Thursday, January 23, 2014
OK, so I don't think the odds of SCOTUS taking the Delaware arbitration appeal are high -- there isn't an obvious circuit split of the type that generally attracts the court's attention. That said, it's possible that the court might take the case because they want to make more statements about the value of arbitration.
With that in mind, this little colloquy from EBIA v Arkison which was before the court earlier this month is interesting - if for no other reason that it allows us to do the most ridiculously vain thing ever: count potential votes on the court.
The issue for the court in EBIA was whether - with the consent of the parties - a Federal bankruptcy judge could enter a final judgment on a fraudulent conveyance claim rather than hear the claim and then make a recommendation for review by a Federal district court.
So, not directly on point, but close enough for this to play out (via Oyez):
Justice Elena Kagan: --Mr. Gannon, could you say a word about the relevance of arbitration here?
Because I've been trying to figure out, if there's an Article 3 problem irrespective of consent when Congress adopts some kind of scheme for alternative adjudication, why schemes of mediation and arbitration wouldn't similarly be constitutionally problematic.
Curtis E Gannon: I -- obviously, we don't think that -- that these schemes here in the bankruptcy judge context and the magistrate judge context, which are -- which are hedged around with lots of procedural protections and statutory protections, rise to that level.
But I do think that a principal difference, if the Court were looking to distinguish arbitration from these types of concerns, is that the arbitration is more purely private.
Although there's statutory authorization, the arbitrators are generally not Federal employees.
Bankruptcy judges, by contrast, are actually units of the district courts.
They are within Article 3.
Justice Elena Kagan: Yes, but that would suggest that arbitration is more constitutionally problematic because it -- it extends -- you know, it goes -- it's further away from the supervisory authority of the district court.
Curtis E Gannon: --I'm -- I'm loathe to say that it's further away because I think that there may be a separation of powers distinction between--
Chief Justice John G. Roberts: Arbitration is a matter of contract between two parties.
Nothing happens in an arbitration until you get a district court to enter a judgment enforcing the contract.
It seems to me totally different from the situation we're talking about here.
Curtis E Gannon: --Well, I do--
Justice Elena Kagan: A matter of contract versus a matter of consent?
Like I said, you understand the difference.
Chief Justice John G. Roberts: But you -- I'm posing a question to you, I guess.
Courts enforce contracts all the time.
They don't enter judgments beyond their Article 3 authority simply because the two parties before them agree that they should.
Curtis E Gannon: --That's true, Mr. Chief Justice.
OK, so one for. And maybe one against?