Henry Schein Redux – The Appeals Court Decides “The Placement of the Carve-Out is Dispositive”

By Mark Kantor

Kantor Photo (8-2012)You may recall that the US Supreme Court last term in Henry Schein, Inc. v. Archer and White Sales, Inc. rejected a “wholly groundless” exception to its general principles allocating arbitrability issues between court and arbitrator (the First Options rule that “Unless the parties clearly and unmistakably provide otherwise, the question of whether the parties agreed to arbitrate is to be decided by the court, not the arbitrator.”).  The Supreme Court then sent the case back to the US Court of Appeals for the Fifth Circuit for reconsideration in light of the Supreme Court’s ruling.

Yesterday, the Fifth Circuit issued its new opinion in that case (Archer and White Sales, Inc. v. Henry Schein, Inc., No. 16-41674, Aug. 14, 2019, available on TDM at https://www.transnational-dispute-management.com/legal-and-regulatory-detail.asp?key=22906, subscription required).  In that opinion, the Appeals Court concluded that the arbitration clause in question did not clearly and unmistakably allocate the relevant question to the arbitrators.  The Court then held that, based on the exclusion for “actions seeking injunctive relief” from arbitration under the relevant clause, the dispute in question was not arbitrable.  As explained more fully below, the appeals court relied on contract interpretation principles to reach this result.  The court thereby emphasized the importance of precise drafting of the arbitration clause and any exceptions – “the placement of the carve-out here is dispositive.”

The underlying court proceeding brought by Archer and White Sales, Inc. is an antitrust complaint against Henry Schein, Inc. and others relating to alleged anticompetitive agreements entered into among the defendants with respect to sales of dental equipment.  Complainant Archer and White Sales “alleges violations of federal and Texas antitrust law and seeks money damages and injunctive relief.”  The defendants argued that an exclusion in the relevant arbitration clause of “actions seeking injunctive relief” operated to prevent arbitrability of the dispute.

The arbitration clause in the underlying contract reads as follows (emphasis added):

Disputes. This Agreement shall be governed by the laws of the State of North Carolina.  Any dispute arising under or related to this Agreement (except for actions seeking injunctive relief and disputes related to trademarks, trade secrets, or other intellectual property of Pelton & Crane), shall be resolved by binding arbitration in accordance with the arbitration rules of the American Arbitration Association [(AAA)].  The place of arbitration shall be in Charlotte, North Carolina.

Under AAA Commercial Arbitration  Rule 7(a), “[t]he arbitrator shall have the power to rule on his or her own jurisdiction, including any objections with respect to the existence, scope, or validity of the arbitration agreement or to the arbitrability of any claim or counterclaim.”  However, the Fifth Circuit interpreted this arbitration clause in the agreement to exclude actions seeking injunctive relief from arbitration.  By doing so, the parties, said the appeals court, had placed the relevant dispute entirely outside the AAA arbitration rules.  Thus, Rule 7(a) did not come into play, and the parties had not clearly and unmistakably delegated the issue of arbitrability of an action seeking injunctive relief to the arbitrator.

Finding that the exclusion in the arbitration clause was itself clear, the Court of Appeals itself then determined that the dispute was not arbitrable because the court claims sought injunctive relief in addition to damages.

The decision of the Fifth Circuit avoids reconsidering the issue raised by amicus and discussed by Justice Ginsburg in her separate Supreme Court opinion – do provisions in arbitration rules such AAA Rule 7(a) in fact constitute a clear and unmistakable delegation of arbitrability decisions to the arbitrator.  As the Fifth Circuit Court of Appeals noted in footnote 11, “While both parties read the tea leaves in the questions asked by the Justices at oral argument, attempting to shepherd them to support their own positions, the Court declined to decide whether this agreement in fact delegated the arbitrability question.”

In the Fifth Circuit, precedent holds that an arbitration rule such as AAA Rule 7(a) satisfies the First Options test; “As we held in [Petrofac, Inc. v. DynMcDermott Petroleum Operations Co., 687 F.3d 671, 675 (5th Cir. 2012)], an arbitration agreement that incorporates the AAA Rules “presents clear and unmistakable evidence that the parties agreed to arbitrate arbitrability.””  That issue, as to which the ALI Restatement of The U.S. Law of International Commercial and Investor-State Arbitration takes the contrary position, therefore remains the subject of a circuit split among Circuit Courts of Appeals in the US to be resolved in the future by the US Supreme Court.

