Middle Ground On Arbitration

One of the biggest problems with arbitration is that there is nothing but the arbitrator's conscience to insure that arbitration decisions conform to the law and the facts, even though they are, in principal, supposed to conform to both. Arbitration clauses with expanded judicial review could address this flaw that discourages parties from utilizing this forum.

This article argues that courts should enforce private contractual agreements for expanded judicial review in arbitration agreements. This article demonstrates that the court decisions enforcing such arbitral contractual provisions are consistent with the FAA’s purpose to ensure enforcement of parties’ arbitral agreements, whatever the form. Furthermore, this article argues that the FAA does not preclude courts from reviewing awards under expanded grounds where parties so agree, because the statutory structure provides default rather than mandatory grounds for award vacatur. Finally, this article concludes that permitting the parties to contract for expanded judicial review serves the public policy favoring arbitration, insofar as it encourages arbitration by giving parties who may be extraordinarily concerned with obtaining the legally correct outcome the ability to contract for expanded judicial review.

Richard A. Bales, Contracting Around the FAA: The Enforceability of Private Agreements to Expand Judicial Review of Arbitration Awards, SSRN (2025).

What To Abolish?

Republicans want to abolish the Department of Education and the IRS. Both are horrible ideas. 

What should be abolished?

1. The Drug Enforcement Administration (DEA).

2. The Office of National Drug Control Policy.

3. The Alcohol And Tobacco Tax And Trade Bureau.

4. The Alcohol and Tobacco parts of the Bureau of Alcohol, Tobacco, Firearms and Explosives.

5. The Article I Immigration Court system (transfer this duty to Article III courts).

6. U.S. Immigration and Customs Enforcement (ICE) (as opposed to the separate border control agency).

7. The Employment and Training Administration in the Labor Department.

8. The Export-Import Bank of the U.S.

9. The National Indian Gaming Commission.

10. Criminal and civil forfeiture enforcement of copyright and trademark violations (a similar statutory stand alone crimes).

11. Federal pornography possession enforcement.

12. Diversity jurisdiction in the federal courts.

13. Federal question jurisdiction in the federal courts in most cases involving private parties. 

14. The U.S. Court of Appeals for the Federal Circuit (merge into the U.S. Court of Appeals for the D.C. Circuit)

15. The Federal Arbitration Act.

16. Federal grand juries (would require a constitutional amendment).

17. Criminal punishment of illegal entry into the United States.

18. Federal enforcement of bank robbery laws.

19. Federal enforcement of intrastate controlled substance violations.

20.  Most federal agency law enforcement agencies.

21.  Merge the Commodity Futures Trading Commission into the SEC.

22. Slow speed, long haul passenger rail lines at AMTRAK.

23. Door to door rural mail delivery (replace it with P.O. boxes).

24. The Jones Act.

25. Grants to for profit colleges and universities.

26. Federal civil forfeitures.

27. For profit federal prisons and detention centers.

28. The Medicaid Estate Recovery program.

29.  FEMA grants to people suffering disaster losses after rebuilding in stupid zones.

30. The Office of the Director Of National Intelligence.

31. The Foreign Intelligence Surveillance Court (enforce the laws in regular Article III courts).

32. The Selective Service System.

33. Most tanks in the U.S. Army (transfer them to allies who want them like Ukraine and Taiwan).

34. New destroyers (of existing designs) for the U.S. Navy.

35. The U.S. military base at Guantanamo Bay.

36. Bomber aircraft in the Air National Guard.

37. Canon artillery in the Army National Guard.

38. The Space Force (which should be merged into the Air Force).

39. The Air Force (which should be merged into the Army).

40. Stealth fighters in the Air National Guard.

41. The Next-Generation Intratheater Airlift (NGIA) program in the Air Force (it duplicates a more advanced Army Future Long-Range Assault Aircraft program).

42. Foreign aid to Saudi Arabia.

43. The amphibious assault mission of the U.S. Marine Corps.

44. The U.S. Navy's nuclear-armed sea-launched cruise missile (SLCM-N) program.

45. Most U.S. military VIP transport aircraft.

46. The Armored Multipurpose Vehicle (AMPV) procurement of 522 M1283 General Purpose Vehicles, 993 M1286 Mission Command Vehicles, and 386 M1287 Mortar Carrier Vehicles. This would leave the AMPV program with 790 M1284 Medical Evacuation Vehicles and 216 M1285 Medical Treatment Vehicles.

47. The M10 Booker Mobile Protected Firepower program.

48. Retire the B1-B bomber (or transfer it to the U.S. Navy as a patrol aircraft).

49. The ban on travel by Americans to Cuba.

50. The U.S. Army Junior Reserve Officers' Training Corps (JROTC), which is a high school pre-ROTC program.

Common Misconceptions About Law

This is a list of common misconceptions people have about the law (to be clear, every statement below is false):

Sources of Law

* The law is mostly the same everywhere.

* The law is the mostly the same everywhere in the U.S.

* Legal terms almost always mean exactly one thing no matter where they are used.

* The law mostly fits a criminal law paradigm of statutes that prohibit you from doing something and impose a punishment if you do that.

* The constitution tells you everything you need to know about the law.

* Only the U.S. Supreme Court has jurisdiction to decide the constitutionality of something.

* Usually, a determination that something is unconstitutional involves finding that a treaty, statute, ordinance, or regulation is unconstitutional.

* The law is mostly contained in statutes.

* It is rarely necessary to look at case law or regulations to determine the meaning of a statute.

* The "common law" is the same in every state.

* Only one state or country's law applies to a business operating on the Internet. In a variant of this, the most important way to determine which law applies to a business on the Internet is where its servers are physically located.

* The law is static and has changed only a little over time.

* Modern U.S. law is very similar to modern English law.

* The Declaration of Independence creates enforceable U.S. law.

* The U.N. Universal Declaration of Human Rights creates enforceable U.S. law.

* International law consists mostly of legal rules that can be litigated in international courts producing judgments that matter.

Judges

* Judges are heavily influenced by their personal feelings about litigants and their personal relationships to litigants and are strongly biased against particular people.

* Judges can do whatever they want and the person who wins is mostly determined not by what the law says but by which side has the best lawyers which is mostly a function of much each side spends on their lawyers.

* Family court judges are intentionally or ideologically biased against men.

* Judges are basically umpires with no independent ability to interpret the law in different ways.

* A judge's political philosophy and judicial ideology have no impact on how a judge rules in a case.

