Equal Opportunity for Arbitration
Hiro N. Aragaki
Loyola Law School (Los Angeles)
May 31, 2011
UCLA Law Review, Vol. 58, p. 1189, 2011
Despite talk of a “federalism revival,” state law is quietly losing ground in the U.S. Supreme Court, and the arbitration area is no exception. For as currently interpreted by the lower courts, the Federal Arbitration Act (FAA) is on course to preempt a vast array of legislation that serves important public interests but that is only tenuously related to arbitration. The Court has implicitly endorsed this trajectory in AT&T Mobility v. Concepcion (decided as this Article went to press), leading many to abandon hope of a principled judicial response to this mounting problem of overpreemption.
In this Article, I offer a new model for thinking about the extent to which the FAA should preempt state laws that do not target arbitration for special regulation but that are also not general enough to escape preemption under settled doctrine. I argue that the current predicament of overpreemption should be understood less as a symptom of the law’s rabid favoritism toward arbitration (as is commonly supposed) and more as a symptom of a basic misapprehension of what I have elsewhere described to be the FAA’s latent principle of nondiscrimination. Contrary to popular belief, that principle does not demand the impossible feat of placing arbitration agreements on the “same footing” as all other agreements. Instead, it seeks the more modest goal of leveling the playing field between arbitration and litigation - or, as I put it here, equal opportunity for arbitration.
I illustrate how a more sophisticated engagement with the logic of equal opportunity can help lower courts fulfill the FAA’s nondiscrimination mandate without inevitably displacing state law just because it adversely impacts arbitration agreements. Considering controversial examples from the recent past, I conclude with concrete guidance for how my proposed model might be implemented in practice.
Number of Pages in PDF File: 67
Keywords: Arbitration, AT&T Mobility, Concepcion, Federal Arbitration Act, FAA, FAA Preemption, Federal Preemption, Supreme Court, Anti-Discrimination, Stanford/Yale Junior Faculty Forum
Date posted: March 28, 2011 ; Last revised: May 22, 2012