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Monday, April 26, 2010

Supreme Court hears ERISA, arbitration cases
Jaclyn Belczyk at 3:12 PM ET

[JURIST] The US Supreme Court [official website; JURIST news archive] heard oral arguments [day call, PDF; merit briefs] Monday in two cases. In Hardt v. Reliance Standard Life Insurance Co. [oral arguments transcript, PDF; JURIST report], the court heard arguments on whether whether § 502(g)(1) of the Employee Retirement Income Security Act (ERISA) [materials] provides a district court discretion to award reasonable attorney's fees only to a prevailing party, and whether a party is entitled to attorney's fees when she persuades a district court that a violation of ERISA has occurred, successfully secures a judicially-ordered remand requiring a redetermination of entitlement to benefits, and subsequently receives the benefits sought on remand. The US Court of Appeals for the Fourth Circuit held [opinion, PDF] that § 502(g)(1) provides a district court discretion to award reasonable attorney's fees only to a prevailing party. Counsel for petitioner argued that she "is eligible for a fee award under section 502(g)(1) of ERISA by proper application of this Court's established fee standards under any test this Court has previously established." Counsel for the US government argued as amicus curiae on behalf of petitioner. Counsel for the respondent argued that "the Petitioner must demonstrate some success on the merits, and under Rule 54 she must specify the judgment entitling her to an award."

In Rent-A-Center v. Jackson [oral arguments transcript, PDF], the court heard arguments on whether a district court is required in all cases to determine claims that an arbitration agreement subject to the Federal Arbitration Act (FAA) [materials] is unconscionable, even when the parties to the contract have clearly and unmistakably assigned this "gateway" issue to the arbitrator for decision. The Ninth Circuit held [opinion, PDF] that that the district court was required to determine whether the arbitration agreement was unconscionable. Counsel for the petitioner argued:

The agreement between Antonio Jackson and Rent-A-Center should be enforced as written. There is no statutory impediment to the enforcement of the clear and unmistakable agreement that gives the arbitrator exclusive authority to decide Jackson's challenge to enforceability, nor is there any language in the Federal Arbitration Act that would prohibit the court from making the determination - prohibit the arbitrator from making the determination of Jackson's challenge to unconscionability.

Counsel for the respondent argued that "Petitioner would have the Court adopt a rule whereby agreements to arbitrate are presumed enforceable before their validity has been determined by a court under section 2 of the Federal Arbitration Act."

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