* Judicial decisions are purely a matter of legislating from the bench.

* Judge are being dishonest when they utilize "legal fictions."

Dishonesty

* Criminal defense lawyers are bad people who unethically try to make it possible for people guilty of serious crimes to avoid responsibility for their actions by being acquitted at trial of all of the charges against them.

* It is unethical to represent someone you as a lawyer know is guilty or liable for wrongdoing.

* Pleading not guilty in a criminal case when you are guilty is perjury.

* Lawyers are allowed to lie.

* Prosecutors are routinely punished when a court determines that they withheld exculpatory evidence from a criminal defendant in a case.

* Negotiated compromises are dishonest.

* Cops are legally required to tell the truth to criminal suspects.

* Cops almost always tell the truth in court.

* Cops are routinely punished by their employers or a court when a court finds that they violated a criminal suspect's constitutional rights.

* Perjury in court is frequently prosecuted criminally.

* People are more likely to tell the truth when they are under oath or are making a statement under penalty of perjury.

* You can make an evidentiary objection to testimony presented in court on the grounds that the person giving the testimony is lying.

Certainty

* The law mostly involves general principles that can be stated at a high level of generality and logically applied to any new situation.

* If you know the facts of a case with perfect certainty you can know the legal consequences of those facts with certainty. Conceiving of the law as rules rather than standards.

* The law has a clear answer to every hypothetical situation one can imagine.

* Legal questions that don't have clear answers are rare.

* Traffic laws clearly establish that one person is at fault and another person is not at fault in a car accident most of the time.

* Jury trials are highly accurate at reaching outcomes consistent with the true facts and the law.

Arbitration

* Arbitrators have to follow the law based upon the facts presented to them the way that judges do.

* Arbitration awards can be reviewed on the merits in an appeal.

* Arbitration is usually less expensive than going to court.

* Arbitration is usually much faster than going to court.

* Arbitrators are not more biased in favor of one side over the other than judges are.

* You can only be compelled to arbitrate a dispute if you sign a contract agreeing to arbitrate the dispute.

* Only contract disputes are subject to arbitration.

Criminal Justice

* Criminal cases can be filed only if the victim files a complaint with a law enforcement officer.

* People who are released from prison after having their convictions overturned are automatically entitled to substantial compensation.

* People who are acquitted in criminal cases usually receive compensation for their legal fees and the disruption that their lives experienced.

* The police and prosecutors have an enforceable legal obligation to prevent, investigate, and prosecute crimes committed against you, if they can.

* People who commit crimes other than murder are usually caught and punished for their crimes.

* When a criminal law is repealed, people incarcerated for violating that law are routinely released from prison.

* The fact that a witness recants testimony provided in a criminal trial that gave rise to a criminal conviction makes it highly likely that the person convicted will have their conviction vacated and be released from prison.

* Prosecutors routinely cooperate in having wrongful convictions which they secured overturned.

Finality

* Mistaken findings of fact made in a trial can usually be corrected in an appeal.

* Mistakes made in hearings and trials can usually be corrected later, and information provided in hearings and trials can usually be supplemented after the fact. 

The Value Of Legal Training

* Lawyers are mostly charging people for the written documents that they produce.

* Any reasonably literate person can quickly learn what they need to know to effectively act as their own lawyer with a modest amount of self-study on the Internet.

* Doing legal work yourself saves money while also giving rise to few risks.

* Non-lawyers can learn to be competent judges with tens of hours to a couple hundred hours of training.

* When you have a dispute with someone, you can have a lawyer write the person you have a dispute with a letter for a minimal fee or no legal fee and the other person is likely to concede that you are right and cooperate.

* People who win legal disputes usually have their attorney fees awarded to them in the United States.

* A large share of losing lawsuits fit the law's description of a legally frivolous, groundless, or vexatious lawsuit.

The Effectiveness Of The Law And Justice

* The law is self-executing.

* People rarely get away with breaking the law.

* People almost always conform the behavior they would have taken otherwise to what the law requires. The law powerfully influences everyday behavior.

* The law almost always produces fair outcomes, unless someone incompetently makes a mistake in applying it.

* Every wrong has a legal remedy.

* All violations of constitutional rights and obligations have a legal remedy.

* There is always someone who is legally liable for the harm caused by an accident.

Contracts

* Economic pressure is enough to make a contract involuntary and invalidate it.

* Statements made by someone involved in a circumstance that gives rise to a legal case that aren't corroborated in writing aren't "proof."

* Contracts are never binding unless they are in writing.

* Contracts are only binding if you have read them and understood their terms.

Miscellaneous Other Specific Legal Issues

* Obligations to a child depend on the nature of the events that led to the child's conception and the relationship between the parents.

* Children must always take the surname of their father.

* In the United States, illegitimate children can't inherit from their fathers.

* You can't be an intellectual property infringer if you don't make a profit and give credit to the source of the work.

* Bank deposits are basically currency in a safe waiting for you to need to use it.

* Debts for fraud and other willful misconduct are automatically non-dischargeable in bankruptcy without any need for the creditor to take legal action to establish the nature of the debt in the bankruptcy case.

* Non-citizens don't have legal rights.

* The doctrine of "corporate personhood" usually hurts the average person in a legal dispute with a big business.

* People who engage in criminal conduct or civil wrongs in the course of their employment by a corporation are immune from liability for their actions.

* The U.S. Constitution, the Second Amendment to the U.S. Constitution, and the Declaration of Independence create a legal right to overthrow an unjust government.

* Texas has a right to secede from the United States.

Duels Are A Product Of Weak States

Cultures of honor generally, and dueling in particular, are associated with weak states.

Scholars have long tried to understand the conditions under which actors choose to use violent versus non-violent means to settle disputes, and many argue that violence is more likely in weakly-institutionalized settings. Yet, there is little evidence showing that increases in state capacity lowers the use of violent informal institutions to resolve disputes. Utilizing a novel dataset of violence—specifically, duels—across American states in the 19th century, we use the spread of federal post offices as an identification strategy to investigate the importance of state capacity for the incidence of violent dispute resolution. We find that post office density is a strong, consistent, and negative predictor of dueling behavior. Our evidence contributes to a burgeoning literature on the importance of state capacity for development outcomes.

Jeffrey L. Jensen, Adam J.Ramey, "Going postal: State capacity and violent dispute resolution" 48(4) Journal of Comparative Economics 779-796 (December 2020).

