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The party resisting arbitration bears the burden of proving that the claims at issue are unsuitable for arbitration. The party seeking to avoid arbitration bears the burden of establishing that Congress intended to preclude arbitration of the statutory claims at issue. Similarly, where a party seeks to invalidate an arbitration agreement on the ground that arbitration would be prohibitively expensive, that party bears the burden of showing the likelihood of incurring such costs.
Respondent Randolph's mobile home financing agreement with petitioners, financial institutions, required that Randolph buy insurance protecting petitioners from the costs of her default and also provided that all disputes under the contract would be resolved by binding arbitration. Randolph later sued petitioners, alleging that they violated the Truth in Lending Act (TILA) by failing to disclose the insurance requirement as a finance charge and that they violated the Equal Credit Opportunity Act by requiring her to arbitrate her statutory causes of action. Among its rulings, the District Court granted petitioners’ motion to compel arbitration, dismissed Randolph's claims with prejudice, and denied her request for reconsideration, which asserted that she lacked the resources to arbitrate, and as a result, would have to forgo her claims against petitioners. The Eleventh Circuit held that it had jurisdiction to review the District Court's decision as a final appealable order under 16(a)(3) of the Federal Arbitration Act (9 USCS 16(a)(3)). The Eleventh Circuit further held that the agreement was unenforceable as posing a risk that the borrower's ability to vindicate her statutory rights would be undone by "steep" arbitration costs. A writ of certiorari was granted.
Was it proper to render the arbitration unenforceable on the basis of “steep” arbitration costs?
The court concluded that the Eleventh Circuit’s decision ordering arbitration and dismissing respondent's claims for relief was appealable because it was a final decision under 9 U.S.C.S. § 16(a)(3) in that it plainly disposed of the entire case on the merits and left no part pending before the trial court. However, the court held that the Eleventh Circuit erred in determining that the arbitration was unenforceable because the record did not contain sufficient information related to respondent's costs if the matter was arbitrated. Thus, the risk that she would have been saddled with prohibitive costs in enforcing her statutory rights was too speculative to justify invalidating the arbitration agreement.