Monday, November 7, 2011

U.S. Supreme Court Vacates 4th DCA Arbitration Opinion About Madoff Claims

On December 22, 2010, I posted about the Fourth DCA's decision in KPMG, LLP v. Cocchi, et al (4D09-4867 & 4D10-988). The post can be viewed HERE. Today, the United States Supreme Court released a unanimous opinion vacating the Fourth District's opinion. The Supreme Court's opinion in KPMG LLP v. Cocchi states, in part:
Agreements to arbitrate that fall within the scope andcoverage of the Federal Arbitration Act (Act), 9 U. S. C. §1 et seq., must be enforced in state and federal courts. State courts, then, “have a prominent role to play as enforcersof agreements to arbitrate.” Vaden v. Discover Bank, 556 U. S. 49, 59 (2009).
The Act has been interpreted to require that if a disputepresents multiple claims, some arbitrable and some not,the former must be sent to arbitration even if this will lead to piecemeal litigation. See Dean Witter Reynolds Inc. v. Byrd, 470 U. S. 213, 217 (1985). From this it follows that state and federal courts must examine with care the complaints seeking to invoke their jurisdiction in orderto separate arbitrable from nonarbitrable claims. A court may not issue a blanket refusal to compel arbitration merely on the grounds that some of the claims could beresolved by the court without arbitration. See ibid.
In this case the Fourth District Court of Appeal of the State of Florida upheld a trial court’s refusal to compel arbitration of respondents’ claims after determining thattwo of the four claims in a complaint were nonarbitrable.Though the matter is not altogether free from doubt, a fairreading of the opinion indicates a likelihood that the Court of Appeal failed to determine whether the other two claimsin the complaint were arbitrable. For this reason, the judgment of the Court of Appeal is vacated, and the case remanded for further proceedings.


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