Wikipedia background here.

Stray Thoughts On ADR

* One of the reasons to be skeptical of arbitration is that it is almost never mutually agreed to by the parties ex post. This isn't true of all methods of alternative dispute resolution (ADR). Parties routinely elect to participate in mediation ex post for example.

* I am not a great fan of the term "Alternative Dispute Resolution", because it confuses what the primary purpose of courts, and by association court substitutes like ADR, are really about. Court are not primarily "dispute resolution" forums. They are primarily "rights enforcement" forums, in which a fairly small minority of cases are seriously disputed (and even many disputed cases result in the enforcement of rights).

* Thinking about arbitration globally is also something that is commonly done and usually unhelpful. The predominant form of arbitration mandated in contracts and to which the Uniform Arbitration Act and Federal Arbitration Act are applied is a court substitute forum in which a private organization with professional, usually legally trained, professionals (often retired judges) serve as arbitrators and apply organization specific procedural rules. The most common rules are to apply the rules of civil procedure with only minor modification administered by private judges, or to apply one of the handful of rules of procedure that are type specific, established by the American Arbitration Association (AAA),with at least five other kinds of arbitration processes are fairly common: securities arbitration organized by the securities dealer's trade association, arbitration over commission disputes between members of the Realtors® organization organized by it, union-management arbitration of employment disputes arising during the term of a collective bargaining agreement, lawyer-client fee dispute arbitration organized by bar associations, and rabbinical divorce mediation organized by Orthodox Jewish denominations to apply Jewish law.

The currently active AAA rules for domestic U.S. binding arbitrations are:

Construction Industry

AAA Dispute Resolution Board Hearing Rules and Procedures

AAA Dispute Resolution Board Operating Procedures

AAA New Jersey Residential Construction Lien Arbitration Rules

Construction Arbitration Rules and Mediation Procedures

Construction Industry Initial Decision Maker (IDM) Procedures

Home Construction Arbitration Rules and Mediation Procedures

Supplementary Rules for Fixed Time and Cost Construction Arbitration

Internet Domain Name Disputes

AAA Domain Name Disputes Supplementary Rules

AAA Nexus Disputes Supplementary Procedures

gTLD Dispute Resolution Procedures

Interim Supplementary Procedures for Internet Corporation for Assigned Names and Numbers (ICANN) Independent Review Process

Insurance Disputes

AAA Healthcare Payor Provider Arbitration Rules and Mediation Procedures

AAA Medicare Demonstration Project Rules - MA

AAA Medicare Demonstration Project Rules - NY

Illinois Uninsured/Underinsured Motorist Arbitration and Mediation Rules

Minnesota Rules of No-Fault Arbitration Procedure

Procedures for New York State No-Fault Master Arbitration

Resolution of Intra-Industry U.S. Reinsurance and Insurance Disputes Supplementary Procedures

Rules for Arbitration of No-Fault Disputes in the State of NY

Rules for Arbitration of Supplementary Uninsured/Underinsured Motorist

Rules for NY Workers' Compensation Health Insurers' Match Program (HIMP)

Employment Disputes

Employee Benefit Plan Claims Arbitration Rules

Employment Arbitration Rules and Mediation Procedures

Grievance Mediation Procedures

Impartial Umpire Rules Employee Benefit Trust Funds

Labor Arbitration Rules

Multiemployer Pension Plan Arbitration Rules for Withdrawal Liability Disputes

Rules for Impartial Determination of Union Fees

General

Accounting and Related Services Arbitration Rules and Mediation Procedures

Commercial Arbitration Rules and Mediation Procedures

Consumer Arbitration Rules

Election Arbitration Rules (for non-government entity elections)

Large, Complex Commercial Disputes Procedures with Commentary

Wireless Industry Arbitration Rules (consumer and commercial).

Supplements To General Rules

AAA Optional Appellate Arbitration Rules

Final Offer Supplementary Arbitration Procedures

Resolution of Patent Disputes Supplementary Rules

Supplementary Rules for Class Arbitrations

*  I have litigated many arbitrations. They tend to be somewhat faster than litigation in court (although only marginally), but are almost never significantly less expensive and are often somewhat more expensive to litigate. The quality of the decision making in arbitration is almost uniformly worse, on average, than in the court process.

* The Federal Arbitration Act basically adopts the opposite of the better rule for addressing the question by expressing a strong preference for arbitration, even in close cases, and giving this preference pre-emptive effect. In the vast majority of cases, arbitration is inappropriate and verges on unconscionable as a contract term because arbitrators don't have to follow the law or make decisions consistent with the evidence, aren't subject to meaningful appellate review, and in most cases, show systemic bias towards the repeat players that named them or their organizations as arbitrators in their agreements. There are some narrow circumstances when arbitration can make sense, with more safeguards than exist under present law, but in the vast majority of cases, pre-dispute arbitration clauses should be invalidated as contrary to public policy.

* The existing civil litigation process admittedly does a poor job of handling some kinds of cases. For example, it is too expensive for medium sized (ca. $7,500 to $100,000) civil litigation of any complexity whatsoever (i.e. pretty much anything more complicated than a judicial foreclosure or  the collection of a promissory note). The civil litigation process is also too slow (especially at the appellate level). But arbitration doesn't do a significantly better job in these cases, and even when it reaches the right result, often creates an appearance of impropriety or injustice.

* What does the status quo in civil litigation do wrong in small cases? 

Some of the major factors are as follows:

(1) The finality of the factual determinations at trial profoundly increases the cost of preparing for trials and the cost of litigation; discovery and disclosures and pre-trial motion practice mostly exist to reduce uncertainty at trial, 

(2) a system designed around resolving everything in a final jury trial (even when the case will actually be decided by a judge without a jury at trial) prevents the scope of the case from being narrowed early on by have a judge resolve clear but disputed factual issues, 

(3) the substantive law frequently makes much more much evidence relevant than is necessary to resolve these disputes in a reasonably just manner greatly lengthening trials and increasing the costs of discovery and disclosures prior to trial, 

(4) a legal document heavy process is exceedingly difficult to navigate for pro se parties, even reasonably literate ones, and small cases more often have pro se parties, but lawyers are expensive (and "simplified" procedures that are document intensive don't solve the problem),

(5) there are insufficient intermediate options between hiring lawyers whose scarcity and expensive and time consuming educations make them expensive and representing oneself inadequately pro se, and

(6) underfunding of courts slows down the process and leads judges to adopt processes and courts to adopt legal doctrines that minimize judicial involvement until it is absolutely indispensable, even though this imposes great monetary and delay costs on the parties.

