By Professor
Adam ZimmermanProf. Zimmerman is guest blogging on Prawfsblawg, where this post originally appeared.To follow up on
Richard's post, I wanted to ask your thoughts about another aspect of the Supreme Court’s most recent Article III decision in
Wellness Int’l v. Sharif (2015). As a reminder, Sharif is one of many cases that asks how much power Congress can give to bankruptcy courts, legislative courts and other dispute resolution programs without threatening our independent federal judiciary. Over at
Indisputably, Jean Sternlight argues that the opinion raises "substantial questions as to the constitutional legitimacy of ... private mandatory arbitration." She observes:
[Sharif] held that litigants may “knowingly and voluntarily” allow a bankruptcy judge to hear claims that, absent such consent, Article III would bar the bankruptcy judge from deciding...
Yet, while the Justices who have spoken on the topic seem inclined to find arbitration permissible, the principles espoused by the Court cast doubt as to the constitutional legitimacy under Article III of mandatory private arbitration. Lower court decisions have blithely held that arbitration is permitted because parties waive their right to go to court when they agree to arbitrate, but the issue is not so simple...
[W]hen courts have sought to justify arbitration on the ground that parties “consented” to bring claims in arbitration rather than in court, they have not applied the “knowing and voluntary” definition of consent recently applied in Sharif. If courts did look for knowing and voluntary consent they would find that while many business-to-business arbitration agreements meet the test, few if any consumer and employment clauses do so.
(
H/T Jeff Sovern). I wonder whether Sternlight’s argument cuts more broadly. "Mandatory arbitration" refers to "take-it-or leave" it agreements forged between businesses and consumers before a dispute arises. But do you think the same analysis could apply to recent efforts by policymakers to encourage or require similar corporate dispute resolution programs after-the-fact? Some thoughts after the jump.