Category: Supreme Court

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A Dozen SCOTUS Anti-Contract Arbitration Rules

As noted in a recent post, since the 1980s, the U.S. Supreme Court in dozens of decisions has decided that the country has a national policy favoring arbitration over litigation. It discerns that policy from a 1925 statute that expresses no such national policy.

The Court’s injection of federal power into territory long the prerogative of the states has been heavily criticized for many years, especially by Prof. Schwartz.  Scholars debate the legitimacy of its jurisprudence from the perspectives of statutory interpretation, federalism, and the relative fairness or efficacy of arbitration compared to litigation.

Less attention has been given to contract law issues in the Court’s arbitration jurisprudence. True, some scholars (like Prof. Ware and Prof. Rau) identify doctrinal infirmities or puzzles in the Court’s cases. Some, especially Prof. Ware, have noted how the Court’s talk of the contractual basis of arbitration is sometimes at odds with the jurisprudence it lays down. But this contribution to the literature compared to other aspects seems both more muted and less comprehensive.

As noted in the linked post, the Court routinely announces things like “arbitration is a matter of consent, not coercion.” (Volt 1989, Rehnquist.)   But the body of rules it has established demonstrates a greater degree of federal judicial coercion than traditional consensual freedom manifest in the common law of contacts.

I’ve identified a dozen examples—general and specific—of occasions when the Court’s federal arbitration jurisprudence is at odds with the common law of contracts. The discrepancies include overt commitments the Court has made to the federal policy; covert values the Court has injected into its policy; and more narrow but surprising misstatements of the common law of contracts. Read More

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The Supreme Court’s Social Control Disguised as Freedom

Look at the contracts governing your cell phone service, credit card, home loan, and many other consumer items, and even your employment agreement: a large percentage will include a boilerplate clause saying you are bound to arbitrate any disputes that may arise, waiving any day in court.   Look at many business contracts and you’ll see the same thing.

Thanks to forty years of expansionist U.S. Supreme Court precedents, those clauses will be taken literally and enforced, as a matter of federal law.   That’s so even if basic principles of state contract law would otherwise invalidate the contract and the clause.  

The Court led the country to this position beginning in 1984 by tortured interpretations of a 1920s federal statute making federal law on arbitration paramount. The Court compounded that error in a series of equally contorted later interpretations that nearly foreclose any contract-law objection to such clauses.   The Court has been roundly rebuked for its 1984 decision but, among active Justices, all but Thomas seem agreed that there is no turning back.

The Court’s manipulation of the old statute, whose purpose was to make state law applicable in federal court not the opposite, seemed initially driven by desire to reduce the work load of federal and state courts.  Arbitration was a release valve for overworked courts.   Though many justices–including Black, O’Connor, Rehnquist–found that repugnant on federalism grounds, some libertarian types find it appealing as a way to privatize dispute resolution.

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Does the Roberts Court Have a First Amendment Agenda?

Commentators sometimes study the Supreme Court’s certiorari grants over short periods to discern patterns that suggest an agenda. There are different types of agendas. Some Justices may have a substantive agenda to expand, contract, or change the approach to an area of constitutional doctrine or other federal law. A different agenda might be to clarify or further develop an area of law, but not have a particular direction in mind. That is, the goal simply may be clarity.

Sometimes an agenda may be the product of external events, such as the Court’s foray into limits on executive powers growing out of government actions to address terrorist threats after 9/11 (though, as Fred Schauer argues, the Court’s approach to case selection does not always mirror the nation’s governance priorities). At other times, it might occur internally. It would not be wild to suggest that a majority of the Rehnquist Court consciously wanted to alter the landscape of federalism by reviewing several Commerce Clause and state sovereignty cases over the span of just a few terms.

