Court Opinion

ID: 9464426
Source: CourtListenerOpinion
Date Created: 2023-08-04 23:32:38.772086+00
Date Added: 2024-06-11T17:38:36.942226
License: Public Domain

MESKILL, Circuit Judge
(dissenting):
I respectfully dissent. The arbitration clause involved in this case was valid when the parties executed the account agreement; 1 it was valid when Ames’ claims arose; and it was still valid when Ames commenced the instant action.
Although federal law generally, and the Commodity Act in particular, favors the arbitration of disputes, all are agreed that 17 C.F.R. § 180.3 would bar enforcement of this arbitration clause if it were entered into today. It is also clear that the Commission intended § 180.3 to apply retroactively to at least some agreements entered into prior to the regulation’s effective date. Obviously, it did not wish to postpone the effectiveness of the regulation until the expiration of all pre-existing agreements. In its brief as amicus curiae, the Commission explains that its intent to reach pre-existing agreements did not extend to cases where a dispute had already arisen at the time the regulation was adopted. The Commission’s use of the dispute as a focal point is not based on an inconsequential distinction. Before this dispute arose, the right conferred by the arbitration clause was inchoate. The value of the right was remote and speculative. It took on real meaning, however, when an actual dispute arose, for it provided an inexpensive and expeditious means of resolving that dispute. There would have been nothing particularly unjust about invalidating this arbitration clause had no dispute arisen, because the parties could have altered their relationship accordingly; indeed, they might even have entered into a new, valid arbitration agreement. After the dispute arose, however, the unfairness of taking away the right to arbitrate is striking.
The Commission’s interpretation is fair and reasonable. It gives a retroactive effect to the regulation to the extent necessary to bring about an immediate change in *1182existing contracts without unnecessarily cutting off accrued rights. For this reason, I would adopt it.
In addition, the decision of the majority violates no less than three basic canons of construction — canons we cannot ignore. First, the Commission’s interpretation of its own regulation must be given “controlling weight unless it is plainly erroneous or inconsistent with the regulation.” Bowles v. Seminole Rock Co., 325 U.S. 410, 414, 65 S.Ct. 1215, 1217, 89 L.Ed. 1700 (1945). In my view, the majority, instead of trying to accommodate the Commission’s interpretation, goes to great lengths to evade it,2 without ever showing that “it is plainly erroneous or inconsistent with the regulation.” Second, we should construe new regulations in such a way as to avoid interference with antecedent rights. Greene v. United States, 376 U.S. 149, 160, 84 S.Ct. 615, 11 L.Ed.2d 576 (1964). The question *1183before us is not whether the regulation is retroactive, but to what degree. By following the Commission’s interpretation, I would construe the regulation in a way that would least interfere with antecedent rights. The majority needlessly opts for the path of greatest interference. Third, a regulation should be construed, whenever possible, so as to avoid constitutional issues. See Ashwander v. T.V.A., 297 U.S. 288, 348, 56 S.Ct. 145, 80 L.Ed. 688 (1936) (Brandeis, J., concurring); United States v. Oates, 560 F.2d 45, 80 (2d Cir. 1977); Fine v. City of New York, 529 F.2d 70, 76 (2d Cir. 1975). The majority goes out of its way to interpret the regulation in a manner that necessitates the resolution of a difficult due process issue.3
I dissent.

. The majority’s suggestion that the arbitration clause might not have been valid is groundless. No duress was involved, and even if this were a contract of adhesion the arbitration clause would be denied effect only to the extent necessary to prevent an unfair result. See J. Cala-mar! & J. Perillo, The Law of Contracts § 3 (1970). There is certainly nothing unfair about the enforcement of this arbitration clause.

