Bench Memos

Law & the Courts

Breyer vs. Ginsburg in Arbitration Ruling

In today’s decision in DirecTV v. Imburgia, the Supreme Court ruled by a 6-3 vote that a California court wrongly refused to enforce an arbitration provision in a service contract between satellite-television provider DirecTV and two of its customers in California. Justice Breyer wrote the majority opinion and was joined by the Chief Justice, Scalia, Kennedy, Alito, and Kagan. Justice Thomas dissented, explaining in three sentences that he continues to adhere to his view that the Federal Arbitration Act does not apply to proceedings in state courts. Justice Ginsburg, joined by Justice Sotomayor, wrote a much lengthier dissent.

The issue in the case is an interesting and intricate one. The contract at issue provides for binding arbitration and waiver of class arbitration, unless the “law of your state” makes the waiver of class arbitration unenforceable, in which case the entire arbitration provision is unenforceable. At the time the contract was entered into, the law of California (in the form of a state supreme court ruling) barred waiver of class arbitration, but in 2011 the Supreme Court ruled that the Federal Arbitration Act preempted that state bar. The intermediate state court below held that the “law of your state” was the law that was invalid under the Supreme Court’s 2011 ruling. The Breyer majority, accepting the state court’s ruling as a correct statement of California contract law, ruled that that law was not consistent with the Federal Arbitration Act (because it did not place arbitration contracts “on equal footing” with all other contracts) and that the state court therefore should have enforced the arbitration agreement, including its waiver of class arbitration.

Ginsburg’s strident dissent seems to be waving for attention. Ginsburg begins by stating that it “has become routine, in a large part due to this Court’s decisions, for powerful economic enterprises to write into their form contracts with consumers and employees no-class-action arbitration clauses.” She accuses Breyer of reading the arbitration provision “in a manner most protection of the drafting enterprise.” (The “drafting enterprise” is her rather clumsy way to refer to the entity that drafted the contract.) And she faults him for taking a “further step to disarm consumers, leaving them without effective access to justice.” (That’s all in the first paragraph.) She even stoops to cite a recent very one-sided New York Times article against arbitration.

Let’s see how many editorials trumpeting Ginsburg’s rhetoric stop to point out that she is dissenting from a ruling written by fellow liberal Breyer and joined by fellow liberal Kagan.

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