High Court Asks: When Are Arbitration Clauses Voided?

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WASHINGTON -- A Supreme Court hearing Tuesday was dominated by questions about whether a ruling in favor of a payday lender's former customer could invalidate millions of arbitration clauses used by banks and other companies.

Christopher Landau, a partner at the law firm Kirkland & Ellis LLP, who represents Buckeye Check Cashing Inc. of Dublin, Ohio, said such a ruling "would cause an earthquake in the law in terms of arbitration." Bankers, who have supported the payday lender's appeal, say the Florida Supreme Court's decision in the case called into question clauses routinely used by banks and credit card companies.

The prospect of invalidating arbitration clauses appeared to concern the justices during the …