Source: https://www.gibsondunn.com/judge-neil-gorsuchs-potential-impact-on-the-development-of-arbitration-law/
Timestamp: 2019-04-20 10:32:36+00:00

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As Judge Neil Gorsuch proceeds through the Senate confirmation process, we are continuing to review his jurisprudence while assessing how he might affect the Supreme Court should the Senate approve his nomination. We will be publishing our analyses in a series of client alerts focusing on individual subject matters. This alert discusses arbitration law.
Judge Gorsuch’s arbitration opinions reflect his adherence to two general principles: first, that questions regarding arbitrability are matters of contract and therefore the parties’ intent controls; and second, that federal policy favors arbitration and preempts state laws that conflict with that policy.
Judge Gorsuch has written majority, concurring, and dissenting opinions in cases involving arbitration disputes. The reasoning in each opinion generally focuses on deciphering the parties’ intentions as to arbitrability, enforcing arbitration clauses according to their terms, and rejecting state policies that upset the federal policy favoring arbitration articulated in the Federal Arbitration Act ("FAA").
In Chelsea Family Pharmacy, PLLC v. Medco Health Solutions, Inc., 567 F.3d 1191 (10th Cir. 2009), for example, the majority began its arbitrability analysis (as some circuit courts do) by assessing whether an arbitration clause was "broad" or "narrow." The answer to that question, in turn, determined the strength of the FAA’s presumption of arbitrability and, ultimately, whether the majority held that the dispute was subject to arbitration.
Opining that he was "bound to abide" by circuit law, Judge Gorsuch concurred in the majority’s ultimate arbitrability holding in Chelsea Family, but wrote separately "to question this business of classifying arbitration clauses as ‘broad’ or ‘narrow.’" Id. at 1200 (Gorsuch, J., concurring). "The question of arbitrability," he reasoned, "is simply and always a matter of straightforward contract interpretation," as "[n]either Congress nor the [Supreme] Court . . . has suggested that we should engage in the scholastic task of classifying the parties’ [arbitration] clause according to some abstract taxonomy." Id. at 1201. "When the arbitrability of a particular matter is plain on the face of the parties’ agreement, the agreement is enforceable according to its terms–whether the arbitration clause is ‘broad’ or ‘narrow’ or somewhere in between (where, if we are to be frank, many clauses will fall)." Id.
Judge Gorsuch similarly focused on the terms of the parties’ agreement in Ragab v. Howard, 841 F.3d 1134 (10th Cir. 2016). The parties had executed six separate agreements, each with an arbitration clause. These clauses conflicted as to "which rules [would] govern [arbitration]," "how the arbitrator [would] be selected," "the notice required to arbitrate," and "who would be entitled to attorneys’ fees and on what showing." Id. at 1136. The majority reasoned that these conflicting terms prevented a "meeting of the minds with respect to arbitration," and thus affirmed the district court’s decision denying the defendants’ motion to compel arbitration. Id. at 1138.
Judge Gorsuch dissented from the majority opinion in Ragab, reasoning that although "the six agreements before [the court] differ[ed] on the details concerning how arbitration should proceed," the parties "could have hardly demonstrated with greater clarity an intention to arbitrate their disputes." Id. at 1139 (Gorsuch, J., dissenting). He reasoned that conflicting procedural terms in an arbitration clause are like the "battle of the forms" under the Uniform Commercial Code. Id. at 1140. Accordingly, conflicting terms "knock each other out but do not void the [arbitration agreement]" because "a meeting of the minds occurs with respect to the fundamentals of [the decision to arbitrate] even if not with respect to the details." Id. Judge Gorsuch also criticized the majority’s reliance on state-law principles that "erect barriers to arbitration," expressing doubt that those principles would "survive a brush with the FAA," which "preempts state laws that single out arbitration clauses for disfavored treatment." Id. at 1140-41.
Judge Gorsuch similarly focused on the parties’ intent in writing for a unanimous panel in Howard v. Ferrellgas Partners, L.P., 748 F.3d 975 (10th Cir. 2014). Explaining that the scope of an arbitration agreement hinges on the parties’ intent, Judge Gorsuch held that the arbitrability question had to "proceed summarily to trial" because "material disputes of fact" existed as to "whether the parties opted for or against arbitration." Id. at 977-78. Although the FAA adopts a "heavy hand in favor of arbitration," the parties’ intent must control, and "[t]he object is always to decide quickly–and summarily–the proper venue for the case, whether it be the courtroom or the conference room." Id. at 977.
Judge Gorsuch’s views on arbitration could become relevant in a trio of important cases pending before the Court: Epic Systems Corp. v. Lewis, No. 16-285; Ernst & Young LLP v. Morris, No. 16-300; and NLRB v. Murphy Oil USA, Inc., No. 16-307. Although these cases were originally scheduled for argument this Term, the Court rescheduled their argument for the next Term in October 2017. At issue in the three cases is whether an agreement that requires an employer and an employee to resolve employment-related disputes through individual arbitration, and that waives the right to join a class action, is enforceable under the FAA notwithstanding provisions of the National Labor Relations Act that favor collective proceedings. Judge Gorsuch’s vote and any written opinions in this trio of cases could provide our first insights into how he will approach arbitration disputes as the Court’s ninth Justice.

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