The wacky world of litigating arbitration issues keeps getting wackier.
Witness today’s Ninth Circuit ruling that, no, by golly, a party needn’t include in its complaint an explanation of why it doesn’t have to arbitrate.
The defendant, Fastbucks, which franchises “payday loan” stores in California and elsewhere, including its home state, Texas, urged that Golden State franchisee Bridge Fund, couldn’t resist Fastbucks’s motion to compel arbitration because Bridge Fund lacked the foresight to explicate in its complaint that California law wouldn’t abide the clause’s unconscionable features.
Yes, folks, we’ve now come to the point that whether you must arbitrate a dispute may turn on whether you anticipated the arbitrability question in the complaint — the one you filed with a view not to arbitrate the dispute.
To its credit, the Ninth Circuit spent only 3.5 pages on the question. And proceeded to affirm the district court’s refusal to compel arbitration under California conflict of laws and unconscionability principles. Bridge Fund Captal Corp. v. Fastbucks Fin’l Corp., No. 08-1707 (9th Cir. Sept. 16, 2010).