On June 1, 2020, the Supreme Court denied review of a Ninth Circuit decision that misconstrues the Federal Arbitration Act’s saving clause. Under the saving clause, an arbitration agreement that is otherwise enforceable under federal law remains subject to any generally applicable state-law contract defense. The Ninth Circuit concluded that a state policy known as the “McGill Rule” is such a defense. As the Ninth Circuit acknowledged, however, the McGill rule arises from California Civil Code § 3513, a state “maxim of jurisprudence.” WLF filed an amicus brief urging the Supreme Court to grant review. In its brief, WLF contended that California’s maxims of jurisprudence are not contract defenses that properly trigger the FAA’s saving clause. In addition, WLF argued, the McGill rule is preempted because its only purpose is to serve as a tool for striking down arbitration clauses.
Documents:
