Virginia College, LLC v. Blackmon, 109 So. 3d 1050

Plaintiffs enrolled in Virginia College's surgical technology program by signing an Enrollment and Tuition Agreement that includes an arbitration clause.
Plaintiffs allege the college fraudulently induced signing by misrepresenting accreditation status with CAAHEP and that lack of accreditation would impair licensure and marketability.
Plaintiffs asserted numerous claims including fraud in the inducement, negligence, fiduciary breaches, and fraudulent inducement of the arbitration provision.
The trial court granted the motion to invalidate the arbitration clause, finding facts alleged sufficient to show fraud in the making of the agreement to arbitrate, rendering the clause unenforceable.
Virginia College appealed, contending the trial court erred in recognizing fraud in the inducement of the arbitration clause; the appellate court reviews de novo.
The court clarifies that under federal law, fraud claims must be specific to the arbitration agreement itself to affect arbitrability, and claims about the broader contract generally must be submitted to arbitration.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether plaintiffs pleaded fraud in the inducement of the arbitration clause with specificity	Blackmon documents fraud in inducement of arbitration clause	Virginia College asserts fraud claims target the overall contract, not the arbitration clause	Fraud in the inducement not sufficiently pleaded for arbitration clause
Whether the allegations attach to the arbitration clause rather than the entire contract	Allegations concern the arbitration clause itself	Allegations concern the overall agreement and accreditation status	Allegations attach to whole contract; not sufficient for arbitration clause
Whether the claims of fraud in inducement of the arbitration clause should be decided by the arbitrator or the court	Claims should be litigated in court due to fraudulent inducement of arbitration	Arbitrator should decide whether the contract was fraudulently induced	Arbitrator must decide fraud in the inducement of the arbitration clause, not the court
Whether the trial court properly denied or granted arbitration based on unconscionability	Arbitration clause unconscionable and unenforceable	Unconscionability not properly ripe for review; issue not decided	Unconscionability claim was not ripe for review due to lack of ruling below

Prima Paint Corp. v. Flood & Conklin Mfg. Corp., 388 U.S. 395 (U.S. 1967) (fraud in the inducement of the contract vs. arbitration clause; severability)
Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (U.S. 2006) (arbitration-clause validity depends on the integrity of the entire agreement)
Rent-A-Center, West, Inc. v. Jackson, 130 S. Ct. 2772 (U.S. 2010) (arbitration agreements are subject to federal policy favoring arbitration)
Southland Corp. v. Keating, 465 U.S. 1 (U.S. 1984) (federal policy favoring arbitration applies to state actions)
Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (U.S. 1985) (arbitration of antitrust claims; broad FAA applicability)
Will-Drill Resources, Inc. v. Samson Resources Co., 352 F.3d 211 (5th Cir. 2003) (observes arbitration issue boundaries in certain contexts)