ATTENTION: The software behind KU ScholarWorks is being upgraded to a new version. Starting July 15th, users will not be able to log in to the system, add items, nor make any changes until the new version is in place at the end of July. Searching for articles and opening files will continue to work while the system is being updated.
If you have any questions, please contact Marianne Reed at mreed@ku.edu .
Buckeye Check Cashing and the Separability Doctrine
dc.contributor.author | Drahozal, Christopher R. | |
dc.date.accessioned | 2013-06-18T19:18:50Z | |
dc.date.available | 2013-06-18T19:18:50Z | |
dc.date.issued | 2009 | |
dc.identifier.citation | Christopher R. Drahozal, Buckeye Check Cashing and the Separability Doctrine, 1 Y.B. ON ARB. & MEDIATION 55 (2009). | |
dc.identifier.uri | http://hdl.handle.net/1808/11276 | |
dc.description | Full-text available at SSRN. See link in this record. | |
dc.description.abstract | In Buckeye Check Cashing, Inc. v. Cardegna, the Supreme Court held that arbitrators, not courts, are to decide whether a contract that includes an arbitration clause is illegal as usurious; and that the separability doctrine applies in state court as well as federal court. This article examines various implications of Buckeye, which can be summarized as follows: (1) Buckeye was one of a series of class actions filed in Florida challenging as usurious the fees charged on payday loans. Despite the fact that most payday loan contracts included arbitration clauses and most arbitration clauses included class arbitration waivers, the plaintiffs were able to obtain a court adjudication of the usury issue and class relief for most individuals (albeit for many in arbitration instead of in court). (2) After Buckeye, the question of whether a court can resolve a challenge to the main contract (which includes an arbitration clause) likely depends on whether the challenge is one that undercuts a party's assent to the main contract. If so, the defense - such as lack of assent or fraud in the execution - is one that courts can decide. If not, the defense - such as fraudulent inducement or illegality - is for the arbitrator. The defenses of lack of capacity and duress sometimes, but not always, undercut a party's assent to the main contract. (3) Buckeye’s holding that the FAA’s separability doctrine applies in state court not surprisingly has triggered responses from state courts seeking to avoid the decision and by Congress seeking to overrule it. The Supreme Court has already resolved one post-Buckeye case and may well face others. Congress’s attempt in the Arbitration Fairness Act to overrule the separability doctrine should be rejected. (4) Other contract clauses - in particular, forum-selection clauses, choice of-law clauses, and jury-trial waivers - raise separability issues similar to those raised by arbitration clauses. Courts have regularly applied the separability doctrine to those types of contract clauses, supporting the suggestion by some commentators that separability can be derived from the expectations of the parties to the contracts, rather than just from the text of the Federal Arbitration Act. | |
dc.language.iso | en_US | |
dc.publisher | Penn State Dickinson School of Law | |
dc.relation.hasversion | http://ssrn.com/abstract=1888576 | |
dc.subject | Arbitration | |
dc.subject | Dispute resolution | |
dc.subject | Contracts | |
dc.subject | Separability doctrine | |
dc.title | Buckeye Check Cashing and the Separability Doctrine | |
dc.type | Article | |
kusw.kuauthor | Drahozal, Christopher R. | |
kusw.kudepartment | School of Law | |
kusw.oastatus | waivelicense | |
kusw.oapolicy | The license granted by the OA policy is waived for this item. | |
dc.rights.accessrights | openAccess |