Arbitration and Americanization: the paternalism of progressive procedural reform.

AuthorKessler, Amalia D.
PositionIntroduction through II. Courts of 'Small Claims and Conciliation' A. The European Model of the Conciliation Court, p. 2940-2966 - Arbitration, Transparency, and Privatization: Contextualizing and Analyzing Recent Developments in U.S. Arbitration Regimes

FEATURE CONTENTS INTRODUCTION I. PROGRESSIVE-ERA LAWYERS' PURSUIT OF PROCEDURAL REFORM A. The Enactment of the FAA B. New Challenges to Lawyers' Longstanding Leadership Role C. The Appeal of Arbitration and Conciliation (and Progressive Lawyers' Tendency To Equate the Two) II. COURTS OF "SMALL CLAIMS AND CONCILIATION" AND THE PROGRESSIVE CAMPAIGN TO AMERICANIZE THE URBAN, IMMIGRANT POOR A. The European Model of the Conciliation Court and the (Largely) Failed Nineteenth-Century American Efforts To Transplant It B. The Progressive Prototype: Manuel Levine's Cleveland-Based "Conciliation Branch" III. THE "AMERICAN CONCEPT OF ARBITRATION" AND THE NEW IDEAL OF PRIVATE PROCEDURE A. Kellor's Early Life and Career: Social Gospel, Settlement Houses, and Americanization B. The Great Depression: Kellor's Initial, Corporatist Vision of Arbitration Within the AAA C. The Cold War: Kellor's Later, Free Market Account of Arbitration Within the AAA CONCLUSION INTRODUCTION

Even as Alternative Dispute Resolution (ADR) has become increasingly common over the last several decades, the debate over its perceived virtues and vices has intensified. For just about every claim made on behalf of ADR, critics have arisen to assert the contrary. While much of the debate has focused on the extent to which ADR achieves the cost- and time-savings promised by its advocates, (1) the discussion has also addressed fundamental values extending well beyond efficiency. Advocates of ADR insist that it is more effective than adversarial procedure at promoting values of party participation--and thus autonomy--and at ensuring broad, meaningful access to justice. (2) In contrast, detractors claim that ADR's promises of party autonomy and increased access are often hollow in practice. In their view, ADR advances the interests of a select elite, while denying countless ordinary individuals the remedies afforded by the proverbial day in court. (3)

While the debate over ADR has ranged across a number of specific dispute resolution practices, it is arbitration--and, in particular, binding, pre-dispute arbitration--that has lately assumed center stage. In recent years, the United States Supreme Court issued a series of opinions reinterpreting the Federal Arbitration Act of 1925 (FAA), the net effect of which has been significantly to expand the enforceability of binding, pre-dispute arbitration clauses. (4) As a result, such arbitration is now used widely, including in consumer and employment disputes--a practice that makes the United States an outlier among democratic, economically developed nations. (5) Advocates of these developments suggest that they increase access to justice (by lowering procedural costs) and reflect a commitment to party autonomy (as embodied in contract). (6) Opponents argue, by contrast, that consumers and employees forced into binding, mandatory arbitration are denied the procedural tools required for meaningful vindication of their rights. Moreover, they assert, such arbitration is the product of contracts of adhesion and therefore reflects (and reinforces) these disputants' relative lack of power, rather than their autonomy. (7)

In this context, a number of legal scholars--including especially those critical of the Court's recent arbitration jurisprudence--have turned to the past in an effort to mine history for potential ammunition. Towards this end, many have emphasized that the immediate roots of the FAA lay in a massive lobbying campaign to promote arbitration initiated by the New York Chamber of Commerce. This campaign led first to the enactment of a New York arbitration statute in 1920 and thereafter to the passage of the FAA, conceived as a federal variant of its state predecessor. (8) Pointing to these origins, as well as to the fact that businessmen in this period were increasingly organizing into trade associations (each with its own rules for resolving intra-communal disputes), these scholars have suggested that the core purpose of the statute was to promote merchant self-regulation. For example, according to Katherine Stone, the FAA can be understood as following from a broader commitment to associationalism --a kind of proto-corporatism, backed by Herbert Hoover in his capacity as Secretary of Commerce, which would soon find full expression in many of the policies of the New Deal. (9) From this perspective, the effort of the U.S. Supreme Court to expand the reach of the FAA well beyond commercial arbitration marks a clear departure from the drafters' goal of promoting a form of communal, intra-merchant dispute resolution.

