Disputing Blog by Karl Bayer, Victoria VanBuren, and Holly Hayes
One has to wonder whether the 9th Circuit is paying attention to the principles embodied in the Federal Arbitration Act (FAA) as interpreted by the Supreme Court. Casa Del Caffe Vergnano v. ItalFlavors (9th Cir 03/15/2016) fails to even mention the Supreme Court decisions that are applicable.
The case involves a situation in which two parties signed a franchise agreement (containing an arbitration clause) and then soon after signed another agreement saying that the franchise agreement “does not have any validity or effectiveness between the parties.” Naturally, the parties had a falling out and one of them brought a lawsuit claiming violations of a state franchise statute, and the other one petitioned to compel arbitration. The district court issued an order compelling arbitration. The 9th Circuit reversed in a 2-1 decision.
You may read more about the recent appellate decision over at the Ross Runkel Report.
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