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Compel Arbitration

Sample Form Motion to Compel Arbitration

POINTS AND AUTHORITIES

This motion seeks an order from this honorable Court compelling arbitration of all matters between ____________________.  The Parties entered into a written agreement on _____________ requiring arbitration of their disputes.  _________ asks the Court to compel compliance  with that agreement pursuant to the Federal Arbitration Act, as well as Nevada’s Uniform Arbitration Act.

 

 

I.     Introduction and Factual Background

[INSERT]

II.     Argument

     A.     Standard For Motion To Compel Arbitration

1.     The Standard Under the Federal Arbitration Act

The Federal Arbitration Act, 9 U.S.C. §1 et seq. (the “FAA”), governs the enforcement of arbitration agreements.  9 U.S.C. §§ 1-2; Prima Paint Corp. v. Flood & Conklin Mfg. Co., 398 U.S. 395, 402 (1967).  The FAA established a national public policy favoring arbitration.  AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740, 1745 (2011)).  An arbitration agreement is enforceable under the FAA if it is in writing, relates to a commercial or maritime transaction, and manifests and agreement between the parties to arbitrate a dispute. 9 U.S.C § 1.  Contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce” are not covered by the FAA.  Id.

One of the primary purposes of the FAA is to ensure enforcement of private arbitration agreements according to their own terms.  Stolt-Nielsen S.A. v. AnimalFeeds Int’l. Corp., 559 U.S. 662, 682 (2010).  In determining whether the FAA applies to an arbitration agreement, courts must weigh facts in accordance with the “liberal” policy favoring arbitration.  Cecala v. Moore, 982 F.Supp. 609 (N.D. Ill. 1997).  All doubts whether a dispute is arbitrable must be resolved in favor of arbitration.  Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983); Javitch v. First Union Securities, Inc., 315 F.3d 619, 624 (6th Cir. 2003); Riley Mfg. Co., Inc. v. Anchor Glass Container Corp., 157 F.3d 775 (10th Cir. 1998).  “[T]he preeminent concern of Congress in passing the [FAA] was to enforce private agreements into which the parties [have] entered, a concern which requires that we rigorously enforce agreements to arbitrate.”  Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 221, 105 S.Ct. 1238, 1242-43 (1985); Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 625-26 (1985).

“[A]ny doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the problem at hand is the construction of the contract language itself or an allegation of waiver, delay, or a like defense to arbitrability.” Moses H. Cone Mem’l Hosp, 460 U.S. at 24-25.  Consequently, “as with any other contract, the parties’ intentions control, but those intentions are generously construed as to issues of arbitrability.”  Mitsubishi, 473 U.S. at 627 (emphasis added).

The FAA “leaves no place for the exercise of discretion” if there is a valid, applicable agreement, so arbitration must be compelled even if some claims are subject to arbitration and some are not and the maintenance of separate proceedings may be inefficient.  Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 217-18, 105 S.Ct. 1238, 1241 (1985).  The U.S. Supreme Court has explained the importance of enforcing arbitration agreements thusly:

[A]rbitration is a matter of contract. See Rent–A–Center, West, Inc. v. Jackson, 130 S.Ct. 2772, 2776, 177 L.Ed.2d 403 (2010). And consistent with that text, courts must “rigorously enforce” arbitration agreements according to their terms, Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 221, 105 S.Ct. 1238, 84 L.Ed.2d 158 (1985), including terms that “specify with whom [the parties] choose to arbitrate their disputes,” Stolt–Nielsen, supra, at 683, 130 S.Ct. 1758, and “the rules under which that arbitration will be conducted,” Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior Univ., 489 U.S. 468, 479, 109 S.Ct. 1248, 103 L.Ed.2d 488 (1989).

Am. Exp. Co. v. Italian Colors Rest., 133 S. Ct. 2304, 2308–09, 186 L. Ed. 2d 417 (2013).

