Parnell v. Cashcall, Inc.

Plaintiff filed suit alleging that CashCall and Western Sky’s business practices exploit tribal sovereign immunity and illicitly avoid federal and state regulations. The district court denied CashCall's motion to compel arbitration. The Supreme Court has explained that where an arbitration agreement contains a delegation provision - committing to the arbitrator the threshold determination of whether the agreement to arbitrate is enforceable - the courts only retain jurisdiction to review a challenge to that specific provision. Absent such a challenge, the Federal Arbitration Act (FAA), 9 U.S.C. 1 et seq., requires that the court treat a delegation provision as valid and permit the parties to proceed to arbitration. The court held that when a plaintiff seeks to challenge an arbitration agreement containing a delegation provision, he or she must challenge the delegation provision directly. Accordingly, the court concluded that the district court erred in neglecting to recognize the delegation provision in the agreement in this case. The court reversed and remanded. View "Parnell v. Cashcall, Inc." on Justia Law