First Options of Chicago, Inc. v. Kaplan

First Options of Chicago, Inc. v. Kaplan
U.S. LEXIS 3463; 63 U.S.L.W. 4459; Fed. Sec. L. Rep. (CCH ) ¶ 98,728; Comm. Fut. L. Rep. (CCH) ¶ 26,398; 95 Cal. Daily Op. Service 3821; 95 Daily Journal DAR 6474; 9 Fla. L. Weekly Fed. S 64
Case history
Prior	On writ of certiorari to the United States Court of Appeals for the Third Circuit
Holding
Judicial review of arbitrability of contract is properly permitted when parties have not clearly agreed that arbitrator will decide question
Court membership
Chief Justice William Rehnquist Associate Justices John P. Stevens · Sandra Day O'Connor Antonin Scalia · Anthony Kennedy David Souter · Clarence Thomas Ruth Bader Ginsburg · Stephen Breyer
Case opinion
Majority	Breyer, joined by unanimous

First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995), was a case decided by the Supreme Court of the United States on who decides whether a dispute is subject to arbitration, the courts or an arbitrator.

Background

Under the 1924 U.S. Federal Arbitration Act and subsequent Supreme Court rulings, there is a strong presumption in favor of arbitration, with the courts generally deferring to the opinions of an arbitrator.^[1]

This case arose out of disputes over a "workout" agreement, embodied in four documents, which governed the "working out" of debts to First Options of Chicago, Inc. incurred as a result of the

reversed. The Third Circuit said that courts should independently decide whether an arbitration panel has jurisdiction over a dispute, and that it would apply ordinary standards of review when considering the District Court's denial of the Kaplan's' motion to vacate the arbitration award.

Supreme Court holdings

The Court unanimously agreed with the Third Circuit that arbitrability of the Kaplan—First Options dispute was subject to independent review by the courts. On the narrow question of whether the

in deciding whether such an agreement exists. However, courts should not assume that the parties agreed to arbitrate arbitrability unless there is "clear and unmistakable" evidence that they did so.

The Court also held that courts of appeals should apply ordinary standards when reviewing district court decisions upholding arbitration awards, i.e., accepting

See also

• List of United States Supreme Court cases, volume 514
• List of United States Supreme Court cases
• Lists of United States Supreme Court cases by volume
• List of United States Supreme Court cases by the Rehnquist Court

References

External links

• Works related to First Options v. Kaplan at Wikisource
• Text of First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995) is available from: Cornell  CourtListener  Findlaw  Google Scholar  Justia  Library of Congress  Oyez (oral argument audio)