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.