The manner in which the Fifth Circuit judges reached this conclusion is particularly relevant to patent licensing disputes, where the parties to a patent license agreement or similar IP agreement often provide for arbitration but contractually exclude patent validity, infringement and similar disputes from arbitration.

The Circuit Court of Appeals (Judge Patrick Higginbotham writing for a unanimous court) began its analysis in the customary two-step fashion, asking first if there is any arbitration agreement at all and thereafter considering whether “this claim is covered by the arbitration agreement” (footnotes omitted here and elsewhere).

We review a ruling on a motion to compel arbitration de novo.  Our inquiry proceeds in two steps.  The first is a matter of contract formation—“whether the parties entered into any arbitration agreement at all.”  Next we turn to the question of contract interpretation and ask whether “this claim is covered by the arbitration agreement.”

Judge Higginbotham then restated the well-known First Options “clearly and unmistakably” formulation for allocating the second question between court and arbitrator.

While ordinarily both steps are questions for the court, the parties can enter into an arbitration agreement that delegates to the arbitrator the power to decide whether a particular claim is arbitrable. The Supreme Court has repeatedly made clear that “parties can agree to arbitrate ‘gateway’ questions of ‘arbitrability,’ such as whether the parties have agreed to arbitrate or whether their agreement covers a particular controversy.”

When considering whether there was a valid delegation, “the court’s analysis is limited.” As always, we ask if the parties entered into a valid agreement. If they did, we turn to the delegation clause and ask “whether the purported delegation clause is in fact a delegation clause—that is, if it evinces an intent to have the arbitrator decide whether a given claim must be arbitrated.”  When determining that intent, “[c]ourts should not assume that the parties agreed to arbitrate arbitrability unless there is ‘clear and unmistakable’ evidence that they did so.” If there is a valid delegation, the court must grant the motion to compel.

Here, the disputing parties had agreed that a valid arbitration agreement existed, leaving only the second step for consideration – was the particular claim covered by that agreement.  Archer and White argued that decision was for the courts to make.

Archer asserts that the AAA rules (and resulting delegation) only apply to disputes that fall outside of the arbitration clause’s carve-out for actions seeking injunctive relief. Under their reading, if a case falls within the carve-out, the agreement does not incorporate the AAA rules and the gateway arbitrability question is not delegated to an arbitrator.

Henry Schein argued in response that, by operation of AAA Commercial Arbitration Rule 7(a), the parties had expressly delegated that issue to the arbitrator.

[D]efendants argue that the agreement’s incorporation of the AAA rules ends the inquiry.  They maintain that the carve-out for actions seeking injunctive relief does not trump the parties’ delegation.  Defendants warn that to read the contract as Archer suggests would require the court to make a merits determination about the scope of the carve-out—whether this is indeed an action seeing injunctive relief—to answer the delegation question, precisely the category of inquiries a court is precluded from making in answering the delegation question.

The Fifth Circuit agreed with claimant Archer and White, holding that the “plain language” of the arbitration clause did not incorporate the AAA rules for disputes “under the carve-out”.

that is precisely the point—the placement of the carve-out here is dispositive. We cannot re-write the words of the contract. The most natural reading of the arbitration clause at issue here states that any dispute, except actions seeking injunctive relief, shall be resolved in arbitration in accordance with the AAA rules. The plain language incorporates the AAA rules—and therefore delegates arbitrability—for all disputes except those under the carve-out.  Given that carve-out, we cannot say that the Dealer Agreement evinces a “clear and unmistakable” intent to delegate arbitrability.

The appellate court then considered whether the “backdrop of a strong presumption in favor of arbitration” would result in referring the dispute to arbitration.  But the language of the exclusion in the arbitration clause, said the judges, was clear.  Moreover, the court noted that the clause excluded “actions seeking injunctive relief,” not “actions seeking only injunctive relief.”  The appellate court therefore refused to compel arbitration, even of only the claim for damages.

We note first that the arbitration clause creates a carve-out for “actions seeking injunctive relief.” It does not limit the exclusion to “actions seeking only injunctive relief,” nor “actions for injunction in aid of an arbitrator’s award.” Nor does it limit the carve-out to claims for injunctive relief. Such readings find no footing within the four corners of the contract. Under North Carolina law, “[w]hen the language of a contract is clear and unambiguous, effect must be given to its terms, and the court, under the guise of construction, cannot reject what the parties inserted or insert what the parties elected to omit.” The mere fact that the arbitration clause permits Archer to avoid arbitration by adding a claim for injunctive relief does not change the clause’s plain meaning. “While ambiguities in the language of the agreement should be resolved in favor of arbitration, we do not override the clear intent of the parties, or reach a result inconsistent with the plain text of the contract, simply because the policy favoring arbitration is implicated.” Fundamentally, defendants ask us to rewrite the unambiguous arbitration clause. We cannot.

