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U.S. Supreme Court Settles Whether Illegality Claims Go to Arbitrator
Until the recent decision in Buckeye Check Cashing, Inc. v. Cardegna, 126 S.Ct. 1204 (Feb. 21, 2006), there was some uncertainty as to how claims of illegality would fare against attempts to enforce arbitration agreements. The decision did not turn on whether the contract was void or voidable, as did earlier lower court decisions, but simply on whether the illegality claim was directed to the underlying contract or the arbitration clause itself. Relying on Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (1967), the Court treated the illegality claim in the same manner as a claim of fraud in the inducement and held that 'unless the challenge is to the arbitration clause itself, the issue of the contract's validity is considered by the arbitrator in the first instance.' 126 S.Ct. at 1206.
Buckeye was brought as a class action in the Florida state court, claiming that a check-cashing firm charged usurious interest. The allegedly usurious contract contained a standard arbitration clause and provided it would be governed by the Federal Arbitration Act ('FAA'). On a motion to compel arbitration by the check-cashing firm, the trial court ruled that since the contract was void ab initio (because it was illegal), the arbitration clause could not be enforced. The intermediate appellate court went the other way, holding that since the arbitration clause itself was not challenged as illegal, it could be enforced. The Florida Supreme Court reversed on the basis that to enforce an arbitration clause in an illegal agreement would 'breathe life into a contract that not only violates state law, but also is criminal in nature.' Id. at 1207.
Bankruptcy Sales: Finding a Diamond In the Rough
There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.
Judge Rules Shaquille O'Neal Will Face Securities Lawsuit for Promotion, Sale of NFTs
A federal district court in Miami, FL, has ruled that former National Basketball Association star Shaquille O'Neal will have to face a lawsuit over his promotion of unregistered securities in the form of cryptocurrency tokens and that he was a "seller" of these unregistered securities.
Why So Many Great Lawyers Stink at Business Development and What Law Firms Are Doing About It
Why is it that those who are best skilled at advocating for others are ill-equipped at advocating for their own skills and what to do about it?
Blockchain Domains: New Developments for Brand Owners
Blockchain domain names offer decentralized alternatives to traditional DNS-based domain names, promising enhanced security, privacy and censorship resistance. However, these benefits come with significant challenges, particularly for brand owners seeking to protect their trademarks in these new digital spaces.
'Insurable Interest' and the Scope of First-Party Coverage
This article reviews the fundamental underpinnings of the concept of insurable interest, and certain recent cases that have grappled with the scope of insurable interest and have articulated a more meaningful application of the concept to claims under first-party property policies.