Professor S.I. Strong, from the University of Missouri School of Law (and a friend of this blog), has published an interesting article entitled Beyond the Self-Execution Analysis: Rationalizing Constitutional, Treaty and Statutory Interpretation in International Commercial Arbitration, 53 Virginia Journal of International Law __ (2013), University of Missouri School of Law Legal Studies Research Paper No. 2013-05. Here is the abstract: International commercial arbitration has long been considered one of the paradigmatic forms of private international law and has achieved a degree of legitimacy that is virtually unparalleled in the international realm. However, significant questions have recently begun to arise about the device’s public international attributes, stemming largely from a circuit split regarding the nature of the New York Convention, the leading treaty in the field, and Chapter 2 of the Federal Arbitration Act, which helps give effect to the Convention in the United States. Efforts have been made to place the debate about the New York Convention within the context of post-Medellin jurisprudence concerning self-executing treaties. However, that framework does not adequately address the difficult constitutional question as to what course should be adopted when a particular issue is governed by both a treaty and a statute that is meant to incorporate that treaty into domestic law. This Article addresses that question by considering the role of and relationship between the New York Convention and the Federal Arbitration Act, and by providing a robust analysis of the constitutional, statutory and public international issues that arise in cases involving international treaties and incorporative statues. Although the discussion is rooted in the context of international commercial arbitration, the Article provides important theoretical and practical insights that are equally applicable in other types of public international law. This and other scholarly papers authored by Professor Strong are available for download (free of charge) from the Social Sciences Research Network.

Mediation is in the news again. Last week, a New York judge ordered a dispute between Macy’s, Inc., J.C. Penney Co., and Martha Stewart Living to mediation. The lawsuit itself reportedly arose after New York-based Martha Stewart Living signed a contract with Plano-based J.C. Penney to open a Martha Stewart mini shop in many of the retailer’s stores. In a separate case filed three months later, Cincinnati-based Macy’s sued J.C. Penney for interfering with the company’s contract with Martha Stewart Living. The two cases were later consolidated for a bench trial in New York State Supreme Court (Manhattan). During the third week of trial, a dispute purportedly arose over whether Macy’s has the exclusive right to sell certain Martha Stewart Living items. Macy’s has reportedly sold Martha Stewart branded items in its stores since 2007. In December 2011, J.C. Penney acquired a 17 percent stake in the home merchandise brand. As a result of the disagreement and failing communication between the parties, Judge Jeffrey Oing ordered the three companies to engage in mediation before April 8th. J.C. Penney has also agreed to refrain from selling Martha Stewart Living merchandise until that date. Stay tuned to Disputing for future updates about this case.

In recent months, changes to homeowner foreclosure mediation programs were a hot topic in a number of states. In Illinois, the Supreme Court enacted Rule 99.1 in an effort to offer some level of flexibility in foreclosure mediation programs across the state. The rule went into effect on March 1st and requires judicial districts that choose to offer such programs to demonstrate feasibility, sustainability, compliance with HUD-certified counseling requirements, and homeowner access to pro bono attorney representation. Next door, legislators in Missouri are currently considering whether to put an end to all homeowner foreclosure mediation programs. The bill was reportedly proposed in response to a 2012 St. Louis County law that allowed homeowners facing foreclosure the option to choose mediation. The law also required banks to participate and pay for the mediation. Under the St. Louis County law, banks that refused to participate in foreclosure mediation as well as those that participated in bad faith could be fined as much as $1,000. The Missouri Court of Appeals Eastern District later prohibited enforcement of the law in response to a judicial challenge by the Missouri Bankers Association. Finally, in both Connecticut and Oregon, lawmakers are purportedly considering changes to statewide foreclosure mediation programs. Connecticut Governor Dannel P. Malloy recently announced a proposal that would require banks to maintain consistent contact with homeowners involved in the foreclosure mediation process. In Oregon, lawmakers are reportedly considering significant changes designed to increase the use of non-judicial homeowner foreclosure mediation programs. Thanks to Court ADR Connection for bringing this topic to our attention. It will be interesting to see how homeowner foreclosure mediation programs continue to evolve in the future.

Jodi Wilson, Assistant Professor of Law and Director of Legal Methods at the University of Memphis’ Cecil C. Humphreys School of Law, has published a timely article entitled How the Supreme Court Thwarted the Purpose of the Federal Arbitration Act, Case Western Reserve Law Review, Vol. 63, No. 1, 2012; University of Memphis Legal Studies Research Paper No. 122. In the article, Professor Wilson discusses the policy behind the Federal Arbitration Act and critiques the high court’s decision in AT&T Mobility LLC v. Concepcion. Here is the abstract: When the Federal Arbitration Act (“FAA”) was enacted in 1925, its purpose was to place arbitration agreements on the “same footing as other contracts” and thereby overcome judicial hostility to arbitration. Almost thirty years ago, however, the United States Supreme Court declared that the FAA reflected a policy favoring arbitration. Since first announcing the favoritism policy, the policy has taken on increasing importance in the Court’s arbitration jurisprudence. Indeed, in 2011, this favoritism policy was the cornerstone of the Court’s decision in AT&T Mobility LLC v. Concepcion. In Concepcion, a divided Court expanded the preemptive effect of the FAA by holding that the FAA preempted a generally applicable state law doctrine despite a “savings clause” that should have protected the doctrine from preemption. This Article critiques Concepcion and argues that the Court improperly preempted state law by relying on a flawed purpose focused on facilitating streamlined arbitration proceedings, rather than the policy of equal footing. Part I of this article describes the judicial hostility that led to the enactment of the FAA, the equal footing policy reflected in the legislative history of the FAA, and the Court’s progression from hostility to favoritism. Part II examines the conflict between the policy favoring arbitration and the FAA’s savings clause, with particular focus on the unconscionability doctrine at issue in Concepcion and the Court’s resolution of the conflict in Concepcion. Part III provides a critique of Concepcion arguing that the Court gave insufficient weight to the FAA’s equal footing purpose, placed undue weight on the judicially created policy favoring arbitration, and reframed the favoritism policy to incorporate a vision of arbitration that is not reflected in the FAA. Had the Court premised its analysis on the stated legislative purpose of equal footing, it could not have expanded the preemptive effect of the FAA to include a generally applicable state contract doctrine. Concepcion demonstrates the Court’s willingness to thwart the stated legislative purpose of equal footing in favor of the judicially created policy of favoritism. Legislative reform should reaffirm the FAA’s historical purpose within the text of the statute so that the Court can no longer find a policy favoring arbitration in the shadows of the FAA and, thus, can no longer allow that policy to influence its interpretation and application of the FAA. This scholarly paper is available for download (without charge) from the Social Sciences Research Network.