In cases where the low threshold is met and the FAA applies, a court has no discretion and must apply the FAA on arbitrability issues; state law may not preclude the enforcement of the arbitration agreement in question.  First Citizens Mun. Corp. v. Pershing Div. of Donaldson, Lufkin & Jenrette Securities Corp., 546 F.Supp. 884, 887 (D.C. Ga. 1982).  Under U.S. Supreme Court precedents, state laws mooting or limiting contractual agreements to arbitrate must yield to the pro-arbitration public policy set forth in the FAA.  See Doctor’s Associates, Inc. v. Casarotto, 517 U.S. 681, 116 S.Ct. 1652 (1996) (invalidating a Montana law that required an arbitration provision to be underlined, in caps, and on the first page of a contract to be valid, because such law was in conflict with the FAA).

2.     The Standard Under the Nevada Uniform Arbitration Act

Nevada enacted the Uniform Arbitration Act (“Act”) as NRS 38.206 et. seq.  The purpose of the Act is to preclude a court from intervening into the merits of a dispute for which arbitration has been contractually agreed.  NRS 38.219 states:

(1) An agreement contained in a record to submit to arbitration any existing or subsequent controversy arising between the parties to the agreement is valid, enforceable and irrevocable except upon a ground that exists at law or in equity for the revocation of a contract.

(2)The court shall decide whether an agreement to arbitrate exists or a controversy is subject to an agreement to arbitrate.

(3) An arbitrator shall decide whether a condition precedent to arbitrability has been fulfilled and whether a contract containing a valid agreement to arbitrate is enforceable.

(4) If a party to a judicial proceeding challenges the existence of, or claims that a controversy is not subject to, an agreement to arbitrate, the arbitral proceeding may continue pending final resolution of the issue by the court, unless the court otherwise orders.

“Nevada courts resolve all doubts concerning the arbitrability of the subject matter of a dispute in favor of arbitration.”  Truck Ins. Exchange v. Palmer J. Swanson, Inc., 189 P.3d 656, 659 (2008).  Nevada’s strong public policy favors the enforcement of arbitration provisions.  “[A]rbitration clauses are to be construed liberally in favor of arbitration.”  Kindred v. Second Judicial Dist. Court ex rel. County of Washoe, 116 Nev. 405, 411, 996 P.2d 903, 907 (Nev. 2000).  According to one Nevada court:

[I]n judging the scope of the arbitration agreements, we resolve all doubts concerning the arbitrability of the subject matter of a dispute in favor of arbitration. In fact, we have observed that the purpose of the [Nevada Uniform Arbitration Act of 2000] is to prevent courts from intervening when a provision for arbitration has been contractually provided by the parties. Therefore, we are hesitant to deprive the parties of the benefits of arbitration they have bargained for, and arbitration clauses are to be construed liberally in favor of arbitration…Nevada overwhelmingly favors arbitration.

 Kindred, 116 Nev. at 411, 996 P.2d at 907 (internal citations omitted) (emphasis added); see also Phillips v. Parker, 106 Nev. 415, 794 P.2d 716 (Nev. 1990); International Ass’n of Firefighters, Local No. 1285 v. City of Las Vegas, 104 Nev. 615, 764 P.2d 478 (Nev. 1988); Exber, Inc. v. Sletten Const. Co., 92 Nev. 721, 729-30, 558 P.2d 517, 522 (Nev. 1976).

If a party to a proceeding involving issues that are subject to a contractual agreement to arbitrate applies for a stay of proceedings to arbitrate, the court must grant the application.  Lane-Tahoe, Inc. v. Kindred Construction Company, Inc., 91 Nev. 385, 388, 536 P.2d 491,493 (1975) (interpreting prior act); see also County of Clark v. Blanchard Construction Company, 98 Nev. 488, 491, 653 P.2d 1217, 1219 (1982) (interpreting prior act).  Disputes are presumed to be arbitrable and the court should order arbitration unless it is certain that the arbitration clause is not susceptible to an interpretation that covers the asserted dispute.  Clark County Public Employees Association v. Pearson, 106 Nev. 587, 591, 798 P.2d 136, 138 (1990) (interpreting prior act).  “The court may stay [an] arbitration proceeding only on a showing that there is no agreement to arbitrate.”  Exber, Inc. v. Sletten Construction, Co., 92 Nev. 721, 729, 588 P.2d 517, 522 (1976) (interpreting prior act).

