Term: 2008
Docket: 08-146
Arthur Andersen Llp, Et Al. v. Wayne Carlisle Et Al.
- Pro
08-146 ARTHUR ANDERSEN, LLP V. CARLISLE DECISION BELOW: 521 F.3d 597 CERT. GRANTED 11/7/2008 QUESTION PRESENTED: Section 3 of the Federal Arbitration Act (“FAA”), 9 U.S.C. § 3, provides that "on application of one of the parties," a district court shall stay proceedings pending arbitration if the district court concludes that the "issue involved in such suit or proceeding is referable to arbitration" under "an agreement in writing for such arbitration." Section 16(a)(1)(A) of the FAA, 9 U.S.C. § 16(a)(1)(A), provides that "an appeal may be taken from an order" of a district court denying a stay application made under Section 3. The questions presented are: (1) Whether Section 16(a)(l)(A) of the FAA provides appellate jurisdiction over an appeal from an order denying an application made under Section 3 to stay claims involving non-signatories to the arbitration agreement. (2) Whether Section 3 of the FAA allows a district court to stay claims against non- signatories to an arbitration agreement when the nonsignatories can otherwise enforce the arbitration agreement under principles of contract and agency law, including equitable estoppel. LOWER COURT CASE NUMBER: 06-5290
In the case of Arthur Andersen LLP, et al. v. Wayne Carlisle et al., 2008, the U.S Supreme Court ruled in favor of Arthur Andersen and other accounting firms who were sued by a group of taxpayers led by Wayne Carlisle for alleged tax advice that resulted in substantial penalties and interest. The plaintiffs had signed an agreement with the defendants which included an arbitration clause but argued that they should be allowed to bring their claims as a class action lawsuit instead. However, the court held that federal law established a liberal policy favoring arbitration agreements and did not allow parties to sidestep such agreements simply because they would prefer to litigate their claims as part of a class action suit.
In the dissenting opinion for Arthur Andersen LLP, et al. v. Wayne Carlisle et al., Justice Ruth Bader Ginsburg argued that the Federal Arbitration Act (FAA) does not grant arbitrators the power to decide their own jurisdiction, particularly in cases involving class-action claims. She contended that such a decision should be made by a court rather than an arbitrator and criticized her colleagues' interpretation of precedents as overly broad. Furthermore, she expressed concern about the potential implications of this ruling on consumers and employees who may be forced into arbitration without fully understanding its consequences or having any real choice in the matter due to unequal bargaining power with corporations.
