Defining the power of arbitration agreements has been a hot topic at the federal and state levels for the past couple of years. In a recent post, we discussed two North Carolina Court of Appeals decisions that validated the reach of the U.S. Supreme Court’s AT&T Mobility v. Concepcion, 131 S.Ct. 1740 (2011) and Italian Colors v. American Express 133 S.Ct. 2304 (2013) decisions to enforce class arbitration waivers in the State. In one of those cases, Torrence v. Nationwide Budget Finance, et. al., No. 05- CVS 447 (N.C. Ct. App. Feb. 4, 2014), a question also was raised regarding the viability of the arbitration agreement at issue because the arbitration organization the parties had agreed to use ceased conducting arbitrations. The trial court invalidated the arbitration agreement based, in part, on the fact that the chosen organization serving as the sole arbitrator was an integral feature of the agreement.
The North Carolina Court of Appeals held that the trial court erred by invalidating the agreement instead of appointing a substitute arbitrator pursuant to § 5 of the FAA. Last year, the Court of Appeals held in King v. Bryant, ___ N.C. App. ___, 737 S.E.2d 802 (2013) (see our King post) that an “agreement to agree” on an arbitration panel and procedures was definite enough to form a binding contract to arbitrate under the FAA. Consistent with King, the Court of Appeals in Torrence relied upon § 5 of the FAA and North Carolina General Statutes § 1-567.45(a) (2013), which provide for the court to appoint a substitute arbitrator if there is evidence that the parties agreed to arbitration. The court noted that U.S. Supreme Court and other precedent establishes that “the key aspect of the analysis of an agreement to arbitrate is the intent of the parties to arbitrate, not the identity of the arbitrator.”
About MVA Litigation Blog
Companies are operating in an increasingly globalized and regulated business environment, facing ever-changing and complicated litigation and regulatory challenges. We provide cutting-edge information regarding developments in federal, North Carolina State, and international litigation, as well as in arbitration, regulatory enforcement, and related business practices.
MVA Litigation Blog Updates
- As States Begin to Ease COVID-19 Restrictions, How Are Businesses Faring in Business Interruption Coverage Disputes?
- Is There a Fix for COVID Business Interruption and Event Cancellations Losses on the Horizon?
- Pandemic Risk Insurance Act of 2020 Introduced in Congress – A Federal Backstop for Business Interruption and Event Cancellation Losses
- North Carolina Considering COVID-19 Workers’ Compensation Expansion for Frontline and Essential Workers