Arbitration’s Counter-Narrative: The Religious Arbitration Paradigm
abstract. Arbitration theory and doctrine are dominated by a narrative conceptualizing arbitration via reflection on the qualities of litigation. Litigation, the thought goes, is more procedurally rigorous, but takes longer and costs more; arbitration, on the other hand, is faster and cheaper, but provides fewer procedural safeguards. Notwithstanding these differences, the standard narrative sees both arbitration and litigation as ultimately serving the same purpose: resolving disputes. This narrative has been pervasive, not only becoming entrenched in recent Supreme Court decisions, but also garnering support from arbitration critics and supporters alike.
However, the exclusive focus on this standard narrative has left unexplored a competing arbitral narrative—a counter-narrative of sorts—that examines the contexts in which arbitration differs from adjudication because it aims to promote an alternative set of values beyond simply resolving disputes. The failure to consider this counter-narrative has prevented legal doctrine from accounting for contexts in which arbitration seeks to amplify the autonomy of parties to pursue shared values by resolving their disputes in the arbitral forum.
This arbitral counter-narrative filters into numerous contexts, but it finds its paradigmatic application in the context of religious arbitration. When parties agree to religious forms of arbitration, they select religious authorities to resolve disputes in accordance with religious law. These forms of arbitration are embraced not solely because they help to resolve disputes, but also because they enable parties to resolve disputes in accordance with shared religious principles and values. If successfully incorporated into current legal doctrine, this arbitral counter-narrative could unlock the transformative potential of arbitration, enabling parties to employ arbitration not simply as an expedient venue for resolving disputes, but also as an alternative forum for breathing life into mutually shared values.
author. Associate Professor of Law, Pepperdine University School of Law; Associate Director, Diane and Guilford Glazer Institute for Jewish Studies. I would like to thank participants in the Quinnipiac-Yale Dispute Resolution Workshop and the University of Pittsburgh Faculty Workshop as well as Hiro Aragaki, Donald Earl Childress, Christopher Drahozal, Christine Goodman, David Han, Derek Muller, Nathan Oman, and Gary Spitko for helpful and insightful comments on earlier drafts of this project.
Arbitration theory and doctrine are dominated by an overarching narrative that conceptualizes arbitration as functionally equivalent to litigation.1 This narrative views arbitration and litigation as parallel institutions, both providing parties with a method for resolving their dispute. On one side of this equation is litigation, procedurally rigorous but expensive. On the other side is arbitration, faster and cheaper but with fewer procedural safeguards. Both arbitration and litigation, however, ultimately serve the same purpose: dispute resolution.
This standard narrative has been recapitulated repeatedly in a string of recent Supreme Court decisions touting arbitration’s streamlined process over the perceived rigors of litigation.2 And both critics and supporters of arbitration have largely adopted this narrative. Critics bemoan arbitration’s failure to provide the procedural safeguards typical of litigation3 and suggest that the parties’ choice to forego litigation often lacks true consent.4 Supporters of arbitration counter that concerns over consent—or lack thereof—in selecting arbitration over litigation are exaggerated and that parties benefit from arbitration’s relative procedural informality, which enables arbitrators to mete out justice faster and more cheaply than courts.5 Notwithstanding these differences, there is a common thread to these arguments: arbitration and litigation, first and foremost, are both viewed as methods of dispute resolution.
One of the few challenges to this standard narrative suggests that it fails to provide an accurate depiction of litigation. Critics, most famously Owen Fiss and Judith Resnik, have argued that the purpose of litigation is not simply to resolve disputes, but also to promote public values by enabling judges to articulate, interpret, and enforce central legal rules and principles.6 On this view, however, arbitration is still viewed as merely achieving the more modest objective of resolving disputes between the parties. There is, of course, good reason for this. Parties typically consent to arbitration because it provides an efficient and cheaper method for resolving disputes.7
But the law has largely failed to account for a competing arbitral narrative, in which arbitration differs from adjudication because arbitration aims to promote an alternative set of values beyond simply resolving disputes.8 Indeed, in a wide range of contexts, arbitration serves a “jurisgenerative” function, amplifying the parties’ autonomous ability to pursue shared values in the dispute resolution context.9 Thus, various groups—such as trade associations, ethnic communities, and families10—adopt specific procedures to select arbitrators, choose the governing law, and incorporate community norms in order to ensure that their dispute resolution forum reflects the parties’ shared values. While techniques and methods vary, these forms of arbitration share a common feature: they all embrace arbitration at least in part because of the values the selected form of arbitration promotes.
Taken together, these forms of arbitration coalesce into an arbitral counter-narrative. This counter-narrative implicitly critiques debates over arbitration’s adequacy as a method of dispute resolution, and it encourages us to account for arbitration’s broader social benefits. Focusing only on the standard arbitration narrative, which uses litigation as the barometer, misses the transformative purposes around which at least some forms of arbitration are organized. And while most arbitrations fall squarely within the standard arbitral narrative, the failure to account for arbitration’s counter-narrative has already led to doctrinal problems—problems that will likely multiply if the exclusive focus on the standard narrative continues. By flattening arbitration doctrine and discounting the contexts in which arbitration is pursued for purposes beyond garden-variety dispute resolution, courts have too frequently, and too unreflectively, adopted the bare equation of litigation and arbitration.11
Moreover, even courts that have resisted the bare equation of the purposes of arbitration and litigation have not tried to articulate the ways in which arbitration does differ from litigation. Thus, they have not considered whether there are differences between various forms of arbitration.12 One of the chief lessons of arbitration’s counter-narrative is that arbitration is not monolithic; parties benefit from arbitration when the forum is successful at promoting the unique values shared by the parties. To the extent that courts fail to account for the diversity of arbitration, they also misconstrue the nature of the differences between arbitration and litigation.
All told, then, courts have adopted an either/or strategy: some cases have mistakenly equated arbitration and litigation, while other cases have rejected the equation but without considering the circumstances under which the equation might actually be accurate. In embracing this uniform conceptualization of arbitration, courts have not adequately accounted for either the differences between litigation and arbitration or the internal differences between various forms of arbitration. In short, courts have failed to adequately account for the lessons to be learned from arbitration’s counter-narrative.
This failure to consciously consider arbitration in all of its dimensions has led to the development of doctrine that fails to account for the fact that some arbitral fora are geared toward achieving fundamental, transformative objectives that differ from those to which litigation aspires. Courts have become too willing to assume the standard arbitral narrative—that arbitration is simply a method for resolving disputes—and to thereby import rules from the litigation context into the arbitration context. In so doing, courts undermine the ability of various forms of arbitration to promote an alternative set of fundamental values successfully.
In order to correct this narrow focus on the standard arbitral narrative, we must look to the contexts in which arbitration aims to achieve objectives beyond mere dispute resolution—a dynamic perhaps best exemplified in religious arbitration. When parties agree to religious forms of arbitration, they select religious authorities to resolve disputes in accordance with religious law. Parties embrace this form of arbitration not solely because it is a useful mechanism for dispute resolution, but because these arbitrations are meant to enable parties to resolve a dispute in accordance with shared religious principles and values. In turn, these principles and values create the framework under which procedural and substantive rules are developed and applied.13
These arbitrations are more than expedient attempts to resolve a particular controversy; they are embedded in a much larger communal infrastructure and incorporate shared values into the selected method of dispute resolution.14 Thus, Owen Fiss’s famous argument that a judge has a unique role to play because “he is a public officer; paid for by public funds; chosen not by the parties but by the public or its representatives; and empowered by the political agencies to enforce and create society-wide norms,”15 has a parallel in religious arbitration: these arbitrators have a unique role to play because they are religious authorities applying religious law and are thereby instructed to elaborate on fundamental religious values shared by the parties.
Identifying the counter-narrative exemplified by religious arbitration provides important lessons for how courts should approach questions of arbitration doctrine more generally. While parties select arbitration largely because it provides a more expedient form of dispute resolution, courts must still recognize that arbitration is not a one-size-fits-all category; this is a conclusion highlighted by, but not exclusive to, religious arbitration. Parties enter arbitral fora hoping to achieve a wide and diverse range of objectives. To properly adjudicate cases, and to encourage new forms of arbitration that similarly promote alternative values, courts must develop doctrine that better reflects arbitration’s varied nature.
Accordingly, courts should not continue unreflectively extending rules applicable in litigation to arbitration on the assumption that arbitration is simply, like litigation, a form of judicial proceeding. Rather, courts need to evaluate whether each particular arbitral forum is designed to substitute for litigation or whether it is designed to promote other fundamental values.
Moreover, failing to distinguish between the fundamentally distinct objectives of different forms of arbitration can lead to inadequate protection for parties to the arbitration. Some arbitration agreements—geared towards achieving shared values—are embedded within a larger communal and religious network; in such circumstances, common law contract defenses must account for communal dynamics that can threaten the full exercise of unfettered consent when entering arbitration agreements—otherwise they will leave vulnerable parties without the necessary legal tools to enforce their rights.
