Earlier this month in Jones v. GGNSC Pierre, LLC, the U.S. District Court for the District of South Dakota agreed with arguments made by the Knudsen Law Firm, compelling the parties to arbitrate pursuant to their arbitration agreement despite the unavailability of the named National Arbitration Forum (NAF).

Arbitration agreements naming the NAF are rapidly being challenged nationwide as a result of that entity’s unavailability under the terms of a recent consent judgment with the State of Minnesota. In Jones, the Court noted the parties’ arbitration agreement incorporated the NAF Code of Procedure, but found no reason to believe that specification was integral to the agreement, relying instead on the parties’ primary promise to resolve any future disputes “exclusively by binding arbitration” and “not by a lawsuit or resort to court process.” The Court also noted the agreement’s severance clause as further evidence of their intention to arbitrate if a portion of the agreement was unenforceable.

Kevin R. McManaman