US Supreme Court: 06-989

8/14/2019 US Supreme Court: 06-989

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Official - Subject to Final Review

IN THE SUPREME COURT OF THE UNITED STATES

- - - - - - - - - - - - - - - - - x

HALL STREET ASSOCIATES, :

L.L.C., :

Petitioner :

v. : No. 06-989

MATTEL, INC. :

- - - - - - - - - - - - - - - - - x

Washington, D.C.

Wednesday, November 7, 2007

The above-entitled matter came on for oral

argument before the Supreme Court of the United States

at 10:05 a.m.

APPEARANCES:

CARTER G. PHILLIPS, ESQ., Washington, D.C.; on

behalf of the Petitioner.

BETH S. BRINKMANN, ESQ., Washington, D.C.; on

behalf of the Respondent.

1Alderson Reporting Company



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C O N T E N T S

ORAL ARGUMENT OF PAGE

CARTER G. PHILLIPS, ESQ.

On behalf of the Petitioner 3BETH S. BRINKMANN, ESQ.

On behalf of the Respondent 31REBUTTAL ARGUMENT OFCARTER G. PHILLIPS, ESQ.

On behalf of the Petitioner 62




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P R O C E E D I N G S

(10:05 a.m.)

CHIEF JUSTICE ROBERTS: We'll hear argument

first today in Case 06-989, Hall Street Associates v.

Mattel, Inc.

Mr. Phillips.

ORAL ARGUMENT OF CARTER G. PHILLIPS

ON BEHALF OF THE PETITIONER

MR. PHILLIPS: Thank you, Mr. Chief Justice,

and may it please the Court:

In this case two very sophisticated parties

agreed to arbitrate an ongoing dispute that was pending

in litigation before the United States District Court

for the District of Oregon. Their agreement states

plainly that after an arbitration award is issued the

district court -- and this is at Pet. App. 16A -- "shall

vacate, modify, or correct any award where the

arbitrator's conclusions of law are erroneous."

Ultimately what this Court must decide is whether there

is anything in either the Federal Arbitration Act or any

other Federal law that renders this non-adhesive,

unambiguous contract agreement unenforceable.

JUSTICE GINSBURG: Mr. Phillips, would you

say the same thing if the agreement provided for de novo

review in the district court?




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MR. PHILLIPS: I would be more concerned

about identifying a standard of review for the district

court than identifying a standard for modifying the

arbitration award pursuant to the agreement. So I think

that's a different issue. I think that's closer to

dealing with a judicial function than this is, which is

simply implementing the intent of the parties as to what

the standard ought to be for enforcing an initial award.

JUSTICE GINSBURG: That would be -- I am

assuming that the parties wrote that standard into their

contract, so to the extent you're relying on party

autonomy why couldn't the parties elect whatever

standard of review they wish?

MR. PHILLIPS: Justice Ginsburg, I recognize

that there is a limit to party autonomy. I think there

ought to be a very strong preference for party autonomy,

and I'm not saying that if I were here and I had an

agreement by which de novo review is the standard I

wouldn't defend that autonomy. All I'm saying is that I

recognize that there are limitations on autonomy that

recognize the functions of the Judiciary. But that

limitation isn't remotely implicated in this particular

case.

JUSTICE KENNEDY: Well, in some -- one of

the functions of a judicial -- what about an agreement,




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arbitration agreement, that the district court can find

facts de novo?

MR. PHILLIPS: That one I think worries me

less because it doesn't -- it doesn't suggest -- I mean

it just says that we will leave to the district, to the

district court the findings, and essentially renders the

arbitration agreement --

JUSTICE KENNEDY: Well, suppose it's a

complex matter of monitoring emissions, looking at water

quality, and the arbitrator has to sit by the river for

a month, the district judge had to go down and sit by

the river for a month.

MR. PHILLIPS: But again, the parties under

those circumstances it seems to me are perfectly free to

decide whether they want those issues to be decided

conclusively by the arbitrator or to have them

adjudicated at the end of the day by the Federal court.

And so, if they choose to go through the arbitral

process, and then still say nevertheless that's

nonbinding and that the district court's free to

evaluate that on a de novo record, that it seems to me

doesn't in fact implicate the judicial function in quite

the same way that the standard of review does.

JUSTICE SCALIA: Indeed, are there not such

things as nonbinding arbitration's?




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MR. PHILLIPS: Precisely, Justice Scalia.

JUSTICE SCALIA: Which in effect say that

when we're done the district court will do it as an

original matter.

MR. PHILLIPS: Right. And in that context

you're not raising the same problem that you're

referring to, Justice Ginsburg, because you're not

saying anything about the standard of review. You're

just simply saying that the court ought to decide the

legal issues.

Now, I do think that when the parties agree

that it's a question of law that the question of law is

for the district court to decide. My assumption is that

the district court in fact will use de novo review, but

the parties are not dictating that. That's a matter

that's left -- I'm sorry.

JUSTICE ALITO: Doesn't the arbitration

agreement in this case set out a standard of review and

say on findings of fact they have to be supported by

substantial evidence?

MR. PHILLIPS: They do, but that issue --

that standard of review is not at issue in this

particular case. The only question here is whether or

not there has been an error of law committed, and

obviously the district court found that there was a




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clear error of law committed. Indeed, the dissenting

judge below said it was an irrational decision on the

law.

CHIEF JUSTICE ROBERTS: Mr. Phillips --

JUSTICE GINSBURG: But they were both --

they were both in this agreement, both the substantial

evidence rule and the standard of review of legal error.

So are you saying that you -- we don't have to deal with

that question or you're not going to defend it, because

the standard was dual. Am I not right about what they

MR. PHILLIPS: No. There are, there are

clearly two different standards that are set out in the

arbitration agreement and one of them is substantial

evidence. But when the matter went from the arbitrator

to the district court there was no issue presented by

Hall Street on the question of substantial evidence. We

didn't challenge any of the factual findings by the --

by the arbitrator, and therefore that issue is not

presented. I'm not saying I wouldn't defend it. All

I'm saying is I don't have to defend it in this

particular case because the only issue here is whether

there has been an error of law.

