Directv, Inc. v. Imburgia (14-462)
argument 14-462Directv, Inc. v. Imburgia
Supreme Court of the United States
57 min
6 speakers
8 chapters
transcribed 6 days ago
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Transcript
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Transcript generated automatically by AI and may contain errors.
What is the Federal Arbitration Act and why does the Court say it overrides state law?
We'll hear argument next in Case 14462, DirecTV v. Embergia. Mr. Landau.
Thank you, Mr. Chief Justice. It may please the Court. The Court below violated the Federal Arbitration Act by refusing to enforce the party's arbitration agreement on grounds the Ninth Circuit characterized as nonsensical. The agreement provides for individual arbitration and expressly precludes class arbitration. And just to underscore that point, It specifies that if state law would force the parties into class arbitration, then the entire arbitration agreement would be unenforceable. The court below interpreted the reference to state law to mean inoperative state law preempted by the FAA. But neither respondents nor the court below identified a single case in the history of California or American law adopting that interpretation for any contract.
And it would be
particularly — — about the problem that this is California law and a California court said that's what the contract means under California law. In other words, I can't find a case that we're supposed to say we have the power to say that they're wrong, even if they were to say the words do not turn on the light mean turn on all the lights. Your Honor. And they may have done that in this case. Nonetheless, what do we do about it?
What you do about it is look to the Federal Arbitration Act. There is not a general Federal Contracts Act, but there is a Federal Arbitration Act that Congress passed specifically because a particular kind of contract was not getting enforced by the courts, and Congress was concerned about that. So a Congress — The principle of contract
interpretation — I beg to differ with Justice Scalia. The I thought that what the Court asked itself is what did the parties intend when they used the words state law?
MR. Correct.
JUSTICE BREYER- Is that correct? MR. That's what the Court purported to answer. JUSTICE BREYER- That's the interesting part. You used the word purported. What California law did it apply that disfavors arbitration? What contract principle did they use?
MR. A lot of cases, you have courts that are bringing in some principle external to the contract. And those are kind of easy cases. This court has now made clear that courts can't rely on principles external to the contract that are hostile to arbitration. But courts also under the Federal Arbitration Act have a responsibility to enforce the contract according to its terms with a reference to the federal substantive law. For more than 50 years, the Court has made clear that the Federal Arbitration Act creates federal substantive law. What is the content of that federal substantive
law? What was the point of putting state law in at all? If federal law applies, then it makes no sense to have any reference to state law. If state law means state plus federal law and federal law trumps State law, the reference to state law is inexplicable.
No, Your Honor, it's to the contrary, Your Honor, with respect. The reference to state law was a recognition of the concern, the problem that the parties were confronting, which is state laws were being enacted, as in California, in their Discover Bank rule, that would force the parties into class arbitration against their will. And we had not yet held, at the time this contract was made, that those laws are invalid? MR. Precisely, Your Honor. And so at that point, the problem they were focusing on was state law. They could have also said, you know, if this is unenforceable or use the passive voice. But here they chose to take the bull by the horns and be honest about what was actually the problem, and they said state law.
But the use of the term state law does not indicate a recognition or a desire to have inoperative state law that's been preempted by the Federal Arbitration Act. As the Ninth Circuit said,
that was it. I'm sure that I understood your answer to Justice Breyer's question. His question was, this court purported and did give an interpretation of the intent that two parties had when they entered into a contract, and that is a matter of state law.
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Chapters
8 chapters
1
What is the Federal Arbitration Act and why does the Court say it overrides state law?
0:01–8:08
2
How does the contract’s “state‑law” clause affect the enforceability of the arbitration agreement?
8:08–15:33
3
What test does Justice Breyer propose for deciding when a state‑court interpretation is too hostile to arbitration?
15:33–22:06
4
Why do the parties argue that the contract was intended to avoid class‑action waivers in California?
22:06–29:44
5
How does the Ninth Circuit’s “nonsensical” finding influence the Supreme Court’s analysis?
29:44–37:02
6
What is the significance of the Volt decision for interpreting arbitration agreements under the FAA?
37:02–44:09
7
Why does the Court consider whether the arbitration provision is “self‑defeating” or a “blow‑up” clause?
44:09–51:37
8
What are the potential consequences of the Court’s ruling for future arbitration‑contract disputes?
51:37–57:46