Authors

Tamar Meshel

The Judicial Grassroots of the "Arbitration Revolution"

Abstract

The “arbitration revolution”—the meteoric rise in the use of arbitration in the United States—is commonly imputed to the Supreme Court’s unilateral and ideologically driven expansion of the Federal Arbitration Act (FAA). The portrayal of the FAA’s evolution as a campaign launched by a Supreme Court that is out of touch with society and with the judicial system over which it presides usefully serves to delegitimize both this one-hundred year-old statute and arbitration more generally. This Article argues that the popular description of the Supreme Court as the sole instigator of the “arbitration revolution” is misleading because it conveniently ignores a critically important player in the FAA’s judicial development—the lower courts.

This Article offers a novel, alternative account of the judicial evolution of the FAA. It demonstrates that, contrary to conventional wisdom, the current judicial understanding of the FAA was not created by the Supreme Court out of whole cloth. Rather, some of the most fundamental, and controversial, arbitration principles set out by the Supreme Court were in fact rooted in the lower courts’ interpretation of the FAA and these courts’ own policy preferences regarding arbitration, rather than in the Supreme Court’s unilateral rewriting of arbitration law.

This Article revisits five fundamental arbitration principles set out in Supreme Court decisions rendered between 1967 and 2001—the separability principle, the principle that the FAA reflects a federal policy favoring arbitration, the principle that the FAA preempts state law in state courts, the principle that statutory claims are arbitrable under the FAA, and the principle that employment disputes are arbitrable under the FAA. These five principles seem revolutionary and have been criticized as such. However, this Article shows that in establishing all of them the Supreme Court adopted an interpretation of the FAA that had already been accepted by at least some, and at times by the majority, of the Circuit Courts of Appeals as well as by other lower federal and state courts. Therefore, the Court was simply reacting to jurisprudential development already taking place in the lower courts. Accusing the Supreme Court of single-handedly producing the woes associated with modern arbitration does little more than fuel a counterproductive anti-arbitration movement that operates to delegitimize arbitration rather than to improve it.

Repository Citation

Tamar Meshel, The Judicial Grassroots of the "Arbitration Revolution", 15 Wm. & Mary Bus. L. Rev. 245 (2024), https://scholarship.law.wm.edu/wmblr/vol15/iss2/2