Kpmg LLP v. Cocchi
132 S. Ct. 23
| SCOTUS | 2011Background
- KPMG moved to compel arbitration under an audit services agreement with Tremont defendants regarding claims against KPMG.
- Florida Court denied arbitration, holding two of four claims nonarbitrable and unclear about the others.
- Court of Appeal relied on Delaware law to treat some claims as direct rather than derivative and affirmed denial.
- Respondents amended their complaint with a fifth claim; trial court again denied arbitration.
- Supreme Court grants certiorari to address whether all arbitrable issues should be compelled and remands for consideration of remaining claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Should pendent arbitrable claims be compelled when some claims are nonarbitrable? | Cocchi argues FAA requires arbitration of arbitrable claims despite some nonarbitrable claims. | KPMG contends the court may not compel arbitration unless all claims are arbitrable under the agreement. | Yes; compel arbitration of pendent arbitrable claims. |
| Did the Florida court properly analyze direct vs. derivative claims under Delaware law? | Cocchi maintains the court misapplied Delaware law to classify claims. | KPMG asserts proper application but seeks full arbitration of arbitral-covered claims. | Court failed to address all claims; remand for full analysis. |
| Does the arbitration clause apply to the non-assessed direct claims identified by the Court of Appeal? | Cocchi argues clause covers broader disputes arising from services. | KPMG contends direct claims fall outside the clause and are nonarbitrable. | Remand to determine applicability to remaining claims. |
Key Cases Cited
- Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213 (1985) (compel arbitration of pendent arbitrable claims when one party moves)
- Southland Corp. v. Keating, 465 U.S. 1 (1984) (federal policy favoring arbitration; statutory scope)
- Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985) (emphatic federal policy in favor of arbitral dispute resolution)
- Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1 (1983) (questions of arbitrability must honor FAA policy)
- Arthur Andersen LLP v. Carlisle, 556 U.S. 624 (2009) (state law may govern nonparties to arbitration agreements)
- Vaden v. Discover Bank, 556 U.S. 49 (2009) (state courts' role in enforcing arbitration agreements)