Alltel Corp. v. Rosenow

Summary

The Supreme Court of Arkansas affirmed the denial of Alltel Corporation and Alltel Communications, Inc.'s motion to compel arbitration in a class action concerning early termination fees. The court held that the arbitration agreement was invalid and unenforceable for lack of mutuality because Alltel reserved the ability to pursue remedies outside arbitration while limiting customers to arbitration. The court affirmed on direct appeal and dismissed Rosenow's cross-appeal concerning waiver as moot.

Holdings

1. An arbitration agreement is unenforceable when it lacks mutuality of obligation. The agreement here lacked mutuality because Alltel reserved for itself, but not its customers, the ability to pursue remedies outside arbitration without waiving arbitration.
2. The Federal Arbitration Act does not preempt Arkansas's requirement that arbitration agreements satisfy the generally applicable contract-law requirement of mutuality of obligation.
3. The court did not need to decide whether the circuit court improperly considered parol evidence because the arbitration agreement was invalid for lack of mutuality based on the contract's written provisions.
4. Rosenow's cross-appeal concerning whether Alltel waived arbitration was moot because the arbitration agreement was invalid for lack of mutuality.

Questions Presented

1. Whether the arbitration agreement was invalid and unenforceable for lack of mutuality of obligation under Arkansas contract law.
2. Whether Arkansas's requirement that an arbitration agreement contain mutuality of obligation is preempted by the Federal Arbitration Act.
3. Whether the circuit court erred by considering parol evidence in evaluating mutuality.
4. Whether Alltel failed to enforce a valid arbitration agreement and thereby waived arbitration.

Disposition

affirmed