Opinion ID: 794138
Heading Depth: 4
Heading Rank: 1

Heading: Howsam

Text: 39 In analyzing a given vindication of statutory rights claim, we must first decide who the proper decision maker is for such a claim: an arbitrator or a court. The touchstone for deciding this question is Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 123 S.Ct. 588, 154 L.Ed.2d 491 (2002). In Howsam, the Court focuse[d] upon an arbitration rule of the National Association of Securities Dealers (NASD) involving a six-year statute of limitations. Id. at 81, 123 S.Ct. 588. Dean Witter had asked the district court to declare that the dispute was `ineligible for arbitration' because it was more than six years old. Id. at 82, 123 S.Ct. 588. The Supreme Court had to decide whether a court or an NASD arbitrator should apply the [NASD's] rule to the underlying controversy, id. at 81, 123 S.Ct. 588—the type of threshold decision we must make here for each of Plaintiffs' vindication of statutory rights claims. 40 The Court began its analysis with the observation that `arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.' Id. at 83, 123 S.Ct. 588 (quoting Steelworkers v. Warrior & Gulf Nav. Co., 363 U.S. 574, 582, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960)). The Court continued: 41 Although the Court has also long recognized and enforced a liberal federal policy favoring arbitration agreements, it has made clear that there is an exception to this policy: The question whether the parties have submitted a particular dispute to arbitration, i.e., the question of arbitrability, is an issue for judicial determination unless the parties clearly and unmistakably provide otherwise. 42 Id. at 83, 123 S.Ct. 588 (internal citations omitted). This statement requires close scrutiny because it includes references to three distinct elements: (1) the federal policy favoring arbitration agreements, which has nothing to do with the intent of the parties that have entered into an arbitration agreement; (2) the exception to this policy — based on the presumed intent of the contracting parties — that the question of whether the parties have submitted a particular dispute to arbitration (the question of arbitrability) is an issue for judicial determination; and (3) a clear and unmistakable expression of actual intent by the contracting parties that they want an arbitrator rather than a court to decide whether they have submitted a particular dispute to arbitration. 43 This second element, involving the presumed intent of the contracting parties favoring judicial determination of whether a particular dispute has been submitted to arbitration, is described by the Court as the interpretive rule. The Court in Howsam had to decide whether application of the NASD time limit provision falls into the scope of this . . . interpretive rule. Id. at 83, 123 S.Ct. 588. If the Court decided that the interpretive rule applied, a court would decide the applicability of the six-year statute of limitations. If the Court decided that the interpretive rule did not apply, the general policy favoring arbitration would govern, and the arbitrator would decide the applicability of the statute of limitations. 44 In rejecting the application of the interpretive rule to the dispute over the applicability of the statute of limitations, the Court explained that it would be wrong to view too broadly the presumption that the parties to an arbitration agreement intend that a court rather than an arbitrator will decide whether the parties have submitted a particular dispute to arbitration. As the Court explained: 45 Linguistically speaking, one might call any potentially dispositive gateway question a question of arbitrability, for its answer will determine whether the underlying controversy will proceed to arbitration on the merits. The Court's case law, however, makes clear that, for purposes of applying the interpretive rule [that a court rather than an arbitrator should decide whether the parties have submitted a particular dispute to arbitration], the phrase question of arbitrability has a far more limited scope. The Court has found the phrase applicable in the kind of narrow circumstance where contracting parties would likely have expected a court to have decided the gateway matter, where they are not likely to have thought that they had agreed that an arbitrator would do so, and consequently, where reference of the gateway dispute to the court avoids the risk of forcing parties to arbitrate a matter that they may well not have agreed to arbitrate. 46 Id. at 83-84, 123 S.Ct. 588 (internal citations omitted). The cornerstone here is an assumption about the intent of the contracting parties to an arbitration agreement, in the kind of narrow circumstances where contracting parties would likely have expected a court to have decided the gateway matter. Id. at 83-84, 123 S.Ct. 588. In these narrow circumstances, the gateway dispute poses a question of arbitrability, meaning that a court, rather than an arbitrator, decides whether the parties have submitted the particular dispute to arbitration. 47 Howsam described two categories of disputes where we presume that courts rather than arbitrators should resolve the gateway dispute: (1) disputes about whether the parties are bound by a given arbitration clause; and (2) disagreements about whether an arbitration clause in a concededly binding contract applies to a particular type of controversy. Id. at 84, 123 S.Ct. 588. Examples of the former include whether an arbitration contract binds parties that did not sign the agreement; and whether an arbitration agreement survived a corporate merger and bound the subsequent corporation. See First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 115 S.Ct. 1920, 131 L.Ed.2d 985 (1995); John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 84 S.Ct. 909, 11 L.Ed.2d 898 (1964). Examples of the latter include whether a labor-management layoff controversy was covered by the arbitration clause of a collective-bargaining agreement; and whether a clause providing for arbitration of various grievances covers claims for damages for breach of a no-strike agreement. See AT & T Technologies, Inc. v. Comm. Workers of Am., 475 U.S. 643, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986); Atkinson v. Sinclair Refining Co., 370 U.S. 238, 82 S.Ct. 1318, 8 L.Ed.2d 462 (1962). 48 The Court also found the phrase `question of arbitrability' not applicable in other kinds of general circumstances where parties would likely expect that an arbitrator would decide the gateway matter. Howsam, 537 U.S. at 84, 123 S.Ct. 588. For example, `[P]rocedural' questions which grow out of the dispute and bear on its final disposition are presumptively not for the judge, but for an arbitrator to decide. Howsam, 537 U.S. at 84, 123 S.Ct. 588 (quoting John Wiley, 376 U.S. at 557, 84 S.Ct. 909). So too, the presumption is that the arbitrator should decide `allegation[s] of waiver, delay, or a like defense to arbitrability.' Id. (quoting Moses H. Cone, 460 U.S. at 24-25, 103 S.Ct. 927). Citing the comments to the Revised Uniform Arbitration Act of 2000, the Court elaborated on this statement, stating: 49 in the absence of an agreement to the contrary, issues of substantive arbitrability. . . are for a court to decide and issues of procedural arbitrability, i.e. whether prerequisites such as time limits, notice, laches, estoppel, and other conditions precedent to an obligation to arbitrate have been met, are for the arbitrators to decide. 50 Id. at 85, 123 S.Ct. 588 (citing Rev. Un. Arb. Act § 6 and cmt. 2) (original emphasis omitted). 51 Finally, the Howsam decision invoked the concept of comparative expertise: 52 the NASD arbitrators, comparatively more expert about the meaning of their own rule, are comparatively better able to interpret and apply it. In the absence of any statement to the contrary in the arbitration agreement, it is reasonable to infer that the parties intended the agreement to reflect that understanding. And for the law to assume an expectation that aligns (1) decisionmaker with (2) comparative expertise will help better to secure a fair and expeditious resolution of the underlying controversy.. . . 53 Id. at 85, 123 S.Ct. 588. Based on this reasoning, the Court concluded that the NASD's time limit rule falls within the class of gateway procedural disputes that do not present what our cases have called `questions of arbitrability.' And the strong pro-court [as decision maker] presumption as to the parties' likely intent does not apply. Id. at 85-86, 123 S.Ct. 588. 54