Introduction

As part of a settlement of a deceptive-trade-practices lawsuit, the National Arbitration Forum (NAF or “the Forum”)— then the nation’s largest administrator of consumer arbitration1—permanently ceased arbitrating consumer claims in July 2009. The settlement has affected the millions of standard-form contracts that require the parties to submit to arbitration exclusively before the Forum. A great deal of litigation has recently forced state and federal courts to decide whether parties to these contracts can be compelled to arbitrate in a different forum or whether they must now litigate in court. Section 5 of the Federal Arbitration Act (FAA) gives a trial court judge the power to appoint a substitute arbitrator if the contractual method for naming an arbitrator fails for “any [ ] reason,” but courts have divided on its applicability. A judge-made rule has emerged from these cases: a court can sever the language naming an unavailable forum and enforce the contract with a substitute arbitrator only if the parties’ choice of forum was an “ancillary logistical concern” of the agreement and not “integral” to the agreement to arbitrate itself.

 

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