Arbitration - University Toyota v. Hardeman


University Toyota v. Hardeman, [Ms. 1151204, Jan. 27, 2017] __ So. 3d __ (Ala. 2017). The Court reverses an order of the Colbert Circuit Court allowing parties to pursue claims against automobile dealerships in arbitration proceedings conducted by the American Arbitration Association rather than by the Better Business Bureau of North Alabama as specified in the controlling arbitration agreements. The evidence established that the Better Business Bureau rejected the arbitration petition because it sought relief on a class-wide basis. Citing Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662 (2010) and Chambers v. Groome Transp. of Alabama, 41 F.Supp.3d 1327 (M.D. Ala. 2014)(Ms. *14-15), the Court holds that the arbitration agreement’s silence as to the availability of class-wide relief did not afford the circuit court the discretion to select an alternative arbitration forum which could provide class-wide relief because, under Alabama law, class-wide arbitration is permitted only when the arbitration agreement provides for it. The Court concludes

Because a trial court can compel arbitration only in a manner consistent with the terms of the applicable arbitration agreement, we reverse the trial court’s order compelling arbitration and remand the cause for the entry of a new order compelling [plaintiffs] to arbitrate their claims against the University dealerships before the BBB if they wish to pursue those claims.

Ms. *17.


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