Arbitration About Arbitration : The Legacy of Rent-A-Center West, Inc. v. Jackson

In March 2021, 82-year-old Cecile Wade, who suffered from dementia, was paralyzed by a stroke and admitted to the Evangelical Lutheran Good Samaritan Society Hospital in Florida. According to Cecile’s husband, Glennon, she could neither sign anything nor “comprehend what she would be signing anyway.” Yet during Cecile’s stay, someone scrawled her name in the signature block of the hospital’s admissions contract and checked a box next to the words: “YES I DO wish to arbitrate disputes.” Later, Cecile and Glennon filed a lawsuit against the hospital, alleging that it had illegally detained her for five days. Cecile and Glennon also contended that the arbitration clause in the admissions contract was invalid because the signature has been forged and Cecile was mentally incapacitated. However, the trial court held that it lacked jurisdiction to consider this argument. The judge noted that the admissions contract did not just mandate that patients arbitrate the merits of their lawsuits. Instead, it included a “delegation clause,” which, as paradoxical as it sounds, allowed the arbitrator to decide if a party’s claims are even “subject to arbitration.” Thus, the court ordered Cecile and Glennon to arbitrate the very issue of whether Cecile had agreed to arbitrate the complaint. This invited contribution to The Federal Arbitration Act: Successes, Failures, and a Roadmap for Reform (Cambridge Univ. Press forthcoming 2024) explores the phenomenon of arbitration about arbitration. It shows that the fountainhead of this movement is the U.S. Supreme Court’s 2010 decision in Rent-A-Center West, Inc. v. Jackson. This quiet blockbuster held that delegation clauses are their own sovereign arbitration agreements: (1) freestanding contracts to arbitrate disputes about arbitration (2) within contracts to arbitrate substantive claims (3) within the so-called “container contract.” This chapter critiques this approach and proposes a reform. Instead of throwing a Hail Mary, such as urging Congress to intervene or the Court to reconsider Rent-A-Center, it reveals how judges can nudge one important and unsettled issue in the right direction