Amicus Brief in Second Circuit

This posting is courtesy of Richard Reuben:


I want to make you aware of an arbitration amicus opportunity in the 2nd Circuit that presents both Stolt-Nielsen and Hall Street issues.

In brief, the arbitrator in this case, before Stolt-Nielsen, decided that an arbitration clause that does not expressly address class arbitration  “did not prohibit” the availability of class actions. After Stolt-Nielsen, the defendant asked the district court in New York to vacate that ruling in light of Stolt-Nielsen. The judge did so, ruling that the arbitrator exceeded her powers by issuing a decision that contravened Stolt-Nielsen.

The main brief was filed on Friday, and argued that Stolt-Nielsen did not provide a basis for a review of the substance of the arbitration award and that if anyone needed to reconsider the award it was the arbitrator.

The amicus brief is still being drafted, but will explain why exceeding-the-powers review does not provide a basis to vacate the arbitrator’s decision, and why it would be inappropriate for new rules of law to provide a basis for re-opening decided arbitration awards. (Note there is a wrinkle on the last point in that the arbitration has not yet been concluded, although the ruling on the class arbitration issue is final.)

I hope you will consider joining this brief, which was developed in consultation with Paul Bland, Nina Pollard, Michael Rubin, Adam Klein, and myself. Paul Mollica, of Meites, Mulder, Mollica & Glink in Chicago is drafting the brief. While the list of participants may lean a little to the left, my sense is that the issues are basic and straightforward enough to cross any ideological divides within the field.

Please let Paul or me know if you have any questions. Paul can be reached at Do decide quickly, though, as the A-C brief is due on Friday, Oct. 22.



Richard C. Reuben

James Lewis Parks Professor of Law

University of Missouri School of Law

Hulston Hall

Columbia, MO   65211

Phone: 573-884-5204

Fax: 573-882-3343




5 thoughts on “Amicus Brief in Second Circuit”

  1. I know of a few others who share this subversive view, and indeed used to harbor it myself. However, I have come to conclude that it just throws out the baby with the bathwater.

    There is plenty wrong with mandatory, but there is nothing inherently wrong with arbitration as a process. It can be a terrific process if parties really agree to use it. The problem with the subversive view is that it leads to the destruction of the process itself. Eliminating finality fundamentally changes the process, encouraging even further legalization and undermining if not negating many of the virtues that make arbitration desirable. This hardly seems like a normatively desirable remedy to me; rather it seems way overbroad. In my view, mandatory requires a remedy and that remedy is legislative action to correct this particular problem, not fundamentally changing the process as a whole.

  2. I’m torn on this. I see the reason for challenging the district court decision. The outcome in Stolt-Nielsen was awful, and I don’t like the prospect of judges cutting off class arbitration like the district court did here. At least some of the time, arbitrators will be willing to allow class arbitration to proceed if they are given these decisions.

    On the other hand, I think the Supreme Court overreached in Stolt-Nielsen by finding that the arbitrator exceeded his powers, and in the process potentially (and unintentionally) opened the door to far more searching review and vacatur of arbitral awards. That’s something that I would welcome, at least with respect to adhesory arbitration clauses. I believe mandatory adhesory arbitration should either be subject to due process analysis (as Rich has argued) or treated as a form of contract with judicial review to ensure that awards do not violate mandatory legal rules. Either approach entails greater judicial review. As a practical matter, I think if greater judicial review became the norm we’d see many fewer adhesory arbitration agreements. So for that somewhat subversive reason I’m hesitant to challenge a decision in which a judge reviews an award on essentially legal grounds.

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