In the end, the core lesson of arbitration’s counter-narrative is that arbitration can augment a range of values. Recognizing this core lesson is necessary if the law is to secure the best arbitration has to offer while simultaneously protecting those vulnerable to its excesses. The argument that follows will hopefully serve as a corrective, shifting our attention towards arbitration’s counter-narrative. It will proceed in three parts. Part I will provide additional background on arbitration’s standard narrative. Part II will explore this counter-narrative, using religious arbitration to demonstrate how arbitration can sometimes be organized around an alternative set of objectives. Part III will then consider how judicial focus on the standard narrative has led to doctrinal developments ill-suited to the diversity of values that arbitration promotes, limiting the ability of arbitration to leverage its jurisgenerative potential.
The standard arbitration narrative, embraced by judges and scholars alike, sees modern arbitration law as trying to answer the following question: when it comes to resolving disputes, can arbitration serve as a viable alternative to litigation?16
Prior to the enactment of the Federal Arbitration Act (FAA), courts believed the answer to this question was no, and so they refused to enforce executory arbitration agreements.17 Even subsequent to the passage of the FAA, the Supreme Court’s answer to the question was only a tepid yes. The Court still believed arbitrators, in contrast to judges,18 were ill-equipped to resolve complex disputes—most notably, those implicating federal statutory claims—and therefore worried that arbitrators would issue final awards that failed to apply the law accurately and could not be corrected by subsequent judicial review.19
But over the past three decades, the Supreme Court’s answer to this fundamental question has morphed into an unequivocal and emphatic yes. Indeed, the Supreme Court has now wholeheartedly endorsed arbitration, consistently shielding arbitration agreements and awards from innumerable legal challenges. On this new view, arbitrators are no longer seen as less capable of applying complex legal rules than their counterparts in the judiciary.20 Instead, parties’ decision to opt out of the judicial process and select arbitration amounts to a voluntary choice to “forgo the procedural rigor and appellate review of the courts in order to realize the benefits of private dispute resolution: lower costs, greater efficiency and speed, and the ability to choose expert adjudicators to resolve specialized disputes.”21 Arbitration serves as a worthy alternative to litigation, on this view, because it provides “efficient” and “streamlined” procedures22 and thereby reaches far more “expeditious results.”23 Accordingly, “the recognition that arbitration procedures are more streamlined than federal litigation is not a basis for finding the forum somehow inadequate; the relative informality of arbitration is one of the chief values in arbitration.”24
This new—and far more confident—vision of arbitration has informed the Court’s overhaul of its arbitration jurisprudence, leading it to expand the enforceability of arbitration agreements and awards. In contrast with the law under the Court’s early decisions,25 therefore, parties now may submit disputes implicating federal statutory rights to arbitration, even when the underlying statute includes a provision explicitly prohibiting waiver of those rights.26 Parties can also submit the very enforceability of an arbitration agreement to arbitration, circumventing judicial review of the agreement even when claims that the agreement is unconscionable persist.27 In fact, the Supreme Court has enforced arbitration agreements that include class arbitration waivers, preempting state court decisions that had invoked the presence of such a waiver to deem the arbitration agreement unconscionable.28 Moreover, the Court has refused to invalidate arbitration agreements with class action waivers even when those waivers make marshaling evidence to support federal statutory claims economically unfeasible.29 And in addition to bolstering the enforceability of arbitration agreements, the Court has further narrowed the grounds for vacating arbitration awards, holding that the FAA’s statutory grounds provide the exclusive grounds for reversing awards even when parties agree by contract to enlarge that list.30
This new vision of arbitration has also led the Court to reconsider its longstanding distinction between commercial arbitration and labor arbitration.31 In a number of earlier decisions, the Court had emphasized that because collective bargaining agreements inherently entail a “majoritarian process,” they cannot require employees to arbitrate claims predicated on an individual’s statutory rights.32 But this distinction between labor arbitration and commercial arbitration has been largely eliminated as the Court has increasingly conceptualized arbitration as a homogenous dispute resolution mechanism. Thus, in the context of the Age Discrimination in Employment Act, the Court has explained that “[n]othing in the law suggests a distinction between the status of arbitration agreements signed by an individual employee and those agreed to by a union representative.”33 And the Court has further emphasized that concerns over the ability of arbitration—even arbitration conducted pursuant to a collective bargaining agreement—to adequately protect the statutory rights of claimants emanates from an outdated distrust of arbitration that was discarded long ago.34
Not surprisingly, the Court’s growing confidence in arbitration’s ability to serve as an alternative to litigation has triggered vociferous backlash from scholars. At the center of this criticism is a fundamental worry that arbitration agreements often fail to represent a considered decision of both parties to forgo litigation.35 On this view, some parties find themselves subject to the procedural uncertainties of arbitration without truly waiving their right to pursue litigation. Indeed, those skeptical of whether parties truly consent to arbitration note that an overwhelming majority of arbitrations are conducted pursuant to pre-dispute arbitration provisions.36 Thus, for example, employees and consumers who sign employment or purchase agreements will often consent to waiving their statutory rights where the prospect of a dispute is sufficiently far off that their concerns over securing the job or purchasing the particular product are significantly more pressing.37
The problems of consent are particularly worrisome, according to critics, because arbitration provisions are generally deployed by institutional actors. These institutional actors, the claim goes, are able to leverage their superior bargaining position to insulate themselves from liability by shielding their conduct from meaningful judicial scrutiny and review.38 Moreover, arbitration provisions are sometimes used in tandem with class-arbitration waivers, enabling corporations to kill off class-action lawsuits and thereby ensure that small-money plaintiffs lack the incentives to bring suit for various forms of widespread—but low-cost—malfeasance.39
Furthermore, some critics contend that arbitration proceedings themselves are structurally skewed to favor the corporate repeat player who not only holds informational advantages over the one-shot plaintiff,40 but also implicitly holds out the carrot of more business for the arbitrator if the current dispute is resolved in accordance with the corporate defendant’s expectations.41 These asymmetries are particularly troubling, critics argue, given that the Supreme Court has erased nearly all limits on which disputes can be arbitrated.42 At the same time, arbitration proceedings lack the procedural safeguards of judicial proceedings, further undermining the likelihood of arbitral justice, especially for those unfamiliar with the ins and outs of arbitration.43 In this way, the decision to embrace the “procedural informality” of arbitration is problematic not only because of the uneven nature of consent, but also because the claimed advantages of arbitration—speed and efficiency—do not actually inure to the benefit of all parties.
To be sure, plenty of arbitration’s defenders emphatically reject these characterizations, arguing that arbitration does indeed serve as a viable alternative to litigation.44 These supporters view arbitration as largely volitional;45 they provide strong reasons to wonder whether concerns that arbitration is skewed in favor of the repeat player are misguided;46 they note that the plaintiff’s bar has helped counteract the informational imbalance that might otherwise be experienced by one-shot parties to arbitration;47 and they also highlight the way in which arbitration service providers have created procedural rules to provide for predictability in everything from arbitrator selection to discovery.48 In sum, arbitration advocates claim that the problems in arbitration are much less dire than they are made to seem and that, in fact, arbitration is appropriately favored because it provides a cheaper, faster, and thus potentially superior alternative to adjudication in court.49
But notwithstanding the divide between arbitration’s advocates and critics, both groups assess arbitration from a similar vantage point: they evaluate arbitration by determining whether it allows for the fair and equitable resolution of disputes. In this way, advocates and critics focus on the dispute resolution function of arbitration, comparing it—either implicitly or explicitly—to the judicial process. Critics see arbitration as a second-best alternative to litigation, arguing that is plagued by two fundamental flaws: it is often conducted without the true consent of the parties and it fails to live up to the standards of the judicial process. Advocates argue that arbitration provides a fair and equitable alternative to litigation and that, to the extent arbitration provides more limited protections than the judicial process, the speed and efficiency of the arbitration make the trade-off well worth it. But for both, arbitration and judicial proceedings fundamentally serve the same primary function: resolving disputes.50
This shared conceptual framework has not gone unchallenged. Indeed, a number of scholars have contended that the basic assumption that courts are simply intended to resolve disputes misses how courts are also meant to serve as institutions that promote core public values. Thus, these scholars argue, a wholesale movement away from courts and towards arbitration would erode core public values that are advanced by judicial resolution of disputes. On this view—most directly associated with the work of Owen Fiss51 and Judith Resnik52—the encroachment of alternative dispute resolution, including settlement and arbitration proceedings, deprives the public of vital first-order values unrelated to the dispute-resolution objectives of the parties. Thus Fiss has argued that the job of judges “is not to maximize the ends of private parties, nor simply to secure the peace, but to explicate and give force to the values embodied in authoritative texts such as the Constitution and statutes: to interpret those values and to bring reality into accord with them.”53 Similarly, Resnik has lamented the decline of adjudication, which aspired to ensure fairness and impartiality, with disinterested judges providing “reasoned explanations of their decisions . . . without concern for the interest of particular constituencies.”54
On this view, the focus of adjudication is on the public and its relationship to the law—a focus at odds with arbitration’s attempt to simply provide the parties with an alternative dispute resolution forum. Indeed, following Fiss and Resnik, others have emphasized that this public-values worry (that is, the need for courts to define, promote, and enhance fundamental legal values through their decisions) has become increasingly acute now that the Supreme Court has allowed a wide range of federal statutory claims to be submitted to arbitration.55
But while the public-values critique challenges the standard narrative, it does so by concluding that there is more at stake in litigation than mere dispute resolution. The public-values critique does not challenge the fundamental assumption that arbitration is mainly about dispute resolution. In this way, the standard view of arbitration has become entrenched not only in Supreme Court doctrine, but also in the conceptual framework embraced by a wide range of scholars. On these accounts, parties select arbitration for one reason alone: to resolve disputes.