. In order to avoid giving “controlling weight” to the Commission’s view, the majority characterizes it as a mere “current litigating position” and denies that it should be afforded the deference due to an “interpretation.” It is a mistake to approach this issue as if the only question were whether the Commission’s view constitutes an “interpretation.” The views of an administrative agency are never controlling in the sense that they have the force of law; rather they
constitute a body of experience and informed judgment to which courts and litigants may properly resort for guidance. The weight of such a judgment in a particular case will depend upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control.
Skidmore v. Swift & Co., 323 U.S. 134, 140, 65 S.Ct. 161, 164, 89 L.Ed. 124 (1944). The issue, therefore, is not whether the judgment constitutes an “interpretation,” but whether it is thorough, rational and consistent with other pronouncements. If it is, then it is entitled to “controlling weight” regardless of whether it is denominated an “interpretation.”
In applying these standards to the instant case, I should note at the outset that I can perceive no reason why the views of an administrative agency should be given either more or less deference depending on where they are expressed. An amicus brief is as good a place as any. See, e. g., Skidmore v. Swift & Co., supra, where the Court relied on “rulings, interpretations and opinions,” including “the conclusion of the Administrator, as expressed in the brief amicus curiae.” 323 U.S. 139 — 40, 65 S.Ct. at 164. The majority refers to the Commission’s “current litigating position” as if to suggest that the Commission is not serious about it or has taken it merely for reasons of expediency. A reading of the Commission’s argument belies that suggestion and demonstrates that the Commission views the submission of this amicus brief as a serious undertaking.
When a substantive provision of law is applied prospectively, i. e., affects only conduct and events arising after its effective date, due process considerations — questions of fairness — are unlikely to arise, since conduct can be adjusted prospectively to comply with the new requirements. Retrospective application of a statute or rule can, however, raise due process considerations, although the mere fact or [sic] retroactivity does not, standing alone, make it unconstitutional. . Absent a strong showing of contrary intent, the courts have generally construed substantive legislation and rules to apply prospectively only. .
While the Commission, in the adoption of Rule 180.3(b), has provided that all arbitration clauses not complying with the provisions of Rule 180.3(b) would be null-and-void as of November 29, 1976, the requirements of the rule . . . were intended to be effective only concerning disputes that had not arisen prior to that date. . . . Thus, the only element of unfairness that might otherwise have arguably been involved in the enforcement of the Commission’s rule was eliminated.
Insofar as the Commission’s rule applies prospectively to govern the resolution of all disputes arising after its effective date, firms were given two months after the adoption of Rule 180.3(b), as a reasonable period in which to bring their agreements into conformity with the rule’s specific requirements. Thereafter, disputes which subsequently arose would be encompassed by the protections of Rule 180.3(b) and this was to be true regardless of any prior agreements to the contrary.
Memorandum of the Commodity Futures Trading Commission, Amicus Curiae, at 12-13 (footnotes and citations omitted; emphasis added). These views are thorough, rational and persuasive. Because the Commission has expressed no other views on the precise issue before us, there is no inconsistency with any earlier or later pronouncements. Thus, absent some showing that the Commission’s interpretation was “plainly erroneous or inconsistent with the regulation,” I believe we should give it controlling weight.

. The majority finds it unnecessary to reach the question whether Wilko v. Swan, 346 U.S. 427, 74 S.Ct. 182, 98 L.Ed. 168 (1953), renders the arbitration clause invalid. My analysis requires me to reach the issue. I do not consider Wilko controlling. In that case, the Supreme Court held that arbitration clauses in margin agreements are void under a provision of the Securities Act of 1933 which prohibits “[a]ny condition, stipulation, or provision binding any person ... to waive compliance with any provision” of the Act. The Court said that the arbitration clause was a “stipulation” that required a customer to “waive compliance with” the “provision” in the Act for a private damage action. 346 U.S. at 434-35, 74 S.Ct. 182. Wil-ko has been applied in other situations where a waiver of a statutory cause of action would undermine a paramount federal policy. E. g., Alexander v. Gardner-Denver Co., 415 U.S. 36, 94 S.Ct. 1011, 39 L.Ed.2d 147 (1974) (Title VII cause of action cannot be waived by arbitration clause in collective bargaining agreement). The Commodity Act has no express provision for a private damage cause of action and no non-waiver clause. Thus, Wilko is inapplicable. If some paramount federal policy required that there be a non-waivable private cause of action under the Commodity Act, surely we would not be required to imply the existence of the cause of action itself.