Since her nomination, I have been wondering what impact The Honorable Sonia Sotomayor would have on the law of dispute resolution if she were confirmed as a Supreme Court Justice. While I could find no opinions she authored during her time on the Second Circuit Court of Appeals related to mediation law, I have read eight opinions she authored related to substantive arbitration law, including three reversals of a district court’s ruling so as to favor arbitration as a dispute resolution process. Overall, her rulings show her strong support for commercial arbitration between parties of relatively equal bargaining strength but a reluctance to enforce “mandatory” arbitration clauses.
Of those eight opinions, one addressed the threshold issue of appellate jurisdiction pursuant to the Federal Arbitration Act (FAA), but revealed little of her views about arbitration. See Salim Oleochemicals v. M/V Shropshire, 278 F.3d 90 (2d Cir. 2002) (district court’s dismissal without prejudice of action in favor of arbitration was appealable under FAA §16). In contrast, two opinions – each of which reversed a district court ruling to keep a dispute in court – demonstrate her respect for arbitration. See Astra Oil Co., Inc. v. Rover Navigation, Ltd., 344 F.3d 276 (2d Cir. 2003) (reversing denial of third-party non-signatory’s motion to compel arbitration on grounds of estoppel because third party’s claim was closely connected to claims between signatories of arbitration clause in shipping contract); ACE Capital Re Overseas Ltd. v. Central United Life Ins. Co., 307 F.3d 24 (2d Cir. 2002) (reversing grant of motion to stay arbitration and construing scope of arbitration clause broadly to include fraudulent inducement and contract termination claims).
Her preference for arbitration yielded, however, in a consumer arbitration matter. For those of you who may have forgotten, Judge Sotomayor authored the well-known pro-consumer Specht opinion in which she refused to enforce an arbitration clause contained in a “clickwrap” software license agreement. See Specht v. Netscape Communications Corp., 306 F.3d 17 (2d Cir. 2002) (affirming denial of motion to compel arbitration by software producer because arbitration clause in license agreement was not visible unless user scrolled down a webpage before downloading free software and thus download did not demonstrate assent to clause).
At the post-hearing phase, Judge Sotomayor’s opinions reflect respect for the finality of arbitration awards. Thus, in Westerbeke Corp. v. Daihatsu Motor Co., Ltd., 304 F.3d 200 (2d Cir. 2002), she voted to reverse the district court’s vacatur of an award for manifest disregard of the law when the legal principle allegedly violated was subject to interpretation. Likewise, Judge Sotomayor authored three opinions affirming the district court’s confirmation of an arbitration award, demonstrating deference to arbitrators’ authority and the arbitration process. See Phoenix Aktiengesellschaft v. Ecoplas, Inc., 391 F.3d 433 (2d Cir. 2004) (affirming confirmation of award under 9 U.S.C. § 207); Pike v. Freeman, 266 F.3d 78 (2d Cir. 2001) (affirming confirmation of award and stating that “it was well within the scope of the arbitration clause for the arbitrators to decide under what theory or theories [defendant] should or could be held liable for the damage suffered” relating to partnership to manufacture, distribute, and market an abortion-inducing drug”); Circle Industries USA, Inc. v. Parke Const. Group, Inc., 183 F.3d 105, 110 (2d Cir. 1999) (affirming confirmation of award as appellant “failed to establish a violation of the AAA rules sufficient to require vacatur of the award”).
These opinions suggest that she will continue to enforce the strong federal policy favoring arbitration and in support of the FAA, but may show sympathy for the consumer forced into an adhesive arbitration clause. In sum, her confirmation is not likely to alter the current landscape of arbitration law.