At the core of the standard arbitration narrative is a vision of arbitration as an alternative method for resolving disputes. The arguments typically marshaled in favor of arbitration therefore focus on the idea that arbitration is efficient, streamlined, and cheaper than litigation.56 Indeed, none of this is surprising. Surveys of corporations consistently report that saving time and saving money are some of those corporations’ most important reasons for choosing arbitration.57 These considerations appear to have also, in part, motivated Congress to pass the FAA in 1925.58
But while the standard arbitration narrative has strong foundations, it fails to account for alternative conceptions of the practice—conceptions that coalesce into an arbitral counter-narrative—that aim to achieve a wholly different set of objectives. On this count, the transformative potential of arbitration has been largely underappreciated; arbitration provides a framework within which parties can opt out of the dominant legal system and establish their own rules and procedures to govern the dispute resolution process. And parties can tap into this transformative potential by employing arbitration and choice-of-law provisions that ultimately advance a shared set of objectives and values.
While these values-driven modes of arbitration are undoubtedly used less frequently than standard forms of arbitration, they play a prominent role in a wide range of arbitral fora.59 In the commercial sphere, a number of industries and trade associations have adopted methods of arbitration that are intended to amplify shared values and relational objectives. Perhaps the most famous example is the diamond industry,60 but there are numerous others,61 including the construction industry, where “parties . . . are continually building relationships”62 and have embraced a dispute resolution system that reflects the shared sense of “inherent duty to abide by their promises and treat one another fairly.”63 Members of these industries, in turn, “generally understand and accept industry norms [and] standards.”64 This emphasis on shared values has also played a prominent role in labor arbitration, where parties have looked to arbitration as a process capable of improving the working relationship between labor and management.65
The transformative potential of arbitration has been further magnified in the various family law contexts. From division of assets to child custody to wills and trusts, courts and commentators have noted ways in which arbitration can allow parties to select a process of dispute resolution that ensures sensitive decisions reflect personal family values and ideals.66 Thus, subjecting disputes over a testamentary gift to arbitration can ensure not only the privacy of deeply personal family matters, but it can also provide a degree of “testamentary freedom” to the testator by allowing him to establish a process of dispute resolution that reflects his own personal—even if nonconforming—values.67 Similarly, some have endorsed arbitrating child custody disputes in particular cases because doing so would allow parties to select a process of dispute resolution reflecting even non-majoritarian family structures. They argue that such a process would allow parties to be more comfortable during the proceeding with a higher likelihood that a decision will ultimately satisfy the parties.68 And although the legal doctrine addressing the arbitrability of various family law claims is deeply uncertain,69 it is far from surprising that many scholars have seen arbitration as providing an important dispute resolution alternative for members of the LGBT community70 who continue to see the dominant legal system as insufficiently attentive to and accommodating of their needs and values.71
What these counter-narrative forms of arbitration have in common is that parties select them because the forum promotes the values they share, not because it serves as an expedient alternative to litigation. The origin and nature of the values at stake, of course, vary significantly. They range from commercial norms that have evolved within a particular trade association, to ideological commitments within a particular family, to relational values that protect the interpersonal bonds within a tightly knit industry, to rules that have been adopted by a particular religious community.
To safeguard these values, different groups will employ different methods. Some groups may use arbitrator qualification provisions to ensure that the arbitrator is familiar with the parties’ shared values;72 some may use forum selection clauses to authorize an arbitration employing procedural rules that reflect the parties’ commitments;73 yet others may use choice-of-law provisions to ensure that the arbitration proceedings are conducted in accordance with rules that reflect the parties’ shared values.74 But in all such cases, arbitration is selected for its transformative potential—its ability to serve not as a forum of mere expediency, but rather as a forum that can be infused with the procedures and commitments that promote the shared values and aspirations of the parties.75
The arbitration framework is particularly important when parties aim to incorporate community or group values into their own dispute resolution process. Arbitration allows parties to make individual decisions regarding the structure of the arbitral forum; they can, as a matter of contract, decide which rules will apply and what type of individuals will be charged with applying those rules. This flexibility operates as an open invitation to bring community and group norms into the dispute resolution forum. This process operates in reverse as well, with the arbitration itself becoming integrated into a group or community’s infrastructure. Of course, this remains true only so long as courts vigorously police consent to such agreements, a concern to which we will return below.76 In sum, these forms of arbitration provide parties with a mechanism to recognize their shared identities and affiliations while, ideally, ensuring that those identities and affiliations are not merely imposed from the outside.77
The paradigmatic example of this counter-narrative is religious arbitration,78 where parties seek not only to resolve a dispute, but also to have that dispute adjudicated in accordance with religious law and to have that law applied by mutually agreed upon religious authorities.79 To achieve these objectives, religious arbitration agreements will typically incorporate choice-of-law provisions alongside arbitration provisions to guarantee that the proceedings are conducted in accordance with the parties’ shared religious practices.80
In the United States, members of all three primary Abrahamic faith communities employ forms of religious arbitration.81 Likely the most well-known of the three is the Jewish beit din or rabbinical court.82 The sense of obligation within the Jewish community to resolve disputes before a rabbinical courts stems from prevailing interpretations of Jewish Law. The obligation to submit all disputes before a beit din—as opposed to secular courts—is detailed in the Talmud and codified in the Code of Jewish Law.83By adhering to this obligation, parties demonstrate their fidelity to the values and principles animating the Jewish legal system; to violate this rule would be “tantamount to a declaration by the litigant that he is amenable to allowing an alien code of law to supersede the law of the Torah.”84
As a result of these religious requirements, rabbinical courts have been established across the United States, most frequently in large cities with significant Jewish populations.85 Moreover, while statistics tracking the frequency of rabbinical court arbitration are typically unavailable, the number of commercial cases filed annually before the Beth Din of America—one of the most prominent rabbinical courts in America—has nearly doubled over the past ten years,86 providing a limited indication that the use of rabbinical arbitration is on the rise in the United States.
Parallel forms of Islamic arbitration remain in a state of relative flux. Some of the flux appears related to an ongoing debate within Islamic law as to whether and to what extent Islamic law ought to be implemented by Muslim minorities living in non-Muslim states.87 Notwithstanding this debate, the Qu’ran does provide ample basis for concluding that Muslims ought to submit matters of dispute to religious authorities for adjudication.88 Indeed, as some have noted, under Islamic Law, “laymen . . . are under the obligation to follow the guidance of the mujtahids,”89 and laymen must adhere to the mujtahid’s “authority without questioning either his textual evidence or the line of reasoning he adopted in a particular case.”90
Given these principles, it is not surprising that there have been a number of attempts within the Muslim community in the past three decades to begin building a larger Islamic arbitral system in the United States.91 And a number of Islamic organizations have developed protocols, rules, and procedures for use by Islamic arbitration panels in the United States.92 Importantly, this push for Islamic arbitration in the United States flows from a shared religious belief that Muslims ought to resolve their disputes in accordance with Islamic rules, principles, and values. For example, Muzammil Siddiqi, Chairman of the Fiqh Council of North America’s Executive Committee has stated in a fatwa that “Muslims must try their utmost to solve all their problems and disputes among themselves and according to the laws of Allah Almighty.”93
In addition to arbitration before Jewish and Islamic arbitration tribunals, members of various Christian communities also make use of Christian forms of alternative dispute resolution.94 While “Christian forms of dispute resolution are the least formal, and generally range somewhere between negotiation and mediation,”95 they also include options for binding arbitration.96 Indeed, members of Christian communities interested in Christian dispute resolution can contact a range of Christian dispute resolution service providers.97 Among these providers, the most well known is the Institute for Christian Conciliation (ICC), which not only provides a forum for religious arbitration98 but also trains others to serve as independent arbitrators.99 The rules for ICC arbitrations are publicly available and include a choice of law provision that requires arbitrators to “take into consideration any state, federal, or local laws that the parties bring to their attention,” but still emphasizes that “the Holy Scriptures (the Bible) shall be the supreme authority governing every aspect of the conciliation process.”100
In sum, while Jewish, Islamic, and Christian forms of arbitration vary, all three seek to establish forms of binding dispute resolution embodying core religious principles. Efficiency and speed are not the primary goals of the procedural and substantive rules employed in religious arbitration. Instead, both the rules and the arbitrators selected by the parties promote religious values embedded within the history of each of these respective faith traditions. Parties look to the Bible or the Qur’an for rules and procedures—and to religious authorities to apply these rules and procedures—not only to ensure that their selected method of dispute resolution is efficient, but also to ensure that it serves a religious purpose. Put differently, parties to religious arbitration are not, in the words of the Supreme Court, simply “trad[ing] the procedures and opportunity for review of the courtroom for the simplicity, informality, and expedition of arbitration”;101 rather, they pursue a wholly different set of objectives by submitting their disputes to a forum grounded in shared religious worldview. For this reason, as Daniel Markovits has noted, religious tribunals serve as paradigmatic of arbitration tribunals that provide “arbitral solidarity” to the parties, enabling them to “resolve disputes in tribunals that are more sympathetic to their basic world views than the courts of the dominant culture are prepared to be.”102
To get a sense of religious arbitration’s value-oriented focus, consider what we know about the relative use of pre- and post-dispute arbitration provisions in both standard and religious arbitration. Although statistical studies on these questions have some inherent challenges, they provide an important picture detailing the divergences between the narratives for standard and religious arbitration.
