Court Opinion

ID: 9494164
Source: CourtListenerOpinion
Date Created: 2023-08-05 15:30:56.83495+00
Date Added: 2024-06-11T17:56:15.344276
License: Public Domain

SOTOMAYOR, Circuit Judge,
concurring:
The district court held that GTFM is entitled to a jury because, in federal court, the right to a jury attaches in suits involving legal rights and remedies. The majority disagrees, reasoning, inter alia, that when a federal court sits in diversity, it applies state substantive law and that, under Erie and its progeny, arbitration is substantive rather than procedural. My problem with the reasoning of both the district court and the majority is that this action was not brought in federal court. Even more importantly, this action was not brought in any court.
The majority seems to accept the mistaken premise which led the district court into a discussion of what might happen in federal court, that, “[h]ad TKN commenced this action in state court, ... GTFM would have had the right to remove the matter to federal court.” District court opinion at 8 n. 6. TKN, in fact, commenced this action in arbitration, not in court. TKN’s decision to arbitrate its MSRA claims eliminated GTFM’s right to defend itself in any court, to say nothing of an Article III court that is the gateway to the Seventh Amendment. Because the Minnesota legislature has placed an impenetrable barrier between the arbitration GTFM finds itself in and the court proceedings it wishes that TKN had instead brought, this Seventh Amendment challenge easily fails.
At most, GTFM attempts to repackage under a Seventh Amendment label a more general assault on the authority of a state legislature to assign TKN’s claims to a non-judicial forum for resolution by mandatory, binding arbitration. See Complaint ¶ 1 (“This action involves the constitutionality of a Minnesota statute which requires a foreign corporation ... to submit to binding arbitration, even though the foreign corporation never agreed to arbitrate.”). Challenges of this sort have previously failed under other constitutional theories, and invoking the Seventh Amendment does not change matters. In disposing of one such challenge, the Supreme Court explained:
The present statute substitutes a determination by arbitration for trial in court.... As appellant’s objection to it is directed specifically to the power of the state to substitute the one remedy for the other, rather than to the constitutionality of the particular procedure prescribed or followed before the arbitrators, it suffices to say that the procedure by which rights may be enforced and wrongs remedied is peculiarly a subject of state regulation and control.
*246The Fourteenth Amendment neither implies that all trials must be by jury, nor guarantees any particular form or method of state procedure. In the exercise of that power and to satisfy a public need, a state may choose the remedy best adapted, in the legislative judgment, to protect the interests concerned, provided its choice is not unreasonable or arbitrary, and the procedure it adopts satisfies the constitutional requirements of reasonable notice and opportunity to be heard.
Hardware Dealers’ Mut. Fire Ins. Co. of Wis. v. Glidden Co., 284 U.S. 151, 158, 52 S.Ct. 69, 76 L.Ed. 214 (1931) (citation omitted) (rejecting due process and equal protection challenges to a Minnesota statute).
Instead of deciding this appeal solely along these lines, the majority addresses a situation, different from ours, in which GTFM would find itself in federal court based on diversity of citizenship defending an MSRA action commenced in arbitration. The majority concludes that because Bernhardt v. Polygraphic Co. of Am., 350 U.S. 198, 76 S.Ct. 273, 100 L.Ed. 199 (1958), held that arbitration is substantive rather than procedural, a federal court does not have the “power to force TKN to proceed in court on a State-created cause of action as to which the State has given TKN the right to insist on arbitration.” Ante at 244.
But GTFM has never sought to remove this action from arbitration to federal court, perhaps expecting that such an attempt would fail. See 28 U.S.C. § 1441(a) (permitting removal to federal district court from “any civil action brought in a State court”). Even if GTFM had requested removal and had succeeded, the federal courts would more likely find that they have no jurisdiction to hear the claim, rather than broaching the Erie question. See, e.g., Beach v. Owens-Corning Fiberglas Corp., 728 F.2d 407, 409 (7th Cir.1984) (“The Indiana law vesting exclusive jurisdiction over disputes between employees and their employers in the disputes board operates to close state court doors to the plaintiffs. The state’s denial of a judicial remedy in this case is a denial of the substantive right asserted by the plaintiffs .... Accordingly, the state courts have no jurisdiction over the plaintiffs’ claims, and the plaintiffs therefore have no claim to press in this federal action, which depends entirely upon state law.”).
In denying GTFM’s Seventh Amendment challenge to the MSRA, I would simply reaffirm that the Minnesota legislature was free to forgo a judicial forum in permitting resolution of TKN’s claims through mandatory, binding arbitration. Once in arbitration, GTFM had no constitutional right to a jury.