Latest Case: Belton v. GE Capital Retail Bank (Arbitration & Mediation)

The Third-Party Doctrine vs. Katz v. Untied States

SHERRY F. COLB

Cornell law professor Sherry F. Colb proposes revising the third-party doctrine in a way that reconciles two of the U.S. Supreme Court’s decisions that some critics view as conflicting. Colb suggests that, contrary to what most critics argue and what she herself has long assumed, the prior decision, Katz v. United States rather than the later one, United States v. White, is the anomaly.

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Belton v. GE Capital Retail Bank

Docket: 19-648

Opinion Date: June 16, 2020

Judge: Richard J. Sullivan

Areas of Law: Arbitration & Mediation, Bankruptcy

Violation of a bankruptcy court discharge order is not an arbitrable dispute. The Second Circuit affirmed the district court's order denying appellants' motions to compel arbitration of a dispute with two debtors who previously held credit card accounts managed by appellants. Appellants argued that debtors were obliged to arbitrate the dispute concerning whether appellants violated the bankruptcy court's discharge orders when they failed to correct the status of debtors' credit card debt on their credit reports. Though the text and history of the Bankruptcy Code are ambiguous as to whether Congress intended to displace the Federal Arbitration Act in this context, the court held that circuit precedent is clear that the two statutes are in inherent conflict on this issue. In Anderson v. Credit One Bank, N.A., 884 F.3d 382 (2d Cir.), cert. denied, 139 S. Ct. 144 (2018), the court refused to enforce the parties' arbitration agreement, finding that Congress did not intend for disputes over the violation of a discharge order to be arbitrable.