Rent-A-Center West, Inc. v. Jackson - Oral Argument - April 26, 2010

Rent-A-Center West, Inc. v. Jackson

Media for Rent-A-Center West, Inc. v. Jackson

Audio Transcription for Opinion Announcement - June 21, 2010 in Rent-A-Center West, Inc. v. Jackson

Audio Transcription for Oral Argument - April 26, 2010 in Rent-A-Center West, Inc. v. Jackson

John G. Roberts, Jr.:

We'll hear argument first this morning in Case 09-497, Rent-A-Center West v. Jackson.

Mr. Friedman.

Robert F. Friedman:

Thank you, Mr. Chief Justice, and may it please the Court: The agreement between Antonio Jackson and Rent-A-Center should be enforced as written.

There is no statutory impediment to the enforcement of the clear and unmistakable agreement that gives the arbitrator exclusive authority to decide Jackson's challenge to enforceability, nor is there any language in the Federal Arbitration Act that would prohibit the court from making the determination -- prohibit the arbitrator from making the determination of Jackson's challenge to unconscionability.

Through frequent holdings of this Court going back 50 years to the Steelworkers trilogy, this Court has plainly recognized that parties may delegate issues as to scope and validity to the arbitrator in the first instance.

The district court and--

John G. Roberts, Jr.:

But not to the question of which parties have agreed to arbitrate?

Robert F. Friedman:

--I'm sorry, Your Honor.

John G. Roberts, Jr.:

Not the question of which parties have agreed to arbitrate?

Robert F. Friedman:

Which parties can be potentially scope issues and which parties potentially as well.

In this case, the issue is enforceability.

And through the holdings of First Options, Howsam, and Bazzle, going back to previous decisions, this Court has held that parties through clear and unmistakable delegation can give that to the arbitrator in the first instance.

Ruth Bader Ginsburg:

But if -- if fraud in the inducement, I take it, is considered -- even if you have a very broad arbitration clause, as we do here, fraud in the inducement is considered a question for the court, not the arbitrator; is that right?

Robert F. Friedman:

That's correct, Justice Ginsburg.

Ruth Bader Ginsburg:

So why should unconscionability be treated differently?

Robert F. Friedman:

Justice Ginsburg, fraud in the inducement, pursuant to Prima Paint, goes to the making of the agreement, and under section 4, the court retains decisions over the making of the agreement.

Unconscionability is a post-formation attack.

It does not go to the very limited inquiry that is anticipated under section 4, of the making--

Anthony M. Kennedy:

Why is it post-formation?

Arguably, the -- one of the parties has such a strong hand that it forces the other party just to decide.

It's almost like -- duress would certainly be for the court, would it not, if it's a formation issue like Justice Ginsburg indicated?

Robert F. Friedman:

--In some instances, Justice Kennedy, duress could be; for example, a gun to somebody's head.

But procedural unconscionability does not go to the same issues of making.

And, in fact, under Nevada law and this State's laws--

Anthony M. Kennedy:

Well, I'm not sure what procedural unconscionability, but this is -- as Justice Ginsburg indicates, it's not clear to me why this isn't a formation issue.

Robert F. Friedman:

--Formation is a very basic existential analysis.

It goes to mutual assent.

Did the parties sign the agreement and indicate the desire to be bound by the agreement?

Though--

Antonin Scalia:

I guess you could argue that on its face the agreement is so one-sided, so unconscionable, that one of the parties must have been coerced into signing it.