Consumer Law

David Horton Article: Arbitration as Delegation

By Jeff Sovern

David Horton of Loyola Law School Los Angeles haw written Arbitration as Delegation, 86 N.Y.U. L. Rev. (2011).  Here's the abstract:

Hundreds of millions of consumer and employment contracts include mandatory arbitration clauses, class arbitration waivers, and other terms that modify the rules of litigation. These provisions ride the wake of the Supreme Court?s expansive interpretation of the Federal Arbitration Act (?FAA?). For decades, scholars have criticized the Court?s arbitration jurisprudence for distorting Congress?s wishes and ignoring the fact that companies use fine print dispute resolution provisions as a clandestine way to eliminate substantive rights. This Article claims that the Court?s reading of the statute suffers from a deeper, more fundamental flaw: it transforms the FAA into an unconstitutional delegation of legislative power. Article I, section 1 of the Constitution forbids Congress from conferring the right to make law upon private parties. As construed by the Court, that is exactly what the FAA does. Invoking the statute, firms have created a parallel system of civil procedure for consumer and employment cases.This widespread procedural rulemaking is especially troubling because it establishes a private regulatory regime in an area that Congress has already attempted to regulate. In light of these concerns, the Article proposes several ways that the Court can narrow the statute and thus assuage concerns about its constitutionality.

Full post as published by CL&P Blog on September 04, 2010 (boomark / email).