Court Adds a Third Arbitration Case in Friday’s Cert Granted Order List

By Russ Bleemer

In addition to the two cert grants this afternoon on the international arbitration discovery issue in 28 U.S.C. § 1782, the U.S. Supreme Court accepted a third arbitration case for oral arguments.

Southwest Airlines Co. v. Saxon, No. 21-309, presents a Federal Arbitration Act Sec. 1 question:

“Whether workers who load or unload goods from vehicles that travel in interstate commerce, but do not physically transport such goods themselves, are interstate ‘transportation workers’ exempt from the Federal Arbitration Act.”

FAA Sec. 1 defines the statute’s application to maritime transactions and commerce. The section ends noting that “nothing [in the statute] shall apply to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.”

The Court has interpreted the law to mean that the exception from FAA application is only for transportation workers “engaged in” interstate commerce. Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (2001) (available at https://bit.ly/2HhwYLu).

The original plaintiff in the case, now the respondent, is a “Ramp Agent Supervisor for Southwest who occasionally loads and unloads passenger baggage from airplanes,” according to Southwest’s cert petition, which is available at the docket link above. The original plaintiff works at Chicago’s Midway Airport.

The Seventh U.S. Circuit Court of Appeals in the case (available at https://bit.ly/3rRA8Ln) held that the plaintiff was a transportation worker, and therefore exempt from the FAA.  

Noting a circuit split, Southwest appealed, and this afternoon, the nation’s top Court agreed to decide whether the local worker was FAA-exempt, which is likely to include an examination of the plaintiff’s work in relation to interstate commerce.

The case has not yet been scheduled; schedules for winter and spring 2022 argument dates in the current 2021-2022 term have yet to be released, and the case could be added before the Court’s year ends in June.

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Southwest Airlines Co. v. Saxon, and the two new international arbitration cases on 28 U.S.C. § 1782, ZF Automotive US Inc. v. Luxshare Ltd.No. 21-401, and AlixPartners LLP v. The Fund for Protection of Investor Rights in Foreign States, No. 21-518, contribute to an already busy 2021-2022 Supreme Court arbitration docket.

The Court had scheduled an arbitration case to be argued the first week of the term, but it dismissed the matter shortly before the arguments at the parties’ request after an award was issues and the case concluded.  For details, see Bryanna Rainwater, “Case Dismissed: Supreme Court Lightens Its Arbitration Load as Servotronics Is Removed from 2021-22 Docket,” CPR Speaks (Sept. 8) (available here).

But two more arbitration cases quickly followed last month. The Court heard Nov. 2 arguments in Badgerow v. WaltersNo. 20-1143, an employment discrimination case that dives into the jurisdiction of federal courts under Federal Arbitration Act sections on enforcing and overturning arbitration awards.  See Russ Bleemer, “Supreme Court Hears Badgerow, and Leans to Allowing Federal Courts to Broadly Decide on Arbitration Awards and Challenges,” CPR Speaks (Nov 2) (available here).

And on Nov. 15, the Court accepted an employment arbitration case, Morgan v. Sundance Inc.No. 21-328, on the extent to which a federal court may defer to an arbitration agreement. The case will return to the scope of a decade-old case,  AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011), which permits mandatory arbitration backed with class waivers in consumer contracts. For details, see Mark Kantor, “U.S. Supreme Court Adds an Arbitration Issue: Is Proof of Prejudice Needed to Defeat a Motion to Compel?” CPR Speaks (Nov. 15) (available here).

Like today’s three-case addition to the Court docket, Morgan awaits an argument date.

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The author edits Alternatives to the High Cost of Litigation for CPR.

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