Among other attempts to consider this question in the context of standard arbitration,103 Lewis Maltby’s 2003 study analyzing the relative use of pre- and post-dispute arbitration clauses is likely the most instructive.104 In conducting his study, Maltby examined two years’ worth of filings—from 2001 and 2002—in employer-employee and business-to-business arbitrations before the American Arbitration Association (AAA). According to a computerized analysis conducted by the AAA, the percentage of employment disputes filed pursuant to a post-dispute arbitration agreement was 6 percent in 2001 and 2.6 percent in 2002.105 A similar computerized analysis of business-to-business disputes determined that the percentage of disputes filed pursuant to a post-dispute arbitration agreement was only 1.8 percent.106 These numbers indicate that parties to employment arbitrations are very reluctant to arbitrate after a dispute arises. Once the facts underlying the dispute are known, both parties make strategic decisions, and it is unlikely that both parties will simultaneously conclude that arbitration will best serve their interests;107 invariably, arbitration will be seen as preferable for one party or the other—but not both.108
By contrast, a survey of the pre- to post-dispute agreement ratio in one religious arbitration forum suggests results that are precisely the opposite. Although there are no published studies on the question, according to Beth Din of America records, 96.8 percent of its arbitration proceedings between January 2008 and August 2014 were conducted pursuant to a post-dispute arbitration agreement.109 And anecdotal evidence suggests that this is a more general feature of religious arbitration; some websites for religious arbitration providers offer boilerplate post-dispute arbitration agreements, but do not include model pre-dispute arbitration provisions.110
To be sure, these are only indications.111 But, at the same time, it does suggest a very different picture of the reasons parties enter religious arbitration. While parties presumably engage in strategic decision making, the broad use of post-dispute arbitration agreements indicates that other considerations—not present in the context of standard arbitration—still drive the parties to mutually agree on arbitration. The fact that various faiths place a high value on religious dispute resolution—precisely because it ensures that religious rules and principles will govern the arbitration—leads parties to submit disputes to religious arbitration tribunals even when one of the parties may see some strategic disadvantages to doing so. Thus, the high rate of post-dispute religious arbitration agreements captures one way in which the unique objectives and aspirations of religious arbitration can drive differences in the practice of arbitration.
Of course, not all forms of arbitration, even those constructed around shared values, will employ post-dispute arbitration agreements with such high regularity. For example, labor arbitrations, which, as noted above, can have social-therapeutic value, are typically conducted pursuant to collective-bargaining agreements, and thus are negotiated far in advance of a particular labor dispute. As a result, the doctrinal consequences of recognizing these counter-narrative forms of arbitration will vary by context, requiring the reviewing court to be sensitive to the particular dynamics within each group or community. The fundamental point, however, is that in all cases of counter-narrative arbitration it is essential to integrate the underlying motivations for the decision to arbitrate into the law’s treatment of the proceeding.
Recognizing this counter-narrative is vital if we are to develop a more nuanced body of arbitration doctrine. Unfortunately, as described below, important areas of arbitration doctrine have assumed the standard narrative. Arbitration doctrine has too often equated litigation and arbitration, and has extended rules to arbitration that, by their terms, cover only judicial proceedings. Building arbitration doctrine around the standard narrative raises serious legal problems when the arbitration agreements and forums under consi-deration are designed to achieve a very different set of objectives, and are embedded within a very different social context, from those imagined by the standard narrative.
Arbitration’s counter-narrative requires us to grapple with contexts in which arbitration aspires to promote first-order values different than those inherent to litigation or standard-issue arbitration. Recovering this counter-narrative suggests that we need a more nuanced arbitration doctrine that accounts for the reasons for parties to select the particular forum. The counter-narrative exemplified by, but not exclusive to, religious arbitration therefore requires us to reconsider both how courts define arbitration and how arbitration agreements are enforced.
It is far from surprising that debate over the degree to which arbitration can be equated with adjudication continues to animate a wide range of doctrinal questions. The FAA fails to provide a definition for arbitration,112 and this gap has required courts to fashion their own definitions when the issue arises.113 When courts have attempted to fill this definitional void, they have at times reflexively reached back to the standard arbitral narrative, concluding that arbitration is functionally equivalent to litigation and therefore qualifies as a “judicial proceeding.” And, in the instances where courts have resisted this functional equation between arbitration and litigation, they have gone to the opposite extreme, concluding that arbitration should never be equated with litigation.114
By contrast, emphasizing arbitration’s counter-narrative provides reason to resist these extremes. The fundamental differences motivating parties to enter different arbitral fora require a more context-sensitive approach to the equation of arbitration and litigation. Notably, where parties aspire to infuse the arbitral process with the parties’ shared values, applying rules that govern “judicial proceedings” to arbitration creates problems of fit. To see how, consider the following recent example.
In Bauer v. Bauer, the Supreme Court of New York evaluated competing motions to confirm and vacate a religious arbitration award issued by a rabbinical tribunal.115 Among the grounds raised to vacate the award was an allegation that some of the arbitration proceedings were conducted on Sunday.116 To be sure, none of the statutory grounds for vacating an arbitration award included circumstances where the proceedings took place on Sunday.117 However, New York’s Judiciary Law provides:
A court shall not be opened, or transact any business on Sunday, nor shall a court transact any business on a Saturday in any case where such day is kept as a holy day by any party to the case, except to receive a verdict or discharge a jury and for the receipt by the criminal court of the city of New York or a court of special sessions of a plea of guilty and the pronouncement of sentence thereon in any case in which such court has jurisdiction.118
While this statute does not reference arbitration, the court advanced the following syllogism. A judicial proceeding cannot take place on Sunday. “Arbitration is a judicial proceeding and arbitrators perform a judicial function.”119 Therefore, “the arbitration proceedings and award herein are void upon the ground that at least one hearing was held on a Sunday.”120
Some have criticized the logic of Bauer on constitutional grounds.121 And a number of other states have reached different conclusions in applying their own no-Sunday rules—with some holding that arbitration cannot be compared to adjudication122 and others holding that parties to arbitration can contract around no-Sunday prohibitions.123 But Bauer v. Bauer appeared to faithfully follow nearly 200 years of precedent in New York, which had subsumed arbitration—at least for these purposes—under the rubric of adjudication.124 In Brody v. Owens, the New York Appellate Division equated arbitration to adjudication for the purpose of New York’s no-Sunday statute, holding that “[t]he statute expresses the public policy of the State, and cannot be waived.”125
Indeed, Bauer is not the only recent decision employing this syllogism. In Terrace View Estates Homeowners Association v. Bates Drive Condominium III, another New York Supreme Court addressed a case where a rabbinical arbitration tribunal issued an award after holding arbitration proceedings on Sunday.126 In deciding the case, the court once again embraced a familiar mantra: “Arbitration is a judicial proceeding and arbitrators perform a judicial function and therefore arbitrations are held to the same rule of law as are Courts.”127 Having embraced this mantra, the court reached what it deemed to be an inevitable conclusion—that it “ha[d] no choice but to vacate the Arbitration Award.”128
While both Bauer and Terrace View may have been well grounded in New York state precedent, it is hard to justify their methodology. Bauer and Terrace View embrace the standard arbitral narrative that conceives of arbitration as akin to litigation because both “perform a judicial function.”129 And because both arbitration and litigation provide a method for resolving disputes, they can be equated for the purposes of the no-Sunday rule.130
By contrast, viewing Bauer and Terrace View through the lens of arbitration’s counter-narrative yields a very different analysis. Arbitration’s counter-narrative highlights the way in which not all arbitrations aim to achieve the same set of purposes. As a result, arbitration and litigation cannot be easily conflated under the single rubric of “judicial proceedings.” Judicial consideration of such cases must therefore begin by evaluating the nature of the parties’ decision to resolve the dispute before a rabbinical court.
