841 F.3d 781
8th Cir.2016Background
- Willie Robinson, Sr. signed an arbitration agreement on admission to Pine Hills nursing home in 2010; the agreement incorporated the National Arbitration Forum (NAF) Code of Procedure and listed five possible arbitration fora.
- In 2009 (before the agreement), NAF entered a consent judgment agreeing not to process new consumer arbitrations; it is undisputed NAF stopped consumer arbitration, and the availability of the other four listed fora is unclear but assumed unavailable by the parties.
- After Willie died, his son and estate administrator Eddie Robinson sued Pine Hills and affiliated entities in state court for alleged negligence/wrongful death; defendants moved to dismiss and compel arbitration and removed the case to federal court.
- The arbitration agreement included a severability clause, stated it was governed by the Federal Arbitration Act (FAA), and provided that if a listed forum was unavailable the parties "may seek legal and other remedies."
- The district court granted the motion to compel arbitration; the Eighth Circuit reviewed de novo and affirmed, holding the arbitration agreement enforceable and covering Robinson’s claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of arbitration agreement | Agreement unenforceable because NAF was unavailable | Agreement valid under Arkansas law despite NAF's unavailability | Agreement is valid and enforceable (Arkansas law controls validity) |
| Whether dispute must be arbitrated given NAF's unavailability | Robinson may litigate because parties were "denied the opportunity" to arbitrate before listed fora | FAA §5 requires courts to appoint a substitute arbitrator when named forum(s) lapse; parties must still arbitrate | Court must enforce arbitration; FAA §5 fills the gap and compels arbitration absent an integral-forum exception here |
| Whether the choice of NAF was integral (exception to FAA §5) | Selection of NAF was integral; if integral, court cannot appoint substitute and claim can be litigated | Agreement's language and severability leave open arbitration before other/alternative fora and remedies; no integral-forum showing | No integral-forum exception applied: selection was not integral, so FAA §5 substitute appointment applies |
| Whether defendants who did not sign can compel arbitration | Nonsignatory defendants cannot force arbitration | Nonsignatories closely related to facility (owners/operators/managers/agents) can compel to avoid eviscerating the agreement; agreement extends to successors, assigns, agents | Nonsignatory defendants may compel arbitration under Arkansas law given allegations of close relationship and agreement language |
Key Cases Cited
- Schultz v. Verizon Wireless Servs., LLC, 833 F.3d 975 (8th Cir. 2016) (standard of review for arbitration questions)
- Faber v. Menard, Inc., 367 F.3d 1048 (8th Cir. 2004) (two-step inquiry: valid agreement and scope)
- 3M Co. v. Amtex Sec., Inc., 542 F.3d 1193 (8th Cir. 2008) (motion to compel when agreement covers dispute)
- Donaldson Co. v. Burroughs Diesel, Inc., 581 F.3d 726 (8th Cir. 2009) (state contract law governs arbitration agreement validity)
- Courtyard Gardens Health & Rehab., LLC v. Arnold, 485 S.W.3d 669 (Ark. 2016) (Arkansas court held NAF's cessation did not by itself cancel the incorporated code)
- Inetianbor v. CashCall, Inc., 768 F.3d 1346 (11th Cir. 2014) (discussing an "integral forum" exception to FAA §5)
- DIRECTV, Inc. v. Imburgia, 136 S. Ct. 463 (2015) (state law governs contract interpretation when FAA does not address the issue)