* Some plausible solutions that would help include:

Resolving as many legal and factual issues as possible (with some room for reconsideration by the same judge based upon additional evidence) with little or no discovery, just weeks after a case is "at issue" following a very early, abbreviated evidentiary hearing similar to what is done in eviction cases, writ of pre-judgment attachment cases, and cases where preliminary injunctions are sought. This would also parallel the criminal procedure process of having a prompt evidentiary preliminary hearing before a judge, prior to a full jury trial if the prosecutor's case is found to have merit. In cases where they are held, often these preliminary hearings in civil and criminal cases lead to merits based settlements that dispense with a final hearing where they are present. Only the narrow remaining issues not resolved at this stage, if any, would be the subject of further litigation, following discovery and motion practice, prior to a final hearing.

In small consumer cases, handling proceedings predominantly remotely.

Authorizing independent legal paraprofessionals with narrow areas of practice who would be less expensive than traditional lawyers with an almost unlimited range of practice. I would also favor broadening the right to counsel at state expense to all issues of personal status (e.g. paternity, child custody, guardianships, and immigration), rather than only to criminal defense for indigent defendants and termination of parental rights cases.

Providing more funding for judges and courts to speed up the handling of cases and to promote earlier judicial involvement in cases.

Narrowing the right to a jury trial in civil cases, and greatly reworking the civil procedure process in cases where a jury trial is not available or not elected by the parties. 

Another Quirk of Arbitration

Arbitrators can administer oaths and issue subpoenas under the relevant section of the Uniform Arbitration Act (adopted in some form in 35 states and codified in Colorado at Colorado Revised Statues § 13-22-217(1)). 

The Act states in pertinent part: 

An arbitrator may issue a subpoena for the attendance of a witness and for the production of records and other evidence at any hearing and may administer oaths. A subpoena issued under this section shall be served in the manner for service of subpoenas in a civil action and, upon motion to the court by a party to the arbitration proceeding or by the arbitrator, enforced in the manner for enforcement of subpoenas in a civil action.

Perjury in those cases could be prosecuted by a District Attorney or the state's Attorney General as a crime. 

As the Acts note, it takes a government appointed judge's order to enforce the subpoena. 

This language of the Uniform Arbitration Act is interesting because usually oaths can only be administered by government officials who take oaths of office themselves, or by a notary public who takes an oath of office upon receiving a government approved commission. 

The power to issue subpoenas is likewise usually limited to government appointed court clerks who swear an oath of office, to state licensed attorneys who swear an oath of office and sometimes to certain other sworn government appointed enforcement officers of regulatory agencies. 

But being an arbitrator isn't a regulated profession under the Uniform Arbitration Act, or under the laws of the vast majority of states. The parties to the contract decide who serves in that capacity. 

A nineteen year old high school dropout with felony sedition and perjury convictions who is an undocumented immigrant and is incarcerated at the time of the arbitration is still legally eligible to serve as an arbitrator. One can't be "disbarred" from serving as an arbitrator either.

This significance of this is somewhat diminished by the fact that both of these powers require the intervention of a judge in a court proceeding to be enforced, however (as does enforcement of an arbitration award involuntarily).

But, the Uniform Arbitration Act didn't have to make this unique exception. Other options could easily have been chosen instead.

Offering unsworn false testimony in an arbitration hearing would still usually constitute the crime of fraud. And, the perjury act could similarly have been amended to provide that unsworn testimony in an arbitration proceeding was punishable as perjury if an unsworn affirmation to that effect was made in the proceeding.

The Uniform Arbitration Act could have provided that arbitration subpoenas are issued by the clerk of the court of general jurisdiction where the arbitration is being held, or by a licensed attorney for a party in the case, just as it would be in a regular court case. 

Indeed, there is much to be said for imposing such a restriction, because how is an average person receiving a subpoena issued by an arbitrator supposed to know that this person, who outside of a contract written by private individuals is nobody special, has the power to exert this authority over them.

Alternately, the Uniform Arbitration Act could have required arbitrators acting under the Act to be commissioned by the state in a manner similar to that of a notary public or an attorney, subject to some sort of minimum standard to be appointed and subject to having the commission revoked for misconduct.

As a practical matter, it isn't a big problem. 

Almost no one is ever prosecuted for perjury for testimony in a judicial or quasi-judicial proceeding anyway, and perjury prosecutions for lying in arbitration proceedings are vanishing rare, so the administration of oaths or affirmations under penalty of perjury has little practical effect.

Likewise, while arbitrators could just be anybody, and this provision of law could be used to manipulate arbitration proceedings for improper purposes, for example, to gain access to otherwise confidential information in connection with a bogus arbitration which is really just a pretense to gain subpoena power, for whatever reason, this is very rarely done. 

The vast majority of arbitrators are attorneys, or if they are not attorneys, are distinguished professionals who are familiar with the Uniform Arbitration Act and Federal Arbitration Act and their roles within it.

Few arbitrators actually issue subpoenas on a regular basis, even though they can, and many don't bother to swear in witnesses, especially if they are not attorneys. And, there are reasons to have non-attorney arbitrators, especially in employment or construction or accounting or appraisal or marital dispute arbitrations with a narrow scope where the technical or religious expertise of the arbitrator is more important than general legal expertise.

But these anomalies are nonetheless notable.

A Selection Of The Worst Federal Laws Currently In Force In The United States

The U.S. Constitution

1. The Electoral College. Article II, Section 1 (as amended).

2. The right to bear arms as interpreted in District of Columbia v. Heller, 554 U.S. 570 (2008) and McDonald v. City of Chicago, 561 U.S. 742 (2010). Second Amendment to the U.S. Constitution.

Federal Statutes and Interpretations Of Federal Statutes

1. The Federal Arbitration Act. 9 U.S.C. §§ 1-16. 

2. The nearly complete unavailability of a discharge in bankruptcy for student loans, even if you didn't graduate and a decade or more has passed since the loans were incurred. 11 U.S.C. § 523(a)(8). 

3. The lack of a statute of limitations after an unlawful entry during which a person can be deported. Primarily missing from the Immigration and Nationality Act. 8 U.S.C. §§ 1101-1537. 

