ninth Circuit’s position is inconsistent, according to RAC not onlywith Supreme Court precedent but also with decisions of the First, Eighth and Eleventh Circuit Courts of Appeals.

In a final section, RAC takes on a public policy argument articulated inJackson’s brief in opposition to cert., in which he contends that arbitersshould not be permitted to decide unconscionability challenges to the exerciseof their jurisdiction because they have a financial incentive for assertingjurisdiction.   If accepted, this argument would havedevastating consequences for arbitration, RAC argues, because parties wouldalways have recourse to an interlocutory appeal to a supervising court.

[Jeremy Telman]