Exploring the Federal Arbitration Act Through the Lens of History

Abstract

My initial interest in the history of the Federal Arbitration Act (FAA) arose out of my experiences representing clients and seeing how the FAA could be a game-changer for dispute resolution. In light of the broad and powerful use of the statute today and how the statute impacts access to justice in connection with so many different areas of law, I went in search of a deeper history regarding the FAA because I wanted to understand why the statute was enacted. Through years of research, I encountered a rich history behind the statute’s enactment during the Roaring Twenties. The individuals who were involved had passionate, sincere beliefs about the use of arbitration to resolve commercial disputes. The campaign for the FAA involved celebratory parties fitting for the Great Gatsby, invitations to an exclusive Hollywood hangout, and stump speeches at movie theaters, synagogues, and churches. Many different people, factors, institutions, and beliefs helped shape and contribute to the development and passage of the FAA, including progressivism, the First World War, a changing national and international interconnected economy, Prohibition, and a larger movement for procedural reform in the legal system, to name a few. Diving into the history stunned me and fascinated me more than I ever expected.

I have received many questions about the FAA’s history from attorneys, other law professors, and my students, such as why is this history important, or isn't the history just an interesting footnote to the statute? This Article explores several important lessons I learned from studying the history of the FAA's enactment. First, in light of this history, it is clear that the Supreme Court has grossly erred in interpreting the FAA. Second, the history can help one better understand current controversies regarding arbitration law. Finally, this history provides different perspectives on the role of arbitration in our legal system, such as the dynamic relationship between litigation and arbitration, the relationship between the government and its people, and hidden values of arbitration.

Keywords: arbitration, legal history, Federal Arbitration Act, civil procedure, dispute resolution, consumer protection, employee rights

JEL Classification: K10, K12, K4, K40, K41