By Charlotte E. Thomas
Special to the Legal
Who doesn’t appreciate a good Jim Carrey quote when gauging the chances of success or failure in moving to compel arbitration? We all know that there is a strong presumption in favor of arbitration under both the Federal Arbitration Act (FAA) and Pennsylvania common law. But I thought it would be interesting to look at some actual judicial outcomes to uncover – all things being equal – just how often motion practice results in orders directing parties to proceed in arbitration.
It was tough going trying to count up the judicial outcomes on motions to compel arbitration. Most published court statistics do not drill down to the level of motions to compel arbitration and certainly not to the detail of how many such motions resulted in an order compelling arbitration. But some services – like Bloomberg Law – allow word searches through the text of documents filed on PACER. So I reviewed the information about compelling arbitration available on the dockets in the Eastern District of Pennsylvania for the last two years to get the count.
Once ensconced in the search, I found the decisions ranged beyond a simple yea or nay vote on arbitrability. Some motions had been withdrawn, some mooted, some not yet decided, and sometimes complaints were dismissed for lack of subject matter jurisdiction. In addition, a number of cases were wrapped up in lockstep with the U.S. Supreme Court’s decision in April 2011 in ATT Mobility LLC v. Concepcion, which held that the FAA pre-empted a California Supreme Court ruling that class action waivers in adhesion contracts were unconscionable. Those district court decisions would not be particularly telling, because any preliminary decision would be later informed by Concepcion. So I excluded the Concepcion cases, though they would tilt the scales in favor of arbitrability, and I limited my search to judicial rulings granting or denying motions to compel arbitration.
Based on the numbers, the presumption in favor of arbitration is definitely alive and kicking. Out of 30 cases, 20 were directed straight up to arbitration, with five motions being granted in part and denied in part. Only five motions were denied. Perhaps more interesting were the 3rd U.S. Circuit Court of Appeals results. Of the seven appeals reviewed, four were vacated with instructions to proceed to arbitration; one order in favor of arbitration was affirmed; one order of waiver was affirmed; and one order denying arbitration was affirmed. Notably, some of the decisions vacating district court orders were included in the thirty-odd district court decisions reviewed, thereby increasing the number of cases that eventually were judicially ordered to proceed to arbitration.
All told, those opposing motions to compel arbitration would be well served to remember Jim Carrey’s response in “Dumb and Dumber” when Lloyd is told that his chances of marrying Mary Swanson are “one in a million.”
“So you’re telling me there’s a chance.”
Charlotte E. Thomas is a partner with Duane Morris, where she practices in the area of complex business litigation. She represents parties in securities actions, broker-dealer and financial adviser arbitrations, lender liability actions, directors and officers actions, intellectual property lawsuits, environmental and toxic tort actions, actions under 42 U.S.C. § 1983 and the defense of class actions. She can be contacted by e-mailing [email protected].
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