JUSTICE KENNEDY: But you have to give us a

standard. You said, you mentioned, oh, functions of the




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district court. I don't know the standard you're

proposing that will allow us to draw the line and to put

cases on one side of the line or the other. You said,

well, you can't interfere with the functions of the

court. I don't quite understand that.

MR. PHILLIPS: Well, the problem there --

and again, I think this is largely a fanciful concern

because I don't think serious parties who are engaged in

arbitration agreements are likely to come up with

standards that are completely alien to the judicial

process, and indeed there's no empirical evidence to

support that. Certainly Respondent didn't cite anything

and our amici didn't cite anything like that.

But to be sure, Judge Kozinski in his

concurring opinion in the original panel decision in

Kyocera said he would have a very different reaction to

this case if we were talking about the district court

either flipping a coin or looking at the entrails of

dead birds as the basis for decision. And our basic

point is we're not embracing that extreme approach. I

mean, we recognize party autonomy as a significant part

of what Section 2 of the Arbitration Act is all about

and we think that ought to drive the analysis of this

Court significantly, particularly in how you interpret

Section 9.




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CHIEF JUSTICE ROBERTS: Mr. Phillips, why do

you care? If this is not enforceable under the Federal

Arbitration Act, which gives you kind of a shortcut --

the district court must confirm it if certain criteria

are met -- I assume you have a normally enforceable

contract that the district court can enforce just like

it enforces any other contract.

MR. PHILLIPS: That's absolutely true,

particularly in this context, Mr. Chief Justice, because

here we have a situation where we were before the

district court, this arrangement came out of the

mediation process, the district court reviewed it,

blessed it, sent it to the arbitrator --

CHIEF JUSTICE ROBERTS: So you should lose.

MR. PHILLIPS: -- and it came right back.

CHIEF JUSTICE ROBERTS: So you should lose.

MR. PHILLIPS: No, no, I should win.

CHIEF JUSTICE ROBERTS: No. We should

conclude that you don't fall within the Federal

Arbitration Act and it's not a big deal because you can

bring -- you can have the contract enforced. The

district court as far as I can tell wants to enforce

this agreement, presumably will enforce it as a

contract. So you don't need the Federal Arbitration

Act, so why should we fly in the face of its plain




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language to accommodate your interests?

MR. PHILLIPS: Because the problem here is

not what happens in the instance if, Section 9 not

applying, that we're suddenly -- we go back to square

one and start over. That might be true in a different

case, but in this particular case we started in Federal

district court. We brought this action as a -- as a

contract action.

CHIEF JUSTICE ROBERTS: Is there a basis --

well, the Federal Arbitration Act doesn't provide

jurisdiction anyway. So I assume you have a basis for

being in Federal court --

MR. PHILLIPS: Diversity, Your Honor.

CHIEF JUSTICE ROBERTS: -- in the first

place. So you're just enforcing a contract in diversity

in Federal court.

MR. PHILLIPS: Right, and that's exactly

what we would ask this Court to be doing here.

CHIEF JUSTICE ROBERTS: No, you're asking us

to bring it under the Federal Arbitration Act and say

that the district court must confirm it despite the fact

that you've changed the standards under Section 9 to 11.

MR. PHILLIPS: No, Mr. Chief Justice, you've

flipped it around. Remember, we lost in the

arbitration. We won in the district court. The

10

Alderson Reporting Company



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district court was prepared to enforce the agreement.

CHIEF JUSTICE ROBERTS: Right.

MR. PHILLIPS: Both the underlying lease

agreement and the arbitration agreement. It was the

court of appeals that said no, you can't do that, you

can't enter a final judgment in this case, and the

reason is --

CHIEF JUSTICE ROBERTS: But my point --

MR. PHILLIPS: -- because of the Federal

Arbitration Act.

CHIEF JUSTICE ROBERTS: My point is that if

you have an ordinary contract action the district court

will, because your contract provides a particular

standard of review, enforce that. Right?

MR. PHILLIPS: Right. No, that's absolutely

true. But that's exactly what we're asking you to do

here.

JUSTICE BREYER: On that point -- the reason

I think you're -- there's a little chaos here is because

you said -- your question is phrased, does the FAA

preclude enforcement of your arbitration agreement? And

you're going to say: We answer that question, no, it

doesn't preclude it.

MR. PHILLIPS: Right.

JUSTICE BREYER: It doesn't require it; it

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doesn't preclude it.

But then would we have to go back and say

what is the source? There has to be some source of law

that authorizes this contractual agreement, and there

could be two possible sources. And my question here is,

is it clear that in fact either of these two sources

does?

The first source is State law. I gather the

difficulty is that the State of Oregon has an act just

like the Federal Arbitration Act, so we'd have to ask

the Oregon courts: Is this a legitimate contract under

Oregon State law.

The alternative source of law is the Federal

judge's case management authority. And there we have a

statute which clearly gives the judge some kind of

authority, but not for your case because your case

exceeds the jurisdictional amount. Therefore, in the

absence of that statute, is there inherent authority in

the district judge?

Now, I don't know the answer to either of

those questions.

MR. PHILLIPS: I thought that --

JUSTICE BREYER: My temptation is to say

they're open questions and they'd have to be argued on

remand, which makes this case the case of the century, I

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guess, in a certain respect. It's quite a difficult

case.

MR. PHILLIPS: I was just looking for the

case of the day, Your Honor, actually.

(Laughter.)

JUSTICE BREYER: All right. Well, in a

certain area. I overstate.

But the -- is there any light you can shed

on those two questions, or is there some third possible

source of law?

