Supreme Court Rings in New Year with Another Ruling in Favor of Arbitration

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Compucredit Corp. v. Greenwood, decided January 10, 2012 is the latest in a series of U.S. Supreme Court opinions that have come down firmly on the side of the enforceability of consumer arbitration agreements. Lining up 8-1 in favor of Petitioner Compucredit, the justices rejected a determination by the U.S. Court of Appeals for the Ninth Circuit that the provisions of the Credit Repair Organization Act (the CROA or the Act), 15 U.S.C. §§ 1679 et seq., which require that consumers be provided with a disclosure informing them that they “have the right to sue” and prohibit the waiver of “any right of [a] consumer under” the Act, make CROA claims nonarbitrable.

Section 2 of the Federal Arbitration Act (the FAA), 9 U.S.C. §§ 1 et seq., has been cited consistently by the Court in arbitration-related decisions issued over the past several years for the proposition that the FAA establishes “a liberal policy favoring arbitration agreements.” This section was cited again by the Court as the basis for its holding in Compucredit. Justice Scalia explained that the federal policy favoring arbitration “requires courts to enforce agreements to arbitrate according to their terms . . . even when the claims at issue are federal statutory claims, unless the FAA’s mandate has been ‘overridden by contrary congressional command.’”

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