4. Qualified immunity for law enforcement from civil liability arising under 42 U.S.C. § 1983. 

5. The lack of vicarious liability under 42 U.S.C. § 1983 for governmental employers. 

6. The habeas corpus provisions of the Antiterrorism and Effective Death Penalty Act of 1996 (AEDPA). 28 U.S.C. § 2254. 

7. ERISA pre-emption. 29 U.S.C. § 1144. 

8. The ability of states to opt out of Medicaid expansion under Obamacare, mostly as a result of the U.S. Supreme Court ruling in National Federation of Independent Business et al v. Sebelius, 567 U.S. 519 (2012), interpreting the Affordable Care Act, and especially 42 U. S. C. §§ 1396a, 1396c and 1396d.

9. Preferential tax treatment of capital gains under the Internal Revenue Code. 26 U.S.C. § 1(h).

10. The untaxed step up in basis of capital gains at death. 26 U.S.C. § 1014.

11. The disallowance of deductions for expenses involved in selling controlled substances (including marijuana) for income tax purposes. 26 U.S.C. § 280E.

12. Drug Enforcement Administration insistence on treating marijuana as a Class I controlled substance pursuant to 21 USC 812(b), for example, in its Notice of denial of petition to reschedule marijuana, 66(75) Federal Register 20038-20076 (April 18, 2001).

The U.S. Supreme Court Virtually Eliminates Class Action Arbitrations

The United States Supreme Court has a long history of favoring arbitration to a degree unmatched anywhere else in the world, and a strong aversion to class action litigation. 

As a result, today's 5-4 decision in Lamps Plus v. Varela, No. 17-988 (U.S. April 24, 2019), along the usual conservative-liberal lines, holding that class action arbitrations may only be conducted if an arbitration clause expressly and unambiguously provides that class action arbitrations are permitted, is not very surprising.  As the New York Times notes: "In earlier 5-to-4 decisions concerning fine-print contracts with consumers and employment agreements, the court ruled that arbitration provisions can require disputes to be resolved one by one."

Since almost no arbitration clauses expressly and unambiguously permit class action arbitrations and many prohibit class action arbitrations expressly, this ruling is effectively a death knell for arbitrations structured as class actions.

In the abstract, this doesn't seem surprising, but the problems are manifest when you consider situations like the currently pending 12,501+ arbitration claims brought by drivers against Uber challenging the classification of Uber drivers as independent contractors rather than as employees, an issue that really ought to be resolved just once (and which could be resolved just once in the ordinary court system with or without class action lawsuits). Handling those claims on a case by case basis has caused the process to break down as Uber has failed to meet its obligations under this clauses, such as its duty to pay the $1,500 filing fee in each one of those cases. As of December of 2018 when there were 12,501 claims pending:

Under the terms of the contract that Uber crammed down these drivers' throats, it must now pay $1,500 per driver to JAMS, the arbitration service it uses -- a total of $18.7m 

But Uber has only paid the filing fees for 296 of these drivers; and of those, only 47 have had arbitrators appointed to them. Uber has paid the retainers for only six of those arbitrators.

So, as it stands, Uber can easily have conflicting determinations, none of which are binding precedents, over whether its drivers are employees or independent contractors, that are binding on any individual driver, even if it can manage the immense administrative burden that it has abjectly failed to adhere to so far.

There are about 25 million employees (a little more than one in six) in the United States with arbitration clauses in their contracts, out of about 144 million people in the U.S. workforce who are not unemployed, according to USA Today in turn quoting a court opinion. Another source states that there are more than 60 million employees covered by such contracts (with higher rates at larger employers). More specifically, it finds that (as of April 6, 2018):

In reviewing the existing literature on the extent of this practice, I found that the share of workers subject to mandatory arbitration had clearly increased in the decade following the initial 1991 Court decision: by the early 2000s, the share of workers subject to mandatory arbitration had risen from just over 2 percent (in 1992) to almost a quarter of the workforce. However, more recent data were not available. In order to obtain current data for this study, I conducted a nationally representative survey of nonunion private-sector employers regarding their use of mandatory employment arbitration.

This study finds that since the early 2000s, the share of workers subject to mandatory arbitration has more than doubled and now exceeds 55 percent. This trend has weakened the position of workers whose rights are violated, barring access to the courts for all types of legal claims, including those based on Title VII of the Civil Rights Act, the Americans with Disabilities Act, the Family and Medical Leave Act, and the Fair Labor Standards Act.

The Supreme Court is currently considering a case challenging the inclusion of class action waivers in arbitration agreements. Class action waivers bar employees from participating in class action lawsuits to address widespread violations of workers’ rights in a workplace. The Court will rule on whether class action waivers are a violation of the National Labor Relations Act; their decision could have wide-reaching implications for workers’ rights going forward.

Key findings of this report

• More than half—53.9 percent—of nonunion private-sector employers have mandatory arbitration procedures. Among companies with 1,000 or more employees, 65.1 percent have mandatory arbitration procedures.
• Among private-sector nonunion employees, 56.2 percent are subject to mandatory employment arbitration procedures. Extrapolating to the overall workforce, this means that 60.1 million American workers no longer have access to the courts to protect their legal employment rights and instead must go to arbitration.
• Of the employers who require mandatory arbitration, 30.1 percent also include class action waivers in their procedures—meaning that in addition to losing their right to file a lawsuit on their own behalf, employees also lose the right to address widespread rights violations through collective legal action.
• Large employers are more likely than small employers to include class action waivers, so the share of employees affected is significantly higher than the share of employers engaging in this practice: of employees subject to mandatory arbitration, 41.1 percent have also waived their right to be part of a class action claim. Overall, this means that 23.1 percent of private-sector nonunion employees, or 24.7 million American workers, no longer have the right to bring a class action claim if their employment rights have been violated.
• Mandatory arbitration is more common in low-wage workplaces. It is also more common in industries that are disproportionately composed of women workers and in industries that are disproportionately composed of African American workers.
• Among the states, mandatory arbitration is especially widespread in California, Texas, and North Carolina, but in all of the 12 largest states by population over 40 percent of employers have mandatory arbitration policies.

Today In The Courts

* A unanimous Ninth Circuit panel has held that federal statute prohibiting the possession of firearms by an alien unlawfully present in the United States withstands constitutional scrutiny and is a valid exercise of Congress’s authority. It is important to note that the fact that the statute was federal is important, because the federal government has the exclusive power to regulate immigration. A similar state statute would probably be unconstitutional on federalism grounds. The argument that the Second Amendment right extended to all persons regardless of citizenship status wasn't frivolous, as most of the protections of the Bill of Rights apply to all persons without regard to citizenship status, but the Second Amendment's reference to a "well regulated" militia means that reasonable regulation of Second Amendment rights is allowed and this regulation was found to be a reasonable one.

