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"Concepcion seems to make it very clear that such a rule would be preempted by the FAA. " I've read it forward and backwards and i don't see it. "The nonsensi

"Concepcion seems to make it very clear that such a rule would be preempted by the FAA. " I've read it forward and backwards and i don't see it. "The nonsensical reasoning in Concepcion applies just the same if the rule invalidates class waivers specifically (that is, permits the arbitration agreement to be enforced but strikes only the part prohibiting class actions, which would result in arbitration proceeding on a class basis) as it does if the rule invalidates the entire arbitration agreement (as the CA Supreme Court rule did)." Again, i'm going to disagree. There is a huge difference between proscribing action and proscribing form of action, and Conception's reasoning seems pretty wholly inapplicable to the latter, only the former. It also does not, in any way, deal with the preemption issue that would occur, and every case i can find on the other side of this seems to say they would allow states to constrain the form. The court reasoned that the purpose of the FAA was "'not [to] mandate the arbitration of all claims, but merely the enforcement . . . of privately negotiated arbitration agreements.'"Id. at 70 (quoting Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 470 U. S. 219 (1985)). While the FAA therefore preempts application of state laws which render arbitration agreements unenforceable, "[i]t does not follow, however, that the federal law has preclusive effect in a case where the parties have chosen in their [arbitration] agreement to abide by state rules."" ... Unlike its federal counterpart, the California Arbitration Act, Cal.Civ.Proc.Code Ann. § 1280 et seq. (West 1982), contains a provision allowing a court to stay arbitration pending resolution of related litigation. We hold that application of the California statute is not preempted by the Federal Arbitration Act (FAA or Act), 9 U.S.C. § 1 et seq., in a case where the parties have agreed that their arbitration agreement will be governed by the law of California. See Volt Inf. Sciences v. Stanford Univ., 489 U.S. 468 (1989) Where california's "form of arbitration" requirements were specifically affirmed.