It is noteworthy that the appeals court did not consider severing Archer and White’s remedial request for injunctive relief from its remedial request for damages, which might have resulted in sending the latter to arbitration but keeping the former in court.

The appellate panel’s decision in Henry Schein is of particular importance to intellectual property practitioners.  It is common in the marketplace for patent licensing and similar agreements to contain arbitration clauses.  However, those clauses often expressly exclude from arbitration a dispute for example, “concerning the validity, scope, infringement and essentiality of a patent or a patent claim.”  Moreover, it is extremely common in all sorts of contracts for an arbitration clause to include as well an express authorization for a disputing party to seek injunctive relief from the courts.

Thus, the Fifth Circuit has previously compelled arbitration of the scope question in another precedent, Crawford Professional Drugs, Inc. v. CVS Caremark Corp., 748 F.3d 249, 256 (5th Cir. 2014), under  an arbitration clause stating inter alia “nothing in the arbitration provision “shall prevent either party from seeking injunctive relief for breach of th[e Agreement.”

In the Ninth Circuit, though, the appeals court there has concluded that the scope of arbitrability was for the arbitrator to decide under an arbitration clause providing that “all” disputes arising out of or relating to the subject license agreement were to be arbitrated, and then containing a carve-out for certain IP and licensing claims.

The Ninth Circuit considered a similar agreement in Oracle Am., Inc. v. Myriad Group A.G.  The arbitration clause adopted arbitration rules delegating arbitrability issues to the arbitrator and contained a carve-out for certain intellectual property and licensing claims.  Because the claims carved-out by that agreement “ar[ose] out of or relat[ed] to” the Source License, and the agreement explicitly provided that any claim arising out of the Source License was subject to arbitration, the Ninth Circuit held that Oracle’s carve-out argument “conflate[ed] the scope of the arbitration clause . . . with the question of who decides arbitrability.30

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30.  ****  The court noted that the issue with Oracle’s carve-out argument was that the two categories of exempted claims by definition were claims arising out of or relating to the Source License, which were explicitly subject to arbitration. Id. at 1076.  No such circularity exists in the contract at issue here.

Where, though, the meaning of a carve-out clause is ambiguous, the Second Circuit Court of Appeals has previously allocated to the courts the scope question in NASDAQ OMX Grp., Inc. v. UBS Securities, LLC, 770 F.3d 1010 (2d Cir. 2014).

the parties in NASDAQ had not clearly and unmistakably delegated arbitrability “where a broad arbitration clause is subject to a qualifying provision that at least arguably covers the present dispute.”  Because there was ambiguity as to whether the parties intended to have arbitrability questions decided by an arbitrator—because the dispute arguably fell within the carve-out—the court held the arbitrability question was for the court to decide.

These varying precedents emphasize the point made by the Fifth Circuit in Henry Schein that the parties must take care in the drafting of their exclusionary clauses; “But that is precisely the point—the placement of the carve-out here is dispositive.  We cannot re-write the words of the contract.”

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Mark Kantor is a CPR Distinguished Neutral. Until he retired from Milbank, Tweed, Hadley & McCloy, Mark was a partner in the Corporate and Project Finance Groups of the Firm. He currently serves as an arbitrator and mediator. He teaches as an Adjunct Professor at the Georgetown University Law Center (Recipient, Fahy Award for Outstanding Adjunct Professor). Additionally, Mr. Kantor is Editor-in-Chief of the online journal Transnational Dispute Management.

This material was first published on OGEMID, the Oil Gas Energy Mining Infrastructure and Investment Disputes discussion group sponsored by the on-line journal Transnational Dispute Management (TDM, at https://www.transnational-dispute-management.com/), and is republished with consent.

