Carolyn G. Nussbaum
Nixon Peabody LLP
1300 Clinton Square
Rochester, New York 14604
Christopher M. Mason
Nixon Peabody LLP
55 West 46th Street
New York, New York 10036
§ 1.1 Introduction
To illustrate the state of arbitration law in 2020, we describe in this chapter selected cases from the United States Supreme Court docket, the federal Circuit Courts of Appeals (and several noteworthy cases from the federal District Courts), and the highest courts of each state that raise unique issues, provide instructive guidance on recurring issues in arbitration law, or are likely to be of interest to the general legal profession. We also discuss several legislative and regulatory developments and several discussions involving mediation issues.
Starting from the top, as we predicted in this chapter in the 2019 ANNUAL REVIEW OF RECENT DEVELOPMENTS IN BUSINESS AND CORPORATE LITIGATION (ABA 2020), the U.S. Supreme Court did not have a significant volume of arbitration cases in 2020. The Court issued just one substantive arbitration decision and heard argument on just one potentially significant case in which a decision is expected in 2021. This, of course, meant that the Court denied review in a number of cases. Among those, one denial of certiorari in particular may also have been somewhat notable.
This year, at least two issues revealed splits among the Circuits on arbitration issues. First, numerous decisions considered whether and to what extent delivery workers in the “gig economy,” including those who carry goods the “last mile,” were within the scope of the residual clause of section 1 of the FAA exempting from the Act contracts of “any other class of workers engaged in foreign or interstate commerce” as interpreted by the United States Supreme Court in Circuit City Stores, Inc. v. Adams. These cases are discussed in section 1.8.1.
In addition, 28 U.S.C.A. § 1782 permits any party or other interested person involved in proceedings taking place before a foreign or international tribunal, or the tribunal itself, to make a request to a U.S. federal district court for an order compelling discovery from a person or entity that resides or is found in the district in which the court sits. Several decisions this year grappled with the question of whether discovery may be ordered in aid of private foreign and international arbitral proceedings, including the Seventh and Fourth Circuits, which came to conflicting conclusions relating to the same international proceeding. These cases are discussed below in section 1.17.
2020 also was the year that federal regulators in the Antitrust Division of the Department of Justice (the “Division”) embraced arbitration after a well-publicized success in arbitrating the definition of the relevant product market in a challenged merger. Capitalizing on that success, the Division issued its Updated Guidance Regarding the Use of Arbitration and Case Selection Criteria in November 2020, signaling an interest in increasing the use of arbitration.
With a deeply divided Congress, and scant chance of abolishing the filibuster, broad-based legislative attacks on the growing use of arbitration agreements appear unlikely. Still, watch for a renewed battle over the proposed Forced Arbitration Injustice Repeal Act (“FAIR”), a bill that has been introduced in one form or another for many years, and which has already passed the House. FAIR would invalidate pre-dispute arbitration agreements in the employment, civil rights, consumer, and antitrust contexts, and would require employers to litigate workplace disputes in court.
§ 1.2 Legislative and Regulatory Development
§ 1.2.1 The Department of Labor
Countrywide Fin. Corp., 369 N.L.R.B. No. 12 (Jan. 24, 2020). Arbitration agreement that does not expressly prohibit filing charges with the National Labor Relations Board (“NLRB”) interfered with employees’ rights to file such charges because …