Court Opinion

ID: 9569321
Source: CourtListenerOpinion
Date Created: 2023-08-21 20:12:54.275249+00
Date Added: 2024-06-11T11:53:39.267418
License: Public Domain

ANDERSON, PAUL H„ Justice
(concurring).
I concur with the result reached by the majority, but write separately to highlight my concerns regarding the potential for abuse of power when parties with unequal bargaining power contract to arbitrate their disputes. I am concerned that too broad a construction of arbitration clause language when applied to issues such as the formation of the arbitration clause may deprive some individuals of their right to a trial by jury as guaranteed by the Seventh Amendment to the United States Constitution and Article I, Section 4 of the Minnesota Constitution.
The majority correctly points out that the law favors arbitration. Individuals have the right to contract, which includes the right to agree to arbitrate them disputes. When two parties freely agree to arbitration and that agreement is made clear by the language of an arbitration clause, the parties are subject to the terms of that agreement and they have waived their right to have their dispute decided by a jury. We have been clear that an agreement to arbitrate waives a right to trial by jury because “ ‘loss of the right to jury trial is a necessary and fairly obvious consequence of an agreement to arbitrate.’ ” Aufderhar v. Data Dispatch, Inc., 452 N.W.2d 648, 653 (Minn.1990) (quoting Pierson v. Dean, Witter, Reynolds, Inc., 742 F.2d 334, 339 (7th Cir.1984)). Moreover, I acknowledge that we have made it clear that arbitration is not only favored as a method of resolving disputes, but that arbitration clauses should be construed to favor arbitration. We have said:
In evaluating whether the parties agreed to arbitrate [a] * * * dispute, we remain aware that we should resolve any doubts concerning the scope of arbitra-ble issues in favor of arbitration, “whether the problem at hand is the construction of the contract language itself or an allegation of waiver, delay, or a like defense to arbitrability.”
Johnson v. Piper Jaffray, Inc., 530 N.W.2d 790, 795 (Minn.1995) (quoting Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983)).
When we construe arbitration clauses to encompass issues of contract formation, we need to be mindful of the potential for individuals to unknowingly and involuntarily waive their constitutional right to a trial by jury. Article I, Section 4 of the Minnesota Constitution provides in part that “[t]he right of trial by jury shall remain *358inviolate, and shall extend to all cases at law without regard to the amount in controversy.” Constitutional rights are generally waived only when the waiver is “knowing, voluntary, and intelligent.” See State v. Camacho, 561 N.W.2d 160, 168 (Minn.1997) (applying this standard to the waiver of Miranda rights). The intent to waive a jury trial must be “expressed affirmatively” or “appear by necessary inference from unequivocal acts or conduct.” Aufderhar, 452 N.W.2d at 653.
While the issue of waiver of the right to a jury trial is not directly before us in this case, I believe it is important to caution courts to be mindful of the right of trial by jury when an arbitration clause is agreed to as part of a contract that might be characterized as a contract of adhesion. Contracts of adhesion can result when the terms of a contract are dictated by one contracting party to the other party in a “take it or leave it” fashion because of unequal bargaining power. See Minn. Min. & Mfg. Co. v. Travelers Indem. Co., 457 N.W.2d 175, 185 (Minn.1990) (Kelley, J., dissenting). The Montana Supreme Court recently discussed the issue of waiver of jury trial rights in connection with an arbitration clause in a contract it found to be a contract of adhesion. In a special concurrence signed onto by a majority of that court, Justice Nelson stated the problem thusly:
Given the sacredness and inviolability of the fundamental right to trial by jury, any contract provision that openly or subtly causes the forfeiture of the exercise of this right must be rigorously examined by the courts. This is all the more necessary when such a contract provision is included in a standard-form contract of adhesion foisted upon unsophisticated and unsuspecting ordinary citizens and small business people as part of the intercourse of daily life. Indeed, the use of such contractual provisions is at one and the same time an “open attack” on the right of jury trial and a “secret machination” causing forfeiture of that right that Blackstone predicted would “sap and undermine” the right, and with that our “public and private liberties].”
Kloss v. Jones & Co., 310 Mont. 123, 54 P.3d 1, 12-13 (2002) (Nelson, J., concurring specially) (quoting William Blackstone, Commentaries on the Laws of England (1765), reprinted in Volume 2 of In Defense of Trial by Jury at ii (J. Kendall Few, American Jury Trial Foundation, 1993)).
The United States Supreme Court has held that the Federal Arbitration Act (FAA) preempts state laws that are hostile to arbitration, Doctor’s Assocs. v. Casarotto, 517 U.S. 681, 687, 116 S.Ct. 1652, 134 L.Ed.2d 902 (1996), but it is unclear how far federal preemption extends to state law. A certain tension exists in this area of the law and this tension continues with today’s opinion. Both the federal courts and our court have developed a body of law that suggests any doubts concerning the scope of arbitrable issues be resolved in favor of arbitration, including issues of contract formation. Johnson, 530 N.W.2d at 795. This body of law by its nature indicates that we should favor a construction which waives the right of trial by jury. Nevertheless, our courts must carefully scrutinize a waiver of the right of trial by jury to ascertain that it was done knowingly, voluntarily, and intelligently. It is not my intent in this concurrence to provide an analysis of the conflicting policies that cause this tension. Such an analysis can wait for that day when this issue is squarely before us. Rather, my intent is to sound a note of caution to courts that when a right as fundamental as the right of access to the courts and trial by jury is at stake, waiver of that right is not to be *359lightly presumed. See Kloss, 54 P.3d at 15 (Nelson, J., concurring specially).