Wednesday, February 23, 2011

SCOTUS to Decide When Arbitration Waiver Becomes Binding

Yesterday, the Supreme Court granted certiorari (i.e. agreed to hear the case) in Stok and Associates v. CitiBank. The Court seems pretty excited about arbitration issues lately. Here, the question presented by Stok in its petition for certiorari is stated as:
Under the Federal Arbitration Act ("FAA"), should a party be required to demonstrate prejudice after the opposing party waived its contractual right to arbitrate by participating in litigation, in order for such waiver to be binding and irrevocable?
The gist of this is that parties often waive their arbitration agreements to resolve matters in court. When does that waiver become irrevocable? When one party wants to revoke its waiver, must the other party show prejudice to prevent such revocation?

One interesting note: Stok appears to be representing itself, which is super awesome (that's a term of art). HT to SCOTUSblog which always has mind-bogglingly amazing coverage of the Supreme Court.

Posted by Philip Miles, an attorney with McQuaide Blasko in State College, Pennsylvania in the firm's civil litigation and labor and employment law practice groups.