Opinion ID: 75978
Heading Depth: 4
Heading Rank: 2

Heading: McMahon Factor Two: Legislative History

Text: 23 The second factor the Supreme Court instructs us to examine in determining Congress' intent to preclude the application of the FAA is the MMWA's legislative history. See McMahon, 482 U.S. at 226-27, 107 S.Ct. at 2338. Like the MMWA's text, its legislative history only addresses internal dispute settlement procedures; it never directly addresses the role of binding arbitration or the FAA. In trying to show that Congress intended to bar binding arbitration, the Davises rely on the MMWA's House Report, which notes that [a]n adverse decision in any informal dispute settlement proceeding would not be a bar to a civil action on the warranty involved in the proceeding. H.R.Rep. No. 93-1107 (1974), reprinted in 1974 U.S.C.C.A.N. 7702, 7723. 4 The Davises argue that Congress considered all methods of dispute resolution, including arbitration, before allowing warrantors to pursue only informal, non-binding settlement procedures. After a thorough reading of the MMWA's legislative history, we disagree. 24 The Davises have proved only that the MMWA's legislative history is ambiguous at most. When considering a preliminary draft of the MMWA, the Senate reflected that it is Congress' intent that warrantors of consumer products cooperate with government and private agencies to establish informal dispute settlement mechanisms that take care of consumer grievances without the aid of litigation or formal arbitration.  S.Rep. No. 91-876, at 22-23 (1970) (emphasis added). As the Fifth Circuit concluded, there is still no evidence that Congress intended binding arbitration to be considered an informal dispute settlement procedure. Therefore the fact that any informal dispute settlement procedure must be non-binding, does not imply that Congress meant to preclude binding arbitration, which is of a different nature. Walton, 298 F.3d at 476. In McMahon, the Supreme Court upheld binding arbitration even though the Securities Exchange Act of 1934's legislative history implied that Congress intended to adopt the Wilko attitude that arbitration is an inadequate forum in which to enforce statutory claims. McMahon, 482 U.S. at 238, 107 S.Ct. at 2343. Any congressional intent to prohibit arbitration in the MMWA's legislative history is considerably less clear than the legislative history of the Securities Exchange Act of 1934, which the Supreme Court held did not prohibit binding arbitration in McMahon. In light of this ambiguity, the Davises fail to carry their burden of showing a clear congressional intent to prohibit binding arbitration of MMWA claims. Thus, given the absence of any meaningful legislative history barring binding arbitration, coupled with the unquestionable federal policy favoring arbitration, we conclude that Congress did not express a clear intent in the MMWA's legislative history to bar binding arbitration agreements in written warranties. 25