MR. PHILLIPS: Well, we know that -- I think

the answer to that is that Section 2 of the Federal

Arbitration Act, which this Court has recognized

repeatedly has a very strong preference for enforcing

the agreement of the parties, is a part of the answer to

that. And you couple that with the fact that Justice

Story, back as early as 1814, said that as a matter of

common law that the notion of restricted arbitration is

a matter completely left to the parties.

So I think that there are general common law

standards. Now, you know, could Oregon law have gone

the other way on that? Maybe. I think it would be an

interesting preemption question. But the Respondent has

never argued that this is unenforceable as a matter of

Oregon law. So I don't think that issue is in this

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case.

As a matter of case management, if the Court

wants to defer to anything then it ought to refer to the

district court's own assessment that this agreement

should be utterly enforceable, that --

JUSTICE BREYER: Have you ever argued that

this is a matter governed by Oregon law and it is

enforceable?

MR. PHILLIPS: Right. They never --

JUSTICE BREYER: Have you ever argued that?

MR. PHILLIPS: That it is enforceable?

JUSTICE BREYER: Yes, under Oregon law.

Have you ever argued Oregon law?

MR. PHILLIPS: No, we've never argued --

JUSTICE BREYER: No?

MR. PHILLIPS: -- Oregon law.

JUSTICE BREYER: Well, then it's not

surprising they haven't argued that Oregon law doesn't

apply.

MR. PHILLIPS: No, no.

CHIEF JUSTICE ROBERTS: But they have in

fact. On page 43 of their brief, they say that if you

prevail the parties would be left to a State law

contract action to determine the enforceability of the

award.

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MR. PHILLIPS: Right, but the State law

contract action that they're talking about is precisely

the State law contract action we brought in this case

before the Federal district court under diversity

jurisdiction. And at the end of the day what we're

asking for is for the Court to enforce --

CHIEF JUSTICE ROBERTS: No, no. I --

MR. PHILLIPS: -- the district judge's

determination --

CHIEF JUSTICE ROBERTS: No. Their citation

is to an arbitration treatise. The contract they're

referring to is the contract to arbitrate. And, unless

I'm mistaken, what you want is for the district court to

be able to enforce your agreement under the Federal

Arbitration Act. Right?

MR. PHILLIPS: Because it falls squarely

within the Federal Arbitration Act.

CHIEF JUSTICE ROBERTS: Well, it doesn't

fall squarely within it because the Federal Arbitration

Act sets different standards of review. And all I'm

saying is I don't see what the big deal is because you

-- okay, don't use the Federal Arbitration Act, which

gives you kind of an express remedy the district court

must confirm. Use normal contract law and say to the

district court: Well, you don't have the Federal

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Arbitration Act, you don't have to confirm it as a

judgment, but we have a contract, it's perfectly valid,

it sets a different standard of review, you should

enforce it.

MR. PHILLIPS: Right. But I think the

answer to that is that if Congress had a choice as

between those alternatives, Congress clearly in Section

9 made it absolutely indisputable that there's a simple

way to enforce it, but it didn't suggest the

alternative, which is that you relegate it to some kind

of State law, completely complicated process to try and

get this arbitration award enforced under those

circumstances.

JUSTICE SCALIA: Excuse me. I'm just not

following this discussion. Does it assume that you can

bring an action on the contract and just bypass the

provision of the contract which says there will be

arbitration? How can you do that? You -- you don't

assert you can do that?

MR. PHILLIPS: No, we clearly can't do that.

JUSTICE SCALIA: You clearly can't do that.


JUSTICE SCALIA: So somebody has to decide

on this arbitration provision.

MR. PHILLIPS: Right. And I think the

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Court, this Court is the court that's got to decide that

at this point and --

CHIEF JUSTICE ROBERTS: The arbitration

provision, the arbitration agreement is just a contract.

Right?

MR. PHILLIPS: To be sure.

CHIEF JUSTICE ROBERTS: Well, then I don't

understand why it's not enforceable as a contract.

MR. PHILLIPS: I don't think we disagree on

that, Mr. Chief Justice. I think the -- I think that's

enforceable.

CHIEF JUSTICE ROBERTS: Well, if it's

enforceable -- I'm obviously missing something here. If

it's enforceable as a contract, what is the great

benefit you get out of prevailing and saying this should

be enforced under the Federal Arbitration Act?

MR. PHILLIPS: Well, the benefit is the

efficiency that the Federal Arbitration Act is trying to

promote. I mean, to be sure, there -- there could

potentially be any number of routes you might want to

identify. The clearest one is where the parties don't

care about what happens on the back end, where they say,

once you get your -- you have your -- you get your

arbitration award and then you go off and you do Section

9 and we don't have any agreement on that. And that one

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is easy, and that's the most efficient.

Then the question is what do you do in a

situation where the parties don't agree with that, where

they want the district court to review it.

CHIEF JUSTICE ROBERTS: What do you do if

you have a contract, an arbitration agreement that's not

covered by Section 2, it's not concerning a maritime

transaction or involving commerce?

MR. PHILLIPS: Those are regulated by State

law.

CHIEF JUSTICE ROBERTS: Okay.

MR. PHILLIPS: Purely by State law. But

this is the contract that falls within Section 2, Mr.

Chief Justice.

JUSTICE SCALIA: But this -- but this one

isn't, and if we say that you lose under the Federal

Arbitration Act, is it open to the State court to say,

well, that's what the Federal Arbitration Act says, but

we handle arbitration differently?

MR. PHILLIPS: Well, that's sort of the core

question I think that sort of comes out of Southland

and --

JUSTICE SCALIA: I think if you lose on the

arbitration here, you've got to lose on the arbitration

before State court.

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MR. PHILLIPS: I mean, I think that's what

Southland --

JUSTICE SCALIA: I mean you don't have to

admit that. That's --

MR. PHILLIPS: That's the logic of

Southland, Your Honor.

