Professor Szalai comments on a somewhat complex case involving several antitrust lawsuits in which the court ultimately had to decide whether a dispute fell under the scope of a dispute resolution clause.  Boardman v. Pacific Seafood Group (9th Cir. May 3, 2016)

Professor Szalai notes that perhaps the most interesting aspect of the case involves the opinion by the Judge Gilman, concurring and dissenting in part.  Writes Professor Szalai:

“What I find interesting is the dissenting judge’s discussion of arbitration under the FAA.  The judge correctly notes that the FAA does not define arbitration, and the judge believed that arbitration simply requires an agreement to submit a dispute to a third party.   Under this definition, the dissenting judge found that the agreement to submit the dispute to the federal judge/magistrate is an arbitration agreement, and the dissenting judge proceeded with an analysis under the FAA.

I disagree with the dissenting judge’s analysis.  The FAA was intended to cover private arbitrators, not federal judges, sitting as decision-makers.  Parties cannot create federal subject matter jurisdiction through a contract.  The underlying dispute in this case happened to involve an antitrust claim, which would automatically trigger federal question jurisdiction, but suppose the underlying dispute involved a $500 contract claim.  A federal judge would be powerless to hear such a dispute involving state law.  Also, a judge serving as an arbitrator raises the same concerns addressed by the Third Circuit’s decision in Delaware Coalition v. Strine, involving Delaware’s failed attempt to create an arbitration system with sitting judges.”