Is the Supreme Court Moving Towards a Preemptive Federal Arbitration Procedural Paradigm?

Ronald Aronovsky, Professor of Law at Southwestern Law School has published an interesting law review article entitled, The Supreme Court and the Future of Arbitration:  Towards a Preemptive Federal Arbitration Procedural Paradigm?, 42 Southwestern Law Review, Number 1, Spring 2013.  In his article, Professor Aronovsky examines a number of recent Supreme Court decisions related to the preemptive power of the Federal Arbitration Act.

Here is a portion of the introduction:

Adopted by Congress in 1925, the Federal Arbitration Act (“FAA”) established a federal “pro-arbitration policy.” That much is beyond debate. It would be difficult indeed to find a judicial decision applying the FAA that did not begin its analysis by reciting the policy’s existence. But courts and scholars have been wrestling for decades over what this federal “proarbitration policy” actually means. Eliminating traditional judicial hostility toward enforcing arbitration agreements? Ensuring specific enforcement of arbitration agreements in federal court? Establishing substantive federal law for interpreting arbitration agreements? Preventing states from treating arbitration agreements as a disfavored type of contract? Or is it something more?

The United States Supreme Court in recent years has embraced an increasingly robust view of the FAA’s preemptive power in a series of often controversial arbitration law decisions reflecting the Court’s evolving view about the meaning of the federal “pro-arbitration policy.” In 2011, the Court unleashed a furor about the federalism and access to justice implications of its decision in AT&T Mobility LLC v. Concepcion, when it held that the FAA preempted the application of California’s Discover Bank v. Superior Court unconscionability rule to the arbitration clause in a consumer cell-phone contract. The Discover Bank rule had barred as an unconscionable exculpatory clause under California contract law a consumer adhesion contract arbitration provision that had the effect of prohibiting class arbitration of small dollar amount claims affecting large numbers of disputants. The Concepcion decision came on the heels of the Court’s 2010 decision in Stolt-Nielsen S. A. v. AnimalFeeds International Corp. barring arbitrators from interpreting arbitration agreements to permit class arbitration if the agreement was “silent” on the issue. Concepcion drew criticism because of its perceived enabling of corporations to chill the vindication of statutory rights in small dollar amount disputes by including class arbitration waivers in adhesion contract pre-dispute arbitration agreements.

Special thanks to Don Philbin of adrtoolbox for bringing this timely article to our attention!