Wednesday, February 10, 2016

Determining Arbitrability In Middle District Florida

In a recent decision on a Motion to Compel Arbitration and Stay Proceedings here in the federal Middle District of Florida, Senior Judge John Steele found that while arbitrability is generally a question reserved for the trial court, an arbitrator may interpret the scope of the arbitration agreement if the parties agree and provide for such delegation "clearly and unmistakably" within the agreement. Authorities for this finding included Terminix Int'l Co. v. Palmer Ranch Ltd. P'ship, 432 F.3d 1327, 1332 (11th Cir. 2005) and Norfolk S. Ry. Co. v. Fla. E. Coast Ry., No. 3:13-cv-576-J-34JRK, 2014 WL 757942 (M.D. Fla. Feb. 26, 2014). For this holding, Judge Steele also relied on prior case law from the Supreme Court, as well as the neighboring Southern District:
"[T]he question `who has the primary power to decide arbitrability' turns upon what the parties agreed about that matter." First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 943 (1995). See also Shea v. BBVA Compass Bancshares, Inc., No. 1:12-cv-23324-KMM, 2013 WL 869526 (S.D. Fla. Mar. 7, 2013) (citing Terminix Int'l Co., 432 F.3d at 1332) ("[W]hen parties explicitly incorporate rules that empower an arbitrator to decide issues of arbitrability, the incorporation serves as clear and unmistakable evidence of the parties' intent to delegate such issues to the arbitrator").
Here, the court found delegation provisions clearly and unmistakably delegated the determination of arbitrability to the arbitrator. Pursuant to the delegation clauses contained within the arbitration provisions in the instant case, the court returned the determination of whether or not a Telephone Consumer Protection (TCPA) claim is subject to the arbitration agreement to the arbitrator. Plaintiffs agreed to Defendant's request to stay the action pending the determination by the arbitrator, while reserving their right to continue to proceed in court if the arbitrator rules that their TCPA cause of action is not subject to the arbitration agreement. Harrington v. Regions Bank, No. 2:15-cv-522-Ftm-29MRM (M.D. Fla. Jan. 29, 2016) See opinion here--