CHIEF JUSTICE ROBERTS: Why in the -- why is

that the case? I mean, this doesn't purport to occupy

the field of arbitration and to preempt State law. It

provides that a very direct order -- the district court

must confirm the arbitration award as a judgment --


CHIEF JUSTICE ROBERTS: -- if you fall

within the criteria. And all I'm saying is they'll say,

okay, I don't have to confirm it as a judgment.

MR. PHILLIPS: But I think the answer to the

conundrum you've raised, Mr. Chief Justice, is that if

you're not in Section 9, then you ought to be in Section

2, and there you should do precisely what the contract

says, which is that you should vacate or set aside the

arbitration agreement --

CHIEF JUSTICE ROBERTS: Oh, no. You're in

Section 2, I agree --

MR. PHILLIPS: -- unless -- if there's an

error in law.

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CHIEF JUSTICE ROBERTS: I agree that you're

in Section 2, and the State court can't invalidate your

agreement under some special rule that applies only to

arbitration. But you want to be under Section 9, and

that says --

MR. PHILLIPS: No, I --

CHIEF JUSTICE ROBERTS: -- that the district

court must confirm the arbitration award if it meets

certain standards.

MR. PHILLIPS: No, I don't need Section 9.

All I need is Section 2 because if -- because under our

agreement, what we specifically say is that the district

court shall vacate, modify, or correct. We're looking

for them to correct this award by saying that the right

interpretation of this lease is that this is an

applicable environmental law, and therefore the

indemnification extends and we are protected.

CHIEF JUSTICE ROBERTS: But the only basis

MR. PHILLIPS: That's what I want under

Section 2.

CHIEF JUSTICE ROBERTS: The only basis you

have for getting them to correct the award is a

different standard of review than the one provided in

Section 10.

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MR. PHILLIPS: That's true, but that's -- it

seems to me that just makes my point, which is I don't

need Section 9, Your Honor. All I need -- all I need is

an aggressive, not even aggressive -- a fair

interpretation of Section 2 that says that the parties'

intent controls under these circumstances.

JUSTICE SOUTER: It's not that you don't

need Section 9. You want to get rid of Section 9 --

MR. PHILLIPS: That's quite true.

JUSTICE SOUTER: -- because Section 9 on its

face seems to provide the opposite to what you're

asking. Isn't that the problem?

MR. PHILLIPS: Well, I don't know that

that's the problem. You're right, I don't want Section

9 to be controlling here, but I don't think it's meant

to be controlling under these circumstances. I think

what -- I mean they're making the Section 9 argument.

All I'm saying is that there's not a problem created by

Section 9.

JUSTICE SOUTER: Why isn't -- I mean the

argument that it is meant to be controlling is an

argument, first, for the plain language.

MR. PHILLIPS: I'm sorry, Justice Souter.

JUSTICE SOUTER: Pardon me?

MR. PHILLIPS: When you say "it's meant to

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be controlling," I don't --

JUSTICE SOUTER: Section 9.

MR. PHILLIPS: Section 9. I'm sorry.

JUSTICE SOUTER: Number one, the plain

language of the statute.

Number two, an argument that that plain

language, as a matter of historical fact, was

deliberately chosen when Congress made a choice between

two different, basic arbitration schemes.

And they chose the arbitration scheme that,

in effect, does not allow the -- the kind of variation

that you're talking about. So they say the language is

plain; the intent behind the language is plain. It is

restrictive, and you can't do that. What is your

response, in effect, to the plain language construed in

terms of the historical argument?

MR. PHILLIPS: Yes. Well, the answer -- the

plain language doesn't -- doesn't say what happens if

the parties reach a different agreement. The first --

JUSTICE SOUTER: Well, it may not -- it may

not say it for the simple reason that it says

unequivocally what should happen, and you are asking for

a variation on what it unequivocally provides. That may

be the reason it does not go into contingencies.

MR. PHILLIPS: Well, I think -- well, first

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of all, it would seem to me less likely that that's

true, given the common law history that comes out of

Justice Story's opinion, which said restrictive

arbitrations are common.

JUSTICE SOUTER: All right. But you're --

you're ignoring -- when you say that, you're ignoring

the development of arbitration in the period after

Justice Story; and you are ignoring the argument that

the other side makes that a deliberate choice was made

between two generally understood arbitration, statutory

arbitration, schemes, and they choose -- they chose the

one that is inconsistent with your position.

MR. PHILLIPS: Justice Souter, there are two

-- there are two questions there, so let me try to

answer both of your questions.

The first one is: What does the plain

meaning of the statute say? The plain meaning of the

statute, which is at 1a of the appendix to the petition,

is the parties in their agreement agreed that a judgment

of the court shall be entered upon the award. We never

agreed to that, so the plain language of Section 9

simply doesn't get you there.

Section 9 envisions that this is a -- that

this is an understanding.

JUSTICE SOUTER: Then how can you get any

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award enforced, even subject to your terms?

MR. PHILLIPS: Because under Section 2 the

parties have -- have provided a mechanism for that by

saying that the district court will correct an award if

it's erroneous as a matter of law.

JUSTICE SOUTER: Then you have to grapple

with the question whether in fact under Section 2 you

can provide for confirmation in a manner consistent with

the provision for confirmation under Section 9.

MR. PHILLIPS: Right. But all I'm saying is

that Section 9 doesn't apply in this particular context,

and, therefore, it makes all the sense in the world to

JUSTICE SOUTER: You simply -- I -- I don't

-- maybe I'm missing something, but you seem to stand

there and just say baldly: Section 9 doesn't apply. It

doesn't apply, you've repeated that several times. And

I at least don't know why it doesn't apply.

MR. PHILLIPS: Well, hopefully I can

persuade you by rereading the portion of the statute,

that the first sentence of Section 9, which is at

Appendix 1: "If the parties" --

JUSTICE STEVENS: Where is it? Where is it?

