Federal Arbitration Act Preemption, Purposivism, and State Public Policy (original) (raw)

The relationship between the Federal Arbitration Act (FAA) and state public policy has long been unsettled. According to some judges, scholars, and litigants, the FAA precludes courts from invalidating arbitration clauses under the contract defense of violation of public policy. However, in a practice that is impossible to square with that understanding of FAA preemption, courts have traditionally nullified arbitration clauses to advance a range of state interests, including preserving substantive rights under state law. Nevertheless, in AT&T Mobility LLC v. Concepcion, the U.S. Supreme Court held that the FAA eclipses a rule that deemed class-arbitration waivers to be unconscionable when they prevented plaintiffs from pursuing numerous, low-value state law claims. Both Justice Scalia's majority opinion and Justice Thomas's decisive concurrence strongly implied that state public policy is not a permissible basis for striking down an arbitration clause. As a result, lower courts are now compelling arbitration-often through gritted teeth-of lawsuits that are destined to fail.

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