{"id":274001,"date":"2014-12-30T06:40:28","date_gmt":"2014-12-30T13:40:28","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=274001"},"modified":"2014-12-17T14:41:26","modified_gmt":"2014-12-17T21:41:26","slug":"arbitrator-should-decide-whether-dispute-falls-within-the-scope-of-the-arbitration-clause","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/arbitrator-should-decide-whether-dispute-falls-within-the-scope-of-the-arbitration-clause\/","title":{"rendered":"Arbitrator Should Decide Whether Dispute Falls Within The Scope Of The Arbitration Clause"},"content":{"rendered":"<p>Addressing who should decide whether a dispute falls within the scope of an arbitration clause, the U.S. Court of Appeals for the 11th Circuit reversed a district court&#8217;s denial of a motion to compel arbitration and remanded the case for an order compelling arbitration. U.S. Nutraceuticals, LLC v. Cyanotech Corp., No. 13-12863, 2014 WL 5471913 (11th Cir., Oct. 30, 2014) (Pryor, J.) (Wilson, J., dissenting).<\/p>\n<p>The dispute over the scope of the arbitration clause existed because the clause changed over the course of the parties&#8217; history.\u00a0 In the parties&#8217; initial agreement, all disputes were to be resolved in arbitration.\u00a0 In 2010, however, the parties amended the agreement and, in relevant part, carved out of the arbitration clause disputes relating to the breach of the confidentiality provision of the parties&#8217; agreement.\u00a0 When one party sued the other for tortious interference and breach of the confidentiality provision, the defendant raised whether the dispute belonged in arbitration rather than litigation and moved a federal court to compel arbitration.\u00a0 If the earlier agreement&#8217;s clause applied, then the parties would be required to arbitrate; if the more recent agreement&#8217;s clause applied, then the case could stay in the court system.\u00a0 The district court held that the 2010 clause applied and denied the motion to compel arbitration.\u00a0 Cyanotech appealed.<\/p>\n<p>The 11th Circuit disagreed, noting first that both versions of the parties&#8217; arbitration clause\u2014like many arbitration clauses\u2014incorporated the rules of the American Arbitration Association into it.\u00a0 Under 11th Circuit precedent, such incorporation constituted a clear agreement to have an arbitrator decide whether the arbitration clause applies.\u00a0 To avoid the all-inclusive arbitration clause in the earlier agreement, the plaintiff sued only under the 2010 agreement.\u00a0 But the 11th Circuit considered this a mere &#8220;legal label&#8221; and examined the &#8220;true thrust&#8221; of the complaint (i.e., the facts alleged therein), which the court concluded implicated both the 2010 contract and the earlier.\u00a0 In this case, that meant an arbitrator should decide whether the carve-out in the 2010 arbitration clause applies or not.<\/p>\n<p>The dissenting judge took the plaintiff at its word and concluded that only the 2010 version of the clause applied.\u00a0 Accordingly, the dissent would have affirmed the district court&#8217;s reliance on the carve-out and refusal to compel arbitration.<\/p>\n<p>Practice Note: This case teaches several lessons to practitioners.\u00a0 First, individuals or companies with long-standing relationships, governed by a sequence of agreements, should be cognizant of differences in their arbitrations clauses over time.\u00a0 Second, when parties agree to change their arbitration clauses, they should consider whether they intend the changes to be retroactive.\u00a0 Third, negotiators should consider including language regarding who decides arbitrability.\u00a0 Finally, when pleading a dispute, consider whether claims can be pleaded to fall within (or without) a particular arbitration clause.