Rent-A-Center, West, Inc. v. Antonio Jackson (SCOTUS 2010)

Summary

The Supreme Court held that under the Federal Arbitration Act a party who resists arbitration must direct any validity challenge specifically at the delegation provision—the clause assigning arbitrability disputes to the arbitrator—for a court to decide the challenge; because Antonio Jackson's unconscionability arguments attacked only the arbitration agreement as a whole and never mentioned the delegation provision, the Court enforced that provision under 9 U.S.C. §§ 3 and 4 and left his unconscionability claims for the arbitrator. Applying the Prima Paint/Buckeye severability rule, the Court treated the delegation provision as a separate, antecedent agreement to arbitrate gateway issues that must be treated as valid under § 2 unless specifically challenged, and it held forfeited Jackson's belated argument that Hall Street had eliminated the delegation provision's quid pro quo of plenary post-arbitration review. Justice Stevens, dissenting, joined by Justices Ginsburg, Breyer, and Sotomayor, would have affirmed the Ninth Circuit, reasoning that a good-faith unconscionability challenge to a standalone arbitration agreement negates clear and unmistakable assent and that Prima Paint does not extend to delegation clauses nested within an arbitration agreement.

Holding

Whether a court or the arbitrator decides a claim that an arbitration agreement is unconscionable when the agreement contains a delegation provision assigning enforceability disputes to the arbitrator.. A court may decide such a validity challenge only if the challenge is specifically directed at the delegation provision itself; because the delegation provision is a separate, antecedent agreement to arbitrate gateway issues, a challenge to the arbitration agreement as a whole does not prevent the court from enforcing the delegation provision, leaving the validity challenge for the arbitrator.

Whether Jackson's unconscionability challenge was specifically directed at the delegation provision, and whether his Hall Street-based challenge to that provision was preserved.. No—Jackson challenged only the validity of the Agreement as a whole and never mentioned the delegation provision in the district court, in the Ninth Circuit, or in his merits briefing, so the delegation provision must be treated as valid under § 2 and enforced under §§ 3 and 4, leaving his unconscionability arguments for the arbitrator; his new argument that the delegation provision is substantively unconscionable because Hall Street eliminated plenary post-arbitration judicial review came too late and was forfeited.

Summary

Holding

Cited authorities