This post first appeared on the Securities Arbitration Alert blog. The blog’s editor-in-chief is George H. Friedman, Chairman of the Board of Directors for Arbitartion Resolution Services, Inc.
The Supreme Court heard oral argument this week in Bissonnette v. LePage Bakeries Park St. LLC, No. 23-51, one of two cases involving arbitration being heard this month.
As reported in SAA 2024-05 (Feb. 15), the Supreme Court on February 20 heard the oral argument in Bissonnette. The audio is here and the transcript can be found here.
Certiorari Petition
The July 2023 Petition states:
“The Federal Arbitration Act exempts the ‘contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.’ 9 U.S.C. § 1. The First and Seventh Circuits have held that this exemption applies to any member of a class of workers that is engaged in foreign or interstate commerce in the same way as seamen and railroad employees—that is, any worker ‘actively engaged’ in the interstate transportation of goods. The Second and Eleventh Circuits have added an additional requirement: The worker’s employer must also be in the ‘transportation industry.’ The question presented is: To be exempt from the Federal Arbitration Act, must a class of workers that is actively engaged in interstate transportation also be employed by a company in the transportation industry?”
Several amicus briefs were filed. Noteworthy briefs were filed by Amazon.com, the California Employment Law Council, and the Chamber of Commerce of the United States.
The Oral Argument
With a full complement of Justices, the oral argument in this case was audio livestreamed via the SCOTUS Website. The discussion focused squarely on Congress’ intent on the scope of the FAA section 1 exemption, with several references to the situation when the FAA was enacted in 1925. (ed: who knew that a coal strike caused a famine in Chicago in 1903?) Bissonnette’s counsel Jennifer Dale Bennett urged that the Court reject an additional requirement that a company be part of the transportation industry:
“Less than two years ago, in Southwest versus Saxon, this Court carefully examined the text and history of the Federal Arbitration Act’s worker exemption, and it held that the exemption applies to ‘any class of workers directly involved in transporting goods across state or international borders.’”
Traci L. Lovitt, Counsel for the Respondent, led with:
“[i]n Circuit City, this Court said that the Section 1 exemption should be read narrowly and should be interpreted with reference to the ejusdem canon, context, and history, all three of which demonstrate that the exemption is limited to transportation industry workers. After all, in 1925 … seamen and railroad employees were defined by the industry in which they work. And that commonality should carry through to the residual clause. Context and history tell you why this line makes sense.”
The Court’s pro-arbitration wing was relatively quiet, with the bulk of the questions coming from Justices Kagan, Jackson, and Sotomayor (although Justice Thomas was atypically active). Several Justices on both sides struggled with additional complications posed by defining the “transportation industry.” For a comprehensive “chapter-and-verse” analysis, we recommend that readers peruse these February 21 posts: Justices Debate Arbitration Exemption for Transportation Workers (SCOTUSBlog); Tuesday’s Supreme Court Federal Arbitration Act Exemption Arguments (CPR Speaks); and US Supreme Court Seems Unlikely to Limit FAA Exemption to Transportation Companies (Reuters).
(ed: *We’re with Reuters. **We had to look up “ejusdem,” too. It means: “of the same kind or class.” ***The Court also granted certiorari in another arbitration-related case, Coinbase v. Suski, No. 23-3, which will be heard Wednesday February 28.)
