Nitty Gritty Advice for Compelling Arbitration under the FAA

Nitty-Gritty Road Sign with dramatic clouds and sky.I regularly receive questions about compelling arbitration under the Federal Arbitration Act.  In particular, people ask : (1) Can I file a motion to compel before any other “complaint” is filed; (2) What should I call my motion?; and (3) What is with this 5-day rule hidden inside Section 4 of the FAA?  Wanting to confirm the advice I give people, I asked our of our summer associates, Nicole Faulkner, to look into these arcane questions.  She did a great job, and here are her tips.

(1) First, it is perfectly fine to start an action with a petition to compel arbitration.  In fact, it is quite common. You will be hard pressed, however, to find a case or rule out there explicitly giving permission to do this. The best indicator that no classic “complaint” is necessary comes from dicta in Vaden v. Discovery Bank, 556 U.S. 49 (2009).  In that case, the Court is settling a jurisdiction issue but before reaching that question it held that courts should use a “look through” approach to assess the underlying claims. This “look through” approach, says the Court, “permits a § 4 petitioner to ask a federal court to compel arbitration without first taking the formal step of initiating or removing a federal question suit.” Voila! The dissent criticized the fact that the Court did not elaborate on what happens when the petition to compel IS a freestanding claim…what exactly do you “look through” to assess the jurisdiction when there is no Complaint? The Eleventh Circuit answered this question in Community State Bank v. Strong, 651 F.3d 1241 (11th Cir. 2011). In that scenario, the Court agreed with Vaden and stated that the “look through” approach gives the Court the ability to dive deep into the “full flavor” of the controversy and they are not limited to what is provided in the motion.

(2) As for your caption? Although you will see many examples titled “Motion to Compel Arbitration,” a true FAA aficionado should title her document “Petition to Compel Arbitration.” A plain read of the text in §§ 4 and 16 of the FAA gets you to this conclusion.

(3) As much as you may want to, you cannot pull in the standard response times under the Federal Rules of Civil Procedure when you’re dealing with petitions to compel arbitration. That twenty-day notice period does not apply here. Courts around the country have interpreted the 5-day rule in § 4 to mean just that—5 days. The FAA does not incorporate an additional response period and the reference to the Federal Rules of Civil Procedure applies only to the manner in which the notice is served. Unionmutual Stock Life Ins. Co. of Am. v. Beneficial Life Ins. Co., 774 F.2d 524, 526 (1st Cir. 1985). Federal district courts in California and Oregon have reached the same conclusion.  The respondent gets 5 days’ notice before the hearing. Guess what? That doesn’t mean 5 days from the time the hearing is scheduled. It means 5 days from the time you file your petition to compel arbitration. The Court in Unionmutual said that the original petition serves as notice that the hearing can be held at any time after 5 days has passed from the date the petition was served. So if the clerk notifies you ten days later that the hearing is on the eleventh day—the notice period was met.

Have any other burning procedural questions about compelling arbitration (or any other FAA-related process)?  Send them my way!  I might even address them before we get a new crop of summer associates…

Topics:  Arbitration, Arbitration Agreements, Federal Arbitration Act, Mandatory Arbitration Clauses, Young Lawyers

Published In: Alternative Dispute Resolution (ADR) Updates, Civil Procedure Updates, General Business Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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