David Horton of California, Davis has written Arbitration About Arbitration Stanford Law Review, Vol. 70, (2017 Forthcoming). Here is the abstract:
Recently, the U.S. Supreme Court’s interpretation of the Federal Arbitration Act (“FAA”) has nearly eliminated consumer and employment class actions, sparking vigorous debate. Yet another important development in federal arbitration law has received less attention. Traditionally, judges granted motions to compel arbitration only after confirming that the parties formed a valid agreement to arbitrate that applies to the underlying lawsuit. But now, through the use of “delegation clauses,” businesses are giving arbitrators the exclusive power to decide these matters. Increasingly, critical questions about the arbitration—including whether the process is fair—are being resolved in arbitration.
This Article demonstrates that judges are struggling with every major issue related to arbitration about arbitration. Indeed, they have splintered over how to determine whether a contract contains a delegation clause, how to gauge the validity of these provisions, and whether arbitrators can decide whether the FAA even applies to a lawsuit. The Article then contends that this doctrinal chaos stems from a single faulty premise.
The Court has opined that delegation provisions are their own freestanding miniature arbitration clauses:
(1) agreements to arbitrate disputes,
(2) over the broader agreement to arbitrate the underlying complaint.
Seen this way, delegation clauses are entitled to the same extraordinary deference enjoyed by conventional arbitration clauses. However, drawing on the FAA’s text, legislative record, and forgotten strands of federal common law, the Article contends that arbitration about arbitration is manifestly different from arbitration about the merits of a case. Finally, the Article explains how acknowledging the ways in which delegation clauses are unique can resolve the many of the questions that are currently dividing courts.
