Cases Dealing With Enforcing Arbitration Agreements
As the amicus curiae brief explains, many federal and state courts have cited Green Tree Financial Corp.-Ala. v. Randolph, 531 U.S. 79 (2000) as creating a case-by-case "prohibitively expensive" standard for determining whether to enforce an arbitration agreement. (E.g., Musnick v. King Motor Co. of Fort Lauderdale (11th Cir. 2003) 325 F.3d 1255, 1259 "The party seeking to avoid arbitration ... has the burden of establishing that enforcement of the agreement would 'preclude' him from 'effectively vindicating his federal statutory right in the arbitral forum.' ";
(1) Blair v. Scott Specialty Gases (3d Cir. 2002) 283 F.3d 595, 610 (Blair);
(2) Burden v. Check Into Cash of Kentucky, LLC (6th Cir. 2001) 267 F.3d 483, 492 Green Tree requires party resisting arbitration to show likelihood of prohibitive expenses;
(3) Bradford v. Rockwell Semiconductor Systems, Inc. (4th Cir. 2001) 238 F.3d 549, 556-557 (Bradford); Guadagno v. E Trade Bank (C.D.Cal. 2008) 592 F.Supp.2d 1263, 1272;
(4) Ting v. AT & T (N.D.Cal. 2002) 182 F.Supp.2d 902, 933-934, revd. on another ground (9th Cir. 2003) 319 F.3d 1126;
(5) Tillman v. Commercial Credit Loans, Inc. (2008) 362 N.C. 93, 104-105 655 S.E.2d 362;
(6) Bess v. DirecTV, Inc. (2008) 381 Ill.App.3d 229, 240-241 319 Ill. Dec. 217, 885 N.E.2d 488;
(7) In re December Nine Company, Ltd. (Tex.Ct.App. 2006) 225 S.W.3d 693, 702-703;
(8) Roddie v. North American Manufactured Homes, Inc. (Ind.Ct.App. 2006) 851 N.E.2d 1281, 1285;
(9) Crawford v. Great American Cash Advance, Inc. (2007) 284 Ga.App. 690, 693 644 S.E.2d 522.)
In Bradford, supra, 238 F.3d 549, 556, the court concluded:
"The appropriate inquiry is one that evaluates whether the arbitral forum in a particular case is an adequate and accessible substitute to litigation, i.e., a case-by-case analysis that focuses, among other things, upon the claimant's ability to pay the arbitration fees and costs, the expected cost differential between arbitration and litigation in court, and whether that cost differential is so substantial as to deter the bringing of claims."
In Blair, supra, 283 F.3d at page 610, the court analyzed an arbitration agreement under Green Tree and decided:
"A remand is appropriate in light of the plaintiff's affidavit of her limited financial capacity, the evidence that the AAA American Arbitration Association would preside over the arbitration, and the AAA rules requiring the parties to bear equally the costs of the arbitrator's fees. Limited discovery into the rates charged by the AAA and the approximate length of similar arbitration proceedings should adequately establish the costs of arbitration, and give the plaintiff the opportunity to prove, as required under Green Tree, that resort to arbitration would deny her a forum to vindicate her statutory rights. The defendant should also be given the opportunity to meet its burden to prove that arbitration will not be prohibitively expensive, or as has been suggested in other cases, offer to pay all of the arbitrator's fees."
The Armendariz court concluded, "this rule will ensure that employees bringing FEHA claims will not be deterred by costs greater than the usual costs incurred during litigation, costs that are essentially imposed on an employee by the employer." (Armendariz, supra, 24 Cal.4th at p. 111.) Under Armendariz, an arbitration provision, silent on costs, that is imposed as a condition of employment, is enforceable but the employer must bear all arbitration costs. (Id. at pp. 110-111.)