For example, in Bauer, the parties to the dispute were all siblings asserting ownership over various assets.131 The parties signed the agreement post-dispute, having a full sense of what that agreement entailed.132 The agreement required the arbitrators to resolve the dispute in accordance with either Jewish Law or p’sharah133—p’sharah serving as a form of compromise that Jewish law embraces and, according to some, infuses with theological significance.134 The parties could have pursued litigation in this matter or chosen another arbitral forum to resolve the dispute. But instead they chose to submit the dispute to a rabbinical tribunal and to have that tribunal apply religious rules in resolving the dispute.
In such circumstances, conflating arbitration with adjudication—on the grounds that both serve judicial functions—is a mistake. The parties in Bauer chose their selected forum not simply because it would generate a binding judgment. More important, it was a forum that would resolve their dispute in accordance with religious rules and values that the parties shared. Thus, the Bauer parties’ chosen process of dispute resolution had what might best be thought of as a theological or ritualistic component.135 And because the parties all embraced a shared religious worldview, the selected rabbinical tribunal was not simply serving a “judicial function”; it was also serving a religious function, leveraging the shared religious worldview of the parties.136
In this way, the religious tribunal provided a degree of “arbitral solidarity” by enabling the parties to “resolve [their] dispute in [a] tribunal that [was] more sympathetic to their basic world views than the courts of the dominant culture [were] prepared to be.”137 This is particularly true given that the no-Sunday rule at stake has its roots in a Christian tradition that the parties very well may have viewed as at odds with their own worldview.138 Consequently, conflating arbitration with adjudication in this context directly undermined the goals both the parties and the forum were trying to achieve. Arbitration, as a category, is simply too multifaceted for such a reductive classification.
It is worth noting that at least one New York decision appeared to take the religious function of a rabbinical arbitration tribunal into account when declining to vacate an award for violating the no-Sunday rule. In Isaacs v. Beth Hamedash Society,139 the court considered a case in which a religious dispute was submitted to a rabbinical court with the arbitration proceedings taking place on Sunday. In holding that the Sunday proceedings did not subject the arbitrators’ award to vacatur, the court stated the following:
The defendants having consented to settle by arbitration, at the instance of one of their prominent ministers, a controversy growing out of the wants or requirements of their religious rites, with the special view of preventing its becoming a matter of public litigation, and the parties and witnesses having attended voluntarily for that purpose, on a day evidently the most convenient to them, it would be very much to be regretted if the investigation of the matter on that day should render the subsequent award of the arbitrators of no avail . . . .140
Here, the religious nature of the arbitration proceedings and the fact that it conformed to Jewish observances motivated the court to resist vacating the award. In reaching this conclusion, the court observed: that the parties had consented to the proceedings; that the proceedings were meant to resolve a dispute over religious matters; and that the parties wanted to keep their private religious dispute out of public view. By conceptualizing the case in this way, the court in Isaacs appeared to recognize that some arbitrations are meant to achieve other purposes, and that those purposes suggest the inapplicability of the no-Sunday rule.
But instead of pursuing and developing this line of reasoning, subsequent New York courts have limited the precedential impact of Isaacs. In Katz v. Uvegi, the court distinguished Isaacs by noting that “the issues submitted for arbitration in the case at bar, did not involve any religious dispute, but was concerned with a dispute over a business transaction.”141 Under this logic, Isaacs would ostensibly apply only where the dispute in question involved wholly religious matters.
This distinction, however, grossly misunderstands religious arbitration. Parties select religious arbitration in order to have their disputes governed by shared religious principles and values. They do so in order not only to have those values reflected in their chosen method of dispute resolution, but also to conform their commercial dealings to a shared set of religious values.142 To limit the insight of Isaacs to cases where the substance of the dispute is religious is to miss the transformative aspirations of religious arbitration.
There is, to be sure, a temptation to shrug off these no-Sunday arbitration cases as so misguided that they provide little in terms of a lesson for other cases, let alone one sufficient to support a counter-narrative. Some of this intuition may stem from general skepticism of the wisdom—if not the constitutionality143—of Sunday-closing laws. As a result, decisions that extend the reach of such laws may seem so deeply wrongheaded that they are best considered unjustifiable, though persistent, judicial mistakes. We might therefore be tempted to dismiss the arbitration-litigation equation as a peculiar feature of a few outdated cases.
Doing so, however, would be a mistake. Indeed, the functional equation between litigation and arbitration on display in Bauer and Terrace View informs court decision-making in a wide variety of other contexts. Consider In the Matter of Ismailoff—a New York Surrogate’s Court ruling from 2007. Esther Ismailoff had executed an agreement with her four children to create an irrevocable inter vivostrust.144 The agreement provided that:
In the event that any dispute or question arises with respect to this Declaration of Trust, such dispute or question shall be submitted to arbitration before a panel consisting of three persons of the Orthodox Jewish faith, which will enforce the provisions of this Declaration of Trust and give any party the rights he is entitled to under New York law. This Declaration of Trust shall be construed in order to effectuate the intent of the parties and the parties admit that they have performed all the necessary requirements for this Declaration to be valid under Jewish law. The panel will have the authority to file their decision with the Court under the New York Arbitration Law. The parties have made a Kinyan Siddur with a garment that may be used for that purpose in order to effectuate this Declaration of Trust.145
These provisions, requiring that any dispute regarding the agreement be submitted for arbitration before “three persons of Orthodox Jewish faith”; representing that the parties “have performed all the necessary requirements for this Declaration to be valid under Jewish law”; and stating that the parties had effectuated the transaction via a kinyan siddur—a form of acquisition under Je-wish law146—all indicate that, at the time of execution, compliance with the process and substance of Jewish law was of central importance to the parties.
The parties subsequently disputed the enforceability of the trust and one of the parties sought to initiate arbitration proceedings. However, a New York court concluded that the arbitration provision was unenforceable, holding that the First Amendment, which prohibits courts “from resolving issues concerning religious doctrine and practice,”147rendered the provision requiring the selection of three arbitrators of Orthodox Jewish faith unenforceable.148 To do otherwise, reasoned the court, would have put the court in the constitutionally untenable position of determining which proposed arbitrators were “Orthodox” and which were not.149
This holding presented the court with a choice: should the court invalidate the entirety of the arbitration provision and have the dispute moved to a civil court, or should it simply sever the “Orthodox Jewish faith” provision and require the parties to select arbitrators irrespective of their religious affiliation? Without much reflection, the court chose the latter option. This choice was somewhat curious given well-settled arbitration doctrine, at least under the FAA, that instructs courts to invalidate the entirety of the arbitration agreement “where the designation of the arbitrator was ‘integral’ to the arbitration provision [and not] merely an ancillary consideration.”150 One would have expected the court in Ismailoff to at least consider the degree to which the arbitrator qualification provision—“three persons of the Orthodox Jewish faith”—was integral to the agreement. For instance, the court might have asked whether, bargaining ex ante, the parties would have preferred resolving the dispute before an arbitration panel without the contractual constraint on the religious affiliation of the arbitrators to resolving the dispute before a civil court. The agreement’s repeated focus on conforming its provisions with Jewish law gives us good reason to believe the contrary.
The court, however, did not give much consideration to this issue, largely assuming that all arbitrations serve the same ends, and that the provision requiring the panelists all be of the “Orthodox Jewish faith” was not significant enough to warrant invalidating the entire arbitration clause. This assumption might make sense in the context of the dominant arbitration narrative, where arbitration is designed primarily to provide efficient dispute resolution. But it is precisely this type of assumption that the counter-narrative presented here aims to correct. Thus, where the agreement indicates that the parties seek to achieve purposes beyond mere dispute resolution, courts should hesitate before regarding the choice to arbitrate as a mere form of forum selection. The implications of this counter-narrative reach a wide range of legal issues—far beyond no-Sunday and severability rules. Consider the following four examples.
One recurring doctrinal question is whether arbitrators should receive the immunity granted to judges. Courts have uniformly answered this question in the affirmative, analogizing arbitration to adjudication and concluding that “[b]ased primarily on the ‘functional comparability’ of the arbitrator’s role in a contractually agreed upon arbitration proceeding to that of his judicial counterpart, [it is appropriate to] immunize arbitrators from civil liability for all acts performed in their arbitral capacity.”151 As a result, arbitrators will not be held liable for a wide range of potentially tortious conduct, including, for example, defamatory statements leveled against either of the parties.152 Some scholars have criticized this judicial willingness to grant arbitrators absolute immunity, arguing that its premise of a functional equivalence between arbitrators and judges is deeply misguided.153 Arbitrators, these scholars contend, are not held publicly accountable in the same manner as judges,154 and, unlike judges, they choose to serve in an arbitral capacity in exchange for significant compensation.155 Effectively, these critics argue, arbitrators are more like professional service providers—such as architects and lawyers—than judges.
