Court Opinion

ID: 6937168
Source: CourtListenerOpinion
Date Created: 2022-07-24 00:40:58.427956+00
Date Added: 2024-06-11T16:07:32.085519
License: Public Domain

JENKINS, Senior District Judge,
concurring in the judgment.
I concur in the judgment. I write separately because I believe the case law interpreting the federal Arbitration Act, title 9 of *801the U.S.Code, has gotten far afield from Congress’s original intent in enacting the statute.
The Arbitration Act was enacted “to reverse the longstanding judicial hostility to arbitration agreements that had existed at English common law and had been adopted by American courts, and to place arbitration agreements upon the same footing as other contracts.” Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 24, 111 S.Ct. 1647, 1651, 114 L.Ed.2d 26 (1991). The “presumption of arbitrability” the court applies elevates arbitration agreements to a preferred position over other contracts.
The issue in this case, as in any ease of contract interpretation, is the parties’ intent. See Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626, 105 S.Ct. 3346, 3354, 87 L.Ed.2d 444 (1985) (with agreements to arbitrate, “as with any other contract, the parties’ intentions control”). Ordinarily, the court determines that issue as a matter of law, from the terms of the contract itself. See, e.g., Florom v. Elliott Mfg., 867 F.2d 570, 575 (10th Cir.1989). But where the terms of the contract are ambiguous (and I agree that the contracts at issue here are hopelessly ambiguous), the issue then becomes a factual question, to be decided from external evidence of the parties’ intent, unless only one conclusion can be drawn from the undisputed evidence. See, e.g., Amoco Rocmount Co. v. Anschutz Corp., 7 F.3d 909, 917 (10th Cir.1993), cert. denied, - U.S. -, 114 S.Ct. 1057, 127 L.Ed.2d 377 (1994); Lumpkin v. Envirodyne Indus., Inc., 933 F.2d 449, 456 (7th Cir.), cert. denied, 502 U.S. 939, 112 S.Ct. 373, 116 L.Ed.2d 324 (1991); LaSalle Nat’l Bank v. General Mills Restaurant Group, 854 F.2d 1050, 1052 (7th Cir.1988); Teton Exploration Drilling, Inc. v. Bokum Resources Corp., 818 F.2d 1521, 1526 (10th Cir.1987); Southern Natural Gas Co. v. Pursue Energy, 781 F.2d 1079, 1081 (5th Cir.1986); Gardner-Zemke Co. v. State, 109 N.M. 729, 790 P.2d 1010, 1014 (1990); Shaeffer v. Kelton, 95 N.M. 182, 619 P.2d 1226, 1229-30 (1980).
It seems to me that the rule that doubts about the scope of arbitrable issues should be resolved in favor of arbitration, like other rales of construction, should be applied only as a last resort, after the court or trier of fact has considered extrinsic evidence of the parties’ intent and found it inconclusive. Cf. Gardner-Zemke, 790 P.2d at 1014 (the rule construing ambiguities against the drafter applies “only if the court is otherwise unable to ascertain the parties’ intent”); Wilburn v. Interstate Elec., 748 P.2d 582, 585-86 (Utah Ct.App.1988) (the doctrine of construing ambiguities against the drafter acts “as a kind of tie-breaker, used as a last resort by the fact-finder after the receipt and consideration of all pertinent extrinsic evidence has left unresolved what the parties actually intended”), cert. dismissed, 774 P.2d 1149 (Utah 1989). Here, the court applies “the presumption of arbitrability” to resolve the ambiguity and determine the parties’ intent as a matter of law. Under the majority’s reasoning, which, I believe, is consistent with controlling Supreme Court precedent, as long as a colorable argument can be made that a contract requires arbitration, the court is required to bypass the usual methods of contract interpretation and compel arbitration regardless of the parties’ actual intent.
Although I believe the issue should ordinarily be resolved as a question of fact (applying the presumption only as a last resort), because the appellants here have not argued that the parties’ intent was a disputed issue of material fact, precluding summary judgment, I believe the court has properly disposed of the issue as a matter of law in these cases. Therefore, I concur in the judgment.
Nevertheless, I am troubled by the direction the case law under the Arbitration Act has taken. What I believe was originally intended only to put arbitration agreements on the same footing as other contracts is now seen as a strong federal policy favoring arbitration agreements.
I believe part of the reason for the historical hostility towards arbitration agreements was the conventional wisdom that the litigation process was superior to alternative forms of dispute resolution, such as arbitration. The pendulum has now swung to the other extreme. Implicit in the Supreme Court’s current position that “any doubts concerning the scope of arbitrable issues,” including doubts about “the construction of *802the contract language itself,” be resolved “in favor of arbitration,” Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25, 103 S.Ct. 927, 941, 74 L.Ed.2d 765 (1983), is a preference for arbitration over litigation as a process for resolving disputes. Despite recent criticisms of the litigation process and the search for alternative means of resolving disputes, I believe the current antipathy towards litigation is as short-sighted as the former antipathy towards arbitration. Each has its place.
I am particularly troubled in cases such as this involving arbitration of employment disputes. The Arbitration Act expressly says it does not apply “to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” 9 U.S.C. § 1. Presumably, insurance agents who are also qualified to sell securities are “workers engaged in foreign or interstate commerce.” In making an exception for employment contracts, Congress recognized that arbitration provisions in such contracts are not really bargained for at all. Ordinarily, if a person wants a job, he must agree to the employer’s terms, however onerous they may be. See Gilmer, 500 U.S. at 39, 111 S.Ct. at 1659 (Stevens, J., dissenting) (quoting Hearing on S.4213 & S.4214 before a Subcommittee of the Senate Committee on the Judiciary, 67th Cong., 4th Sess., 9 (1923)). The plaintiffs in these cases, however, have not argued that the exception for employment contracts contained in section 1 of the Arbitration Act applies to them, presumably because the Supreme Court’s decision in Gilmer appears to have foreclosed that argument. See 500 U.S. at 25 n. 2, 111 S.Ct. at 1651 n. 2 (section l’s exclusionary clause does not apply to arbitration clauses contained in securities registration appliea-tions, which are contracts between the applicant and a securities exchange, not between an employee and his employer). I do not believe that an employer, such as Prudential, should be able to escape the strictures of the Arbitration Act indirectly, by requiring its employees to enter into contracts with third parties (such as securities exchanges) to arbitrate disputes with their employer, when it could not demand such a concession from the employee directly, in the contract of employment.
Nevertheless, I believe that the ease law under the Arbitration Act is now so firmly established that a return to Congress’s original intent will require congressional action.1

. Congress is not unaware of the problem. Legislation has been introduced in the 103d and 104th Congresses to invalidate existing agreements between employers and employees that require the mandatory arbitration of employment discrimination claims. See 141 Cong.Rec. S2271-72 (daily ed. Feb. 7, 1995) (statement of Senator Feingold). In introducing the most recent bill, S.366, Senator Feingold, the bill's sponsor, indicated that the proposed legislation
closes a widening loophole in the enforcement of civil rights laws in our Nation. An entire industry — Wall Street — and a growing number of companies and firms in many other industries have been able to circumvent formal legal challenges to their unlawful employment practices in court — a right intended to be protected by the [civil rights] statutes this bill amends. Employers can tell current and prospective employees, "if you want to work for us, you'll have to check your rights as an American citizen at the door.”
Id. at S2272. The bill has been referred to committee.