Once a court makes the threshold determination that the parties are obligated to submit the subject matter of the dispute to arbitration, “procedural” questions that grow out of the dispute should be left to the arbitrator.  Exber, Inc. v. Sletten Construction, Co., 92 Nev. 721, 728, 588 P.2d 517, 521 (1976) (quoting John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 556-557, 84 S. Ct. 909, 918, 11 L. Ed.2d 898 (1964)) (interpreting prior act).  Moreover the Court may not decide the merits of the underlying claims, and must restrict its decision to the arbitrabilty question.  AT&T Tech., Inc. v. Communications Workers of Am., 475 U.S. 643, 649, 106 S.Ct. 415, 1419, 89 L.Ed.2d 648 (1986).

“If a party requests a court to compel arbitration pursuant to a written agreement arbitrate, and the opposing party denies the existence of such an agreement, the court shall summarily determine the issue.”  Obstetrics and Gynecologists v. Pepper, 101 Nev. 105, 107, 693 P.2d 1259, 1260 (1985) (citing Exber, Inc. v. Sletten Constr. Co., 92 Nev. 721, 729, 558 P.2d 517, 522 (1976)) (interpreting prior act).  The question of whether or not a particular dispute is subject to arbitration is normally a question of contractual construction.  Phillips v. Parker, 106 Nev. 415, 417,794 P.2d 716, 718 (1990); see also, Clark County Public Employees Association v. Pearson, 106 Nev. 587, 590, 798 P.2d 136, 137 (1990) (interpreting prior act).

     B.     The Arbitration Agreement is Valid and Enforceable

“On motion of a person showing an arbitration agreement and alleging another person’s refusal to arbitrate pursuant to the agreement… the court shall proceed summarily to decide the issue and order the parties to arbitrate unless it finds that there is no enforceable agreement to arbitrate.” NRS  38.221.1(b) (emphasis added).

In this matter, the parties entered into a valid and enforceable arbitration agreement on __________.  The relevant portion of the agreement reads:

[INSERT CLAUSE HERE]

The agreement to arbitrate is clear and unambiguous, and requires arbitration for all disputes. Nevada Courts consistently enforce unambiguous contracts according to their plain language. Renshaw v. Renshaw, 96 Nev. 541, 611 P.2d 1070 (1980). Courts are bound by language that is clear and free of ambiguity and cannot, using the guise of interpretation, distort the plain meaning of the agreement. Watson v. Watson, 95 Nev. 495, 496 P.2d 507 (1979).  The Court should grant this motion pursuant to its authority given by the FAA and NRS 38.221.1(b).

III.     Conclusion

Based on the foregoing, movant hereby respectfully respectfully requests that this Court compel the arbitration of all disputes between the parties hereto.

 

 

About the Author

Jay Young is a Las Vegas, Nevada attorney. His practice focuses on business law, business litigation, and acting as an Arbitrator and Mediator. Peers have named him an AV-Rated Lawyer, Best Lawyers, a Top 100 Super Lawyers in the Mountain States multiple years, and to the Legal Elite and Top Lawyers lists for many years. Mr. Young has been appointed a part time Judge, a Special Master to the Clark County, Nevada Business Court, as an arbitrator by the Nevada Supreme Court. He has been appointed as an arbitrator or mediator of well over 250 legal disputes from business disputes to personal injury matters. He has been named Best Lawyers for Arbitration. Mr. Young is a respected author of ten books, including A Litigator’s Guide to Federal Evidentiary Objections, A Litigator’s Guide to the Federal Rules of Evidence, and the Federal Court Civil Litigation Checklist.
Mr. Young can be reached at 702.667.4868 or at jay@h2law.com.