Recently, there is evidence that the Roberts Court has some sort of First Amendment agenda, but it’s not at all clear what that agenda is. Three times in the last two terms, the Supreme Court has granted certiorari to review a First Amendment case in which the government has argued for a new exception to the presumptive rule against government regulation of speech based on its content. Last term, the Court heard United States v. Stevens, 130 S. Ct. 1477 (2010), a challenge to a conviction under a federal law prohibiting the knowing creation, sale, or possession of a depiction of animal cruelty for commercial gain. This term, the Court has already heard argument in Snyder v. Phelps, a case arguing for an exception for emotionally harmful protests outside of funerals, and Schwarzenegger v. Entertainment Merchants Association, a case suggesting a possible exception for regulation of the sale of extremely violent video games to minors.

Though this is an oversimplification, it is generally still valid to describe basic First Amendment analysis as establishing a presumption against government regulation based on the content of the speech (content can include viewpoint, subject matter, and arguably other categories). Exceptions to the general presumption exist for government regulation of “fighting words,” obscenity, child pornography, and threats, as well as altered analytical frameworks for fraud in commercial speech, libel against public figures, and incitement to imminent unlawful conduct. There are continual attempts by government to expand or push the edge on these categories of unprotected or less protected speech, but Courts with vastly different ideological compositions typically resist efforts to carve out exceptions.  As observe in the Third Circuit’s opinion in Stevens, it has been over 25 years since the Court has recognized a new categorical exception to the content discrimination rule.

Given that resistance, the Court’s decisions to review Stevens, Snyder, and Entertainment Merchants in such a short time frame are certainly noteworthy. Read More

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Argument in Class Waiver Case Favors Consumers, States

Power between enterprises and individuals hangs in the balance as the U.S. Supreme Court considers whether organizations can prevent people from banding together to challenge crooked practices that involve stealing small sums from large numbers of people. The judges and lawyers engaged in a riveting oral argument on the hot topic in a case pitting the mighty AT&T against a couple of California citizens. The case also pits the federal government against the states.

At issue are the clauses that companies now routinely include in standard form consumer contracts requiring disputes to be resolved in one-on-one arbitration. People give up the right to mount class claims in arbitration or court. Some unscrupulous companies use this as a way to cheat large numbers of people out of small amounts of money.

Companies following this route benefit from a strict federal law (the Federal Arbitration Act, or FAA) saying states cannot treat arbitration clauses differently than they treat other contracts. Courts nationally have struggled to evaluate whether these clauses pass standard contract tests of unconscionability. Yesterday’s case will determine whether those states are taking the right approach.

The principal theme of questioning probed how the Justices could tell if a state’s judges comply with the FAA’s mandate to treat arbitration clauses like other contracts. The company’s lawyer (Andrew Pincus) said it was simple: look at the general unconscionability doctrine applied to all contracts and compare it to the unconscionability doctrine applied to arbitration clauses.

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Influence on the Supreme Court

I just finished the new biography of Justice Brennan, and I was very impressed.  My thought was that there was no way a balanced account could be written about such a polarizing figure, but the authors pulled it off. Now the book does suffer from the weakness of the judicial biography genre, which is that judges generally lead dull lives, but it’s a great resource on the Court’s internal politics during his tenure.

Brennan is widely acclaimed as one of the most “influential” Justices.  What do people mean when they say that?  I think that there are several types of influential Justices depending on your time horizon.

1.  The Median Justice.  In any given period, somebody is the swing vote on the Court.  Right now that is Justice Kennedy. The swing Justice is often described as influential, but that title disappears once the median position shifts.  If you look at past examples, nobody much cares about the opinions of this type of Justice in the long run, with the possible exception of Justice Powell.

2.  The Coalition Builder.  This is the one who is the best at convincing the median Justice.  Justice Brennan fits this model. Filling this role requires a willingness to sacrifice logical consistency to accommodate the views of colleagues, and this can weaken the persuasiveness of the opinion for subsequent cases.  That may not matter, though, if the holding is the critical aspect of the decision.  Law professors may criticize aspects of Baker v. Carr or Plyler v. Doe, but those holdings were very important and are now deeply woven into American life.

3.  The Great Writer.  To a significant extent, judicial influence depends on how quotable the opinions are.  An old line from the Second Circuit about Learned Hand and Augustus Hand said “Quote Learned, but go with Gus.”  In other words, Augustus Hand was a better judge, but Learned was the more influential one.  Justice Robert H. Jackson is one example of this type.