MR. PHILLIPS: 1a of the appendix to the

petition. Section 9: "If the parties in their

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agreement have agreed that a judgment of the court shall

be entered upon the award" --

JUSTICE STEVENS: Uh-huh.

MR. PHILLIPS: These parties didn't agree

that a judgment would be entered on the award. They

agreed that a judgment would be entered on the basis of

whether there was a non-erroneous declaration of law by

the arbitrator.

JUSTICE SOUTER: Okay. And what you are

arguing is: At this point, even though we didn't agree

within the meaning of the preamble to the first sentence

MR. PHILLIPS: Correct.

JUSTICE SOUTER: -- we still have a right to

have the award confirmed and enforced --


JUSTICE SOUTER: -- because we agreed to it

under Section 2.

MR. PHILLIPS: Both parties agreed to it

under Section 2.

JUSTICE SOUTER: And the question, I think,

is when you argue in that fashion: Do you have a right

under Section 2 to provide for confirmation and

enforcement under terms which are inconsistent with the

provision in Section 9.

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And I think that's the -- that's the

question you've got to answer.

MR. PHILLIPS: Well, if you -- if you want

to make a judgment call and you think there's really a

judgment you have to make as between Section 2 and

Section 9, then it seems to me that all of the Court's

decisions have recognized that the single most important

objective of the Federal Arbitration Act is embodied in

Section 2, which is -- which is to enforce the intent of

the parties --

JUSTICE SOUTER: The -- the cases --

MR. PHILLIPS: -- is you way you should come

out.

JUSTICE SOUTER: The intent of the parties

that's being enforced in those myriad cases is the

intent of the parties to arbitrate. I don't believe any

of those cases respond to the -- to the issue that we've

got before us.

And the issue we've got before us as you are

now framing it is this: If you do not have a provision

within the meaning of the first sentence of Section 9 --

MR. PHILLIPS: Yes.

JUSTICE SOUTER: -- for consummation and

enforcement --

MR. PHILLIPS: What do you do?

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JUSTICE SOUTER: -- but you have a different

contractual provision and its terms are different from

the enforcement terms under Section 9 --


JUSTICE SOUTER: -- can that contract be

recognized? Do you have a right, in effect, to modify

the statute?

MR. PHILLIPS: But, Justice Souter --

JUSTICE SOUTER: And that's what you've got

to come to grips with. And --

MR. PHILLIPS: Well, I think I have come to

grips with it.

JUSTICE SOUTER: No, but it does not answer

that question simply to say there are lots of cases

saying that the intent of the parties to arbitrate

should be enforced. This is a more specific question.

MR. PHILLIPS: No, it's not the intent of

the parties to arbitrate. It is every facet of the

agreement is to be enforced consistent with the intent

of the parties.

JUSTICE SOUTER: Where do you -- do you have

a case that says every facet of the agreement, no matter

how inconsistent arguably with other sections of the

statute?

(Laughter.)

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JUSTICE SOUTER: No, you don't.

MR. PHILLIPS: Well, of course not, Justice

Souter.

JUSTICE SOUTER: That's why we've got this

case here.

MR. PHILLIPS: Well, to be sure. But the

bottom line here -- and -- and I do want to answer the

Illinois v. New York part of this, because I think

that's a complete red herring in this case.

But it still seems to me that if you think

that there is an ambiguity with respect to Section 9,

first you should resolve that ambiguity by construing it

to implement the parties' intent, because that is the

overriding objection to the FAA. And second --

JUSTICE SOUTER: Okay, but --

MR. PHILLIPS: -- if you go to Section 10 --

JUSTICE SOUTER: If we do that, we've got to

dispose of the red herring. So you're going to come

back to that?

MR. PHILLIPS: Okay. All right, let me

answer the red herring. Then -- then I'll tell you what

I think about Section 10. On the red herring, all --

all the -- first of all, there's nothing in the

legislative history that suggests that Congress made

some kind of conscious choice between New York and

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Illinois.

They talk about the New York model. There

is not a word in the legislative history about Illinois.

So I don't think that's what the decision was.

But even if that were the choice they made,

that still doesn't go to the question of what do you do

if the parties reach a different agreement.

JUSTICE SCALIA: That is, indeed, the issue.

What we're arguing about here is whether 9 and 10 are

simply default rules that apply where the parties have

not otherwise specified. That's -- and that's,

arguably, what the New York law and the Illinois -- I --

I don't know that any of those cases cited by the other

side involved cases where the Illinois rule or the New

York rule was applied in the teeth of an arbitration

agreement that said something differently.

MR. PHILLIPS: No. None of -- None of those

cases fall in that category.

JUSTICE SCALIA: In other words, I think

both the Illinois rule and the New York rule were

default rules.

MR. PHILLIPS: That's exactly right.

JUSTICE SCALIA: And you're arguing that

this is the default rule?


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JUSTICE GINSBURG: It doesn't read like one.

10 and 11 don't read like default --

MR. PHILLIPS: Well, I think the important

part about Section 10 to keep in mind is -- is their

argument also is predicated on the assumption that

Section 10 exhaustively lists all of the grounds for

modifying an -- vacating an arbitration award. And it

is absolutely clear from this Court's decisions both in

Wilko and in W.R. Grace that the list in Section 10 is

not an exclusive list.

JUSTICE GINSBURG: What else is there

besides the manifest whatever? The --

MR. PHILLIPS: The manifest disregard of the

law and the -- and public policy. W.R. Grace says you

can't enforce any contract that violates public policy.

JUSTICE STEVENS: Mr. Phillips, on the

question of whether it's just a default rule or a

self-executing definition of what's permissible,

supposing the agreement between the parties provided

that the judgment by the court must be entered in 6

months rather than a year, and it would be vitiated if

it were entered after that. Would that trump the

statute?

