U.S. Supreme Court Grants Cert in Arbitration Case, Denies Another

On Tuesday, the United States Supreme Court granted certiorari in Stok & Associates PA v. Citibank NA, No. 10-514, a case on appeal from the 11^th Circuit Court of Appeals. The question presented in the case is:

Under the Federal Arbitration Act, should a party be required to demonstrate prejudice after the opposing party waived its contractual right to arbitrate by participating in litigation, in order for such waiver to be binding and irrevocable?

According to the petition for certiorari, a conflict currently exists among the Circuits “as to whether a party must demonstrate prejudice.” (Links to the case documents courtesy of SCOTUS Blog.)

The Court also denied certiorari in Ernst & Young LLP v. Clark, No. 10-693, on appeal from the Supreme Court of Kentucky. The question presented in the case was:

Is the FAA “reverse preempted” by the McCarran-Ferguson Act, such that state law vitiates an arbitration agreement covering an ordinary tort suit between the rehabilitator of an insolvent insurer and an auditor?

The Supreme Court of Kentucky held the FAA was “reverse preempted” by the McCarran-Ferguson Act and the auditor’s attempt to arbitrate was barred.

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