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.1 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.2
At first blush, the Court's decision did not disappoint expectations. A
majority of six justices determined that Federal Arbitration Act (FAA)3 §§
9-11 were "exclusive."4 According to the majority opinion, the governing
statute provided for "expedited judicial review to confirm, vacate, or
modify arbitration awards,"5 and could not be "supplemented by contract."6
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"7 and were "exclusive."8
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.10 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.