* The U.S. Supreme Court has held that the Federal Arbitration Act allows the determination of whether a dispute is subject to arbitration in a contract to be allocated to an arbitrator in an arbitration clause and that no exception that that rule exists even if the claim that the dispute is subject to arbitration is clearly groundless. This opinion for a unanimous court in Henry Schein, Inc. v. Archer & White Sales, Inc. is one of the first from Justice Brett M. Kavanaugh. This continues a long line of case in which arbitration clauses have been upheld in the face of low court efforts to narrow their scope and effect.

* U.S. Supreme Court Justice Clarence Thomas delivered an opinion for a unanimous Court in Culbertson v. Berryhill, holding that the 25% of recovery statutory cap on attorneys' fees in Social Security benefits cases applies to two different reasons that attorneys' fees can be awarded by statute separately, rather than capping the combined total of two kind of attorneys' fees that can be awarded under the statute. This effectively doubles the maximum amount of attorneys' fees that may be awarded in Social Security benefits litigation. This technical decision is contrary to prevailing wisdom about how the cap applied (and is probably also contrary to legislative intent), and flows from poor drafting in the statute. The cap is quite restrictive, making these cases unattractive to lawyers and the new rule will make such cases more attractive to lawyers, but at the cost of leaving beneficiaries with a reduced share of already modest benefits in many cases.

Uber Demonstrates A Problem With Arbitration Agreements

Arbitration clauses are put in place in many circumstances to discourage the less economically powerful party from litigating in the first place and to force decisions to be made case by cases rather than globally, because when the odds are in your favor you have a mathematical incentive to resolve issues as many times as possible for the lowest stakes possible. But, arbitration can backfire when there is a global problem as a record number of arbitration requests filed against Uber demonstrate.

When the company went to the court to argue that its employees weren't employees, it defended its binding arbitration, saying that the company would of course pay for the arbitration fees in the states that required it.

12,501 Uber drivers took the company at its word and filed arbitration claims in California. Under the terms of the contract that Uber crammed down these drivers' throats, it must now pay $1,500 per driver to JAMS, the arbitration service it uses -- a total of $18.7m. 

But Uber has only paid the filing fees for 296 of these drivers; and of those, only 47 have had arbitrators appointed to them. Uber has paid the retainers for only six of those arbitrators.

As Larson O’Brien, a lawyer for the drivers, wrote in a motion, "At this point, it is fair to ask whether Uber’s previous statements to the 9th Circuit about its desire to facilitate arbitration with its drivers were nothing more than empty promises to avoid litigating a class action. Uber’s actions make clear it does not actually support arbitration; rather, it supports avoiding any method of dispute resolution, no matter the venue."

Via Boing Boing.

Uber's conduct clearly violates its arbitration agreement. Now the question is, what remedies do the Uber drivers have for its breach of this agreement.

Musings On Relevance And Litigation Expenses

This post was mostly written on November 12, 2015.

TL;DR

One of the most powerful ways to make courts reach reasonable fair decisions quickly and at a relatively modest cost is to narrow the scope of the evidence that substantive law considers to be relevant to enforcing rights and resolving disputes.

Analysis

It is common place to blame lawyers or their clients for the fact that civil litigation is slow and expensive. But, a great deal of the blame really needs to be laid to placed upon the substantive and procedural law involved, and upon the underfunding of the public sector component of the judicial dispute resolution process.

Contrary to popular belief, the law is not simply a set of clear rules that can be called quickly and easily by a judge and all the participants, as players and umpires do in sports.

Often, the substantive law is inherently vague, setting forth standards rather than rules.  And, even when the law is not inherently vague, the proper application of the law to the facts is often ambiguous.

It doesn't help that civil procedure allows for clarification of how the law applies to a particular set of facts, in all but the clearest cases, until after all of the facts have been developed and presented to a tribunal.  Jury instructions, for example, are rarely finalized until all of the evidence in the case has been presented.

The rules of civil procedure generally allow the formal process of investigating the facts, known as "discovery" to extend not only to evidence that is relevant, but also to evidence that is reasonably calculated to lead to relevant evidence, even if it is not itself relevant to the dispute.

At a trial in a court, only relevant evidence is admissible, but the standard for what constitutes relevant evidence is a loose one, subject only to a handful of specific exceptions.

In an arbitration hearing, the standard for what evidence is considered relevant is loose indeed.  The American Arbitration Association rules, as they are usually applied, allow almost any evidence related in any way to the dispute to be considered, even if it does not meet the loose standard of relevance to an element of a legal theory applied in a court setting, on the theory that a legally trained arbitrator will not be swayed by legally irrelevant evidence.

Some of this bias towards loose rules of discovery (some judges sum up this attitude by saying that they are "full discovery" judges),  and loose relevance boundaries on the admissibility of evidence, is driven by underinvestment in judicial resources.

Judicial engagement in a case earlier on in litigation to carefully analyze the legal issues presented and to narrow the scope of discovery and subsequent hearing evidence only to the matters that are really legally relevant is much more time consuming than allowing the parties to exchange information and present evidence at trial with minimal judicial intervention, even if this dramatically increases the cost of the litigation to the parties.

Given the extreme emphasis on the finality of decisions in private civil litigation, and an even greater emphasis on finality in arbitration settings, rational litigants need to prepare for every possible interpretation of the law or determination that facts could be relevant, even if that possibility is fairly remote.  Presentations at trial, and pre-trial discovery and presentations, could be dramatically shorter, if judges and arbitrators made clear at the outset which of many ambiguous interpretations of the law regarding what is relevant were provided.

It is also the case, particularly in a court forum, that it often simply takes a long time for a judge to rule on pending matters particularly at the higher end of the judicial hierarchy in general jurisdiction trial courts and in appellate practice.  This isn't a case of judges being lazy.  It is simply a case of a systemic underinvestment in judges relevant to the benefit which society would receive from having enough judges to produce more prompt rulings and to have a great ability to be involved in a case at its early stages.

In those rare areas where the scope of what is relevant at a particular stage of a case is narrow and well defined, such as in a foreclosure or eviction hearing, or an action to regain possession of tangible personal property, hearings can be quite short, can be held quickly, and can be resolved quickly and inexpensively.