MR. PHILLIPS: I -- I think, yes, I think it

probably would, because --

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JUSTICE STEVENS: I think under your theory

you'd have to --

MR. PHILLIPS: I don't think Congress meant

for it to be -- I don't think Congress intended for this

to be not subject to change.

JUSTICE STEVENS: Yeah.

MR. PHILLIPS: I mean, you know, there are

-- the question in all of these provisions is are there

some components of the FAA that are meant to be

mandatory, and there are others that are all subject to

change. And I think that one strikes me at least as

most likely subject to change, Justice Stevens.

If there are no further questions, I'll

reserve the balance of my time for rebuttal. Thank you,

Your Honor.

CHIEF JUSTICE ROBERTS: Thank you,

Mr. Phillips.

Ms. Brinkmann.

ORAL ARGUMENT OF BETH S. BRINKMANN

ON BEHALF OF RESPONDENT

MS. BRINKMANN: Mr. Chief Justice, and may

it please the Court:

Sections 9, 10 and 11 of the Federal

Arbitration Act provide the exclusive grounds on which a

court can vacate, modify, correct an arbitration award

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under the FAA. Those grounds do not include legal

error.

What Petitioner wants is to graft on an

additional ground to that statute, and say, oh,

10(A)(5), on any other ground that the parties agree to.

JUSTICE SCALIA: What do you do about the

fact that our opinions have said that there is another

ground under 10, which is manifest miscarriage of

justice? That's not listed there.

MS. BRINKMANN: Your Honor, manifest

disregard is Section 10 (A)(4), exceeding the power. It

is not mere legal error, and it's manifest disregard of

the agreement. Section 10 goes to structural errors,

structural problems: Corruption, fraud, exceeding the

power. And manifest disregard is in the statute, and

it's not mere legal error.

JUSTICE SCALIA: Why -- why did we go -- go

to the trouble of expressing it differently?

MS. BRINKMANN: Because --

JUSTICE SCALIA: Why not just say Section 4?

MS. BRINKMANN: It was required in Wilko,

because there were two different questions there. There

was a provision under the Securities Act that said

customers couldn't waive certain right.

And the court said there: Well, we all know

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that the Securities Act generally would apply to

arbitration. Of course, if an arbitrator didn't apply

the Securities Act, that would be manifest disregard,

exceeding their power. That they could not do.

But what the Wilko Court held was: The

customer, if they went to arbitration, was also waiving

judicial review of the arbitrator's interpretation of

the law. And that was the distinction in Wilko, and

that's why manifest disregard is in the statute. It's

10(A)(4), and it's that type of error. It is not beyond

the statute, and that's what Congress meant to do.

JUSTICE GINSBURG: What about public policy?

That was the other one Mr. Phillips brought up.

MS. BRINKMANN: Yes. Public policy would

often be covered under Section 2. Section 2 allows any

arbitration contract to be voided under any generally

applicable State contract law, so that clearly would

apply. A lot of that would capture off as public

policy. But "public policy" is used in different ways.

The Grace case he cites is a labor case.

And there have been different developments of

arbitration under the labor statute. But what public

policy has come to mean in that line of cases is where

there is another Federal statute that is violated by the

arbitration.

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And there you have another source of law.

If there is a later enacted Federal statute that was a

congressional intent to trim the Arbitration Act, that's

another matter.

JUSTICE SCALIA: What would happen in

situations like this? Suppose we agree with you; and we

say, oh, yes, both of the parties agreed as part of this

contract: I don't want to let these arbitrators decide

the law. If they get the law wrong, we want -- we want

the courts to decide the law. That's the deal. And

then you're going to say, oh, that portion of the

contract is no good.

MS. BRINKMANN: You can't in that situation

JUSTICE SCALIA: Is there no such thing as

-- as failure of the contract for a misunderstanding of

the law?

MS. BRINKMANN: That would be a common law

action that the Chief Justice was referring to, to

simply enforce an award. But Section 9 created a

streamlined approach for enforcement of arbitration

awards. When Congress in 1925 said --

JUSTICE SCALIA: You think -- you think the

State can enforce an arbitration award that would not be

enforceable under the FAA?

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MR. PHILLIPS: Under Section 9. I hate to

use the words "broadly FAA," because here's the

situation: You can have arbitration awards that are

clearly covered under Section 2, but they are not

covered under Section 9. Section 9 is a streamlined

procedure for enforcement of arbitration where it's

under the FAA.

When Congress enacted the statute, they

said, you know, we are going to give a streamlined

approach. If you want to go quickly from award to

judgment, you can go right into court and hear Section

9. That -- and you could agree to this. You have to

agree to use Section 9. You have to agree to this

confirmation.

You come in, and that court must enforce

that award, confirm that award, unless Sections 10 and

11 are met. And that's exactly what Congress did.

CHIEF JUSTICE ROBERTS: What happens

outside -- that happens all the time. They are called

consent decrees. The party agrees, and agrees to

particular provisions, and they submit it to the judge

and say: We want you to write two words, "so ordered,"

at the bottom of this; and then it becomes a judgment.

You don't have to worry about the

Arbitration Act. It's a contract.

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that recognized the exclusivity of Sections 9, 10 and

11; and that would end the litigation. That's certainly

of very great interest to our client.

JUSTICE SOUTER: What do you say to

Mr. Phillips' argument that, within the meaning of the

first sentence of Section 9, you don't have any

agreement at all; and, therefore, you have no right to

enforce anything?

I take it that's not the position you took

below, and that's not the position you're taking here,

but how do you answer him?

MS. BRINKMANN: That's really a repackaging

of Petitioner's severability argument from below. There

was an agreement to confirm. It's just whether or not

if the -- it becomes legally impossible for the other

condition to occur, the legal review can't occur because

it's contrary to the statute.

What happened -- and the court of appeals

here addressed that issue, applied Oregon law, and

rejected it. Petitioner filed a rehearing en banc

petition on that and did not bring it to this Court on

cert.