Implications of Henry Schein and New Prime US Supreme Court Decisions

By Mark Kantor

Kantor Photo (8-2012)

As you know, the US Supreme Court has now issued its opinions in two of the three arbitration-related cases it heard this Term, the 8-0 (with an additional short concurrence by Justice Ginsburg) unanimous decision authored by Justice Gorsuch in New Prime Inc. v. Oliveira and the 9-0 unanimous decision authored by Justice Kavanaugh in Henry Schein v. Archer & White Sales.  Only Lamps Plus Inc. v. Varela remains to be decided this Term (Question Presented: whether the Federal Arbitration Act (FAA) overrides a state-law interpretation of an arbitration agreement that would authorize class arbitration based solely on general language commonly used in arbitration agreements).

The headlines in those decisions relate to excluding from the FAA obligation to enforce arbitration any pre-dispute agreements with independent contractor transportation workers (New Prime v. Oliveira) and the rejection of a “wholly groundless” exception to a court’s obligation to allow the arbitral tribunal to decide jurisdictional disputes where the parties have “clearly and unmistakably” allocated that authority to the arbitrators (Henry Schein v. Archer & White Sales).  But there are other implications of those decisions to which we should pay attention.

First, with respect to the decision in Henry Schein and as discussed on the listserv, the lower courts had relied on the competence-competence Rule 7(a) in the AAA Commercial Arbitration Rules to conclude that the parties had “clearly and unmistakably” allocated that decision-making power to the arbitrators, as required by First Options of Chicago, Inc. v. Kaplan.  However, the Henry Schein Court stated:

We express no view about whether the contract at issue in this case in fact delegated the arbitrability question to an arbitrator.  The Court of Appeals did not decide that issue.  Under our cases, courts “should not assume that the parties agreed to arbitrate arbitrability unless there is clear and unmistakable evidence that they did so.” First Options, 514 U. S., at 944 (alterations omitted).  On remand, the Court of Appeals may address that issue in the first instance, as well as other arguments that Archer and White has properly preserved.

As has been explained by others, there is an existing Circuit split as to whether a competence-competence provision in arbitration rules is sufficient to satisfy the First Options standard.  Moreover, Prof. George Bermann’s amicus brief on that issue, reflecting the view of the draft Restatement that a provision within the arbitration rules should not by itself be sufficient, triggered critical questioning by the Justices (particularly Justice Ginsburg) at the case’s oral argument.  That issue was not, however, part of the Question Presented on which the Supreme Court had granted certiorari for review.  It thus appears the Justices are preparing themselves to resolve that Circuit split in a future case.  In that regard, you may recall my October 31 post (see below, triggered by Prof. Bermann’s amicus brief) asking whether that question will be “the Next Big Arbitration Issue”.

Second, the New Prime decision makes clear that independent contractors may nevertheless be transportation “workers” with “employment agreements” who cannot be bound by a pre-dispute arbitration agreement enforceable under the FAA.  Mr. Oliveira himself is an independent trucker.  But I suggest to you the bigger practical impact will be to reinvigorate class actions in US courts brought by Uber and Lyft drivers against their respective ride-sharing employers.  Many of those judicial class actions had been dismissed in favor of arbitration due to mandatory arbitration clauses in the drivers’ independent contracts with the ride-sharing companies.

Similarly, seamen on shipping and fishing vessels and working personnel on cruise ships are not often employees of their shipping companies, fishing vessels or cruise lines etc.  Instead, they are regularly engaged under independent contractor agreements containing arbitration clauses.  There too, we can anticipate a resurgence of claims in US courts, rather than in arbitration, including possible class actions against shipping companies and cruise lines on various compensation, hiring and firing, and working conditions issues.  Unlike ride-sharing companies, though, those maritime companies generally operate internationally.  Consequently, we may anticipate as well that even more of those maritime companies will specify in their employment/independent contractor agreements an arbitration situs outside FAA jurisdiction, such as the many maritime employment arbitrations now being conducted in Caribbean seats.

Rail workers may also employ New Prime to move some disputes from arbitration to courts, although much of that field in the US is unionized under collective bargaining agreements for which arbitration is statutorily authorized outside the FAA.  Independent contractor relationships are less common.

But Justice Gorsuch may have gone further in his opinion.  He wrote:

Given the statute’s terms and sequencing, we agree with the First Circuit that a court should decide for itself whether §1’s “contracts of employment” exclusion applies before ordering arbitration. After all, to invoke its statutory powers under §§3 and 4 to stay litigation and compel arbitration according to a contract’s terms, a court must first know whether the contract itself falls within or beyond the boundaries of §§1 and 2. The parties’ private agreement may be crystal clear and require arbitration ofevery question under the sun, but that does not necessarily mean the Act authorizes a court to stay litigation and send the parties to an arbitral forum.