In counter-narrative cases, however, an entirely different dynamic comes to the fore. When arbitrators are not simply tasked with providing dispute resolution services, but also with advancing the shared values of the parties by incorporating rules and norms into the arbitration, the analogy between judges and arbitrators becomes highly fraught. While judges and arbitrators may be granted immunity so that they can impartially and independently resolve a dispute,156 arbitrations that fall within the counter-narrative pursue objectives outside mere dispute resolution. In the context of religious arbitration, for instance, arbitrators provide the parties with a method of dispute resolution that delivers religious meaning and implicates the religious standing of the parties within their given religious community. Failure to submit a dispute to religious arbitration—or failure to abide by a religious arbitral award—can trigger significant social sanctions within the religious community,157 including various forms of ostracism that can have both interpersonal and financial implications.158Similarly, the decisions of religious arbitrators, declaring who is in the right and who is in the wrong, can have significant reputational impact, broadening the potential adverse consequences of the arbitrator’s conduct.159 In such circumstances, where arbitral conduct can have an impact well beyond the simple merits of the dispute, a rule providing blanket arbitral immunity seems to go too far. It is one thing to protect arbitrators so that they can resolve disputes independently; it is quite another to provide immunity when the conduct of arbitrators cuts far beyond the immediate context of the dispute itself.
Context-sensitive application of doctrine is important as well when it comes to assessing the impartiality required of the arbitrators. This question frequently arises when an arbitrator fails to disclose a relationship with one of the parties: when is such a failure sufficient to trigger a presumption of “evident partiality” such that the award is subject to vacatur?160 In addressing this question, the Supreme Court’s majority opinion in Commonwealth Coatings Corp. v. Continental Casualty Co. highlighted the standards of impartiality demanded of judges. The majority emphasized that “a decision should be set aside where there is ‘the slightest pecuniary interest’ on the part of the judge”161 and concluded that “we can see no basis for refusing to find the same concept in the broad statutory language that governs arbitration proceedings.”162 Accordingly, where arbitrators failed to disclose such relationships, the subsequent award would be subject to vacatur for “evident partiality” because failure to disclose such dealings “might create an impression of possible bias.”163
However, Justice White took issue with this equation, arguing in a concurring opinion joined by Justice Marshall that the holding in the majority opinion should be construed more narrowly: “The Court does not decide today that arbitrators are to be held to the standards of judicial decorum of Article III judges, or indeed of any judges.”164 In fact, Justice White’s opinion expressed an inherent skepticism of the equation between judges and arbitrators: “It is often because [arbitrators] are men of affairs, not apart from but of the marketplace, that they are effective in their adjudicatory function.”165
Because Justices White and Marshall’s votes constituted the fifth and sixth votes in Commonwealth Coatings, federal courts of appeals have questioned how broadly to read the Court’s holding and the extent to which Justice White’s position should be taken to weaken the disclosure standard for relationships between an arbitrator and one of the parties.166 Most courts have followed Justice White’s concurrence.167 These courts have required arbitrators to disclose relationships that are “significant”168 as opposed to “attenuated” or “nonsubstantial,”169 standards of impartiality far less stringent than those placed on judges. By contrast, the Ninth Circuit has embraced an “appearance of bias” standard for arbitrators, a standard familiar from the judicial context170 that requires arbitrators to disclose relationships establishing a “reasonable impression of impartiality.”171
But the core intuition captured in the arbitral counter-narrative counters both of these approaches. It suggests that courts must take note of the particulars of the specific arbitration, rather than incorporating a single standard governing all arbitrations. To see why, consider again the paradigmatic example of the arbitral counter-narrative, religious arbitration. In the context of religious arbitration, arbitrators are often drawn from the ranks of religious community leaders who are selected by the parties precisely because of their intimate knowledge of religious principles and values shared by the parties.172 As a result, parties will select particular arbitrators precisely because there is a pre-existing relationship based upon the joint participation in a given religious community.
And what is true for religious arbitration is true more generally for the various forms of arbitration that aim to advance the set of communal values shared by the parties.173 As Nancy Welsh has noted, parties in this sort of arbitration seek out “embedded neutrals”—that is, arbitrators who are often “wise, respected elder[s] within the community or identity group to which both parties belong.”174 Doing so enables parties to ensure that the arbitrators “share the norms that animate both of the disputing parties and can help to resolve their dispute in a manner that both parties are likely to view as principled.”175
In such cases, courts should be far more reluctant to infer “evident partiality” from the failure of arbitrators to disclose these relationships. Under prevailing doctrine, it is the expectations of the parties that justify inferring partiality from the failure to disclose; where a party would typically expect an arbitrator to disclose a relationship, the failure to do so gives us good reason to believe that the arbitrator’s impartiality might be compromised.176 But when it comes to cases within the arbitral counter-narrative, some such relationships are expected by the parties themselves. Far more than mere non-disclosure should therefore generally be required to trigger vacatur of an award.
To be sure, narrowing the scope of disclosure that would trigger vacatur in counter-narrative cases raises some important concerns. In smaller and more insular communities, the potential for relationships between parties and arbitrators to cloud decision-making looms large. Indeed, as discussed below, that is precisely why courts must remain particularly vigilant when policing the forms of social pressure and communal duress that drive parties to submit disputes for binding arbitration.177
That being said, to raise the bar for non-disclosure does not open the door for arbitrators to conduct proceedings with evident partiality. Importantly, conduct that is partial would still trigger vacatur. The only proposal suggested here is to modify the degree of non-disclosure that would constitute a presumption of evident partiality—a presumption that is justified by the degree of disclosure expected ex ante by the parties. And where arbitrators and parties all inhabit the same communal space, it seems reasonable to presume that the parties are already fully aware or at least on notice of relationships within their shared community.
Moreover, to the extent a party sought to invoke the parties’ shared community in order to shield an award from vacatur, the party would still have to present sufficient evidentiary grounds to justify enforcing the award notwithstanding the arbitrators’ failure to disclose a relationship; thus, a party arguing against vacatur would bear the burden of proving that the parties shared the same community, thereby justifying the presumption that the complaining party fully expected some degree of relationship between the arbitrators and the parties. As a result, there may still very well be counter-narrative cases where an undisclosed relationship between an arbitrator and a party will be sufficient to justify vacatur on the grounds of evident partiality—cases where the extent of the relationship went beyond what would be expected or typical within a given community. But those cases would likely be less typical than they are within the context of the standard arbitration narrative. Indeed, when it comes to counter-narrative arbitrations, courts should recognize that parties are typically looking for arbitrators from within their community—arbitrators that understand the full nature of the dispute because of their relationships with the parties—who can best leverage the shared communal bonds to provide a resolution not only ending the dispute itself, but doing so in accordance with the parties’ shared values and principles.
Similar definitional issues arise in debates over whether arbitrator misconduct can constitute state action. Continued concerns about the lack of procedural protections granted to parties in arbitration have lead critics to propose looking to the Constitution’s Due Process protections to modulate the range of acceptable procedures in arbitration.178 At first glance, importing constitutional requirements into the context of arbitration seems peculiar. Arbitration is a creature of private contract; triggering the constitutional requirements of the Fourteenth Amendment requires state action.179
In response to the perceived disconnect between private arbitration and public constitutional rights, some scholars have highlighted ways in which current state-action doctrine might still be interpreted to include conduct by private arbitrators during private arbitration proceedings. The fact that the doctrine remains a fertile ground for interpretation and creativity is far from surprising; scholars continue to echo Charles Black’s characterization of the state-action doctrine as “a conceptual disaster area.”180 Indeed, the Supreme Court has noted that it has “articulated a number of different factors or tests in different contexts” when trying to ascertain the presence of state action.181 Choosing from among these various tests and factors, some scholars have argued that the conduct of arbitrators ought to constitute state action under the “public function” framework.182 Under this test, “when private individuals or groups are endowed by the State with powers or functions governmental in nature, they become agencies or instrumentalities of the State and subject to its constitutional limitations.”183 Accordingly, arbitration, as one scholar has argued, ought to be considered state action because “[t]he binding resolution of disputes is, of course, a traditionally exclusive public function. Indeed, it is difficult to contemplate a function traditionally more exclusive than . . . ‘the State’s monopoly over techniques for binding conflict resolution.’”184
There are, of course, a wide range of doctrinal rejoinders to this argument.185 And courts have not been hospitable to claims predicated on finding the conduct of arbitrators to constitute state action; in fact, they have uniformly rejected such claims.186 But it is worth noting that the public function argument simply assumes that arbitration serves a function identical to judicial resolution of disputes. This premise constitutes a wholehearted embrace of the standard narrative by conceptualizing the functions of arbitration and litigation as the same.
The core lesson of the arbitral counter-narrative is that we should push back against this claim. As courts and scholars continue to address arguments contending that arbitrators serve a public function—and therefore can be deemed state actors—the arbitral counter-narrative reminds us that various forms of arbitration are organized to pursue aims and objectives beyond mere dispute resolution. In those circumstances, it is far more difficult to claim that these arbitrations play a role equivalent to that of their litigation counterparts. The fact that some arbitrations aim both to resolve disputes and to promote shared values undermines the claims of direct equivalency of function that are predicates for the public function argument and suggests its almost certain inapplicability in counter-narrative cases.
