– The Florida Supreme Court found that the incorporation of AAA arbitration rules in Airbnb’s Terms of Service is clear evidence of the parties’ intent to delegate questions of arbitrability to the arbitrator.
– This decision emphasizes the importance of carefully crafting arbitration agreements to reflect the true intent of the parties and avoid potential issues.
– The ruling highlights the significance of specifying key points in arbitration agreements to prevent disputes. 1. The U.S. Supreme Court held in First Options of Chicago, Inc. v. Kaplan that courts, not arbitrators, must decide questions of arbitrability unless there is clear and unmistakable evidence of the parties’ intent to submit questions of arbitrability to the arbitrators.
2. 11 out of 12 federal circuit courts of appeal have found that the incorporation by reference of arbitration rules empowering arbitrators to decide arbitrability into an agreement to arbitrate indicates the parties’ clear and unmistakable intent to have the arbitrators, rather than the courts, determine arbitrability.
3. In a case involving a couple from Texas who rented a condominium unit in Florida using Airbnb, Airbnb argued that the reference to AAA rules in its terms of service provided clear and unmistakable evidence of the parties’ intent to delegate issues of arbitrability to the arbitrator. The couple argued that the mere incorporation by reference of AAA rules did not show delegation of arbitrability to the arbitrator. 1. The Florida Second District Court of Appeal reversed the trial court’s decision in the case Doe v. Natt.
2. The Florida Supreme Court quashed the Second District’s opinion and held that incorporating by reference arbitration rules empowers arbitrators to decide arbitrability.
3. The Court sought to prevent Florida from becoming an “outlier” and noted that U.S. federal circuit courts of appeal have consistently agreed on the issue. – The Court’s decision did not address any conflict with the Restatement of the U.S. Law of International Commercial and Investor-State Arbitration.
– Professor George A. Bermann, chief reporter of the Restatement, supported the Does with an Amicus Brief, citing the endorsement by the American Law Institute that the presence of competence-competence language in incorporated rules of procedure fails to meet the First Options test.
– The Miami International Arbitration Society filed an Amicus Brief in support of Airbnb, requesting the Court to reverse the Second District Court of Appeal and hold that adopting arbitration rules that empower the arbitrator to decide their own jurisdiction constitutes clear and unmistakable evidence that the parties agreed to arbitrate arbitrability.
https://www.hklaw.com/en/insights/publications/2022/04/who-decides-if-a-dispute-is-subject-to-arbitration
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