contracts

Terrence Byrd was pulled over by a Pennsylvania police officer for violating a state driving law. Eventually, the officer and another police officer discovered that Byrd was driving a rental car but was not a named driver on the rental agreement. Moreover, the officers also discovered that Byrd had a criminal record that included drug, weapon, and assault charges. Ultimately, the officers asked Byrd for permission to search the car, which they assert that Byrd granted, and, the officers found both heroin and illegal body armor in the car. Byrd challenged the stop and search arguing that it was unlawful. The District Court held that the stop and search was lawful. On appeal, the Third Circuit further recognized that the driver of a rental car who is not listed on the rental agreement did not have a reasonable expectation of privacy. The Supreme Court will likely resolve the Circuit conflict regarding whether a reasonable expectation of privacy exists for a driver in sole possession of a rental vehicle that is not listed as a driver on the rental agreement.

At issue in this case is whether employment contracts barring employees from collectively arbitrating disputes with employers are illegal under the National Labor Relations Act (“NLRA”). Employees argue that preventing collective arbitration interferes with the NLRA’s Section 7 protections of “concerted activity” for “mutual aid and protection”. Employers counter that the Federal Arbitration Act governs the arbitration agreements, under which they are enforceable. Employers also contend that enforcing the agreements protects freedom of contract, thus promoting efficiency and protecting judicial resources. Employees respond that collective arbitration allows them to share the costs and risks of litigation, thereby allowing them to pursue claims that, in the aggregate, may reveal abusive practices by employers. One on hand, freedom of contract in the interest of judicial economy may be harmed if the Court does not uphold the validity of the waivers. On the other hand, if the Court does uphold the validity of the waivers, it will may become more difficult for employees to challenge abusive work practices in their workplaces.

The Court must consider whether federal law preempts state law regarding arbitration clauses in powers-of-attorneys. Kindred Nursing Centers argues that state law, which requires principals to explicitly authorize an agent to enter into arbitration agreements, violates the Federal Arbitration Act. Contrarily, Janis E. Clark and Beverly Wellner argue that state law governs contract formation and that state law requires powers-of-attorneys to adhere to the expressed intentions of the principal in a contract. The case will determine whether powers-of-attorney must explicitly grant the agent the power to bind the grantor to an arbitration agreement and may impact elder care and estate planning practices across the United States.

The Supreme Court will consider whether protections for applicants in the Equal Credit Opportunity Act (“ECOA”) also extend to spouses who sign guaranties, and whether the Federal Reserve Board (the “Fed”), in promulgating Regulation B, permissibly expanded the definition of “applicant” in the ECOA to include such guarantors. See Brief for Petitioners, Hawkins & Patterson at i, 8; Brief for Respondent, Community Bank of Raymore at i. The loan guarantors in this case (Hawkins and Patterson) maintain that ECOA’s protections for applicants extend to guarantors, because the ECOA does not explicitly exclude them, and Regulation B clarifies that the ECOA definition of applicants includes guarantors. See Brief for Petitioners at 16, 56. Accordingly, Hawkins and Patterson assert that they have standing to sue to invalidate the loan agreement as illegal and unenforceable under ECOA.  See id. at 51. Raymore, the creditor here, counters that the plain language of the ECOA protects only applicants, not guarantors. See Brief for Respondent at 17–21. Raymore contends that any attempt by the Fed, through Regulation B, to expand the definition of “applicant” in the ECOA to include guarantors was impermissible. See id. at 46. The Supreme Court’s  decision in this case  could affect the cost of borrowing and change the underwriting standards and costs for loans to married business owners.

The Supreme Court will decide whether an arbitration provision in a Customer Agreement purportedly governed by the Federal Arbitration Act (“FAA”) requires the application of state law preempted by, or independent from, the FAA. See Brief for Petitioner, DIRECTV, Inc. at 1.  DIRECTV argues that the parties intended to arbitrate all disputes, that state law is always subject to the preemptive force of federal law, and that in any  event  the FAA requires courts to resolve ambiguities in favor of arbitration. See id. at 18-19. Imburgia counters that the FAA requires agreements to be interpreted according to their express terms and that courts should interpret the express reference to state law in the agreement as California state contract law, independent from the preemptive force of federal law. See Brief for Respondent, Amy Imburgia et al. at 15. The Court’s decision may affect the enforcement of arbitration agreements in other contexts, as well as impact the way in which state courts interpret arbitration agreements. See Brief of Equal Employment Advisory Council as Amicus Curiae, in Support of Petitioner at 21–25.

The Supreme Court will decide whether an arbitration provision in a Customer Agreement purportedly governed by the Federal Arbitration Act (“FAA”) requires the application of state law preempted by, or independent from, the FAA. See Brief for Petitioner, DIRECTV, Inc. at 1.  DIRECTV argues that the parties intended to arbitrate all disputes, that state law is always subject to the preemptive force of federal law, and that in any event the FAA requires courts to resolve ambiguities in favor of arbitration. See id. at 18-19. Imburgia counters that the FAA requires agreements to be interpreted according to their express terms and that courts should interpret the express reference to state law in the agreement as California state contract law, independent from the preemptive force of federal law. See Brief for Respondent, Amy Imburgia et al. at 15. The Court’s decision may affect the enforcement of arbitration agreements in other contexts, as well as impact the way in which state courts interpret arbitration agreements. See Brief of Equal Employment Advisory Council as Amicus Curiae, in Support of Petitioner at 21–25.

The Supreme Court will consider whether protections for applicants in the Equal Credit Opportunity Act (“ECOA”) also extend to spouses who sign guaranties, and whether the Federal Reserve Board (the “Fed”), in promulgating Regulation B, permissibly expanded the definition of “applicant” in the ECOA to include such guarantors. See Brief for Petitioners, Hawkins & Patterson at i, 8; Brief for Respondent, Community Bank of Raymore at i. The loan guarantors in this case (Hawkins and Patterson) maintain that ECOA’s protections for applicants extend to guarantors, because the ECOA does not explicitly exclude them, and Regulation B clarifies that the ECOA definition of applicants includes guarantors. See Brief for Petitioners at 16, 56. Accordingly, Hawkins and Patterson assert that they have standing to sue to invalidate the loan agreement as illegal and unenforceable under ECOA.  See id. at 51. Raymore, the creditor here, counters that the plain language of the ECOA protects only applicants, not guarantors. See Brief for Respondent at 17–21. Raymore contends that any attempt by the Fed, through Regulation B, to expand the definition of “applicant” in the ECOA to include guarantors was impermissible. See id. at 46. The Supreme Court’s decision in this case could affect the cost of borrowing and change the underwriting standards and costs for loans to married business owners.

This case presents the Supreme Court with an opportunity to determine the procedural requirements for exercising the right to rescission under the Truth In Lending Act (“TILA”). The Jesinoskis argue that if a creditor fails to strictly comply with TILA’s terms, then borrowers only need to provide written notice in order to rescind a loan any time within a three-year period. Meanwhile, Countrywide maintains that any rescission occurring after the first three days of the loan requires a lawsuit if the rescission is contested by the creditor. This case ultimately will determine who bears the cost of litigation in rescinding home-secured loans, and also determines the scope of TILA’s protection for borrowers.