This week, the Ninth Circuit resolves whether parties can
delegate issues of contract formation to an arbitrator, and
explains the bounds of federal courts' jurisdiction over
ratemaking orders in a challenge to the procedure for capitalizing
a California wildfire fund.
AHLSTROM V. DHI MORTGAGE COMPANY,
LTD.
The Court held that when a party challenges the very existence
of an agreement to arbitrate the court must decide the issue
notwithstanding the existence of a delegation clause delegating
issues of arbitrability to the arbitrator.
The panel: Judges Wardlaw, Berzon, and
Pregerson (C.D. Cal.), with Judge Pregerson writing the
opinion.
Key highlight: "Put simply, the [Mutual
Arbitration Agreement], as drafted, describes and governs a
relationship between Ahlstrom and D.R. Horton that does not exist,
and thus does not constitute a properly formed agreement to
arbitrate."
