Credit: Shutterstock.com 'Morgan v. Sundance': Bringing Arbitration Agreements Back Down to Earth
U.S. Supreme Court reins in the notion that the Federal Arbitration Act embodies a "policy favoring arbitration." Legal defenses to arbitration agreements should be treated no differently than legal defenses to any other contract.
June 24, 2022 at 10:00 AM
7 minute read
On May 23, 2022, the United States Supreme Court, in Morgan v. Sundance, Inc., 2022 WL 1611788 (U.S. May 23, 2022), issued a surprising 9-0 ruling that brings the analysis of arbitration provisions back in line with that of all other contract provision when it comes to the important topic of waiver. Under Morgan, federal courts must now treat waiver of an arbitration provision the same way they would treat waiver of any other contractual right: by focusing on the actions of the waiving party without requiring a showing of prejudice. This overrules nine of the 11 U.S. circuit courts (including the Third Circuit) that had required a plaintiff to show that he or she had suffered prejudice in order to successfully establish a waiver defense to arbitration.
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