4.  The Visionary.  Some Justices are important because they advance an overarching view of the Constitution that is persuasive over time (whether due to their efforts or not).  These folks often start out in dissent and are not interested in persuading their colleagues.  They are instead interested in convincing law students and the wider public.  They are also not so keen on stare decisis or avoiding unnecessary questions, since they want to put forward their theory as often as they can and brush aside contrary authorities.  John Marshall Harlan the elder is an example of this category.

No Justice fits all of these categories.  Indeed,  John Marshall may be the only one who fits more than one, though you could also put Holmes, Brandeis, and Scalia in that set.

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A Murder Contract’s Arbitration Clause

A client, Mary, recently told a lawyer she breached a written promise to kill the enemy of her boyfriend, Paul, an interstate narcotics dealer. Paul said the value of getting rid of the enemy was at least $200,000 and that he’d pay Mary $100,000 to do the hit. Paul and Mary’s contract was unusually formal, spelling out details and containing an arbitration clause—saying the two couldn’t fight any dispute in court but only by using an arbitrator.

Mary got cold feet and can’t do the killing; Paul started arbitration, seeking $200,000 in damages. Which of the following seems most likely?  (a) Mary’s lawyer can go to court to get the agreement declared unenforceable as a matter of law and halt the arbitration proceedings; (b) Paul can get the court to stay any lawsuit Mary files and an order that she proceed to the arbitration Paul began; (c) the arbitrator can grant Paul the damages he claims, $200,000; (d) a court would enforce such an award (or vacate it).

Following the exuberantly expansive wave of US Supreme Court opinions of the past couple of decades making arbitration agreements hallowed ground above all else, it seems disturbingly more likely that Mary’s lawsuit would be stayed, a court would order her to go to arbitration, the arbitrator could order that Mary pay Paul $200,000 for breach, and a court would enforce the award.

Under Supreme Court precedents, the obvious public policy objections to these outcomes work surprisingly weakly concerning the questions of stay and specific performance and boundaries of what arbitrators can do; they are only a bit stronger in possibly allowing a court to vacate the award as against public policy. The best prediction is that a court would simply defy all the Supreme Court’s precedents and prevent the whole charade from beginning in the first place.

But that doesn’t seem like a good legal system and the Supreme Court’s precedents in this area need revamping. Details on the current state of case law supporting the predicted absurd results follow. I’m beginning to think how to contribute some ideas to the vast literature on this unruly body of law.  One tentative suggestion: the Court and the literature insist that the entire body of law is all about contract law; the more this statement is repeated, the less it seems to be true. 

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Bad Words: Arbitratable and Arbitrability

Terrible vocabulary words are among the negative effects of the arbitration industry’s prosperity that began in the 1960s.  Learned people, on courts, in law offices, and among those vested with power to resolve important disputes, say awful things, like “is this dispute arbirtatable?” and “the issue of arbitrability is for the arbitrator  to decide.”

Leading guilty parties include authors of Supreme Court opinions from a 6-3 majority of current Justices: Breyer, Ginsburg, Kennedy, Scalia, Sotomayor, Thomas–though not Alito, who has had a chance (in 2010’s Stolt-Nielson opinion), or Kagan or Roberts, who haven’t.  

Distinguished predecessors inaugurated this terrible usage in 1960, when Justices Brennan and Whittaker first used the words in SCOTUS opinions in respective concurring and dissenting opinions in that year’s United Steelworkers v. American.   Contemporaries were in on it too, with Justice White using such words in 1962’s DrakeBakeries, and Justice Harlan in 1964’s Wiley & Sons v. Livingston

Some Justices seem to recognize how awful the words are by enclosing them in quotation marks, distancing themselves from the bad idiom.  Thus did Justice Scalia insert the word in 2010’s Rent-A-Center v. Jackson–though he used it without parentheses  in an earlier opinion.  

Courts ought to follow Justice Alito’s example from his opinion in Stolt-Nielson.  You can ask whether a dispute is covered by an arbitration clause and whether the scope of a clause addresses a dispute to an arbitrator.  You don’t need awful words like arbitratable and arbitrability.  They sound affected, professionally parochial, and stupid.