(Emphasis added)

It is certainly possible to interpret that statement to mean that a court must itself determine whether the arbitration agreement falls within or outside §2 of the FAA, not just FAA §1.  FAA Section 1 excludes, according to long-standing precedent, maritime transportation workers from the obligations of the court to stay litigation and compel arbitration.  But FAA §2, the basic provision of the FAA enforcing covered arbitration agreements, contains the well-known savings clause for “such grounds as exist at law or in equity for the revocation of any contract”:

A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.

(Emphasis added)

The quoted language authored by Justice Gorsuch (and endorsed by seven other Justices) can be read to suggest that, regardless of any “clear and unmistakable” delegation of jurisdictional decisions to arbitrators by the contracting parties, a supervising court must itself determine whether a challenge to an arbitration agreement on grounds such as unconscionability, duress or mistake is successful before the dispute proceeds to arbitration; i.e., a challenge under FAA §2 on grounds that exist in law or equity for revocation of any contract.  Certainly, counsel for parties seeking to avoid an arbitral forum in favor of a judicial forum will seize upon that language in New Prime to try to place the dispute in the courts.  We do not know if that was what Justice Gorsuch intended, but we can therefore anticipate a string of US court cases addressing the “who decides” issue again from that perspective, ultimately returning to the US Supreme Court for further clarification.

There is also another important conceptual issue embedded in Justice Gorsuch’s New Prime opinion that may affect many other issues relating to the FAA.  Justice Gorsuch spent considerable effort in his opinion focusing on the original legislative intent in 1925 for the FAA.  For example, these selections from the opinion.

Why this very particular qualification?  By the time it adopted the Arbitration Act in 1925, Congress had already prescribed alternative employment dispute resolution regimes for many transportation workers.  And it seems Congress “did not wish to unsettle” those arrangements in favor of whatever arbitration procedures the parties’ private contracts might happen to contemplate.

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In taking up this question, we bear an important caution in mind. “[I]t’s a ‘fundamental canon of statutory construction’ that words generally should be ‘interpreted as taking their ordinary . . . meaning . . . at the time Congress enacted the statute.’” Wisconsin Central Ltd. v. United States, 585 U. S. ___, ___ (2018) (slip op., at 9) (quoting Perrin v. United States, 444 U. S. 37, 42 (1979)). See also Sandifer v. United States Steel Corp., 571 U. S. 220, 227 (2014).  After all, if judges could freely invest old statutory terms with new meanings, we would risk amending legislation outside the “single, finely wrought and exhaustively considered, procedure” the Constitution commands. INS v. Chadha, 462 U. S. 919, 951 (1983).  We would risk, too, upsetting reliance interests in the settled meaning of a statute. Cf. 2B N. Singer & J. Singer, Sutherland on Statutes and Statutory Construction §56A:3 (rev. 7th ed. 2012).  Of course, statutes may sometimes refer to an external source of law and fairly warn readers that they must abide that external source of law, later amendments and modifications included. Id., §51:8 (discussing the reference canon).  But nothing like that exists here.  Nor has anyone suggested any other appropriate reason that might allow us to depart from the original meaning of the statute at hand.

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To many lawyerly ears today, the term “contracts of employment” might call to mind only agreements between employers and employees (or what the common law sometimes called masters and servants).  Suggestively, at least one recently published law dictionary defines the word “employment” to mean “the relationship between master and servant.” Black’s Law Dictionary 641 (10th ed. 2014).  But this modern intuition isn’t easily squared with evidence of the term’s meaning at the time of the Act’s adoption in 1925.  At that time, a “contract of employment” usually meant nothing more than an agreement to perform work.

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What’s the evidence to support this conclusion?  It turns out that in 1925 the term “contract of employment” wasn’t defined in any of the (many) popular or legal dictionaries the parties cite to us.  And surely that’s a first hint the phrase wasn’t then a term of art bearing some specialized meaning.  It turns out, too, that the dictionaries of the era consistently afforded the word “employment” a broad construction, broader than may be often found in dictionaries today.  Back then, dictionaries tended to treat “employment” more or less as a synonym for “work.”  Nor did they distinguish between different kinds of work or workers: All work was treated as employment, whether or not the common law criteria for a master-servant relationship happened to be satisfied.

