Part II.B: Section 2 Express Preemption – Purposive Analysis by Philip J. Loree Jr. I. Introduction In Part II.A, we considered a textual construction of Section 2’s savings clause and concluded that it supports AT&T Mobility’s position. This Part II.B examines the savings clause from a purposive interpretation and construction standpoint. For the sake of convenience, the term “purposive” or “purposivism” is used here as a convenient way to describe in general terms the two principal methods of statutory construction which permit resort to non-statutory sources: (a) “intentionalism;” and (b) true purposivism. Intentionalism seeks to divine a legislative intent from the words of the statute; applicable interpretation and construction rules; and non-statutory sources, such as legislative history. Generally, if the text of the statute is unambiguous, then an intentionalist will not resort to non-statutory sources. But, unlike a pure textualist, an intentionalist will resort to such sources if the meaning of the statute is unclear. Purposivism seeks to derive meaning from the purpose of the statute, interpreting it from the standpoint of (a fictional) “reasonable” member of the legislature. Even if the plain meaning of the statute, and statutory interpretation and construction principles, suggest a particular meaning, a true purposivist may conclude that a different – or at least a more nuanced – one best serves the purpose of the statute. Associate Justice Stephen G. Breyer is probably the only avowed true purposivist on the United States Supreme Court, although certain other members of the Court may be influenced by purposivism to at least some degree. Since a textual construction would support AT&T Mobility’s position, this installment considers whether non-statutory sources of statutory intent and purpose may support a construction of the savings clause that supports the Concepcions’ position that the “equal footing” principle embodied in the savings clause is satisfied so long as the Discover Bank rule places arbitration agreements with class waivers on the same footing as contracts that bar class action litigation outside the arbitration context. We conclude that consideration of Congress’ intent and purpose as respects the savings clause not only does not support the Concepcions’ position, but confirms that the textual construction of the savings clause – i.e., that it saves from preemption only state revocation law that applies equally and in the same manner to all contracts – best reflects the intention of the legislature and best implements the purpose of the statute. By contrast, interpreting Section 2 in the manner suggested by the Concepcions would significantly undermine the purposes of the statute and render it largely ineffectual, all in contravention of the Court’s prior Federal Arbitration Act jurisprudence. II. A Purposive Construction of Section 2’s Savings Clause A. Sources of Legislative Intent and Purpose The first step in a purpose- or intent-based statutory interpretation and construction analysis is to identify the relevant sources of legislative intent and purpose. As respects the Federal Arbitration Act there are three principal sources: The Act’s text; The legislative history; and The Court’s prior pronouncements of legislative intent and purpose based on its interpretations of the text and legislative history. B. Divining the Legislative Intent or Purpose Relevant to Section 2’s Savings Clause 1. The Act’s Text Part II.A discussed in some detail a textual interpretation of the savings clause based on the text and Court decisions construing it as written. That interpretation saves from preemption only state-law revocation grounds which apply equally to a contract of whatever kind, and thus to all contracts. If we are to take the 68th Congress at its word, and assume it intended what it said back in 1925, we can infer that it intended to protect arbitration agreements from state laws that would render them unenforceable – or impair their enforceability – but not render unenforceable — or impair the enforceability of — all other contracts. Thus, the savings clause provides broad protection from state laws that discriminate against arbitration agreements, whether or not they also happen to discriminate against another type of agreement as well. 2. Legislative History In Southland Corp. v. Keating, 465 U.S. 1 (1984), the Court analyzed the Federal Arbitration Act’s legislative history and concluded that the Act was designed to address two “large problems”: “the old common-law hostility toward arbitration;” and “the failure of state arbitration statutes to mandate enforcement of arbitration agreements.” Southland, 465 U.S. at 14. Of these, the problem of the “old common-law hostility to arbitration” is the one most pertinent to the interpretation of the savings clause. That “hostility” was a result of the infamous “ouster” doctrine developed by early English courts and incorporated into the common law of many or most of the states in existence as of 1925, the year Congress passed the Federal Arbitration Act. See Scherk v. Alberto-Culver Co., 417 U.S. 506, 510-11 & n.4 (1974); see also The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 9 & n.10 (1972). A basic premise of that doctrine was that private persons could not effectively divest court A of jurisdiction to hear a case by agreeing that the case would be submitted to court B or to arbitration panel C. See 417 U.S. at 510-11 & n.4; 407 U.S. at 9 & n. 10. The rule thus targeted run-of-the-mill forum selection clauses in the litigation context as well as arbitration agreements, which are themselves forum selection agreements. See Scherk, 417 U.S. at 519 (“An agreement to arbitrate before a specified tribunal is, in effect, a specialized kind of forum-selection clause that posits not only the situs of suit but also the procedure to be used in resolving the dispute.”) So in what Judge Richard A. Posner aptly termed the “bad old days,” “[a]greements to arbitrate were not enforceable, because they deprived the objecting party of his right to litigate the parties’ dispute in court,” and “invoking a forum selection clause as a ground for dismissal of a suit brought in violation of the clause was considered an improper effort to ‘oust’ the court’s jurisdiction.” Northwestern National Ins. Co. v. […]

