Legal Memorandum: Standards for Enforcement of Arbitration Agreements

Issue: Under the law of the Virgin Islands, will an arbitration agreement be unenforceable if it can be shown the party against whom enforcement is sought did not knowingly waive the right to a jury trial?

A plaintiff’s fundamental right of access to the courts is protected by the First Amendment to the U.S. Constitution.  See Downes v. Bidwell, 182 U.S. 244, 282 (1901).  This right applies in the U.S. Virgin Islands.  Id.; 48 U.S.C. § 1561.  Thus, the Federal Arbitration Act (FAA) generally compels enforcement of arbitration agreements, but not if those agreements fail to meet standards of state or territorial law that are generally applicable to all contracts.  9 U.S.C. § 2. 

The right to a trial by jury in civil cases is a fundamental right guaranteed by the federal Constitution.  See U.S. Const. amend. VII; Bouriez v. Carnegie Mellon Univ., 359 F.3d 292, 294 (3d Cir. 2004) (“The right to a jury trial is a fundamental right that is expressly protected by the Seventh Amendment to the United States Constitution.”).  As one federal court of appeals has observed, “It is elementary that the Seventh Amendment right to a jury is fundamental and that its protection can only be relinquished knowingly and intentionally.  Indeed, a presumption exists against its waiver.”  Nat’l Equip. Rental, Ltd. v. Hendrix, 565 F.2d 255, 258 (2d Cir. 1977) (citations omitted).  The Seventh Amendment right to a civil jury trial applies in the U.S. Virgin Islands.  See 5 V.I.C. § 321; 48 U.S.C. § 1561; Univ. of V.I. v. Petersen-Springer, 232 F. Supp. 2d 462, 471 (D.V.I. 2002).

The law in the Virgin Islands, as amended […]