In part, this is also because those decisions are highly structured.  In a foreclosure or eviction hearing, for example, the sole inquiry is usually whether there is a default in payments or in other contractual obligations which justifies the remedy sought, not a determination regarding the exact amount owed, which is deferred to a later date if a breach of the agreement is found to exist.

Similarly, in criminal cases, which are often decided quite swiftly, the sole decision presented to a judge or jury at trial is usually whether a criminal statute has been violated in a single, well defined incident, not the punishment that is appropriate to impose if indeed this is the case.

CFPB Bars Bans On Class Actions In Consumer Financial Products Arbitration Agreements

Administration efforts to stop new regulations promulgated under the Obama Administration failed to stop a major new Consumer Financial Protection Board regulations limiting arbitration clauses. It also requires disclosures about consumer financial products arbitrations to be shared with the CFPB.

Today the Consumer Financial Protection Board issued its final rule on arbitration agreements. Here’s the full 775-page document (the text of the regulation itself begins at p.747). 

From the summary: 

First, the final rule prohibits covered providers of certain consumer financial products and services from using an agreement with a consumer that provides for arbitration of any future dispute between the parties to bar the consumer from filing or participating in a class action concerning the covered consumer financial product or service. Second, the final rule requires covered providers that are involved in an arbitration pursuant to a pre-dispute arbitration agreement to submit specified arbitral records to the Bureau and also to submit specified court records. The Bureau is also adopting official interpretations to the regulation.

From the Civil Procedure and Federal Courts blog on Monday, July 10, 2017.

A Quick SCOTUS Summary

It was a bad day for consumers and ex-spouses at the Supreme Court today.

* Filing a claim for zombie debt is a bankruptcy is not actionable as an unfair debt collection practice. Midland Funding, LLC v. Johnson. Justices Sotomayor, Ginburg and Kagan dissented from the 5-3 decision. The ruling hinges on the fact that the statute of limitations is an affirmative defense rather than part of the prima facie case to enforce a debt.

* An arbitration agreement with a nursing home entered into by a POA agent binds the principal and the principal's estate with respect to a wrongful death case, even though state law didn't authorize the agent to enter into arbitration agreements. Kindred Nursing Centers Limited Partnership v. Clark. Justice Thomas is the sole dissent futilely arguing as he has in many dissenting opinions that the Federal Arbitration Act does not apply to the states.

* A military spouse's QDRO benefits for a military pension can be reduced when some of the pension is converted to a disability benefit after the decree enters. Howell v. Howell. The opinion is unanimous, although Justice Thomas concurs.

Of course, Justice Gorsuch, did not participate in any of these cases which were granted, briefed and argued before he was appointed. He probably won't regularly appear as a participant in cases upon which opinions are rendered by the Supreme Court until October.

Wells Fargo Bank Still Violently Anti-Consumer And Crooked

Consumer arbitration is always a scam, but this one is particularly noteworthy, because the company claims the consumers are bound by agreements signed with signatures forged by the company. 

If there is any way that you can avoid doing business with this dishonest bank, you should take advantage of it and move your accounts immediately.

Even though disgraced Wells Fargo CEO John Stumpf has left the building, his most outrageous legal theories live on: on Wednesday, the company filed a motion in a federal court in Utah seeking dismissal of a class action suit by the customers it defrauded -- the bank argues that since customers sign a binding arbitration "agreement" when they open new accounts, that the customers whose signatures were forged on fraudulent new accounts should be subject to this agreement and denied a day in court.

This is the same argument that Stumpf made during his disastrous performance in front of a blazing Elizabeth Warren -- that Wells's poor customers should be subjected to agreements they never made, because Wells stole their identities and "agreed" on their behalf.

From here.

OSHA Still Irrelevant

When a Greeley man working for an oil and gas company died, the Occupational Health and Safety Administration investigated, found that the death was caused by violations of federal safety rules by two companies working at the site, and . . . . fined one company $5,000 and the other company $9,800.  The original fines of $8,400 and $14,700 were reduced without explanation.

The death was part of a series of nine deaths under similar circumstances in Colorado recent years caused by safety violations by oil and gas companies.

But, they don't really care, and why should they, if they are being economically rational and loyal to their shareholders?

Economics works and firms respond to incentives or the lack thereof.  In the case of oil and gas worker safety, there are no economic incentives for companies to protect their workers.

The OSHA fines are pitifully small relative to the seriousness of the offense and the profits generated by the enterprise, and relative to the administrative and legal costs of investigating and pursuing the case.

The OSHA fines probably aren't even large enough to make it cheaper for the companies to comply with the safety regulations than to incur the fines.  It also is not uncommon for OSHA fines to go unpaid for years.

And, since the oil and gas industry is governed by OSHA, which has a tiny budget to cover almost every workplace in the United States, rather than by the Mine Safety and Health Administration, MSHA, which has a similar sized budget to cover the tiny number of high risk mine workplaces in the United States, OSHA lacks the resources to imposed more rigorous regulations or to enforce them with a frequency that amounts to anything more than random chance in the absence of a workplace death. Yet, oil and gas operations are every bit as dangerous or more so than other kinds of natural resource exploitation jobs governed by MSHA.

The family of the man who died can't sue his employer, even though OSHA has established that it violated safety laws, because worker's compensation pre-empts the right to sue in exchange for paying for the minimal medical expenses present in the case of a death, a four or five figure death settlement, and a very modest pension to his surviving wife and minor children if he has any (if this 57 year old man is single, and has no children or has adult children, worker's compensation doesn't have to pay any death benefits other than a meager sum that will barely pay for a funeral).

The company doesn't even pay a deductible when a worker's compensation claim is made by the man's family, and while its rates could go up based upon the employer's claims history, the reality is that most of the risk of regular deaths is already figured into the worker's compensation premium which sets races based upon occupation and industry, which are high for high risks like coverage for oil and gas workers.

Like most private sector workers in Colorado, he was not part of a union, so there was no one, from his union or OSHA, to effectively advocate to provide him with a safe workplace.

So long as the worker's compensation system is in place, the solution to making oil and gas companies respect worker safety is simple:

1. Increase the amount of fines imposed by MSHA and OSHA when a death or serious injury occurs, or there is a near miss that could have caused death or serious injury by roughly a factor of 100.  The fines in a case like this one should have been on the order of $500,000 and $980,000, not $5,000 and $9,800.

