Arbitrations in Florida: A Tale of Two Courts

Article excerpt

The Federal Arbitration Act ("FAA") (1) "was enacted in 1925 in response to widespread judicial hostility to arbitration agreements." (2) It is evident from a number of decisions issuing out of Florida courts that this judicial hostility endures. A frequently stated goal of arbitration is the fast and efficient resolution of disputes, (3) but decisions that refuse to enforce such agreements undermine predictability and embroil the litigants in court proceedings that delay and drive up the cost of deciding disputes.

During the last two years, the arbitration profession has gained five staunch supporters. They also comprise a majority of the United States Supreme Court: Chief Justice John G. Roberts, along with Justices Antonin Scalia, Anthony M. Kennedy, Clarence Thomas, and Samuel A. Alito. With the latest trilogy of cases, (4) the Court has emphatically promoted the use of arbitration and undermined attempts to invalidate contractual commitments that obligate the parties to arbitrate their disputes. This article will examine this trilogy of cases, (5) and will contrast how courts in Florida have reacted, ignored, or interpreted federal decisions to spurn the U.S. Supreme Court's efforts to streamline this alternative to courtroom litigation.

I. BACKGROUND

The FAA was enacted to "revers[e] centuries of judicial hostility to arbitration agreements," (6) and was designed to allow parties to avoid "the costliness and delays of litigation" and to place arbitration agreements "upon the same footing as other contracts[.]" (7) The Act provides that arbitration agreements "shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." (8) "English courts [had] traditionally considered irrevocable arbitration agreements as 'ousting' the courts of jurisdiction, and [have thus] refused to enforce such agreements." (9) Until the adoption of the FAA, American courts uncritically adopted this view as part of the common law. (10) As the U.S. Supreme Court stated in Dean Witter Reynolds, Inc. v. Byrd, (11) "[t]he preeminent concern of Congress in passing the Act was to enforce private agreements into which parties had entered," (12) a concern which "requires that we rigorously enforce agreements to arbitrate[.]" (13)

The first trilogy is known as the Steelworkers Trilogy, (14) whose continuing validity was reaffirmed by Justice Byron White in AT&T Technologies, Inc. v. Communications Workers of America. (15) The cases established certain precepts: first, "arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit"; (16) second, the question of arbitrability is an issue for judicial determination; (17) and third, where the contract contains an arbitration clause, there is a presumption of arbitrability. (18)

To appreciate the latest trilogy of cases from the U.S. Supreme Court, we need to examine the second trilogy of cases, (19) which were decided in the mid-1980s, because these cases established the FAA as a source of "federal substantive law of arbitrability." (20) In Moses H. Cone Memorial Hospital v. Mercury Construction Corp., (21) the Court stated:

   Section 2 is a congressional declaration of a liberal federal
   policy favoring arbitration agreements, notwithstanding any state
   substantive or procedural policies to the contrary. The effect of
   the section is to create a body of federal substantive law of
   arbitrability, applicable to any arbitration agreement within the
   coverage of the Act. (22)

The significance of this is that it allowed the Court to make the FAA applicable to the states as well as federal courts. (23) Thus, in Southland Corp. v. Keating, (24) the Court held that the California Franchise Investment Law, which invalidated certain arbitration agreements covered by the FAA, violated the Supremacy Clause. …