The Watcher Cat

The Watcher Cat

Thursday, June 20, 2013

Everybody Knows...

Everybody knows the fight was fixed
The poor stay poor, the rich get rich
That's how it goes
Everybody knows

Today's majority opinion in American Express Co. v. Italian Colors Restaurant is written by by Justice Scalia for a 5-3 majority (Justice Sotomayor recused herself). It is the usual story for the Roberts Court--creating a right on the part of big business to shape the playing field so that even a viable claim of a violation of federal law becomes immunized as a practical matter, because of an onerous arbitration agreement's provisions--imposed through the very monopoly power the Sherman Antitrust Act was designed to prohibit--that forbid all fora but arbitration, but set ground rules for arbitration that make the cost of litigation far more than the possible recovery by banning shared expenses among plaintiffs.

Or, as Justice Kagan put it in her persuasive dissent:
The Court today mistakes what this case is about. To a hammer, everything looks like a nail. And to a Court bent on diminishing the usefulness of Rule 23, everything looks like a class action, ready to be dismantled. So the Court does not consider that Amex’s agreement bars not justclass actions, but "other forms of cost-sharing . . . that could provide effective vindication." Ante, at 7, n. 4. In short, the Court does not consider—and does not decide— Italian Colors’s (and similarly situated litigants’) actual argument about why the effective-vindication rule precludes this agreement’s enforcement.

As a result, Amex’s contract will succeed in depriving Italian Colors of any effective opportunity to challenge monopolistic conduct allegedly in violation of the Sherman Act. The FAA, the majority says, so requires. Do not be fooled. Only the Court so requires; the FAA was never meant to produce this outcome. The FAA conceived of arbitration as a "method of resolving disputes"—a way of using tailored and streamlined procedures to facilitate redress of injuries. Rodriguez de Quijas, 490 U. S., at 481 (emphasis added). In the hands of today’s majority, arbitration threatens to become more nearly the opposite—a mechanism easily made to block the vindication of meritorious federal claims and insulate wrongdoers from liability. The Court thus undermines the FAA no less than it does the Sherman Act and other federal statutes providingrights of action. I respectfully dissent.
(Opinion of Kagan, J., dissenting at 14-15.)

Justice Kagan's dissent is remarkable for both its plainspokenness--it's rare for a dissenter to question not just the majority's reasoning but its intentions and the integrity underlying the ruling--and her casual use of arresting language throughout the opinion. Elena Kagan is turning Scalia's own weapons on him. Her caustic wit, vivid writing, and eye for shoddy legal construction are a match for his own, and she has, in this instance, the added advantage of being right on the law.

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