ContractsProf Blog

Editor: Jeremy Telman
Oklahoma City University
School of Law

Monday, April 19, 2010

Reply Brief in Rent-A-Center West v. Jackson

Supreme_large_seal  On Friday, Rent-A-Center West filed its reply brief with the U.S. Supreme Court in Rent-A-Center West v. Jackson, a case we have been following on the Blog.  Here is a summary of Petitioner's arguments on Reply:

Rent-A-Center (RAC) begins by noting that Respondent Jackson signed an arbitration agreement according to which all questions of enforceability were said to be within the exclusive authority of the arbitrator.  That agreement, says RAC, is presumptively enforceable.  

In order to overcome that presumption, Jackson first argues that Section 2 of the Federal Arbitration Act bars parties from delegating enforceability issues to the arbitrator.  RAC argues that the statutory language does not support Jackson's interpretation of Section 2 and urges the Court not to read elements into the statute that do not appear on its face.  Indeed, RAC contends, the full language of Section 2, together with the prior precedents, First Options and AT&T, make clear that issues regarding the scope of an arbitration agreement may be delegated to the arbitrator by clear and unmistakable language. If the Court rules as Jackson wishes, RAC contends, these precedents "wither to nothing."  Jackson's unconscionability claim is not extinguished under RAC's understanding of current precedent.  Rather, his claim will be addressed by the arbitrator.

Jackson similarly argues that Section 4 of the FAA requires that courts decide enforceability challenges.  No, RAC says, Section 4 only permits a judge or jury to decide issues having to do with formation -- with the "making" of an agreement to arbitrate -- and this case is not about formation.  Jackson's unconscionability claim is not about formation.  It is a claim that, although an agreement has been made, it should not be enforced because it is substantively unfair.  According to RAC, Jackson treats language in Section 4 relating to the "making" of an agreement as equivalent to language in Section 2 about when an agreement is valid and enforceable.  RAC argues that Congress used different language intentionally in the two sections and the meanings of the various terms should not be confused or conflated.  

Finally, RAC seeks to rebut Jackson's policy arguments in favor of court review by returning to the FAA's textual presumption in favor of the enforceability of arbitration agreements.  RAC contends that arbitrators will in fact refuse to enforce unconscionable arbitration provisions.  Moreover, RAC contends that Jackson has failed to produce any empirical evidence suggesting that the inequities he fears would result from continued reliance on arbitrators to determine enforceability and validity issues.  Finally, RAC argues that Jackson overstates in various ways the potential harm that would result from a ruling in RAC's favor.

[Jeremy Telman]

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