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On May 23, 2022, the U.S. Supreme Court decided Morgan v. Sundance. In a rare 9-0 decision, the Court vacated and remanded the judgment of the U.S. Court of the Appeals for the Eighth Circuit, holding that federal courts may not adopt an arbitration-specific rule conditioning a finding of waiver of the right to arbitrate on a showing of prejudice to the other party. Though this had been a relatively common analysis, the Court rejected it, cabining any concept that there is a “policy favoring arbitration.” The Court reinterpreted that to mean only that federal courts may not invent special, arbitration-preferring procedural rules. “[A] court must hold a party to its arbitration contract just as the court would to any other kind.” The Court went on to say that “a court may not devise novel rules to favor arbitration over litigation.” But the Court also left open the role of state law and what rules can apply, including waiver, forfeiture, estoppel, laches, or procedural timeliness.
Justice Kagan delivered the opinion of the Court.
Please join our legal experts to discuss the case, the legal issues involved, and the implications for these parties and other litigation parties going forward.
Erika Birg, Partner, Nelson Mullins Riley & Scarborough LLP
Richard D. Faulkner, FCIArb., Arbitrator, Attorney & Former Professor of ADR Law
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