June 28, 2022

Hungry for Arbitration


The justices’ appetite for arbitration cases remains strong. They seem to have at least one arbitration case every term, but this term, they decided four–a large number, according to Mayer Brown partner Andrew Pincus. Pincus has done considerable work in the arbitration arena. He successfully argued two of the court’s most important and recent arbitration decisions: AT&T Mobility v. Concepcion (2011) and Lamps Plus v. Varela (2019). He offered us some thoughts on three of the four decisions this term he considered the most significant: Viking River Cruises v. Moriana; Morgan v. Sundance, and Southwest Airlines v. Saxon.

Supreme Court Brief: Are four arbitration cases in one term unusual?

Pincus: I think it’s unusual. It’s a function of the fact that arbitration is used much more frequently. I think the judicial system is incredibly expensive, complex, and time consuming. People are looking for more efficient ways to resolve disputes.

A lot of the litigation is about details of how it works, and so you have conflicts in the lower courts. It’s just a reflection of what’s going on in the real world.

Supreme Court Brief: The court has been strongly pro-arbitration for years, but the pro-arbitration sides lost in Morgan and Southwest. Is the court shifting its stance?

Pincus: I think there was some expectation on the plaintiff and defendant side that there would be big pronouncements. But [the court] ended with narrow decisions that were broad based.

In Southwest, the employee argued that airline employees as a whole fell within the exception to arbitration. Southwest argued it applied only to people who actually move goods across state or international boundaries. The court says no to both. Airplane cargo loaders–this particular category of workers is excluded.

And it’s hard to think of a narrower decision than what they did in Morgan. As the merits briefing developed, it turned out to more complicated than the petition was. [Justice Elena] Kagan writes a decision that there is a federal waiver law and you can’t have a prejudice requirement.

Supreme Court Brief: Which decision do you think will have the greatest impact?

Pincus: Viking River, because of the huge expansion of PAGA claims (Private Attorneys General Act). The court addressed the core question: whether the Federal Arbitration Act preempted California’s Iskanian rule, which precludes dividing claims under PAGA into individual and non-individual claims in an arbitration agreement. The court concluded that the rule couldn’t preclude arbitration agreements providing for arbitration of an individual PAGA claim. Since Moriana’s labor violation claim was in arbitration, state law would require dismissal of her other (non-individual PAGA) claims for lack of standing.

That line of preemption decisions starting with Concepcion has been very contentious, with 5-4 decisions. It’s quite interesting the court was unanimous.

“Reprinted with permission from the 6/30 edition of Law.com © 2022 ALM Properties, Inc. All rights reserved. Further duplication without permission is prohibited.”

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