How the Supreme Court Used a Jedi Mind Trick To Turn Arbitration Law Upside Down

Imre S. Szalai, Judge John D. Wessel Distinguished Professor of Social Justice at the Loyola University New Orleans College of Law, has published “Directv, Inc. v. Imburgia: How the Supreme Court Used a Jedi Mind Trick To Turn Arbitration Law Upside Down,” 32 Ohio State Journal on Dispute Resolution, 1, 2016, Forthcoming.  In his scholarly article, Professor Szalai examines the United States Supreme Court’s recent Federal Arbitration Act jurisprudence with a particular focus on the high court’s 2015 decision in Directv, Inc. v. Imburgia.

Here is the abstract:

The Federal Arbitration Act (FAA) is the primary federal statute governing millions of arbitration agreements that have mushroomed in every nook and cranny of modern American society. The Supreme Court of the United States has grossly erred when construing and applying the FAA in a long series of cases spanning the last few decades, and these flawed decisions have encouraged this explosion of arbitration agreements across America. In its most recent FAA decision from December 2015, DIRECTV, Inc. v. Imburgia, 136 S. Ct. 463 (2015), the Supreme Court continued its awkward tradition of issuing preposterous FAA rulings. However, the Court in DIRECTV reached a new low, a result so extreme and “dangerous,” according to the dissenting Justices, that the Court’s DIRECTV decision turns arbitration law completely upside down.

This Article explores the Supreme Court’s deeply flawed interpretation of the FAA in DIRECTV. The Court’s decision desecrates the most fundamental principle of arbitration law, that arbitration must be based on the agreement of the parties. The Court in DIRECTV overrides the intent of the parties in this case, as well as the intent of Congress in enacting the FAA. The first part of this Article explains the background of the DIRECTV case. The second part of the Article closely examines the deep, multiple flaws in the opinion. Finally, the Article concludes by addressing how DIRECTV’s holding applies to some common hypotheticals in order to demonstrate the broader impact of this case in shutting off access to America’s civil justice system.

This and other research papers written by Professor Szalai may be downloaded for free from the Social Science Research Network.

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