Arbiration - Part VI

Q. Arbitrators’ Jurisdiction, Scope of Authority and Enforcement Issues

1.       The following categories of actions may not be referred to arbitration by the Court:

 a.     Bond estreatures.

b.     Habeas corpus or other extraordinary writs.

c.      Bond validations.

d.     Civil or criminal contempt.

e.     Any other matter specified by the chief judge in the circuit.

Fla. R. Civ. P. 1.800.

2.     Statutory and intentional tort employment claims are arbitrable, such as hostile work environment, defamation, tortious interference with business relationships and intentional infliction of emotional distress, where the parties are subject to a written arbitration contract that provides for binding arbitration of "any and all claims and disputes that are related in any way to my employment or the termination of my employment."  Henderson v. Idowu, 828 So. 2d 451 (Fla. 4th DCA 2002).

3.     An arbitrator exceeds his or her power when he or she goes beyond the authority granted by the parties’ agreement and decides an issue not within the scope of the arbitration clause or not pertinent to the resolution of the issues submitted to arbitration.  Chandra v. Bradstreet, 727 So. 2d 372 (Fla. 5th DCA 1999), rev. den., 741 So. 2d 1134 (Fla. 1999); Applewhite v. Sheen Fin. Res., Inc., 608 So. 2d 80 (Fla. 4th DCA 1992).

4.     The Federal Arbitration Act (“FAA”) controls where an arbitration agreement expressly provides that the agreement was made pursuant to a transaction involving interstate commerce and is governed by the FAA.  Checksmart v. Cardegna, 824 So. 2d 228 (Fla. 4th DCA  2002).^[1] 

5.     An arbitration agreement with out-of-state parties seeking to acquire the assets of a Florida corporation involved interstate commerce and was thereby governed by the FAA.  Mintz & Fraade, P.C., et al. v. Beta Drywall Acquisition, LLC, et al., 59 So. 3d 1173, 1175-76 (Fla. 4th DCA 2011).

6.     The FAA established federal public policy favoring arbitration, requiring Courts to rigorously enforce agreements to arbitrate involving interstate commerce.  Davis v. Prudential Sec., Inc., 59 F.3d 1186, 1192 (11th Cir.1995). “[A]ny doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration.”  Creative Tile Mktg., Inc. v. SICIS Int'l. S.r.L., 922 F.Supp. 1534, 1538-39 (S.D. Fla.1996) (quoting Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth Inc., 473 U.S. 614, 626 (1985)).

7.     The FAA prohibits states from conditioning the enforceability of arbitration agreements involving interstate commerce on the availability of class arbitration procedures.  The FAA also prohibits such arbitration agreements from being invalidated by defenses that apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue.  Indeed, the FAA was held to preempt a California ruling which invalided an arbitration agreement in a consumer contract as unconscionable because it disallowed class procedures as “an obstacle to the accomplishment and execution of the full purposes and objectives of Congress."  AT&T Mobility, LLC v. Vincent Concepcion, 131 S. Ct. 1740, 1753 (2011).

8.     Although the FAA governs the applicability of interstate arbitration agreements, state law governs issues “concerning the validity, revocability, and enforceability of contracts generally.” Perry v. Thomas, 482 U.S. 483, 492 n. 9 (1987).  Therefore, defenses such as fraud, unconscionability, and duress are governed by state law. Dale v. Comcast, 498 F.3d 1216, 1219 (11th Cir. 2007).

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^[1] A detailed discussion of the FAA is outside the scope of these materials.