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Wednesday, January 30, 2013


Imre Szalai

Hi Paul,
I hear your arguments, but my bet is that a majority of Supreme Court justices will rule against the small business owners. I think the judicial avenue to arbitration reform is dead, and the only real opportunity for change is Congress. The Supreme Court will likely to take a look at the vindication of rights idea, dismiss it as dicta, and/or construe the idea narrowly, perhaps by saying the vindication of rights idea focuses solely on the fairness of procedures within a 2 party arbitration, like whether the arbitral discovery procedures are adequate, not whether a case is financially feasible. And/or they will link the vindication of rights idea to unconscionability and rely on Concepcion to give a narrow reading of unconscionability and say that the small business owners' demand for class wide relief is antithetical to arbitration. The fact that sophisticated parties are involved probably puts the nail in the coffin. I hear your arguments of the need to vindicate important antitrust rights. This is a very legitimate concern, and it should be overriding. But I think only Congress will right this wrong, as Justice Sotomayor recently suggested in a different context regarding the FAA. The Supreme Court has piled mistake upon mistake when construing the FAA, and they have screwed up the statute beyond recognition. The real problem began decades ago when the court allowed for the arbitrability of statutory claims. The FAA was likely intended solely for basic contract disputes to be decided by a business person, like whether the widget that was delivered was the same as the widget that was promised, not insanely complex economic arguments surrounding statutory antitrust claims. I don't think it was ever the intent of Congress for the FAA to cover statutory claims. Best of luck with preparing for the oral arguments.
Imre Szalai
Loyola University New Orleans College of Law

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