Buckeye Check Cashing, Inc. v. Cardegna
| Buckeye Check Cashing, Inc. v. Cardegna | |
|---|---|
|
|
| Argued November 29, 2005 Decided February 21, 2006 |
|
| Full case name | Buckeye Check Cashing, Inc., petitioner v. John Cardegna et al.' |
| Citations | 546 U.S. 440 (more)
126 S.Ct. 1204
|
| Prior history | Petitioner's motion to compel arbitration denied in Florida trial court, denial overturned by Florida Fourth District Court of Appeal; appeals court decision reversed by Florida Supreme Court, 894 So. 2d 860; certiorari granted, 545 U.S. ___ |
| Holding | |
| Where contract contains arbitration clause, arbitrator alone can rule on legality of contract under state law in first instance unless clause itself is challenged, distinguishing between void and voidable. Florida Supreme Court reversed and remanded | |
| Court membership | |
| Case opinions | |
| Majority | Scalia, joined by Roberts, Stevens, Kennedy, Souter, Ginsburg, Breyer |
| Dissent | Thomas |
| Alito took no part in the consideration or decision of the case. | |
| Laws applied | |
| Federal Arbitration Act, 9 U.S.C. §§ 1–4 | |
Buckeye Check Cashing Inc. v. Cardegna, 546 U.S. 440 (2006), is a United States Supreme Court case concerning contract law and arbitration. The case arose from a class action filed in Florida against a payday lender alleging the loan agreements the plaintiffs had signed were unenforceable because they essentially charged a higher interest rate than that permitted under Florida law.
The lending agreements called for all disputes between the borrower and lender to be settled in arbitration. The original plaintiffs argued that the entire contract, including the arbitration clause, was invalid because it violated the law. When it was appealed to the High Court, Justice Antonin Scalia wrote for a majority of seven that the Federal Arbitration Act, as previously interpreted by the Court, settled a question that had long been debated by legal scholars and lower-court judges. The opinion distinguished void and voidable contracts, requiring that in the latter an arbitrator rule on all issues including the legality of the contract unless the arbitration clause was itself challenged. The only dissenter was Clarence Thomas, who restated his belief that the Arbitration Act does not supersede state law.
In 1978, the court's Marquette Bank decision, which held that under the National Banking Act of 1863 states could not enforce their anti-usury laws against nationally-chartered banks based in other states, opened the door to increased credit card spending by Americans. Other forms of consumer credit, such as title and payday loans, became available for those who could not get even the most restrictive credit cards available. Social activists criticized the banks and companies that engaged in those practices, calling them predatory lenders who targeted the poor with promises of no credit check and easy money that only came at extremely high interest rates, profiting when the loans were extended long beyond the original short term.
...
Wikipedia