by Holly Hayes The American Hospital Association (AHA) and the American Medical Association (AMA) sent a letter to hospital CEOs and medical staff presidents in November to remind them that The Joint Commission’s (TJC) recent revisions to hospital accreditation Standard MS.01.01.01 (formerly MS.1.20) will take effect April 1, 2011. The new standard is “designed to contribute to patient safety and quality of care through the support of a well-functioning, positive relationship between a hospital’s Medical Staff and Governing Body.” Jane Reister Conard wrote a detailed post for Disputing earlier this year about the new standard and its Element of Performance (EP) 10 which states “there must be a conflict management system to address disputes that arise between the medical staff and the medical executive committee.” She wrote: The inclusion of conflict management in the medical staff standard reaffirms The Joint Commission’s commitment to conflict management first set forth in the leadership standard (LD) 01.03.01, and more particularly stated in its EP 7. The leadership standard became effective January 1, 2009. In December, 2008, the American Health Lawyers Association (AHLA) ADR Task Force published its Conflict Management Toolkit, to assist accredited facilities in addressing their need to develop conflict management systems in order to comply with The Joint Commission leadership standard. As part of its commitment to public service, the AHLA provides a complimentary download of the Toolkit available here. While many of the Toolkit’s foundational principles and its conflict management guidance apply equally well to the development of a medical staff conflict management system for disputes between the medical staff and the executive medical staff committee, the medical staff should be wary of using a “cookie cutter” approach by accepting the transfer in total of a facility conflict management system based on LD 01.03.01, EP 7 to a medical staff conflict management system based on MS 01.01.01, EP 10. Among other distinctions, a discerning medical staff member (or facility manager) would note that MS EP 10 addresses disputes among members of a unique entity, the medical staff, and its leadership. The medical staff may not be recognized as a distinct legal organization, may not have a separate business structure, and may not have sole control of its funds. Because of this looser structure, accommodations in processes in the broader facility conflict management system are necessary to account for individual physician’s concerns. As mentioned above, the AHLA toolkit is an excellent resource for use by hospitals and medical staffs as medical staff bylaws are updated to accommodate MS.01.01.01. Holly Hayes is a mediator at Karl Bayer, Dispute Resolution Expert where she focuses on mediation of health care disputes. Holly holds a B.A. from Southern Methodist University and a Masters in Health Administration from Duke University. She can be reached at holly@karlbayer.com. Technorati Tags: Mediation

Last week, a second round of mediation was ordered in Cull and Cull v. Perry Homes. The ten-year-old dispute has already been the subject of an arbitration, a trial and a court-ordered mediation. Briefly, here are the facts of the case: In 1996, the Culls purchased a house from builder Perry Homes. After problems with the foundation and construction caused the appraised value of their house to plummet from more than $233,000 to $41,000 in only a few years, the Culls filed suit against both the builder and a home warranty company for shoddy construction. Only days before trial, however, the Culls moved to compel arbitration. The case was submitted to arbitration 14 months after the lawsuit was filed. After approximately one year of arbitration, the Culls were awarded $800,000 in damages. Perry Homes appealed the judgment to the Supreme Court of Texas in Perry Homes, et al. v. Robert E. Cull and S. Jane Cull. (Our discussion of the case may be read here.) In a headline grabbing twist, the Supreme Court vacated the arbitration award and sent the case back to the trial court. On March 1, 2010, a Fort Worth jury awarded the Culls approximately $58 million in Cull and Cull v. Perry Homes, et al. In mid-March, the trial court ordered the parties to mediation in an attempt to prevent appeals, but the mediation failed and no settlement was reached. After mediation, the court heard additional arguments regarding the jury award. In April, Disputing updated you on the case here. On November 24, 2010, a state district judge in Tarrant County ordered another round of mediation to be completed by December 29th stating, “The parties need to exhaust all efforts to finally settle this long-running dispute.” The judge also declared if no resolution can be reached, he will issue a ruling. Counsel for the Culls responded “I’m going to be surprised if it settles.” The date for mediation has not yet been set. You may read more about the recent mediation order here. Stay tuned to Disputing for continued updates on this most unusual of cases. Technorati Tags: law, ADR, arbitration, mediation

Voting is currently underway in the fourth annual ABA Journal Blawg 100. The Blawg 100 is compiled by the staff of the ABA Journal and as they state, it “is largely a favorites’ list.” Readers are invited to vote for up to 12 of their favorite blawgs from among the top 100 in each of 12 categories. The categories include: Court Watch Law Biz News Law Prof Plus Torts In Labor IP Law Criminal Justice IMHO Niche For Fun Legal Tech Blawgs must be listed in the ABA Journal’s Blawg Directory in order to be considered. More information about the nominees can be found here. Registration with ABAJournal.com is required in order to vote. Voting ends at close of business on December 30th and winners will be announced in January. According to the Blawg 100’s Frequently Asked Questions, short Blawg Amici testimonials from fans of particular blogs will also be sought by the ABA Journal in 2011. You may comment on the ABA Journal staff picks or nominate your favorite blawg here. Technorati Tags: law