SCOTUS Summarily Vacates More Arbitration Decisions
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The US Supreme Court this morning summarily granted certiorari, vacated and remanded for consideration several related Supreme Court of Hawaii arbitration decisions in The Ritz-Carlton Development Company, Inc. v. Narayan and The Ritz-Carlton Development Company v. Nath (Docket Nos. 14-378, -379 and -406) in light of the Court’s recent DirecTV v. Imburgia opinion (see today’s Order List at www.supremecourt.gov/orders/courtorders/011116zor_n7io.pdf). The Ritz-Carlton cases all involve rulings by the Supreme Court of Hawaii declining to order arbitration of a dispute between condominium owners and inter alia Ritz-Carlton, the condo management company, and the affiliated condo developer. The Hawaii Supreme Court had held that the parties did not form an unambiguous arbitration agreement. In any event, the Hawaii Court also concluded that the arbitration clause at issue was unconscionable because it was a contract of adhesion that among other matters limited discovery rights, required the arbitration proceedings and the facts underlying the dispute to be confidential, and prohibited punitive damages. The vacatur and remand of these rulings by the US Supreme Court will compel the Hawaii Supreme Court to review whether its decisions in Ritz-Carlton place arbitration agreements “on equal footing with all other contracts” and do not give “due regard to the federal policy favoring arbitration.”
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