Supreme Court grants certiorari in arbitration clause case News
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Supreme Court grants certiorari in arbitration clause case

The Supreme Court granted certiorari in Morgan, Robyn v. Sundance, Inc. in an order list released Monday. The case concerns arbitration clause waivers in contract disputes.

Robyn Morgan sued Sundance in September 2018 for alleged failure to pay her overtime wages. According to the contract between Morgan and Sundance, Sundance could have compelled arbitration. However, Sundance participated in settlement mediations with Morgan and other similarly situated plaintiffs. In May 2019, Sundance attempted to compel arbitration.

When considering the case, the Eighth Circuit Court of Appeals cited its ruling in Messina v. N. Cent. Distribution, Inc., saying “a party waives its right to arbitration if it: ‘(1) knew of an existing right to arbitration; (2) acted inconsistently with that right; and (3) prejudiced the other  party by these inconsistent acts.'” Following this rule, the Eighth Circuit ruled that Sundance did not waive its right to compel arbitration. Morgan appealed to the Supreme Court.

Morgan and her attorneys concede that federal policy favors arbitration but believe the Eighth Circuit’s ruling violates the “equal treatment” principle established in a 2017 Supreme Court case Kindred Nursing Center Ltd. Partnership v. Clark. Under the equal treatment principle, arbitration clauses should be treated similarly to other contractual provisions. Morgan argues that the Eighth Circuit was wrong to include the prejudice requirement “when prejudice is not required to establish waiver of other contractual rights.”

The court also ruled to allow the filing of an amicus brief  “on Behalf of Law Professors in Support of Granting the Petition for a Writ of Certiorari.” The collective of professors asserts that the Eighth Circuit’s ruling “ignored state contract law and misapplied this Court’s repeated holdings that arbitration clauses should be placed on equal footing with other contracts.”