Category: Supreme Court


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.


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.


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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Justice Kagan

In the aftermath of Justice Elena Kagan’s successful confirmation (by a 63-37 vote), have we learned anything new about the Supreme Court appointment process? I don’t think so. The process continues to be highly political, with a nominee’s ideological views and “judicial philosophy” taking center stage. Kagan’s qualifications — or lack thereof, according to some — became an issue. While everyone agrees that she is very intelligent, her lack of prior judicial experience was a minor problem for her nomination, leading even moderate Republican Senator Scott Brown to vote against her. Kagan will be the first justice since Justice Rehnquist (when he became Associate Justice in 1972) not to have had prior experience as a judge.

An interesting counterfactual:  Let’s say Kagan were nominated to replace one of the conservative justices on the Court instead of Justice Stevens. In such a scenario, Kagan would have shifted the ideological balance of power to the left, thus making it a more significant, critical nomination. Would Republicans have filibustered her nomination under those conditions? It will be very interesting to see how such a confirmation process unfolds in the future if such conditions are present. With conservative justices hesitant to retire under an Obama administration, it would take death or a serious illness (that would force retirement) for Obama to change the ideological balance of the Court (sorry to sound morbid). Under these conditions, Obama might choose someone he knows could withstand rigorous Senate scrutiny given the high-stakes nature of the appointment. He would also have to consider the partisan and ideological makeup of the Senate.

The two most recent instances where a justice retired while a president of opposite ideological stripes held office were Justices Brennan and Marshall. Both retired for health reasons; President George H.W. Bush appointed their replacements. Marshall was replaced by Thomas, and we all know how that confirmation process turned out; the vote was 52-48. Brennan was replaced by Souter, though that process was not contentious. The vote was 90-9.

If President Obama does happen to get the opportunity to change the ideological balance of the Court (i.e., replace a conservative justice with a more liberal one), we can surely count on a highly dramatic, contentious appointment process far eclipsing the Kagan appointment process.


Prop 8, Gays, Homosexuals, and What is In a Name

Like many, I was glued to the blogosphere waiting for the decision in Perry v. Schwarzenegger yesterday, the Prop 8 decision. One seemingly superficial issue I have been interested in is how the court would refer to the class to which the plaintiffs belonged: as “gay” men and women or homosexuals?

I actually first started thinking about this a few months ago. A wonderful midwest law school in a smaller city invited me to a conference and arranged to have a student pick me up at the airport. This was unusually gracious, and I appreciated it, but a funny thing happened on the ride. I asked the student about the city, and what it was like to live there, etc. The student at one point said to me: “Oh, and we have a really vibrant homosexual community.”

I was a little amused that he focused on this element of the city, though perhaps something I said had primed him, or this was just a testament to the perceived role of gays in the rise of the creative classes and a city’s hipness factor. What surprised me the most, though, was actually his language — his use of the term “homosexual” in a positive way. My own anecdotal experience is that people use the term “homosexual” when they want to ascribe negative connotations, and “gay” when they want a more neutral or positive ones. A quick (and very unscientific) google search of the terms “homosexual marriage” and “gay marriage” this morning seems to confirm this.

On this view it is unsurprising, then, that Judge Walker in the Perry opinion repeatedly refers to the plaintiffs and their group as “gays and lesbians”.  What is more surprising is that I expected I would find a split in usage between Justice Kennedy and Scalia’s majority and dissenting opinions in Lawrence v. Texas, with “homosexual” being dominant in the Scalia’s opinion.  Interestingly, both opinions use “homosexual.”

So here are a few questions I am thinking about: Was my initial instinct that which term to use reflects a political valence correct? Does it instead reflect something else? Geography (think of the student driving me)? Age? A change in time over which term is more acceptable, a little bit like the way the term “handicapped” has given way to “disabled” to “people with disabilities”?  Is the usage of “homosexual” by people who do not want to expand rights for the group a subtle attempt to bring the “sex” (in the intercourse sense) back into people’s minds?  Which word do you use in the classroom? Would Lesbian, Gay, and Bisexual students be offended by the term “homosexual,” and if so, is that a good reason not to use it?


Lindsey Graham and the Advice and Consent Clause

As the full Senate takes up the Kagan nomination today, which will almost certainly lead to a successful confirmation, I am still struck by Senator Lindsey Graham’s (R-SC) comments before casting his vote in the Judiciary Committee, which reported the nomination to the floor by a 13-6 vote. Sen. Graham was the lone Republican yes vote, a redux of the Sotomayor nomination. Given the political pressure from conservative groups and his Republican colleagues to vote no, as well as Graham already being on shaky ground with conservatives and Tea Party adherents, his vote should certainly be considered a principled and courageous act. It is one, among others, that could pose electoral problems for Graham down the road.

Graham’s reasoning for voting yes on Kagan was compelling, and, somewhat ironically, it rests on his constitutional interpretation of the “advice and consent” clause of Article II (the president “shall nominate, and by and with the Advice and Consent of the Senate,…Judges of the supreme court….”). What is the standard by which Supreme Court nominees are to be assessed by the Senate? To what extent does “advice and consent” entail that senators scrutinize a nominee’s ideological preferences or judicial philosophy? According to Graham:

The Constitution, in my view, puts a requirement on me as a senator to not replace my judgment for [the president’s], not to think of the hundred reasons I would pick someone differently or pick a fight with Ms. Kagan. It puts upon me a standard that stood the test of time:  Is the person qualified, is it a person of good character, are they someone that understands the difference between being a judge and a politician? And quite frankly, I think she’s passed all those tests.

