Adjunct Professor George Friedman wrote a blog post about the Supreme Court’s continued support for arbitration.
Having already agreed to review two arbitration-centric cases next Term, the Supreme Court on June 25 granted Certiorari in a third case, setting up the first arbitration “trilogy”[1] in over fifty years. This blog post examines the three cases the Court has agreed to review and suggests what impact the decisions may have on securities arbitration.
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The FAA Supremacy War is Over
What to me is most interesting about the three cases lined up for next Term is not what they are about, but what they are not about. For the first time in a while, the Court is not reviewing a case involving whether the Federal Arbitration Act (“FAA”) preempts conflicting State laws (statutory or decisional) or prevails over another federal statute protecting individual rights. Why is that? The Court has made clear that the preemption/statutory supremacy war is over.
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And of Course, the Vacancy at SCOTUS will have an Impact
Overarching any discussion of these three cases is who will replace the retiring Justice Anthony Kennedy. Many of the landmark arbitration-related decisions from SCOTUS were 5-4 votes, and President Trump’s list of potential nominees to me indicates that the individual will be a pro-arbitration “Gorsuch 2.0” constitutional literalist. And let’s remember that Justice Neil Gorsuch authored the majority Opinion in Epic Systems, holding that the FAA permits employers to use arbitration clauses containing class action waivers, notwithstanding the National Labor Relations Act’s protections of workers’ rights to act collectively.