<\/p>\n<p>via <a href=\"http:\/\/www.mondaq.com\/article.asp?articleid=356848&amp;email_access=on\">Arbitrator Should Decide Whether Dispute Falls Within The Scope Of The Arbitration Clause &#8211; Intellectual Property &#8211; United States<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Addressing who should decide whether a dispute falls within the scope of an arbitration clause, the U.S. Court of Appeals for the 11th Circuit reversed a district court&#8217;s denial of a motion to compel arbitration and remanded the case for an order compelling arbitration. U.S. Nutraceuticals, LLC v. Cyanotech Corp., No. 13-12863, 2014 WL 5471913&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/arbitrator-should-decide-whether-dispute-falls-within-the-scope-of-the-arbitration-clause\/\">Continue reading <span class=\"screen-reader-text\">Arbitrator Should Decide Whether Dispute Falls Within The Scope Of The Arbitration Clause<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[41],"tags":[42,6259],"class_list":["post-274001","post","type-post","status-publish","format-standard","hentry","category-arbitration","tag-arbitration-2","tag-arbitration-clause","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Arbitrator Should Decide Whether Dispute Falls Within The Scope Of The Arbitration Clause - Advise &amp; Consult, Inc.<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/arbitrator-should-decide-whether-dispute-falls-within-the-scope-of-the-arbitration-clause\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Arbitrator Should Decide Whether Dispute Falls Within The Scope Of The Arbitration Clause - Advise &amp; Consult, Inc.\" \/>\n<meta property=\"og:description\" content=\"Addressing who should decide whether a dispute falls within the scope of an arbitration clause, the U.S. Court of Appeals for the 11th Circuit reversed a district court&#8217;s denial of a motion to compel arbitration and remanded the case for an order compelling arbitration. 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Cyanotech Corp., No. 13-12863, 2014 WL 5471913&hellip; Continue reading Arbitrator Should Decide Whether Dispute Falls Within The Scope Of The Arbitration Clause","og_url":"https:\/\/www.myconstructionexpert.com\/blog\/arbitrator-should-decide-whether-dispute-falls-within-the-scope-of-the-arbitration-clause\/","og_site_name":"Advise &amp; Consult, Inc.","article_publisher":"https:\/\/www.facebook.com\/Advise-Consult-Inc-126949043996790\/","article_published_time":"2014-12-30T13:40:28+00:00","author":"admin","twitter_card":"summary_large_image","twitter_creator":"@adviseconsult","twitter_site":"@adviseconsult","twitter_misc":{"Written by":"admin","Est. reading time":"2 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.myconstructionexpert.com\/blog\/arbitrator-should-decide-whether-dispute-falls-within-the-scope-of-the-arbitration-clause\/#article","isPartOf":{"@id":"https:\/\/www.myconstructionexpert.com\/blog\/arbitrator-should-decide-whether-dispute-falls-within-the-scope-of-the-arbitration-clause\/"},"author":{"name":"admin","@id":"https:\/\/www.myconstructionexpert.com\/blog\/#\/schema\/person\/0a11abe008083d5fb19c2b0feefe7bd7"},"headline":"Arbitrator Should Decide Whether Dispute Falls Within The Scope Of The Arbitration Clause","datePublished":"2014-12-30T13:40:28+00:00","mainEntityOfPage":{"@id":"https:\/\/www.myconstructionexpert.com\/blog\/arbitrator-should-decide-whether-dispute-falls-within-the-scope-of-the-arbitration-clause\/"},"wordCount":485,"commentCount":0,"publisher":{"@id":"https:\/\/www.myconstructionexpert.com\/blog\/#organization"},"keywords":["arbitration","Arbitration Clause"],"articleSection":["Arbitration"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/www.myconstructionexpert.com\/blog\/arbitrator-should-decide-whether-dispute-falls-within-the-scope-of-the-arbitration-clause\/#respond"]}]},{"@type":"WebPage","@id":"https:\/\/www.myconstructionexpert.com\/blog\/arbitrator-should-decide-whether-dispute-falls-within-the-scope-of-the-arbitration-clause\/","url":"https:\/\/www.myconstructionexpert.com\/blog\/arbitrator-should-decide-whether-dispute-falls-within-the-scope-of-the-arbitration-clause\/","name":"Arbitrator Should Decide Whether Dispute Falls Within The Scope Of The Arbitration Clause - Advise &amp; 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