While the counter-narrative discussed here highlights how parties use arbitration to pursue various first-order values beyond dispute resolution, such values can be introduced into particular arbitration settings in other ways as well. To take a recent and high profile example, consider the Third Circuit’s decision addressing the constitutionality of Delaware’s attempt to empower the Chancery Court to arbitrate business disputes.187
To “preserve Delaware’s pre-eminence in offering cost-effective options for resolving disputes, particularly those involving commercial, corporate, and technology matters,”188 the legislature authorized the Chancery Court, pursuant to an agreement between parties to a potential suit, to arbitrate disputes, with the parties paying $12,000 to file, plus $6,000 in costs per day after the first day of the of the proceedings.189 Access to this arbitration option was limited: at least one of the parties needed to be a Delaware corporation, organized under Delaware law; neither party could be a consumer; and the amount in controversy needed to be at least $1,000,000.190 The dispute would be arbitrated by a Chancery Court judge and would take place in a Delaware courthouse during normal business hours.191 Notably, this legislatively created arbitration system provided that the “[a]rbitration proceedings shall be considered confidential and not of public record until such time, if any, as the proceedings are the subject of an appeal.”192
A coalition formed to challenge this new system, arguing that the system, for all intents and purposes, transformed judicial proceedings into secret arbitrations shielded from public scrutiny193 and therefore violated the public’s First Amendment right of access to trials.194 In evaluating this claim, the Third Circuit invoked the “experience and logic” test, which determines whether “[a] proceeding qualifies for the First Amendment right of public access” by evaluating “when ‘there has been a tradition of accessibility’ to that kind of proceeding, and when ‘access plays a significant positive role in the functioning of the particular process in question.’”195
The court, however, faced some significant challenges in applying the test. As the court itself noted, it was far from clear which proceedings the court should examine to determine whether there was a “tradition of accessibility.”196 Not surprisingly, the defendants argued that the proper point of comparison was arbitration; the proceedings were, after all, characterized as arbitrations.197 By contrast, the plaintiffs argued that the proceedings were best compared to civil trials—and that therefore the court should determine whether there was a tradition of public accessibility to civil trials.198 As the court well understood, the fundamental problem was in determining the baseline: should the court classify Delaware’s new dispute resolution system as providing for arbitration, and therefore engage in the First Amendment “tradition of accessibility” inquiry by examining the extent of public access to other forms of arbitration; or should the court classify Delaware’s new dispute resolution system as effecting a system equivalent to the civil trial, and therefore engage in the First Amendment “tradition of accessibility” inquiry by examining the scope of public access to civil trials? In other words, to answer the First Amendment question, the court had to consider the question: to what extent was Delaware’s proposed system of arbitration simply a form of civil litigation?199
Instead of choosing one option or the other, the court embraced a “broad historical approach” that considered the history of both civil trials and arbitration.200 Central to the analysis was an emphasis on how arbitration has changed over time: arbitration, the court noted, has not always been shielded from public view.201 The court therefore concluded that “[t]he history of arbitration thus reveals a mixed record of openness.”202 Describing this “mixed record,”203 the court explained that the public has generally not had access to private arbitrations—that is, arbitration proceedings organized under the auspices of modern arbitration service providers.204 By contrast, some earlier forms of arbitration are reported to have actually taken place in public with judges sometimes presiding in an unofficial capacity.205 Given this historical record, the court characterized the history of public access as follows:
Proceedings in front of judges in courthouses have been presumptively open to the public for centuries. History teaches us not that all arbitrations must be closed, but that arbitrations with non-state action in private venues tend to be closed to the public. Although Delaware’s government-sponsored arbitrations share characteristics such as informality, flexibility, and limited review with private arbitrations, they differ fundamentally from other arbitrations because they are conducted before active judges in a courthouse, because they result in a binding order of the Chancery Court, and because they allow only a limited right of appeal.206
The court’s analysis is striking because it does not simply classify the new arbitration system as a system of civil trials masquerading as arbitration. Such an approach, to be sure, would have yielded a similar result—that is, that Delaware’s proposed arbitration system violated the First Amendment by failing to afford the public access to the proceedings. Instead, the court highlighted the ways in which the institutional setting of a particular arbitration impacts the character of the first-order values the forum is meant to promote. Thus, the court identified a variety of context-sensitive considerations leading to the conclusion that First Amendment values required providing public access to the arbitration; the fact that the arbitration was to be held in a public courthouse and presided over by a state-court judge meant that the proceedings were sufficiently within the public interest to require public access. In this way, the setting of the arbitration and the identity of the arbitrators transformed the law’s conceptualization of the values at stake in the proceedings and led the court to conclude that First Amendment concerns were triggered.
The structural and institutional dimensions of the Delaware arbitrations led the Third Circuit to recognize that the distinct features of the Delaware arbitrations implicated the machinery of government and were, to use the court’s language, “government-sponsored” because they were held in courthouses and employed public judges. In this way, rather than conflating different forms of arbitration and then confusing those with adjudication, the court distinguished between forms of arbitration based upon their particular institutional features.207 While religious arbitration is paradigmatic of cases in which the parties infuse the arbitration with shared values, Strine highlights the way in which the institutional dimensions of arbitration can implicate values and interests beyond dispute resolution. Thus, in Strine, the setting of the arbitration (the courthouse) and the identity of the arbitrators (judges) required the court to protect other first-order values, specifically the public’s First Amendment right to access. In this way, Strine further highlights how a wide range of considerations—from the objectives of the parties to the location of the arbitration—can implicate various values in a particular arbitral forum. And this dynamic once again underscores the fundamental insight of the arbitral counter-narrative, which embraces the multifarious nature of arbitration and resists reductive reasoning that either conflates litigation and arbitration or sees all forms of arbitration as fundamentally identical.
The lofty aspirations of religious arbitration can at times also emerge as the forum’s Achilles heel. Religious arbitration tribunals provide parties with the option to resolve disputes in accordance with shared religious rules and values. But sometimes parties agree to submit disputes to religious arbitration tribunals not because they personally desire to have their dispute resolved in accordance with a particular brand of religious law, but because they find themselves enmeshed in a religious community that expects them to do so. In this way, the fact that religious tribunals serve as extensions of religious communal values is both a strength—it enables parties to incorporate shared religious values into the process of dispute resolution—as well as a weakness: the expectations of religious communities can put pressure on reluctant members to forego access to judicial resolution of disputes in favor of the community’s preferred religious tribunal.
Because of religious norms favoring religious dispute resolution within particular communities,208 a party’s refusal to arbitrate before a religious arbitration tribunal can entail social consequences.209 For example, under Jewish law, an individual who refuses to submit a dispute for arbitration before a rabbinical arbitration tribunal will receive a seruv (similar to a contempt order), which conveys strong communal disapproval210 and can carry significant social sanctions.211 Therefore, the signing of a religious arbitration agreement could be seen, in some circumstances, as far from consensual. This has led some to worry about whether religious arbitration tribunals, to the extent the parties submit their disputes because of these communal pressures, can truly claim to operate with the consent of the parties.212 However, in the few cases where parties have petitioned a court to invalidate a religious arbitration agreement on the grounds of duress, courts have uniformly rejected those claims, instead enforcing the agreements and compelling arbitration.213
Of course, duress is only one of many defenses that a party might marshal against a religious arbitration agreement. Unconscionability, for example, is an attractive alternative given its success in the arbitration context.214 Moreover, unconscionability takes various forms of unfairness into account, focusing both on defects in the process of forming an agreement as well as defects in the substantive impact of the agreement.215 To raise an unconscionability claim, parties typically must demonstrate the existence of both “procedural” unconscionability—what Arthur Leff famously referred to as “bargaining naughtiness”216—and “substantive” unconscionability, which includes “contractual terms that are unreasonably or grossly favorable to one side and to which the disfavored party does not assent.”217
In principle, the dual focus of unconscionability would seem to provide a doctrinal antidote to concerns over the volitional nature of religious arbitration.218 A court could consider communal pressure exercised by a religious community as constituting procedural unconscionability “preclud[ing] the weaker party from enjoying a meaningful opportunity to negotiate and choose the terms of the contract.”219 And where such pressures were exerted in a context in which the religious arbitration tribunal served as a forum fundamentally skewed in favor of one party over the other—a recurring concern of feminist critics worrying that religious tribunals systematically favor men over women220—then unconscionability could enable a party to void the agreement.221 Thus, for example, if a party executed a religious arbitration agreement under significant pressure from her religious community and then learned in the course of the arbitration proceedings that her star witness would not be allowed to testify because she is female,222 the party could potentially raise a claim of unconscionability: the communal pressure could constitute procedural unconscionability because it undermined the capacity for meaningful choice, and the religious rule against a female witness might be deemed sufficiently unfair and one-sided to render the arbitration agreement substantively unconscionable. Together, the existence of procedural and substantive unconscionability could serve to void the religious arbitration agreement.223
But the promise of unconscionability is severely undermined by the doctrine of waiver, which is a direct consequence of the doctrinal obsession with arbitration’s dominant narrative. A party is considered to have waived objections to an arbitration agreement once it participates in arbitration proceedings. The reasoning here is straightforward:
To the extent that a party is entitled to challenge the validity of an agreement to arbitrate, the time to raise that issue is before the matter goes to arbitration, not after. Otherwise a party could hold back, await the outcome of the arbitration, and then blithely render it null simply by challenging the validity of the proceedings. Failure to challenge arbitrability in timely fashion and participating in the arbitration proceedings, in other words, will result in waiver of the right to object.224
This mantra that parties waive challenges to an arbitration agreement by participating in arbitration proceedings has been repeatedly recited by courts.225 And the logic behind waiver always remains the same; the time to challenge an arbitration agreement is before the proceedings begin, not after.226
To be sure, courts have tried to calibrate the waiver inquiry, examining a range of considerations before concluding that a party has waived its right to challenge the enforceability of the arbitration agreement. Thus some courts have concluded that participation in various preliminary matters—such as scheduling conferences, arbitrator selection, submission of papers contesting various factual allegations—is insufficient to trigger waiver of the right to challenge the underlying arbitration agreement.227
But while courts have embraced a variety of factors as bearing on the waiver inquiry, they remain wedded to the standard picture of arbitration in evaluating waiver claims—a model in which, importantly, the arbitration agreement is signed pre-dispute. In such circumstances the logic of the waiver doctrine makes sense. If a party believes an arbitration agreement is invalid, then when the dispute arises that party should challenge the agreement instead of moving forward with arbitration proceedings. Courts reasonably give parties some leeway if they participate in the arbitration proceedings only on a limited basis, but, if a party chooses to proceed with arbitration instead of challenging a pre-dispute arbitration agreement, it might be appropriate to construe that decision as equivalent to a waiver of all claims that the underlying arbitration agreement is invalid. Otherwise, the party should have raised the challenge to the arbitration agreement before participating in the arbitration proceedings.
