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Washington Law Review

Andre V. Egle

Abstract

The Federal Arbitration Act (FAA) requires courts to order parties in a dispute arising out of a commercial contract containing an arbitration provision to proceed to arbitration unless the formation or performance of the arbitration agreement itself is at issue. In 1967, the U.S. Supreme Court held in Prima Paint Corp. v. Flood & Conklin Manufacturing Co. that under the FAA, courts, instead of arbitrators, should resolve claims for fraudulent inducement of arbitration agreements. However, courts were not permitted to resolve claims for fraud in the inducement of the underlying commercial contracts. The Court also held that when deciding whether to enforce an arbitration agreement, a court should only consider the issues related to making and performing that agreement. The federal circuit courts have applied Prima Paint in two ways. The Third, Ninth, and Eleventh Circuits have held that a court may consider a claim that a commercial contract containing an arbitration agreement is void, even if the party has not alleged that the arbitration agreement is invalid. In contrast, the Fifth and Sixth Circuits have held that alleging that a contract is void is not enough to put the contract's arbitration agreement at issue under the FAA and Prima Paint. This comment argues that to put an arbitration agreement at issue a party should specifically plead that it is invalid. A mere allegation that the underlying commercial contract is void is insufficient because federal law encourages arbitration and treats arbitration agreements as severable from the contracts in which they are included. Only if a court finds that an arbitration clause is merely a part of the underlying commercial contract should the court resolve a claim that the contract is void.

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