commercial arbitration class 5

recap from last class:
9th circ is anti-arb, and still used to compel arb of employment cases
CA district courts weren't doing so and SCOTUS believes the claims
are arbitrable even without a square holding
the courts have taken a significant interest in trying to provide safeguards
that govern arbitration in these types of claims
part of that has been done under an unconscionability rubric, bc
arb is subject to state law to the extent all contract provisions are.
DP protocol - a joint effort of ABA and AAA, which has various safeguards
and very important is that in the protocol, there's a specific provision
that arbitrators are supposed to apply the statute:

the general AAA code, has stuff about fairness but nothing about
adhering to the law.
the cases are still very restrictive to overturning awards that find an
absence of discrimination, even where there's very strong evidence of
discrimination. there's two reasons for this:
1. the "manifest disregard" concept, which applies only to errors of
law and not errors of fact
2. manifest disregard is something taht arbitrators deliberately refuse
to follow

some ways, the most important issue is that not all forums are as
neutral as the AAA. when the forum is more structured for the
employer's purpose, then they're worthy of special scrutiny.

later we'll get to whether collective bargaining requires union members
to arbitrate certain kinds of claims.

thombly.

some employment cases lend themselves to arbitration and others really
don't.

establishing that the person was doing a good job, the other people
didn't have higher ratings, etc.
both cases are readily presentable in arbitration.
unlike court, the employee isn't inundated with lots of procedure,
and there's often "smoking guns" in the files, so it doesn't really
hurt that discovery is more limited and arbitration allows an
employee to go forward who might not have been able to afford
court procedings.
especially in race cases, there's an important issue of
"disparate impact" -- no overt impact, but sometimes more
incidious, what looks on its face to be neutral but is instead
in practice hugely disparate on members of a particular race, or
sometimes sex or age group. that type of case is on the claimant
to show, usually by stat analysis, what the impact of the practice is
and then the burden shifts to the employer to establish a business
necessity for the practice.
but if the plaintiff can show that there's a less discriminatory means
of getting to the objective, then there's a disparate impact case.
these are not good arbitration cases, because you
1. need more discovery
2.

how many employees can bring a class action to arbitration?
they're caput.

wright:
though SCOTUS said that these claims are arbitrable under a
general clause in shirk, etc.

2009: pent clausa decision, overturns precedent against the holding
without admitting it!
so the first thing that j.Thomas writes is that the 80s cases' issue is
"does arbitration bind a later court" where here the question is different....
as long as stat claims are held to, (hear recording...)

weiskoft thinks the different isn't distinguishable.

SCOTUS hasn't been content to extend arbitrability to fed stat claims
that would otherwise be heard in federal court.
basically, the pro-arb policy has been cramed down the states' throats.
see Federal Arb stat. s. 2, which discusses teh enforcability of arbitration
in the cases that involve interestate commerce. there's only two cases that
don't fall in the commerce clause: lopez and morrison.

right of actions. the fed must bring it's own cases for arbitration.
only other way is that it's a federal question or complete diversity.
do you only enforce this when a case happens to wind up in federal court?
or does it mean that for any case involving interstate commerce,
the state courts have to adhere to the federal arbitrability principles
ennunciated by SCOTUS? -- the federal laws of arbitration and
federal case law preempts the state law that is deemed to be anti-arbitrability:

for instance, a state - even under one of its own statutes - cannot effectively
provide in the statute that claims in the statute cannot be arbitrated, for
any issue involving interstate commerce.

for example, a state has other types of provisions which are seen
FAA s. 3/4: stay of the case
state courts have a lot of latitude, so long as they're not hostile to
arbitrability.
so to figure out if something is prempted, we have to go through the
substance procedure distinction under erie.
and then, we have the issue where the parties rights contractually
can create precedent even over the state's laws and that may conflict
with the FAA (because of choice of forum, etc)

if a state court doesn't apply FAA, what can the court do?
tehre's a provision that allows SCOTUS to give judgment
over a state's highest court in art. III s. 2.

prima paint:
weiskopf thinks the principle is right, but thinks it's interestng that the
state rule, even state rule with substance that are supposed to apply
under erie, are preempted because of FAA: so state court rules can't apply
even if it's something necessary!

how does the court explain? if the fed gov't under const analysis,
then the federal courts can make the rules over arbitration over the rules
of interstate commerce, and keep that regulatory power from the states.
this means that federal courts can make the rules as to how that power
may be exercised:
in a diversity case, the state rule doesn't apply and the claim of fraud
and inducement goes to the arbitrator. and the state court must apply
the same rule in an arbitration case.

preemption is coextensive with the FAA -- state courts deal with FAA
cases unless they involve a federal question or diversity.

1. illustrates hoe preemption works
2. SCOTUS says theres a distinction between affecting and involving commerce
3. parties had reason to contemplate interstate activity tho contract was intrastate

preemption doctrine isn't created by congress really.

what if SCOTUS wanted the s.2 construed broadly, then s.1 should construe
the employment clause narrowly as possible.
the court says that the impetus for arbitrability is the taft-hartley

for next class, we'll finish c.3:
argument is whether there should be preemption, and whether FAA
was ever intended to apply to state court. J.O'Connor was the leader
that it shouldn't apply, though Scalia and Thomas were the ones who
said it should, but now they think that it shouldn't.... very possible that
when this issue comes up again, the decision at state level will put out
preemption



mcdonald v. douglass

basic principles of preemption

severability

broad reach of preemptive effect
narrowness of employee exclusion s.1
federal preemption based on subject matter