Arbitrability: Ninth Circuit Holds That ERISA Claims Can Be Subject To Mandatory Arbitration

Intervening Supreme Court Law Means Earlier Ninth Circuit Law Is No Longer Good Law.

        ERISA claims may be the subject of mandatory arbitration: that's the holding and threshold issue in Dorman v. Charles Schwab Corp., 18-15281 (9th Cir.  8/20/19) (Pearson, Gould, Ikuta). To reach this result, the panel needed to conclude that Amaro v. Continental Can Co., 724 F.2d 747 (9th Cir. 1984), holding that ERISA claims were not arbitrable, was no longer good law. And the panel did so conclude, based on intervening Supreme Court case law, specifically, American Express Co. v. Italian Colors Restaurant, 570 U.S. 228 (2013).

        The Amaro panel reasoned that "ERISA mandated 'minimum standards [for] assuring the equitable character of [ERISA] plans' that could not be satisfied by arbitral proceedings." But American Express, a recent Supreme Court case, held there is nothing unfair about arbitration, even on an individual basis, as long as individuals can vindicate their statutory rights in the arbitral forum.

        In an unpublished memorandum opinion, the Ninth Circuit held that the specific arbitration clause in Dorman was enforceable.

        COMMENT: In American Express, Justice Kagan, dissenting, wrote: "No rational actor would bring a claim worth tens of thousands of dollars if doing so meant incurring costs in the hundreds of thousands." Her "nutshell version" of the majority opinion in American Express Co.: "Too darn bad."