JUSTICE SCALIA: Assume we agree with you

that this is a quick and dirty way to get arbitration

agreements enforced if you want to bring it within 9 and

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10, and if you don't, you're free not to; you can go to

the State courts. Why can't he still go to the State

courts?

You say this is going to terminate the

litigation. Is this going to be res judicata on

anything? All it's going to say is the Federal courts

have no jurisdiction over this. It's not under 9 and

10. You're going to run off to State court. You're

going to protract the litigation rather than bring it to

a quick end.

MS. BRINKMANN: Your Honor, this is under

Section 9. The only way it would not be under Section 9

is if they had won on the severability argument.

JUSTICE SCALIA: I don't understand that.

MS. BRINKMANN: We thought --

JUSTICE GINSBURG: Miss Brinkmann, can we

back up a bit, because this agreement had an usual

genesis. This was a big case, and the judge kept right

in the court a piece of it. And then he and the parties

agreed that another piece of it would best be resolved

in arbitration. So the judge was in equal participation

in that effort. All three parties wanted to get a

particular issue resolved through an arbitrator rather

than the court, itself.

And I doubt very much whether the judge

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would have been at all interested in that scheme if he

thought he were doing an idle thing. That the parties,

having agreed to just what the judge thought was a nice

way to resolve this issue, would then find themselves

out of Federal court and have to bring some kind of suit

in State court. It doesn't seem to fit this scenario.

MS. BRINKMANN: Two responses, at least to

that, Your Honor: Then the parties should have asked

the court to appoint a special master. That maintains

under the authority of the district court judge. That's

not what happened here. And that's important.

What is before the Court here is the Section

9 action to confirm the judgment. And that's what comes

to the Court on --

CHIEF JUSTICE ROBERTS: You don't have to go

back to State court. You have diversity. You are in

Federal court, no matter what; right?

MS. BRINKMANN: Yes, Your Honor, that's

right.

JUSTICE BREYER: That's why just what you

said is actually what's worrying me about the case.

Because what Justice Ginsburg said makes me think that

there could be situations, a lot of situations, where

Federal judges do want to peel the case off. And you

say send it to a master. Maybe some would lend

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themselves to a master; maybe some wouldn't. I have no

idea.

And are we going to have to hold in this

case whether a judge or when a judge, a Federal judge,

does or does not have authority to do such a thing?

That's why I say -- I was actually thinking

the case of the century, because it's going to take a

hundred years to finish.

But the fact is there are those issues there

once we say Section 9 doesn't apply. Then you're going

to have to say -- suppose we were to say it's just State

law. Well, suppose the State doesn't allow enforcement

of this kind of contract? Then we have the question of

the authority -- of the inherent authority, not

statutory, of a Federal district judge to peel off bits

of cases and decide them in different ways.

I don't know the answer to those questions,

but I think they are quite important. So what do I do?

MS. BRINKMANN: Well, first of all, Your

Honor, if it comes to a question about the particular

facts in this case involving the scenario that Justice

Ginsburg put forth of the very unusual situation of a

Federal district court being there, we would, of course,

dismiss the writ as improperly granted. That has no

broader implication, I think --

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JUSTICE BREYER: Oh, no, because there is a

holding in the whole Ninth Circuit, which accounts for a

large percent of the country, that the district judge

can't do this. And that's quite a significant holding

in that circuit, and we ought to review that.

MS. BRINKMANN: That would be the question,

Your Honor, if when faced with something that a judge

wants to peel off, you have to look at what tools a

Federal judge has been given. Magistrate judges widely

used for all types of picking juries, discovery, special

masters, those are the tools that have been given to

Federal judges. When arbitration --

JUSTICE GINSBURG: Why not use -- why not

use Rule 16, pretrial procedure, and the parties and the

judge can work out what they think is the most efficient

way to resolve this controversy? So they decide at the

pretrial conference that they are going to build into

this arrangement one issue that they are going to peel

off to go to an arbitrator, but the judge is going to

retain control through the legal error.

MS. BRINKMANN: The arbitrator is what

introduces these different elements, because that's a

private judge chosen by the parties, paid by the

parties. He doesn't have life tenure. It's a very

different animal. And what Congress did in the Federal

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Arbitration Act --

JUSTICE GINSBURG: That's a strange argument

in this respect. You are arguing that this non-Article

III person has more control rather than less control;

that if the judge controlled this arbitrator, somehow

that would violate Article III.

But if the judge has no control and is

essentially little more than a rubber stamp on what the

non-Article III person does, then that's all right. And

the sense of that doesn't come across to me.

MS. BRINKMANN: It's because it's a matter

of contract law, Justice Ginsburg. The parties agreed

to an arbitration here on a contract and the

arbitrator's award speaks for the parties. It is their

agreement. That's what an arbitration award is, and

that's why this streamlined process under Section 9 to

transfer that award, that contractual agreement --

JUSTICE KENNEDY: But -- but the question is

whether or not that streamlined process is the only

process. It seems to me that if the purpose of the

Arbitration Act is to promote confidence in the

arbitration process, that if parties agree to have the

double assurance that the arbitrator hasn't made some

strange ruling of law, that that's quite consistent with

the whole purposes of arbitration.

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MS. BRINKMANN: Well, Your Honor, we are not

suggesting that it's the only means to get an award

enforced, but if you are doing the Section 9 route, the

grounds in the statute are the only grounds on which

that can be done, and the policy about whether or not

those transaction costs, when parties want further

review on an arbitration, is shifted to the courts.

It's one Congress made --

JUSTICE KENNEDY: But you're -- you're

asking us to interpret the statute; and let us assume

that it's a plausible interpretation and interpret the

statute as the Petitioner would. You know, under

Section 8, the parties can use the authority of the

court to libel a ship. The court is extending its

authority to -- to use very intrusive means, and to say

that the parties can't ensure, if they choose, to have

review for correct errors of law -- to correct errors of

law when the ship has been seized, it seems to me to

promote the whole purposes of the act.

