On Tariffs v. Subsidies in Interstate Trade: A Legal and Economic Analysis

Part II of this Article sets out the Supreme Court\u27s current legal analysis of tariffs versus subsidies under the dormant Commerce Clause. Part III undertakes an economic analysis of tariffs versus subsidies, from both a traditional international economics perspective and from a rent-seeking perspective. Part IV suggests an alternative constitutional basis for the Court\u27s distinction between tariffs and subsidies: the Import-Export Clause of the United States Constitution. Part V summarizes my conclusions

Error Correction and the Supreme Court's Arbitration Docket

Supreme Court Justices from William Taft to Stephen Breyer have repeated the maxim that the “Supreme Court is not a court of error correction.” When it comes to arbitration law, however, a number of the Court’s cases do little more than correct errors by lower courts. So why has error correction played such a significant role in the Court’s arbitration docket? One important factor is ongoing resistance to the Court’s arbitration decisions in the lower courts, to which a number of the Court’s error correcting decisions are a direct response. Another is that cases involving standards rather than rules necessarily require fact-based determinations, and the nature of the Court’s case selection process can result in the Court reviewing cases with one-sided facts that make little law. But, in addition, the generalist legal background of Supreme Court Justices (and their law clerks) leads them to overlook important nuances in the facts of arbitration cases before the Court on certiorari. These nuances give rise to several simple steps the Court could take to avoid some of its more limited decisions, including: (1) reviewing state court cases only when the issue presented does not also arise in cases in federal courts; (2) avoiding cases arising out of post-dispute arbitration agreements; and (3) choosing cases with typical arbitration clauses, not atypical ones

Arbitration Costs and Forum Accessibility: Empirical Evidence

In this Article, written for this symposium issue on Empirical Studies of Mandatory Arbitration, I examine the available empirical evidence on these two questions. I take mandatory arbitration to refer to pre-dispute arbitration clauses in consumer and employment (and maybe franchise) contracts. Accordingly, I limit my consideration of the empirical evidence to those types of contracts. I do not discuss empirical studies of international arbitrations, which almost always arise out of agreements between commercial entities. Nor do I discuss empirical studies of court-annexed arbitrations, which may not derive from party agreement and do not ordinarily proceed to a binding award

AAA Consumer Arbitration

This chapter has provided an overview of consumer arbitrations administered by the American Arbitration Association, the largest administrator of consumer arbitrations. It does not, of course, purport to resolve the ongoing debate over arbitration and access to justice. A consumer’s incentive to bring a claim (and an attorneys’ incentive to take a case) depend on the costs of the process and the expected outcome in the forum. With the recent amendments to its consumer arbitration rules, the AAA reduced the cost to consumers of bringing claims in arbitration, both by lowering the upfront fees and by largely precluding reallocation of fees to consumers in the award. The expected outcome in arbitration (in particular, relative to the expected outcome in court) presents a much more difficult question because limits to available data preclude comparison of similarly-situated complainants. More research remains to be done

Disclosure of Franchise Disputes

The Amended FTC Franchise Rule requires franchisors to disclose material litigation and arbitration actions in Item 3 of their Franchise Disclosure Documents. The Amended Rule expanded the scope of the disclosure obligation so that most if not all franchisor-initiated actions must be disclosed in Item 3. As such, the Amended FTC Rule makes available both to franchisees and researchers information and data on franchise disputes, such as arbitration filings and proceedings and settlement terms, that otherwise would not be available. Using the Item 3 data disclosed by Doctor’s Associates, Inc., franchisor of the Subway sandwich shop franchise, this article finds that the frequency of franchisor-initiated actions in a state is, to a large degree, random. But it also finds a (weakly) statistically significant relationship between the frequency of disputes and the presence of a franchise termination statute, one that is negative in states with a low growth rate of Subway franchises but that becomes positive in states with a high growth rate. The Item 3 data thus provide a new perspective both on franchise disputes and the ongoing debate over the effects of franchise termination statutes

Innovation in Arbitration Law: The Case of Delaware

Delaware has become increasingly active in adopting innovative arbitration laws. In 2009, Delaware adopted a confidential system of “arbitration” conducted by sitting Court of Chancery judges, which was subsequently held unconstitutional as violating the First Amendment right of public access to the courts. In 2015, it enacted the Delaware Rapid Arbitration Act (DRAA), creating a system of expedited arbitration in Delaware. Among other things, the DRAA sets mandatory time limits for the completion of arbitration proceedings (with financial penalties for arbitrators who fail to comply), restricts the degree of court involvement in the arbitration process, and provides for expeditious review of arbitration awards directly to the Delaware Supreme Court. This Article analyzes the DRAA, Delaware’s most recent innovation in arbitration law. It distinguishes the provisions of the DRAA that require legislative action from those that the parties can themselves establish by contract. It also notes several potential difficulties with and uncertainties caused by the Act. Finally, it comments on the role of Delaware (as opposed to other American states) as an innovator in arbitration law

FAA Preemption after Concepcion

AT&T Mobility LLC v. Concepcion is an important case for its holding that the FAA preempts application of state unconscionability doctrine to invalidate an arbitration clause with a class arbitration waiver. But in a number of respects, the effect of Concepcion has been overstated, including its effect on application of state unconscionability doctrine to arbitration clauses. Concepcion does not preempt all or even most state unconscionability doctrine as applied to arbitration agreements. Properly construed, Concepcion preempts state unconscionability doctrine only when that doctrine conditions enforcement of arbitration agreements on procedures inconsistent with “fundamental attributes of arbitration” of the sort illustrated in Concepcion itself ― such as the use of juries, court-monitored discovery, evidentiary rules, and, of course, class arbitration. If, however, the Supreme Court were to construe Concepcion more broadly (or eliminate application of unconscionability to invalidate arbitration clauses altogether), courts would retain some residual authority to police the fairness of arbitration clauses, but only by finding a dispute resolution process not to be arbitration at all