Justices take consumer arbitration case (Jan. 15, 2010)

The Supreme Court has agreed to decide whether a federal district court is "required in all cases to determine claims that an arbitration agreement subject to the Federal Arbitration Act ('FAA') is unconscionable, even when the parties to the contract have clearly and unmistakably assigned this 'gateway' issue to the arbitrator for decision."

Antonio Jackson filed a complaint in the Nevada federal district court alleging race discrimination and retaliation. The employer, Rent-A-Center West, Inc., moved to dismiss the proceedings and compel arbitration. The district court granted the motion to dismiss and compelled arbitration.

A divided three-judge panel on the 9th U.S. Circuit Court of Appeals held that where the party opposing arbitration asserts that he or she could not meaningfully assent to the agreement, the threshold question of unconscionability is for the court to decide, notwithstanding language in the arbitration agreement that the arbitrator has exclusive authority to make that decision.

On Jan. 15, 2010, the U.S. Supreme Court granted review in the case.

Question presented: Whether the district court is in all cases required to determine claims that an arbitration agreement subject to the Federal Arbitration Act (“FAA”) is unconscionable, even when the parties to the contract have clearly and unmistakably assigned this “gateway” issue to the arbitrator for decision.