The U.S. Supreme Court’s attention to arbitration matters has not abated this term. The Court has policed state court rulings, reversing two decisions that strayed from established arbitration doctrine, and issued an opinion that again displays this Court’s robust interpretation of the Federal Arbitration Act. In Marmet Health Care Center, Inc. v. Brown, the Court chided the West Virginia Supreme Court for having characterized the Court’s interpretation of the FAA as “tendentious” and “created from whole cloth,” and reversed the state court’s ruling that the FAA does not preempt West Virginia public policy against pre-dispute arbitration agreements that apply to claims of personal injury or wrongful death against nursing homes. Similarly, in KPMG LLP v. Cocchi, the Court reached down to an intermediate state appellate court in Florida to reverse a decision declining to compel arbitration because two of the four claims in the complaint were not arbitrable. Emphasizing that state courts, like federal ones, must enforce the FAA, the Court reiterated that if a dispute presents both arbitrable and nonarbitrable claims, the FAA requires that the former claims be arbitrated, even if that results in piecemeal litigation.
In January 2012, the Court reversed the Ninth Circuit’s holding that the Credit Repair Organizations Act (CROA) precludes enforcement of an arbitration agreement in a lawsuit for violations of that Act. In CompuCredit Corp. v. Greenwood, consumer credit card holders filed a class action complaint alleging violations of CROA. CROA contains a disclosure provision requiring, before any contract is executed, that credit repair organizations give notice that consumers have “a right to sue” for violations of CROA. The act also provides that any waiver by a consumer of any protection or right afforded by CROA will be treated as void and unenforceable. The district court and the Ninth Circuit ruled that the “right to sue” notice entitles a consumer to bring an action in a court of law, and that the non-waiver provision prohibited the arbitration clause in the plaintiffs’ credit card agreements from depriving the plaintiffs of the “right to sue” in court. The Court reversed, ordering that the arbitration agreement be enforced according to its terms. In the Court’s view, the disclosure provision did not create a right to bring an action in a court of law. In addition, given the FAA’s reflection of a liberal federal policy favoring arbitration, the Court concluded that CROA’s disclosure requirement did not constitute a “congressional command” overriding the FAA’s mandate that courts enforce arbitration agreements.