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BRIGHT IDEAS: Collins on Justice Holmes and Free Speech

In his new book, The Fundamental Holmes: A Free Speech Chronicle and Reader (Cambridge University Press, 2010), Ronald Collins guides us through the free speech writings of Justice Oliver Wendell Holmes, Jr.   Ron is the Harold S. Shefelman scholar at the University of Washington School of Law and a fellow at the Washington, D.C., office of the First Amendment Center.

Ron’s book contains numerous excerpts from Holmes’s great judicial opinions, correspondence, essays, and books.  Far from composing the book mainly of excerpts, Ron has provided very extensive commentary and background throughout.  Ron is steeped in the history of his subject and has a rich understanding of the law and theory of the First Amendment.  There is no better guide to help us understand Holmes’s work and thought as it relates to free speech.

I recently had a chance to talk with Ron about the book.

SOLOVE: What inspired you to write this book?

COLLINS: Long story.  It began when I was in law school and read Holmes’s 1919 free speech opinions.  And then, not long afterwards, I read Max Lerner’s The Mind and Faith of Justice Holmes (1943), which fascinated me though it was quite dated by that time.  This was in the 1970s when I was an impressionable law student.  Several years later I met Max – incredible Renaissance man! – and befriended him and then helped him, in 1988-89, with a new and expanded edition of his Holmes book.  That combined with my work in the First Amendment made this latest book a natural for me, though I don’t worship Holmes.  True, he challenged my mind, and I like that sort of thing even when I disagree with someone.

SOLOVE: During the course of immersing yourself in Holmes’s writings, what is the most surprising thing you learned?

COLLINS: There are so many things; Holmes was such a complex man.  Long before I began my book, I knew quite a bit about his First Amendment work, including his pre-1919 Supreme Court opinions.  So, not much surprise there.  I guess I would say I was quite taken by his Civil War experience and how that had such a remarkable impact on his life, jurisprudence, and view of free speech, too. It was the dye that colored everything in the beaker of his thought.

SOLOVE: Personally, what would you consider to be the five most significant writings by Justice Holmes?

COLLINS: Hard call.  But here they are, in no special order:

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On Gay Marriage, Times Are Changin’

As gay marriage continues to be a controversial issue in political and legal discourse, a quite drastic trend in public opinion is occurring right before our eyes:  Public support for gay marriage has risen significantly over the past two decades in ways you may not have noticed. Columbia University political scientists Andrew Gelman (also a statistician), Jeffrey Lax, and Justin Phillips have published a compelling report in the New York Times that documents and discusses these trends. Be sure to look at the associated graphics. The article is related to Lax and Phillips’ research, published in the American Political Science Review, on public support and policy responsiveness on gay rights issues at the state level. Here is a summary of the primary findings from the NYT article:

1.  For the first time, a national public opinion poll (by CNN) finds majority support (narrowly) for gay marriage; on average, polls show roughly 45% support.

2.  In 1996, just 25% of the American public supported gay marriage.

3.  “The more important turning points in public opinion, however, may be occurring at the state level, especially if states continue to control who can get married.”

–  In 2004, no state showed majority support for gay marriage.
–  By 2008, three states showed majority support.
–  Today, 17 states show majority support for gay marriage.
–  “Support for same-sex marriage has increased in all states, even in relatively conservative places like Wyoming and Kentucky.”

Gelman, Lax, and Phillips forecast that these trends will continue in the future, as the under-30 population shows majority support for gay marriage across all states. “As new voters come of age, and as their older counterparts exit the voting pool, it’s likely that support will increase, pushing more states over the halfway mark.”

Of course, the times are changing not only in public opinion, but in public and legal policy as well. 5 states now allow gay marriage (IA, CT, MA, NH, and VT). While several states currently have bans on gay marriage, federal district court Judge Vaughn Walker’s declaration of CA’s Prop 8 as unconstitutional means that the courts — ultimately, the U.S. Supreme Court — will decide whether those bans will stand or not. And a federal district court judge in MA has struck down parts of the federal Defense of Marriage Act (DOMA).

