For a topic that–superficially, at least–is a dry matter of procedure, arbitration provokes a great amount of spirited debate from both its proponents and detractors. I freely admit to falling on the side of the detractors, but that is not necessarily the home for all of our readers. A recently-published article in the Michigan State Law Review by Steven W. Feldman (U.S. Army Corps of Engineers) not only provides a welcome perspective from a blog reader outside the bubble of academia, but he also articulates a position far more favorable to the current state of Supreme Court jurisprudence under the Federal Arbitration Act than do some of us who frequently find the sky to be falling. Here is Feldman’s abstract:
In her article, Disappearing Claims and the Erosion of Substantive Law, published in the June 2015 issue of the Yale Law Journal, J. Maria Glover argues that the Court’s recent arbitration decisions reflect a “fundamental shift” in the normative prerogatives that support “the Court’s freedom-of-contract conception of arbitration.” The Court, she asserts, has devised the view that “such freedom enabled private parties to change the mechanisms of adjudication, but not to change the scope of obligations under substantive law.” Glover is especially critical that the Court’s recent decisions have “[a]bandoned [the] descriptive and normative premise that freedom of contract was justified in the arbitration context because it would result in more cost-effective procedures for ‘settling’ disputes.”
This Article responds that Glover’s key premises and conclusions are unsupported. Instead, the Court has endorsed the major principles of freedom of contract in its arbitration jurisprudence. The better view is that (1) freedom of contract in arbitration cases properly construed is not limited to devising streamlined cost-effective procedures but is broadly construed to allow parties the leeway to select the terms governing the arbitration; (2) the need to enforce the parties’ mutual assent exists independently from arbitral efficiency, and the enforcement of mutual assent takes priority over arbitral efficiency when there is a conflict; (3) pure freedom of contract (which Glover says is the current state of the law) does not exist because many limits from law and public policy (largely unmentioned by Glover) maintain the integrity of the arbitral process; and (4) Italian Colors is a legitimate evolution, and not a revolution, in FAA practice and procedure.
The complete article, Steven W. Feldman, Italian Colors and Freedom of Contract under the Federal Arbitration Act: Has the Supreme Court Enabled Disappearing Claims and the Erosion of Substantive Law?, is now in print at 2016 MICH. ST. L. REV. 109 and is available for download here.