pktgen 9y ago
A state law saying "arbitration is awesome, but banning class arbitration is against our public policy" still has the effect of finding part of an arbitration agreement unenforceable. The rule effectively changes an agreement from "We agree to arbitrate disputes. No arbitration will proceed on a class or collective basis." to "We agree to arbitrate disputes. Arbitration may proceed on a class or collective basis." I don't see how the fact that the state rule would only render part of an arbitration agreement unenforceable, as opposed to the entire agreement (like the CA rule did), matters. Quoting Concepcion (emphasis mine): > We differ with the Concepcions only in the application of this analysis to the matter before us. We do not agree that rules requiring judicially monitored discovery or adherence to the Federal Rules of Evidence are “a far cry from this case.” Brief for Respondents 32. The overarching purpose of the FAA, evident in the text of §§2, 3, and 4, is to ensure the enforcement of arbitration agreements according to their terms so as to facilitate streamlined proceedings. Requiring the availability of classwide arbitration interferes with fundamental attributes of arbitration and thus creates a scheme inconsistent with the FAA. ... > Although we have had little occasion to examine classwide arbitration, our decision in Stolt-Nielsen is instructive. In that case we held that an arbitration panel exceeded its power under §10(a)(4) of the FAA by imposing class procedures based on policy judgments rather than the arbitration agreement itself or some background principle of contract law that would affect its interpretation. 559 U. S., at ___ (slip op., at 20–23). We then held that the agreement at issue, which was silent on the question of class procedures, could not be interpreted to allow them because the “changes brought about by the shift from bilateral arbitration to class-action arbitration” are “fundamental.” Id., at ___ (slip op., at 22). This is obvious as a structural matter: Classwide arbitration includes absent parties, necessitating additional and different procedures and involving higher stakes. Confidentiality becomes more difficult. And while it is theoretically possible to select an arbitrator with some expertise relevant to the class-certification question, arbitrators are not generally knowledgeable in the often-dominant procedural aspects of certification, such as the protection of absent parties. The conclusion follows that class arbitration, to the extent it is manufactured by Discover Bank rather than consensual, is inconsistent with the FAA. A state law like this would still manufacture class arbitration, so I don't see how it could avoid Concepcion's holding. And the holding that requiring the availability of classwide arbitration "interferes with fundamental attributes of arbitration" seems impossible to work around. (Also, if there was a possible "backdoor" way of prohibiting class waivers while still complying with Concepcion, I expect California would have tried it already.) --- response to https://news.ycombinator.com/item?id=16162950 https://news.ycombinator.com/item?id=16162950 (can't directly respond because of the nesting limit): > Note specifically that it's saying policy judgements cannot override the FAA. It also explicitly says background principle of contract law may affect its interpretation. One of those background principles is traditionally being state law on how contracts are interpreted and what is allowed or not allowed. In fact, that's where all the contract law they talk about is coming from. There is no federal contract law. But would this state law really be a "background principle of contract law"? It sounds like it would have "a disproportionate impact on arbitration" and "stand as an obstacle to the accomplishment of the FAA’s objectives" (which, according to Concepcion, is somehow incompatible with class arbitration); it's not just some generally applicable rule. Any state law that tries to require the availability of class arbitration is not going to pass Concepcion under that broad test, no matter the vehicle. There is no federal contract law, but the current Supreme Court has gotten awfully close when it comes to arbitration. One example: in DirecTV v. Imburgia (https://www.supremecourt.gov/opinions/15pdf/14-462_2co3.pdf; https://www.supremecourt.gov/opinions/15pdf/14-462_2co3.pdf; unlike the other decisions, this one was not on party lines), the Supreme Court was unwilling to defer to the California Court of Appeals on contract interpretation relating to arbitration. You should be right, but it's just not something the current Supreme Court will go along with. > Last i looked, there is pending legislation on this matter, so ... Do you have a link to that?
- DannyBee 9y ago
  " I don't see how the fact that the state rule would only render part of an arbitration agreement unenforceable, as opposed to the entire agreement (like the CA rule did), matters. " I'm very surprised you would say that. It matters quite a lot. Rules affecting the procedure by which you get process are very different than rules as to whether you get process at all, and i'm not aware of any case ever holding otherwise. IE a rule that says "if you have a dispute under $2000, you are always allowed to go to small claims court" is very different than a rule that says "if you have a dispute under $2000, you can't sue anyone at all". In practice, saying things like "you may not appeal" would usually be valid limits on procedure when "you may not sue" will not be. I mean, this is essentially saying "i don't see why whether it's procedural or substantive due process would matter". You are citing a decision that examined whether, based on regular old public policy, you could get out of a classwide arbitration waiver. Yes, it says a bunch about how that ain't gonna happen. It also says things like: "In that case we held that an arbitration panel exceeded its power under §10(a)(4) of the FAA by imposing class procedures based on policy judgments rather than the arbitration agreement itself or some background principle of contract law that would affect its interpretation" Note specifically that it's saying policy judgements cannot override the FAA. It also explicitly says background principle of contract law may affect its interpretation. One of those background principles is traditionally being state law on how contracts are interpreted and what is allowed or not allowed. In fact, that's where all the contract law they talk about is coming from. There is no federal contract law. This seems 100% consistent with the case i cited to you, which explicitly allowed a California state contract law to affect the rules of how an arbitration agreement proceeded under the FAA. That case is still good law from the Supreme Court, was explicitly not overruled, and appears to be exactly the kind of thing they leave open in the quoted part above, so until i hear otherwise, i'm going to go with that :) It's 100% clear you aren't going to get out of it based on public policy. "(Also, if there was a possible "backdoor" way of prohibiting class waivers while still complying with Concepcion, I expect California would have tried it already.)" Last i looked, there is pending legislation on this matter, so ...

