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A federal court in Georgia held that it could not determine whether a party waived its right to arbitration because the Court lacked jurisdiction over the underlying claims and neither the Federal Arbitration Act (FAA) nor the common law provides a court with authority to prevent "wrongful arbitration."
In Griffin v. GMAC Commercial Finance, L.L.C., No. 1:05-CV-199-WBH-GGB, 2007 WL 647294 (N.D. Ga. Feb. 27, 2007), Griffin filed a lawsuit for employment discrimination. The trial court held that certain state law claims were outside of its jurisdiction and should be arbitrated pursuant to the employment contract instead.
GMAC then filed a "Motion to Prohibit Arbitration" with respect to the state law claims, arguing that Griffin had "waived" his right to arbitrate by first pursuing an action in court.
The Court denied GMAC's motion, citing a lack of jurisdiction to interfere with an arbitral proceeding dealing with separate claims. Additionally, no provision of the FAA authorizes an order "prohibiting" arbitration, and the common law does not provide a cause of action for "wrongful arbitration."
The Court also pointed out that while courts have the authority to determine "substantive" issues of arbitrability, that authority does not exist where the Court lacks jurisdiction over the underlying claims. Therefore, the Court refused to interfere with arbitration of Griffin's state law employment discrimination claims.
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