Graham is essentially calling for a restoration of a standard from a bygone era. That is, there should be a presumption that a nominee will be confirmed. As long as the person is qualified and has a solid understanding of the law and the issues that come before the Court, that person should be confirmed. Rigorous scrutiny of a nominee’s ideological views and judicial philosophy is outside the realm of “advice and consent,” according to Graham. Elections have consequences, and President Obama is entitled to choose a nominee who agrees with him on various legal issues. It would take some “smoking gun” for the Senate to reject the president’s nomination. What exactly would constitute such a smoking gun is a question that is worthy of considerable debate. The “extraordinary circumstances” standard was suggested by the “Gang of 14” a few years back, and some senators still invoke that standard.

Of course, the Constitution is not at all specific about what exactly the advice and consent clause means or entails. Sen. Graham is basing his interpretation on how numerous nominations were conducted from the founding until well into the 20th century. Today, many senators obviously disagree with Graham’s standard and believe that ideology and judicial philosophy are fair game. Many who vote “no” cite those factors as justification for their votes.

Graham’s exercise in constitutional interpretation is ironic. Senators are prone to preach at judicial hearings that judges should simply do what the Constitution says. But, of course, everyone knows that the Constitution is incredibly vague and contains considerable gray area; judges have to use their judgment to fill in those holes. Here, you have a senator grappling with the gray areas of the Constitution in trying to ascertain the meaning of the advice and consent clause of the Constitution. It is not clear what this clause requires as to how and on what bases senators should scrutinize a nominee. Graham takes a highly restraintist view, while nearly all of his colleagues take a more activist view, at least in Graham’s world. While “judicial activism” is among senators’ favorite buzzwords when it comes to judicial nominations, I doubt Sen. Graham will call out his colleagues as activists on this topic.


Doctrine as Empathetic Umpire

Testifying before the Senate committee reviewing his 2005 nomination as Chief Justice of the United States, John Roberts famously told those assembled that the job of being a justice is like being an umpire. The job is calling balls and strikes; not making rules up, just applying those already laid down. President Obama later rejected that analogy, when appointing both Sonia Sotomoyer and Elena Kagan to the Court, saying justices can’t be mere umpires.   They need to have empathy, he said.

Each of these viewpoints contains different partial truths; both emphatically demonstrate that personality plays a vital role in the docket of the Supreme Court. This underscores the political and ideological nature of the popular cases it grapples with. In that Court and in those disputes, political theory and hence ideology often prove pivotal. It’s easy to classify justices as liberal or conservative and the Court’s direction as toward the right or toward the left.

For less politically-freighted fields of law, or where the terrain is more reliably settled, it’s less accurate to speak of judges applying law in those terms—as being a mere umpire or needing empathy. Take contract law, where doctrine itself is a kind of organic empathetic umpire.

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Victory for Justice in Fensterstock

In a victory for access to justice, the Second Circuit held Monday that a student loan agreement forbidding a borrower to make claims on a class-wide basis in arbitration or litigation was unconscionable under California law and that California’s law was not preempted by the Federal Arbitration Act. It also said the agreement’s severability clause didn’t open the way to compellling class arbitration because, once the other clauses were out, the agreement was silent on dispute resolution, so it couldn’t order class  arbitration.

This is a big case as the first point addresses the issue SCOTUS will hear next term in AT&T v. Concepcion, where AT&T claims the FAA preempts California law because it discriminates against arbitration clauses compared to other kinds of contracts. The second point, on severability, takes up lessons SCOTUS articulated in last term’s Stolt-Nielsen case. It’s important as a broad and convincing contribution to intense national disputes over dispute resolution.

 The substantive objection in the case, Fensterstock v. Education Finance Partners, concerns how the lender allocated monthly loan repayments between interest and principal, using a squirrely provision allocating to interest all payments except those received exactly on the monthly payment due date. The borrower says that’s a hidden fee, stretching out loan amortization, and makes substantive claims for breach of contract and unfair trade practices. The agreement also contained a dispute resolution clause, limiting both sides to individual arbitration—not class arbitration or class litigation or any kind of litigation. It named California as governing law.

The lender wanted to compel arbitration, citing the FAA, requiring courts to do that for any arbitration clause in a contract involving interstate commerce, except those found invalid under general contract law principles. The borrower, a lawyer three years out of law school when he consolidated $52,000 in student loans, claimed the clause was unconscionable under California law and the court agreed, throwing out the clause and opening up a class action lawsuit.

The opinion is meticulous in extracting extensive block quotations from dozens of California cases on point, including the pivotal Discover Bank case. Drawing on a state statute making void contracts exculpating one from fraud, that case finds that some dispute resolution clauses in consumer contracts trip over it, being against law, public policy, and unconscionable. The statute and policy target enterprises who overcharge large numbers of ordinary people small amounts, then insulate themselves from liability using non-negotiable contracts preventing the small stakes from being accumulated to make a case worth pursuing.

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