Rethinking the Constitutionality of the Supreme Court's Preference for Binding Arbitration: A Fresh Assessment of Jury Trial, Separation of Powers, and Due Process Concerns

Abstract

Courts and commentators have typically assumed that binding arbitration is both private and consensual, and that it therefore raises no constitutional concerns. This Article challenges both assumptions and goes on to consider arguments that arbitration agreements may unconstitutionally deprive persons of their right to a jury trial, to a judge, and to due process of law. The author argues first that courts' interpretation of seemingly private arbitration agreements may often give rise to "state action," particularly where courts have used a "preference favoring arbitration over litigation" to construe a contract in a non-neutral fashion. The author next draws on the Supreme Court's decisions governing waiver of constitutional rights to argue that arbitration agreements are invalid where they are unclear, and further contends that many unknowing or coercive agreements are invalid as well. Having demonstrated the relevance of constitutional analysis to many seemingly private arbitration agreements, the Article contends that many arbitration agreements unconstitutionally deprive prospective federal court litigants of their right to a jury and to an Article III judge. Finally, the author asserts that some arbitration clauses violate the Due Process Clause as well by denying parties their right to adequate notice, an impartial judge, a meaningful appeal, and other specific procedural protections. The Article concludes that we must reconsider the applicability of the Constitution to private arbitration agreements. While many such agreements will present no constitutional concerns, other agreements must be voided under the Constitution.