USA: Buckeye Check Cashing, Inc. v. Cardegna et al. - International Arbitration Court Decisions - 3rd Edition
Originally from International Arbitration Court Decisions - 3rd Edition
DECISION BY THE SUPREME COURT OF THE UNITED STATES RENDERED ON 21 FEBRUARY 2006 IN CASE NO. 04-1264*
(Slip Opinion) OCTOBER TERM, 2005
NOTE: Where it is feasible, a syllabus (headnote) will be released, as is being done in connection with this case, at the time the opinion is issued. The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.
SUPREME COURT OF THE UNITED STATES
BUCKEYE CHECK CASHING, INC. v. CARDEGNA ET AL. CERTIORARI TO THE SUPREME COURT OF FLORIDA
No. 04–1264. Argued November 29, 2005—Decided February 21, 2006
For each deferred-payment transaction respondents entered into with Buckeye Check Cashing, they signed an Agreement containing provisions that required binding arbitration to resolve disputes arising out of the Agreement. Respondents sued in Florida state court, alleging that Buckeye charged usurious interest rates and that the Agreement violated various Florida laws, rendering it criminal on its face. The trial court denied Buckeye’s motion to compel arbitration, holding that a court rather than an arbitrator should resolve a claim that a contract is illegal and void ab initio. A state appellate court reversed, but was in turn reversed by the Florida Supreme Court, which reasoned that enforcing an arbitration agreement in a contract challenged as unlawful would violate state public policy and contract law.
Held: Regardless of whether it is brought in federal or state court, a challenge to the validity of a contract as a whole, and not specifically to the arbitration clause within it, must go to the arbitrator, not the court. Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U. S. 395, and Southland Corp. v. Keating, 465
Buckeye Check Cashing, Inc. v. Cardegna et al., Decision by the Supreme Court of the United States rendered on 21 February 2006 in Case No. 04-1264
Gross error of law and manifest disregard of law as grounds to set aside arbitral awards in the United States.