More recently, Hiro Aragaki has authored an important article that departs from the usual focus on the New York Chamber of Commerce as the driving force behind the FAA's enactment. (10) In his telling, the FAA emerged from the efforts of diverse interest groups, including not only businessmen eager to facilitate a form of private ordering, but also Progressive legal elites, like Roscoe Pound and William Howard Taft, who were committed to promoting procedural reform. (11) More particularly, the FAA's effort to minimize procedural complexity--to facilitate "access to an alternative forum" characterized by "simplicity, flexibility, and intolerance of technicalities"--indicates that it "embodied the basic procedural reform values shared by Pound and his colleagues." (12) Along similar lines, Imre Szalai has argued for the importance of "looking at the arbitration reform movement through the lens of the progressive era." (13) Doing so, he claims, reveals that the FAA was "a significant, early triumph at the national level in a broader movement for procedural reform." (14) From this perspective, the fact that the Supreme Court's expansive arbitration jurisprudence gives short shrift to core procedural values suggests that it runs counter to the intended purposes of the FAA.

These scholars' recognition that the FAA's enactment was part and parcel of a broader program of Progressive procedural reform is a vital contribution to the scholarly literature. But the background portrait of such reform on which both Aragaki and Szalai draw--one common to the literature on civil procedure --glosses over much of the complexity of Progressive procedural commitments. Such scholarship treats the Federal Rules of Civil Procedure--the centerpiece of modern-day civil procedure--as the crowning, though delayed, achievement of Progressive reform efforts, (15) enshrining (in the famous language of Rule l) the Progressive commitment to "the just, speedy, and inexpensive determination of every action." (16) The end result is a largely celebratory teleology, leading from a Progressive commitment to access to justice to the eventual enactment of the Federal Rules.

But the Progressive campaign to remake procedure was not limited to the federal courts. If we look at the local level, where, as Michael Willrich notes, "historians of twentieth-century American law and the state too rarely travel," it is the effort to create new, centralized systems of municipal courts that assumes center stage as the core focus of Progressive procedural reform. (17) Indeed, unlike the campaign to enact the Federal Rules, which bore no fruit until 1938, the Progressive effort to develop centralized municipal courts achieved immediate results, leading, in Willrich's words, to "a sweeping reorganization of judicial institutions in the early twentieth century." (18) Moreover, one of the leading such courts--that of Chicago--enabled (in the criminal context) "the rise of eugenics and other coercive forms of social governance." (19) This should give pause to those who would depict Progressive procedural reform as exclusively other-serving and benign. As Willrich concludes, Progressivism cannot be easily framed as "a project of either 'social justice' or 'social control,'" but was instead at once both one and the other. (20)

If we are to understand how the Progressive lawyers responsible for the enactment of the FAA conceived of arbitration (and its relationship to broader reform goals), we must substantially broaden our conception of what "procedural reform" entailed, looking well beyond the Federal Rules on which civil procedure scholars tend to fixate. Nor is it sufficient to focus on the statutory language of the FAA and its immediate legislative history. As has long been recognized, the statutory text is too terse and "indeterminate," and the congressional record "too sparse," to provide real interpretive guidance. (21) To make meaningful sense of the FAA and of the Progressive conception of arbitration more generally, it is necessary to examine Progressive lawyers' efforts to develop concrete institutional structures responsible for deploying the procedure--an area of inquiry neglected by scholars to date.

There were two primary institutional contexts in which Progressives sought to use arbitration: the new municipal courts and the American Arbitration Association (AAA), established in 1926. As deployed within the municipal courts, arbitration was imposed at the discretion of the judge, rather than, as contemplated in the FAA, through prior agreement of the disputants themselves. In this sense, it is the AAA--created specifically for the purpose of facilitating the new system of arbitration envisioned by the FAA--that is the most direct institutional reflection of the statute's intended implementation. Nonetheless, some exploration of the Progressives' approach to arbitration within the municipal courts is critical to any effort to understand how Progressive lawyers viewed arbitration and its connection to their broader procedural reform commitments. This is in part because the municipal courts were so central to the Progressive project of procedural reform more generally. In addition, it seems likely that experience with arbitration within the municipal courts, though limited, played a role in shaping attitudes towards arbitration in...

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