In my ongoing effort to publicize efforts from the Works-in-Progress conference, I am linking here to Aaron Bruhl’s blog post from last week about Rent-A-Center v. Jackson, the upcoming case on whether courts or arbitrators decide unconscionability. Aaron tells me that this paper grew out of his presentation at the Works-in-Progress conference several years ago at Marquette. As Aaron writes,
This case holds obvious interest for those who study ADR, consumer law (most consumer contracts have arbitration clauses, whether or not you know it), and employment law (this case is an employment discrimination suit). What I hope to show you is that it is just as interesting for those who study federal courts and judicial politics. Beneath the surface, the case is, in a sense, more Bush v. Gore than Williams v. Walker-Thomas Furniture.
To see why the case is so intriguing, one has to appreciate what one might call its strategic context. The Supreme Court is strongly pro-arbitration. Some state and federal courts are not quite so enthusiastic, at least when it comes to consumer and employment contexts with their largely adhesionary contracts. (Please note that I’m not discussing whether the Court’s decisions in this area, and its broader pro-arbitration stance, reflect sound interpretations of the relevant statute, good policy, etc.) Over the course of the last couple of decades the Supreme Court has shut off most avenues for challenging arbitration agreements at the wholesale level – state law cannot declare particular fields like consumer transactions off limits from arbitration, courts cannot deem arbitration per se violative of public policy, etc. All such arguments are preempted by the Federal Arbitration Act. What remains, though, is the possibility for retail-level challenges to particular arbitration clauses under section 2 of the Act, which allows ordinary contract defenses that would invalidate any contract. So arbitration itself cannot be questioned, but a particular arbitration clause might be invalidated as the product of duress, fraud, etc.