Geneva-Roth Ventures v. Kelker

Case Updates

The U.S. Chamber urged the U.S. Supreme Court to review a Montana Supreme Court decision refusing to enforce an arbitration provision in a deferred-loan agreement. In its brief, the Chamber argued that the Montana Supreme Court decision violates the Federal Arbitration Act, which requires arbitration agreements to be evaluated on an even footing with all other contracts. Instead, the Montana Supreme Court subjected the arbitration provision to special scrutiny and heightened notice requirements on the grounds that arbitration agreements waive one's constitutional right to a jury trial. By requiring a “labyrinth of specialized showings” as a precondition to enforcing these kinds of arbitration clauses, the Montana Supreme Court ran afoul of both the FAA and numerous precedents of the U.S. Supreme Court.

The Chamber’s brief also notes that the Montana Supreme Court's ruling contravenes a decision by the Ninth Circuit holding that these same heightened-consent requirements violate the FAA. As the Chamber's brief points out, “the enforceability of arbitration agreements should not turn entirely on the happenstance of which courthouse—federal or state—a case arises in.”

Finally, the Chamber’s brief argues that Supreme Court review is imperative because other states have followed Montana’s lead and issued rulings that “display a prominent anti-arbitration strain.”