2. Transfer jurisdiction over oil and gas workers from OSHA to MSHA, and increase funding for MSHA by a factor of two or three so that it has the resources to investigate the oil and gas industry in addition to its existing responsibilities.

3. Vigorously insist upon collecting the fines that are imposed even if it shuts down non-compliant businesses.

4. Put someone who is willing to aggressively enforce the laws in charge of the agency which shows signs of industry capture.

5. Acknowledge that the model of having OSHA cover every workplace with the power to impose only minimal fines, when it lacks the resources to do so, has failed.  Instead, limit OSHA enforcement powers to high risk industries and cases of actual deaths or injuries, and create a private cause of action to enforce its regulations (even in the case of violations that don't lead to injuries), which it would continue to promulgate for all industries, in all other cases, on a model similar to the EEOC, the Colorado Consumer Protection Act, or the federal and state securities laws.  Arbitration of these claims should be prohibited and class action lawsuits to enforce these regulations should be permitted.

With reforms like that, worker injuries and deaths would plummet, and yet, it is very likely that the industry would remain profitable.

Consumer Arbitration Really Is Unfair

The New York Times is running a series on the problems with arbitration, particularly consumer arbitration clauses in take it or leave it contracts of adhesion.

Part I

Part II

Part III

I'll fill out this post at a later date with some of the details of why its indictment of consumer arbitration is correct.  Previous posts at this blog on the subject can be located via the Arbitration tag. The CFPB, a new federal agency, is considering regulations banning or restricting the practice.  A number of major providers of consumer arbitration ceased to provide the service within the past few years.

The stories are effective because mandatory pre-dispute arbitration fundamentally conflicts with a variety of widespread norms held by participants in the community subject to arbitration over their rights in the transactions they enter into and their reasonable expectations of fairness.

There are isolated contexts where it can make sense, such as in business to business transactions where privacy and a swift resolution are imperative, and in business to business transactions in which large numbers of cases, none precedent setting, between entities are likely (e.g. resolution of fee disputes between realtors who are part of the National Association of Realtors over who gets what share of a real estate commission).

But, routine disputes between credit card companies, cable companies, cell phone companies, and the like, over systemic mistreatment of large numbers of similarly situated consumers are not benign and encourage dishonest business practices by large companies.

UPDATE November 5, 2015: Law professor Stephen Carter writing an opinion piece for Bloomberg offers a rather unpersuasive rebuttal to the New York Times account of consumer arbitration clauses discussed above.

As someone who actually represents parties on a fairly regular basis in cases that involve, or could involve, commercial arbitration, and who drafts contracts and evaluates contracts for clients, I should also put on my "to do" list comparison of most material differences between a court forum and an arbitration forum.

For example, privacy, rules of evidence, discovery, speed of litigation, limitations on injunctive relief, and the availability of appeals.  The particulars of these differences are often different for major arbitration forums, for example, the American Arbitration Association and the Judicial Arbiter Group, and a significant minority of arbitration clauses call for arbitration of very narrow issues without specifying any widely adopted set of arbitration rules.  Also, even within AAA arbitration rules, for example, there are actually several different sets of rules for different kinds of disputes.

There are some respects in which arbitration can be a superior forum for certain kinds of disputes, and in other respects arbitration can be profoundly inferior for many kinds of disputes.

In general, for example, the looser rules of evidence that apply in arbitration causes under AAA commercial arbitration rules, tend to be a positive difference between an arbitration forum for commercial cases, and a court forum for commercial cases using evidence rules largely designed in the first instance for criminal cases and applied more generally to all civil cases even though the justifications for them in commercial cases tried to a judge are far less compelling.

On the other hand, it is rare indeed that the near universal absence of appellate relief for a bad decision made in an arbitration forum is a good one, except in very simple, small stakes cases between repeat players with comparable power in the institutions that conduct the arbitrations. In those cases, the law of averages mitigates the harm caused by individual erroneous decisions on any given litigant over time, and the benefits of rapid dispute resolution and reduced costs that flow from a lack of appellate review outweigh the harms caused by a lack of appellate review in any individual wrongfully decided cases within a pool of cases. There may be a place for a lack of meaningful appellate review, for example, in fee disputes between Realtors involved in the same real estate transaction, or between banks resolving disputes over check payment snafus.

But, a lack of meaningful appellate relief is almost never fair to a litigant in a high stakes dispute who is a one time player or will only litigate in that forum a very small number of times.  The lack of meaningful appellate review of arbitration awards in these circumstances fundamentally undermines the rule of law.

In a significant class of disputes for which arbitration is often appropriate, privacy and freedom from government involvement in dispute resolution, are important motives for choosing this forum.  For example, arbitration is frequently a desirable forum for trade secret disputes.  But, bifurcation that allows some relief to be sought in the courts while limiting other relief to arbitration forums can undermine the argument for arbitration in these cases, as can the important harm caused by removing precedents that would have been valuable to litigants in future disputes from the public domain.

Filing fees in arbitration cases are universally much higher than the filing fees in comparable cases in the Court system.  These fees buy, in part, a significantly faster time from filing to resolution in most arbitration cases.  This is partially a procedural issue, and partially a product of an intense scarcity of judges in the vast majority of U.S. courts with jurisdiction over civil actions. But, generally speaking, the amount of attorneys' fees involved in litigating a dispute through arbitration is not materially lower than the attorneys' fees that would have been incurred litigating the same case in the ordinary court system.

Empirical evidence also tends to show rather powerfully, that arbitration forums in which a repeat player (typically a big business) imposes an arbitration forum on an infrequently litigant such as a consumer or employee, show a pronounced bias, relative to the Court system, in favor of the repeat litigant who had the economic power to chose the arbitration forum.

As another example, the arbitration forum is often chosen primarily to defeat the possibility of obtaining vindication through class action litigation, or to deny a litigant substantive remedies (e.g., exemplary damages may not be awarded in arbitration forums in Colorado).  In these circumstances, the appropriateness of using an arbitration clause to secure these benefits is almost always deeply problematic.

Ultimately, however, the ninety year old Federal Arbitration Act tips the balance far too strongly in favor of arbitration and does the nation a deep disservice in the process.  The scope of circumstances in which arbitration is appropriate (and a respectable share of cases that I handle in arbitration are of that type), is, however, far greater than the scope of circumstances where the FAA mandates an extremely strong policy in favor of binding pre-dispute arbitration clauses,