What the dictionaries suggest, legal authorities confirm.  This Court’s early 20th-century cases used the phrase “contract of employment” to describe work agreements involving independent contractors.  Many state court cases did the same.  So did a variety of federal statutes.  And state statutes too.  We see here no evidence that a “contract of employment” necessarily signaled a formal employer-employee or master-servant relationship.

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If courts felt free to pave over bumpy statutory texts in the name of more expeditiously advancing a policy goal, we would risk failing to “tak[e] . . . account of ” legislative compromises essential to a law’s passage and, in that way, thwart rather than honor “the effectuation of congressional intent.” Ibid.  By respecting the qualifications of §1 today, we “respect the limits up to which Congress was prepared” to go when adopting the Arbitration Act. United States v. Sisson, 399 U. S. 267, 298 (1970).

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When Congress enacted the Arbitration Act in 1925, the term “contracts of employment” referred to agreements to perform work.  No less than those who came before him, Mr. Oliveira is entitled to the benefit of that same understanding today.

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(footnotes omitted)

As US arbitration practitioners are aware, the US Federal courts have for many decades strayed from the exact text of the FAA in the course of developing US federal arbitration law.  Instead, the Federal courts have developed a sort of “common law” of arbitration, building on their notions of how to fill legislative gaps or to find modern interpretations to effectuate the FAA’s purposes.  The most obvious example lies in the continuing Circuit split over the meaning of arbitrator “evident partiality” as a ground for vacatur of arbitration awards by arbitrators alleged to have conflicts of interest.  So too, the judicial presumption in favor of arbitration itself.  If Justice Gorsuch’s “1925 legislative intent” approach is applied to such issues, US arbitration jurisprudence on arbitrator conflicts, presumptions of arbitration and many other issues may be in for a vigorous shaking up.

Justice Ginsburg was attentive to the implications of this interpretive approach, although I rather doubt her primary focus was on FAA jurisprudence.  In her short concurrence to the unanimous opinion (in which she also joined), Justice Ginsburg pointed out a more flexible view for interpreting legislative meaning.

Congress, however, may design legislation to govern changing times and circumstances. See, e.g., Kimble v. Marvel Entertainment, LLC, 576 U. S. ___, ___ (2015) (slip op., at 14) (“Congress . . . intended [the Sherman Antitrust Act’s] reference to ‘restraint of trade’ to have ‘changing content,’ and authorized courts to oversee the term’s ‘dynamic potential.’” (quoting Business Electronics Corp. v. Sharp Electronics Corp., 485 U. S. 717, 731‒732 (1988))); SEC v. Zandford, 535 U. S. 813, 819 (2002) (In enacting the Securities Exchange Act, “Congress sought to substitute a philosophy of full disclosure for the philosophy of caveat emptor . . . . Consequently, . . . the statute should be construed not technically and restrictively, but flexibly to effectuate its remedial purposes.” (internal quotation marks and paragraph break omitted)); H. J. Inc. v. Northwestern Bell Telephone Co., 492 U. S. 229, 243 (1989) (“The limits of the relationship and continuity concepts that combine to define a [Racketeer Influenced and Corrupt Organizations] pattern . . . cannot be fixed in advance with such clarity that it will always be apparent whether in a particular case a ‘pattern of racketeering activity’ exists. The development of these concepts must await future cases . . . .”). As these illustrations suggest, sometimes, “[w]ords in statutes can enlarge or contract their scope as other changes, in law or in the world, require their application to new instances or make old applications anachronistic.” West v. Gibson, 527 U. S. 212, 218 (1999).

These different approaches toward divining legislative meaning are part of the basic legal philosophy differences between the conservative and liberal wings of the Supreme Court.  Those differences will play out in many areas of US law but, in light of New Prime, one of them now may be the interpretation of the FAA.

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Mark Kantor is a CPR Distinguished Neutral. Until he retired from Milbank, Tweed, Hadley & McCloy, Mark was a partner in the Corporate and Project Finance Groups of the Firm. He currently serves as an arbitrator and mediator. He teaches as an Adjunct Professor at the Georgetown University Law Center (Recipient, Fahy Award for Outstanding Adjunct Professor). Additionally, Mr. Kantor is Editor-in-Chief of the online journal Transnational Dispute Management.

This material was first published on OGEMID, the Oil Gas Energy Mining Infrastructure and Investment Disputes discussion group sponsored by the on-line journal Transnational Dispute Management (TDM, at https://www.transnational-dispute-management.com/), and is republished with consent.