On June 13, 2022, the Supreme Court issued its highly anticipated decision on the issue of whether 28 U.S.C. § 1782 permits district courts to order discovery for use in international commercial arbitration or ad hoc investment arbitration. See ZF Automotive, Inc. v. Luxshare, Ltd., 142 S.Ct. 2078 (2022). In a unanimous opinion authored by Justice Amy Coney Barrett, the Court held that section 1782 does not authorize discovery for use in those two forms of international arbitration because only a governmental or intergovernmental adjudicative body qualifies as a “foreign or international tribunal.”
On August 12, 2021, the Ninth Circuit Court of Appeals decided whether Washington state law reverse-preempts the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention”), in which case the state law would bar the enforcement of arbitration clauses in insurance contracts in states with similar anti-arbitration laws. CLMS Management Services LP et al. v. Amwins Brokerage of Georgia LLC et al., –F.4th—, 2021 WL 3557591 (9th Cir. 2021). While the Ninth Circuit agreed with the defendants that state law does not reverse-preempt the Convention, plaintiffs have indicated that they will seek review in the U.S. Supreme Court. Plaintiffs point to a circuit split, since the Second Circuit has previously held that an anti-arbitration provision in Kentucky insurance law trumps the New York Convention. If plaintiffs follow through with their intended petition for certiorari, and if the High Court grants review, the Court’s decision should provide insurance companies clearer guidance with respect to the arbitration clauses in their non-domestic policies, as companies should be able to determine whether they can invoke international arbitration in states that bar arbitration clauses in insurance contracts.
Continue Reading Supreme Court May Be Asked to Decide Whether State Insurance Laws Reverse-Preempt the New York Convention