In this post, Laurence Shore and Christian Leathley, partners at Herbert Smith Freehills LLP, discuss the potential impact of US Supreme Court nominee Judge Neil Gorsuch on the evolution of arbitration case law in the US.
On 31 January 2017, U.S. President Donald Trump formally nominated Judge Neil Gorsuch – who currently sits on the U.S. Court of Appeals for the Tenth Circuit – to fill the U.S. Supreme Court seat left vacant after the death of Justice Antonin Scalia. Speaking shortly after his nomination was announced, Judge Gorsuch promised to fulfill his potential role with “impartiality and independence, collegiality and courage.”
While his limited record on arbitration makes it difficult to gauge his potential impact on the Supreme Court, Judge Gorsuch’s tenure on the Tenth Circuit offers some hints on how he would contribute to the Supreme Court’s evolving arbitration case law.
An originalist who seeks to limit the scope of federal powers, Judge Gorsuch has emphasized that “it is the role of judges to apply, not alter, the work of the people’s representatives.” On the bench, he has demonstrated a determination to hold parties to their arbitration agreement, and has admonished lower courts that have delayed in deciding on the existence of an agreement to arbitrate. For example, in 2014 he wrote that parties “should not have to endure years of waiting and exhaust legions of photocopiers in discovery and motions practice merely to learn where their dispute will be heard. The [FAA] requires courts [to] process the venue question quickly so the parties can get on with the merits of their dispute in the right forum. It calls for a summary trial – not death by discovery.” (Howard v. Ferrellgas Partners, L.P., Case No. 13-3061, 2014 WL 1363963 (10th Cir. Apr. 8, 2014)).
Other decisions evidence Judge Gorsuch’s preference to effect parties’ decision to arbitrate a dispute even when the arbitration agreement is imperfect. In an unusual case with six conflicting arbitration agreements, he dissented from the court majority that found no meeting of the minds and held the agreements unenforceable. Instead, he considered that the plaintiff was “free to initiate arbitration under the terms of whichever of the six agreements he prefers,” and that giving effect to the intent of the parties to submit their disputes to arbitration would be preferable to ignoring all six of the arbitration agreements (Ragab v Howard et al, No. 15-1444 (10th Cir. 2016)).
Judge Gorsuch’s mostly pro-arbitration tenure on the bench is not without certain outliers, and his respect for party autonomy is not without limits. Notably, he was recently part of the bench that refused to enforce an arbitral award on due process grounds pursuant to Article V(1)(b) of the New York Convention (which allows for the refusal to recognise or enforce an award if the “party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present his case.”) In that case, the District Court had refused to recognise an award rendered in China when the American respondents had received Chinese-language notices of the arbitration. The Tenth Circuit panel, on which Judge Gorsuch sat, affirmed, ruling that the foreign-language notices were insufficient to apprise the respondent of the proceedings (CEEG (Shanghai) Solar Science & Technology Co., Ltd v. LUMOS LLC, 829 F.3d 1201 (2016)). The case likely turned on the peculiarity of its facts and due process concerns, and did not reflect a judicial hostility to the international arbitration system.
Judge Gorsuch will almost certainly be confirmed by the Senate, even if his path to confirmation may not be smooth. Given his record, and his admiration for Justices Scalia and Kennedy (he clerked for Justices Kennedy and White), it is unlikely that the Court’s position on matters relating to the Federal Arbitration Act (Chapters 1, 2, and 3) will change in any significant way when he becomes the newest Justice.
A version of this post was first published on Herbert Smith Freehills LLP’s Arbitration Notes blog on 1 February 2017. See the original here.