Opinion ID: 3010878
Heading Depth: 1
Heading Rank: 3

Heading: Policy Grounds and Arbitration

Text: In addition to the textual interpretation of the insurance business exception, the district court offered another reason for its denial of arbitration: a concern for potential inconsistent results and inefficiencies given the dozens of putative class actions against Prudential. Although the court recognized that this factor alone cannot justify a reformation of a binding arbitration contract, it nevertheless considered the peculiar class action ramifications as a persuasive factor against committing the disputes to an arbitration forum. While we share the district court's apprehension toward inconsistent results and inefficiencies caused by _________________________________________________________________ 13. Indeed, if this text were a statute, the ordinary canons of statutory interpretation would mandate a narrow construction of the exception in the presence of ambiguity. See Norma J. Singer, Statutes and Statutory Construction S 47.11 (5th ed. 1992). 14. With respect to the plaintiffs' RICO cause of action, we note that the Supreme Court has already approved arbitration of RICO claims pursuant to a pre-existing arbitration agreement. See Shearson / American Express, Inc. v. McMahon, 482 U.S. 220 (1987). 17 arbitration, we cannot frustrate the enforcement of the arbitration clause pursuant to the Federal Arbitration Act on the basis of this concern. As the Supreme Court noted in Moses H. Cone: [F]ederal law requires piecemeal resolution when necessary to give effect to an arbitration agreement. Under the Arbitration Act, an arbitration agreement must be enforced notwithstanding the presence of other persons who are parties to the underlying dispute but not to the arbitration agreement. 460 U.S. at 20 (emphasis in original) (footnotes omitted). Although the Court in Moses H. Cone considered the possibilities of duplicative and piecemeal litigation in terms of federal abstention doctrine, the interest in enforcing federal arbitration law is the same in other situations. See, e.g., Barrowclough, 752 F.2d at 938 (holding that an arbitration clause against certain parties may be enforced even if other parties were not subject to arbitration); Dayhoff, 86 F.3d at 1298 (enforcing an arbitration clause even if a party may have to litigate its claims in three different fora with three different sets of rules). The Eighth Circuit Court of Appeals, for example, specifically rejected the view that arbitration was improper when multi-district litigation may create duplicative litigation and a potential for inconsistency. In re Piper Funds, Inc., Institutional Government Income Portfolio Litig., 71 F.3d 298, 303 (8th Cir. 1995). As the Supreme Court broadly stated, the Federal Arbitration Act was motivated, first and foremost, by a congressional desire to enforce agreements into which parties had entered, and we must not ... allow the fortuitous impact of the Act on efficient dispute resolution to overshadow the underlying motivation. Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 220 (1985) (footnote omitted). Accordingly, we will also reverse the district court's ruling based on judicial efficiency and consistency.