All roads in this debate lead to a fundamental question:  What will the Supreme Court do? The Prop 8 case is on a sure path to the Supreme Court. And the Massachusetts District Court decision on DOMA may also end up at the Court (see this post by CoOp contributor Glenn Cohen). While bloggers and legal commentators continue to speculate on what the Supreme Court will do, I actually have little doubt that in a few years, the Supreme Court will strike down Prop 8 (and by implication, other state bans), declare a constitutional right to gay marriage (via the 14th Amendment’s due process and equal protection clauses), and rule that states cannot prevent citizens from getting married on the basis of sexual orientation. First, it is not at all a stretch to think that Justice Kennedy — who will likely write the 5 person majority opinion — will vote as such. His opinion in Lawrence paves the way for such a position (as Justice Scalia emphasized in his dissent), and I think he and the Court majority will apply the logic in the Loving v. VA precedent (prohibiting state bans on interracial marriage) to sexual orientation. That is, marriage is a fundamental right, and, as Judge Walker emphasized, no matter what legal standard you use (rational basis or strict scrutiny), there is no legitimate basis for preventing that right on the basis of sexual orientation. Also, I do not think that Ted Olson would take on a case of this magnitude — particularly one that goes against his usual ideological proclivities (though see his Newsweek article) — unless he knew there was a high likelihood of a payoff awaiting him at the end.

Sometimes it is difficult to assess social and policy change while you’re in the middle of it.  As Gelman, Lax, and Phillips have documented, momentum has been building for gay marriage in the public for a decade, and it is bound to continue building. Policy in the states has begun to follow suit. And ultimately, it is completely conceivable to think that the Supreme Court will complete the circle and declare that marriage is a fundamental constitutional right that cannot be abridged by states on the basis of sexual orientation.

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Is the Contemporary Supreme Court Really That Conservative?

Adam Liptak’s extensive analysis in the New York Times a few weeks ago presents some compelling empirical trends from the Roberts Court era. Liptak presents some bold conclusions, arguing that the Roberts Court of the 2009 term “became the most conservative one in living memory.”

Some research I am conducting (with my co-author, Christopher Johnston) on public perceptions of the Supreme Court asks, among other things, whether the contemporary Supreme Court is really all that conservative, either objectively (looking at the Court’s raw outputs) or from the American public’s point of view. It has become a sort of kneejerk reaction for the media, legal commentators, and academics to label the contemporary Court as “conservative.” This assumption can partly be attributed to the fact that Republican presidents have dominated Supreme Court appointments over the past 40 years or so. Indeed, since President Johnson put Thurgood Marshall on the Court in 1967 (Johnson’s last appointment), 12 out of the last 16 justices have been appointed by Republican presidents. Justices Ginsburg, Breyer, Sotomayor, and Kagan are the only Democratically appointed justices in this era.

But in recent times, of course, conservatives have not dominated or dictated decision outcomes on the Court, with O’Connor and Kennedy — conservative leaning swing justices — joining the liberal justices on some high-profile decisions. Thinking about some of the Court’s major decisions in the 1990s and 2000s, many high profile and legally significant liberal decisions emerged. Granted, there have also been several high profile conservative decisions, but one would not necessarily expect a supposedly conservative Court to produce as many significant liberal decisions as we have seen. To get an empirical sense of what I am talking about, Figure 1 below displays two graphs. The top graph, Figure 1a, presents the annual percentage of liberal decisions produced by the Court from the 1953-2008 terms of the Court for all cases decided by the Court. The bottom graph, Figure 1b, displays Supreme Court liberalism in highly salient Supreme Court cases that receive ample attention from media and elite discourse. To measure salience, we use Epstein and Segal’s (2000)1 measure for whether or not a decision was covered on the front page of the New York Times the day after the ruling. Data on the Court’s decisions come from the Supreme Court Database, where decisions are coded as liberal or conservative following the standard coding scheme.2 The smoothed solid line in each graph is a non-parametric line of best of fit (lowess, or locally weighted smoothing), which allows one to visualize the overall trends of the Court’s policymaking.

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