Justice Scalia ignores text of Federal Arbitration Act

May 11, 2011 by

I recently posted the results of the Supreme Court opinion in AT&T v. Concepcion – the invalidation of a state law that rendered unenforceable the waiver of class action suits in arbitration.  However, upon closer review of the opinion, the method utilized by the Supreme Court majority of five Republican nominated Justices is very troubling.  Professing to simply follow the “text” of the Federal Arbitration Act (“FAA”), the opinion of the court written by Justice Scalia in effect took a black magic marker and crossed out the words of the text they didn’t like.  Without those words in the statute, the result would indeed be true to the text.  But just as aptly as the boy in the Hans Christian Andersen fable cried, “the Emperor has no clothes,” ignoring the words of a statute is not a textual approach.

Throughout his career on the federal bench, Justice Scalia has famously touted the necessity for courts to rely primarily or even solely on the text of statutory provisions and to disregard “vague” notions of statutory purpose. That approach has served him and his colleagues often and well to justify narrow readings of civil rights and other modern progressive laws.  Here, however, his professed “textualism” is fictitious.

The majority stated: “The overarching purpose of the FAA, evident in the text of §§ 2, 3, and 4, is to ensure the enforcement of arbitration agreements.”  The Court conceded that § 2 includes an exception to this general policy, known as a savings clause, which “preserves generally applicable contract defenses.”  But the Court completely ignored the savings clause when determining that the “objectives” of the FAA were thwarted by state law.

In plain English, the FAA seeks to ensure enforcement of arbitration agreements except when there are contract defenses, but the Supreme Court stated that the statute seeks to ensure enforcement of arbitration agreements when there are contract defenses.  The Court read the exception out of the text and then concluded that the state law was an obstacle to federal law.  This complete disregard of words in the text should not be paraded as a textual approach.

The dissent written by Justice Breyer for the four Democratic nominated justices totally got the picture.  The dissent protested that “[l]inguistically speaking,” the California law “falls directly within the scope of the Act’s exception.”

While the holding in the case will be harmful to many, the approach utilized by the majority is even more ominous.  If the Court can get away with reading important words out of statutes while claiming to follow the text, then the words of laws written by Congress become meaningless and unenforceable.  The rights and protections of numerous civil rights, consumer protection, environmental, and safety net statutes can be emasculated by just crossing out operative words.  This mode of interpretation is totally contrary to the duty of judges to uphold the law.

Steve Larson
An experienced trial lawyer who handles both hourly and contingent fee cases, Steve has expertise in class actions, consumer cases, antitrust litigation, securities litigation, corporate disputes, intellectual property disputes, unfair competition claims, employment matters, and disputes involving family wealth. Steve regularly represents individuals and businesses in federal and state court and has obtained class-wide recovery in multiple class actions. A veteran practitioner, Steve's clients value his creative approach to resolving complex litigation matters.

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