Opinion ID: 613927
Heading Depth: 1
Heading Rank: 9

Heading: The Arbitration Act establishes a federal policy favoring rigorous enforcement of agreements to arbitrate warranty disputes

Text: Even if the FTC had authority to address this question, and FTC regulations could be construed to prohibit the use of binding arbitration by any warranty dispute resolution procedure, I agree with the Fifth and Eleventh Circuitsthe only federal courts of appeals to consider this questionthat such a view would be unreasonable in light of the presumption of arbitrability created by the Federal Arbitration Act. See Walton, 298 F.3d at 475-78; Davis, 305 F.3d at 1272-77, 1280; see also In re American Homestar of Lancaster, Inc., 50 S.W.3d 480, 490-92 (Tex.2001). The Arbitration Act was intended to reverse centuries of judicial hostility to arbitration agreements, by placing arbitration agreements upon the same footing as other contracts. Shearson/Am. Express, Inc. v. McMahon, 482 U.S. 220, 225-26, 107 S.Ct. 2332, 96 L.Ed.2d 185 (1987) (internal quotation marks and alterations omitted) (quoting Scherk v. Alberto-Culver Co., 417 U.S. 506, 510-11, 94 S.Ct. 2449, 41 L.Ed.2d 270 (1974)). The Act provides, in relevant part, that arbitration agreements shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract. 9 U.S.C. § 2. The Act also provides that a court must stay its proceedings if it is satisfied that an issue before it is arbitrable under the agreement, § 3; and it authorizes a federal district court to issue an order compelling arbitration if there has been a `failure, neglect, or refusal' to comply with the arbitration agreement, § 4. McMahon, 482 U.S. at 226, 107 S.Ct. 2332. The U.S. Supreme Court has repeatedly emphasized that the Arbitration Act establishes a `federal policy favoring arbitration,' requiring that `we rigorously enforce agreements to arbitrate.' Id. (quoting Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983) and Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 221, 105 S.Ct. 1238, 84 L.Ed.2d 158 (1985)). This duty to enforce arbitration agreements is not diminished when a party bound by an agreement raises a claim founded on statutory rights. . . . [W]e are well past the time when judicial suspicion of the desirability of arbitration and of the competence of arbitral tribunals should inhibit enforcement of the Act in controversies based on statutes. McMahon, 482 U.S. at 226, 107 S.Ct. 2332 (internal quotation marks omitted) (quoting Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626-27, 105 S.Ct. 3346, 87 L.Ed.2d 444 (1985)). The Arbitration Act, standing alone, therefore mandates enforcement of agreements to arbitrate statutory claims. Id. Nonetheless, the Arbitration Act's mandate may be overridden by a contrary congressional command. The burden is on the party opposing arbitration to show that Congress intended to preclude a waiver of judicial remedies for the statutory rights at issue. Id. at 226-27, 107 S.Ct. 2332. If Congress intended to create an exception to the Arbitration Act, such an intent `will be deducible from [1] the statute's text or [2] legislative history, or [3] from an inherent conflict between arbitration and the statute's underlying purposes.' Id. at 227, 107 S.Ct. 2332 (quoting Mitsubishi Motors, 473 U.S. at 628, 105 S.Ct. 3346) (alterations omitted). Both Walton and Davis followed the Supreme Court's test in McMahon to determine whether the presumption of arbitrability established by the FAA should be overridden by contrary congressional command in the MMWA. See Davis, 305 F.3d at 1273; Walton, 298 F.3d at 475. After a thorough review of the MMWA and the FAA, combined with the strong federal policy favoring arbitration, both courts held that written warranty claims arising under the Magnuson-Moss Warranty Act may be subject to valid binding arbitration agreements. Davis, 305 F.3d at 1280; see Walton, 298 F.3d at 478 ([T]he text, legislative history, and purpose of the MMWA do not evince a congressional intent to bar arbitration of MMWA written warranty claims.). Although Congress adopted the MMWA to improve the adequacy of information available to consumers [and] prevent deception, . . . [t]hese purposes are not in conflict with the FAA. In fact, the Supreme Court has repeatedly enforced arbitration of statutory claims where the underlying purpose of the statutes is to protect and inform consumers. Davis, 305 F.3d at 1276 (citations omitted). `[E]ven claims arising under a statute designed to further important social policies may be arbitrated because so long as the prospective litigant effectively may vindicate [his or her] statutory cause of action in the arbitral forum, the statute serves its function.' Id. (quoting Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79, 90, 121 S.Ct. 513, 148 L.Ed.2d 373 (2000)). Indeed, in every case [5] raising a statutory right that does not explicitly preclude arbitration, the Supreme Court has enforced the presumption of arbitrability under the Arbitration Act. [6] See Walton, 298 F.3d at 474. Therefore, the majority's conclusion that the consumer-friendly policies underlying the MMWA imply congressional intent to exempt warranty claims from arbitration is in error.