But the logic of waiver falls woefully short in the context of religious arbitration. As described above, religious arbitration agreements appear to be typically signed post-dispute.228 Where parties sign post-dispute religious arbitration agreements as a result of communal pressure, with the specter of social sanctions looming in the background, the waiver doctrine can prevent parties from accessing the protections of common law contract defenses. This is because the very same communal dynamics pressuring parties to sign the agreements also induces the parties to participate in the proceedings.
The waiver analysis ought to account for such circumstances. The inquiry should not, as on the standard narrative, focus solely on whether a party’s participation has crossed some undefined boundary of involvement; instead, it should consider whether that party’s participation was the result of external dynamics limiting the party’s freedom to voluntarily object. In counter-narrative cases, the execution of the arbitration agreement and the beginning of the arbitration proceedings can occur simultaneously. In such contexts, inferring waiver merely from participation in the proceedings seems far from justifiable. There is no separate opportunity for a party to challenge the post-dispute religious arbitration agreement prior to the onset of the proceedings, and significant forces can be marshaled to inhibit objection once the parties move into the proceedings themselves.
There are tools internal to waiver doctrine that are useful here. Broadly speaking, we might address this concern with the observation that, to constitute waiver, a party’s participation in arbitration proceedings must be voluntary. To the extent that a party’s participation is driven by communal pressure—pressure that could qualify as procedural unconscionability—participation might be understood as involuntary. But the doctrine remains wholly undeveloped. The fact that waiver doctrine has not been developed in these contexts is largely tied to the dominance of the standard arbitration narrative and the persistence of the pre-dispute arbitration framework, which leads courts to import assumptions without inquiring about the unique features of counter-narrative forms of arbitration.
Indeed, religious arbitration is not the only arbitral context in which unique dynamics related to consent and contract defenses emerge. The Supreme Court’s increasing tendency to conflate various categories of arbitration has raised analogous issues in the context of labor arbitration. For a long time the Supreme Court saw commercial arbitration and labor arbitration as two distinct forms of dispute resolution governed by two different statutory schemes.229 In differentiating between commercial and labor arbitration, the Supreme Court explained that the former “is the substitute for litigation” while the latter “is the substitute for industrial strife.”230 The Court understood labor arbitration as pursuing values beyond mere dispute resolution; indeed, even in cases where labor arbitration proceedings might be deemed frivolous, the Court emphasized the importance of requiring resolution through arbitration because “[t]he processing of even frivolous claims may have therapeutic values of which those who are not a part of the plant environment may be quite unaware.”231
This division had a number of doctrinal implications,232 including effects on the scope of claims that could properly be submitted to arbitration. Initially, even as the Supreme Court explicitly overruled the line of cases limiting the scope of arbitrable statutory claims,233 it did so only in the context of commercial arbitration. Collective bargaining agreements with arbitration provisions, by contrast, were deemed not to cover a worker’s individual statutory claims.234 As the Supreme Court stated in Alexander v. Gardner-Denver:
It is true, of course, that a union may waive certain statutory rights related to collective activity, such as the right to strike. These rights are conferred on employees collectively to foster the processes of bargaining and properly may be exercised or relinquished by the union as collective-bargaining agent to obtain economic benefits for union members. Title VII, on the other hand, stands on plainly different ground; it concerns not majoritarian processes, but an individual’s right to equal employment opportunities.235
While the persistence of these restrictions on arbitrability in the labor arbitration context stemmed, in part, from lingering skepticism that arbitrators were capable of resolving statutory claims,236 they more directly derived from worries about the nature of consent in the labor arbitration context. Accordingly, the line of argument expressed in Gardner-Denver reasonably restricted the scope of statutory claims that could be submitted to arbitration pursuant to a collective-bargaining agreement because of the attenuated nature of individual consent to “majoritarian” collective bargaining. As noted by the Court, the “majoritarian” processes in reaching labor agreements can be complex, potentially undermining the adequacy of the consent exercised by individual employees.
However, the “majoritarian” dynamic also captures the counter-narrative impulse of labor arbitration; indeed, labor arbitration—in contrast to generic commercial arbitration—is geared towards achieving therapeutic values as well as constructing a viable workplace community.237 Accordingly, the Court highlighted the communal nature of arbitration, the unique objectives labor arbitration is geared to achieve and, in turn, the unique problems that arise when it comes to individual consent. Keeping all these considerations in mind, the Court in Gardner-Denver maintained the distinction between labor and other commercial forms of arbitration, protecting employees subject to labor arbitration agreements by deeming certain statutory claims non-arbitrable in the labor arbitration context. Indeed, differentiating between labor arbitration and commercial arbitration for the purposes of arbitrating statutory claims in this way would capture the core intuition of arbitration’s counter-narrative, incorporating into doctrine the dynamics of the particular arbitral forum and the mechanisms by which parties contract into it.
The Supreme Court has, however, recently rejected such distinctions between labor and commercial arbitration.238 In its 2009 decision 14 Penn Plaza LLC v. Pyett, the Court held that “[t]he decision to fashion a collective-bargaining agreement to require arbitration of employment-discrimination claims is no different from the many other decisions made by parties in designing grievance machinery.”239 The dissent’s attempt to defend the distinction between labor and commercial arbitration240 was discarded as flowing from an outdated skepticism of arbitration.241 The Court therefore concluded that claims under the Age Discrimination and Employment Act could be submitted to arbitration pursuant to a collective-bargaining agreement.242
The Court’s decision in Pyett, however, fails to account sufficiently for the implications of arbitration’s counter-narrative. What meets standards of consent to arbitration in some contexts should not necessarily qualify as consent in other contexts. This is certainly true in the context of religious arbitration, where the vagaries of consent require some rethinking of the standard waiver doctrine. A similar point applies in the context of labor arbitration where the “majoritarian” dynamics at play in the negotiation of a collective-bargaining agreement make the standard contractarian model of consent less than relevant to the question of arbitrability. As a general matter, then, arbitration’s counter-narrative highlights the need for a more context-sensitive arbitration doctrine—a doctrine that accounts for each party’s individual objectives; certainly not one that is one-size-fits-all.
To highlight arbitration’s counter-narrative is certainly not to claim that most parties select arbitration for reasons beyond dispute resolution. As noted above, statistics demonstrate that, in fact, providing a faster and cheaper method of dispute resolution is consistently the primary reason that parties forego litigation in favor of arbitration.243
But focusing on the dominant dispute-resolution rationale and the dominant narrative that it produces prevents legal doctrine from addressing instances where parties select arbitration for other reasons. By conflating all forms of arbitration and then equating arbitration with litigation, courts run the danger of misapplying legal doctrine and thereby undermining the ability of arbitration to serve a unique jurisgenerative function. Indeed, the core lesson of arbitration’s counter-narrative is that legal doctrines need to be better calibrated to the range of values a particular arbitration context aims to promote. If successfully grafted onto current legal doctrine, the counter-narrative—exemplified by, but not exclusive to, religious arbitration—holds out to us the hope of unlocking the transformative potential of arbitration, enabling parties to employ arbitration not simply as an efficient venue for resolving disputes, but as an alternative forum that can breathe life into mutually shared values.