pktgen 9y ago

A state law saying "arbitration is awesome, but banning class arbitration is against our public policy" still has the effect of finding part of an arbitration agreement unenforceable. The rule effectively changes an agreement from "We agree to arbitrate disputes. No arbitration will proceed on a class or collective basis." to "We agree to arbitrate disputes. Arbitration may proceed on a class or collective basis." I don't see how the fact that the state rule would only render part of an arbitration agreement unenforceable, as opposed to the entire agreement (like the CA rule did), matters. Quoting Concepcion (emphasis mine): > We differ with the Concepcions only in the application of this analysis to the matter before us. We do not agree that rules requiring judicially monitored discovery or adherence to the Federal Rules of Evidence are “a far cry from this case.” Brief for Respondents 32. The overarching purpose of the FAA, evident in the text of §§2, 3, and 4, is to ensure the enforcement of arbitration agreements according to their terms so as to facilitate streamlined proceedings. Requiring the availability of classwide arbitration interferes with fundamental attributes of arbitration and thus creates a scheme inconsistent with the FAA. ... > Although we have had little occasion to examine classwide arbitration, our decision in Stolt-Nielsen is instructive. In that case we held that an arbitration panel exceeded its power under §10(a)(4) of the FAA by imposing class procedures based on policy judgments rather than the arbitration agreement itself or some background principle of contract law that would affect its interpretation. 559 U. S., at ___ (slip op., at 20–23). We then held that the agreement at issue, which was silent on the question of class procedures, could not be interpreted to allow them because the “changes brought about by the shift from bilateral arbitration to class-action arbitration” are “fundamental.” Id., at ___ (slip op., at 22). This is obvious as a structural matter: Classwide arbitration includes absent parties, necessitating additional and different procedures and involving higher stakes. Confidentiality becomes more difficult. And while it is theoretically possible to select an arbitrator with some expertise relevant to the class-certification question, arbitrators are not generally knowledgeable in the often-dominant procedural aspects of certification, such as the protection of absent parties. The conclusion follows that class arbitration, to the extent it is manufactured by Discover Bank rather than consensual, is inconsistent with the FAA. A state law like this would still manufacture class arbitration, so I don't see how it could avoid Concepcion's holding. And the holding that requiring the availability of classwide arbitration "interferes with fundamental attributes of arbitration" seems impossible to work around. (Also, if there was a possible "backdoor" way of prohibiting class waivers while still complying with Concepcion, I expect California would have tried it already.) --- response to https://news.ycombinator.com/item?id=16162950 https://news.ycombinator.com/item?id=16162950 (can't directly respond because of the nesting limit): > Note specifically that it's saying policy judgements cannot override the FAA. It also explicitly says background principle of contract law may affect its interpretation. One of those background principles is traditionally being state law on how contracts are interpreted and what is allowed or not allowed. In fact, that's where all the contract law they talk about is coming from. There is no federal contract law. But would this state law really be a "background principle of contract law"? It sounds like it would have "a disproportionate impact on arbitration" and "stand as an obstacle to the accomplishment of the FAA’s objectives" (which, according to Concepcion, is somehow incompatible with class arbitration); it's not just some generally applicable rule. Any state law that tries to require the availability of class arbitration is not going to pass Concepcion under that broad test, no matter the vehicle. There is no federal contract law, but the current Supreme Court has gotten awfully close when it comes to arbitration. One example: in DirecTV v. Imburgia (https://www.supremecourt.gov/opinions/15pdf/14-462_2co3.pdf; https://www.supremecourt.gov/opinions/15pdf/14-462_2co3.pdf; unlike the other decisions, this one was not on party lines), the Supreme Court was unwilling to defer to the California Court of Appeals on contract interpretation relating to arbitration. You should be right, but it's just not something the current Supreme Court will go along with. > Last i looked, there is pending legislation on this matter, so ... Do you have a link to that?

DannyBee 9y ago
" I don't see how the fact that the state rule would only render part of an arbitration agreement unenforceable, as opposed to the entire agreement (like the CA rule did), matters. " I'm very surprised you would say that. It matters quite a lot. Rules affecting the procedure by which you get process are very different than rules as to whether you get process at all, and i'm not aware of any case ever holding otherwise. IE a rule that says "if you have a dispute under $2000, you are always allowed to go to small claims court" is very different than a rule that says "if you have a dispute under $2000, you can't sue anyone at all". In practice, saying things like "you may not appeal" would usually be valid limits on procedure when "you may not sue" will not be. I mean, this is essentially saying "i don't see why whether it's procedural or substantive due process would matter". You are citing a decision that examined whether, based on regular old public policy, you could get out of a classwide arbitration waiver. Yes, it says a bunch about how that ain't gonna happen. It also says things like: "In that case we held that an arbitration panel exceeded its power under §10(a)(4) of the FAA by imposing class procedures based on policy judgments rather than the arbitration agreement itself or some background principle of contract law that would affect its interpretation" Note specifically that it's saying policy judgements cannot override the FAA. It also explicitly says background principle of contract law may affect its interpretation. One of those background principles is traditionally being state law on how contracts are interpreted and what is allowed or not allowed. In fact, that's where all the contract law they talk about is coming from. There is no federal contract law. This seems 100% consistent with the case i cited to you, which explicitly allowed a California state contract law to affect the rules of how an arbitration agreement proceeded under the FAA. That case is still good law from the Supreme Court, was explicitly not overruled, and appears to be exactly the kind of thing they leave open in the quoted part above, so until i hear otherwise, i'm going to go with that :) It's 100% clear you aren't going to get out of it based on public policy. "(Also, if there was a possible "backdoor" way of prohibiting class waivers while still complying with Concepcion, I expect California would have tried it already.)" Last i looked, there is pending legislation on this matter, so ...