Hall Street Associates, LLC v. Mattel, Inc.: - A New Englander's Tale of Statutory Supremacy in Arbitration Law - SIAR 2008-1
Thomas E. Carbonneau, Orlando Distinguished Professor of Law, Penn State Dickinson School of Law.
Originally from: Stockholm International Arbitration Review
HALL STREET ASSOCIATES, LLC V. MATTEL, INC.: A New Englander's Tale of Statutory Supremacy in Arbitration Law
Thomas E. Carbonneau
On March 25, 2008, the U.S. Supreme Court rendered its long-awaited opinion in Hall Street Associates, LLC v. Mattel, Inc., 552 U.S. ___ (2008). Commentators expected the ruling to resolve the split between the federal circuits regarding the validity and enforceability of so-called opt-in provisions. Since the late 1990s, these provisions had become a means by which contracting parties could agree to enhanced judicial review of arbitral awards rendered in arbitrations arising under their agreement.
At first blush, the Court's decision did not disappoint expectations. A majority of six justices determined that Federal Arbitration Act (FAA) §§ 9-11 were "exclusive." According to the majority opinion, the governing statute provided for "expedited judicial review to confirm, vacate, or modify arbitration awards," and could not be "supplemented by contract." It should be underscored that the Court never specifically held that opt-in provisions were invalid contracts and, therefore, unenforceable agreements. Written in an intricate and understated style, the opinion may be more significant for what it does not say than for what it says. The majority determined only that the FAA grounds could not be "supplemented by contract" and were "exclusive."
In light of the justices' sophistication, the Court's intelligence on arbitration, and the issue's controversial character, it is unlikely that the indirection in the holding is either happenstance or a mere quirk of style. The Court is prescient of its law-making authority. Its opinions are careful and elaborated with deliberation. The chosen rhetoric is never empty, especially when it seeks to mediate a collegial difference in views. Further, it goes without saying that the Court is preoccupied with arbitration. It has rendered more than forty arbitration decisions9 since 1953. Hall Street Associates is the second arbitration decision this term. In addition to the measured holding, the majority opinion contains reasoning that is analytically perplexing in places, and the dicta casts a fog of ambiguity over the clarity of the principal holding.