MS. BRINKMANN: But, Your Honor, I think

that's where we get to -- between when we are talking

about Section 2 and the purpose is that the parties

control how the arbitration progresses. Then we come to

the entry of the judgment by a court, and that's what

Congress controls; and the grounds in 10 and 11 cannot

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be perceived as default rules. There are many places in

the Federal Arbitration Act where --

JUSTICE KENNEDY: Well, we're arguing about

that textually. I'm saying that there's nothing

inconsistent with the Petitioner's position and the

basic policies of the act. You talk about finality,

streamline, and so forth; but if the parties have more

confidence in the arbitration process by ensuring this

added level of review, it seems to me quite consistent

with the purposes of the act.

MS. BRINKMANN: Well, two things, Your

Honor. If they want to do that, then they don't choose

Section 9, and they don't include an agreement for

Section 9, and then they have what Chief Justice Roberts

was talking about, a -- a state contract action --

JUSTICE STEVENS: Can I interrupt on that

for just a minute? You're assuming and the Chief

Justice's line of questioning was assuming there's an

adequate state remedy available for enforcing this

contract, but the whole premise of the statute at the

time it was enacted was that there was not a state

remedy, because there was a bias against arbitration.

And this was thought to be the sole remedy for

arbitration at the time the statute was enacted.

MS. BRINKMANN: Your Honor, that actually

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brings me to a red herring. I'd like to address the

history, because I think that what happens in

Petitioner's reply brief, there's some confusion between

common-law causes of action to enforce an arbitration

award as a contract, and actions under statutes. Some

of the commentators confuse that also.

There was an opportunity to have judicial

review of the law through a contract enforcement case,

although there was a clear statement requirement. So

there are going to be cases that talk about, that are

not under the statue. Then when you look at cases under

the statute, you have to differentiate between the cases

under the New York model statutes, where you will not

find that, and cases under the Illinois statute, where

you will, because they allow judicial review.

JUSTICE GINSBURG: Are there any --

MS. BRINKMANN: Now, when Justice Scalia --

JUSTICE GINSBURG: Are there any -- are

there any such States left today that are using the

Illinois model?

MS. BRINKMANN: I believe not, Your Honor.

We explain in one of our footnotes that that came into

disfavor.

But I want to address Justice Scalia's point

about the legislative history. There is no case that we

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have found that says, notwithstanding those statutory

grounds, you can contract beyond them, but we do have

not only the New York cases, but also in footnote 8, I

believe, on page 30, several other statutes have

statutory grounds, and repeatedly they say these are the

statutory grounds. That is separate from the common-law

action where you could have a full jury trial.

JUSTICE SCALIA: But -- but the old Illinois

and the old New York rules, you don't have any cases

which say -- which establish that those rules were not

just default rules, but you -- but you were not allowed

to depart from them.

MS. BRINKMANN: We think the language in

those cases will speak -- -

JUSTICE SCALIA: You don't -- you don't have

any case that holds that?

MS. BRINKMANN: The cases say things like on

the statutory grounds, where they do say it. Do they go

the next step and say by the way, we are not going to do

anything else that's -- -

JUSTICE SCALIA: You don't have any case

that holds that.

MS. BRINKMANN: No. No. There's none on

the other side, either.

JUSTICE GINSBURG: Is there a possibility

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that the reason the language in the statute is as it

is -- when was the Federal Arbitration Act; what year

was it?

MS. BRINKMANN: 1925.

JUSTICE GINSBURG: And there was still

abroad in the land considerable distrust of arbitrators.

Judges said arbitrators are stepping on our turf, and so

they would be naturally resistant to let the arbitrator

go ahead and have the most minimal review in court.

Maybe the act was written the way it was to say, if the

parties want to go to arbitration, courts, you stay out

of it.

MS. BRINKMANN: If you choose that -- yes,

Your Honor. And even one more step. But we will tell

the court to stay out of it only if you agree that

you're going to come under for confirmation. It's still

let the parties have the review through common law if

they want it.

That's absolutely correct, Your Honor. And

I think it's that additional step, though, that puts the

whole picture together. And I do want to emphasize,

there is appellate arbitration that takes care all of

the policy concerns about whether or not --

JUSTICE KENNEDY: Would you -- would you

agree that what we hold in this case applies to suits in

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admiralty, where you don't go to State court under

Section 8?

MS. BRINKMANN: That's a difficult question,

Your Honor. I have looked at many of the old -- some of

the arbitration cases did come up from admiralty, and I

think the answer is, if it is an action under Section 9

to confirm, it must be confirmed unless there is

vacatur, modification, or correction under 10 or 11.

Those are exclusive grounds.

JUSTICE KENNEDY: Well, at this point you

don't have a State court fallback for your argument.

MS. BRINKMANN: Well --

JUSTICE KENNEDY: And I -- I can't say why

it isn't -- I just repeat my earlier point -- quite

consistent with encouraging confidence in admiralty

arbitration to allow district courts to review rulings

on a matter of law if the parties so choose.

MS. BRINKMANN: I think that question,

though, perhaps goes to more or not whether the Section

9 is the exclusive means for enforcing an award, and it

isn't. So perhaps there is some other means that is

beyond my expertise.

JUSTICE BREYER: Oh, if there is, then let's

think -- suppose that in the middle of a trial, the

parties say, judge, this is so complicated factually, we

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have a way that we can get an agreed statement of facts.

They walk out the door; they have a friend who has a

sign called arbitrator; and they come away from that

friend with an agreed statement of facts, which they

agree to submit to the judge to apply the law. Now,

there is nothing wrong with that, I imagine.

MS. BRINKMANN: Well, that sign would have

to be changed. It would have to say --

JUSTICE BREYER: We know -- I'm sorry. I'm

not even going to tell the judge how I find this. I go

to a crystal ball; I go to any way I want. I will come

in with an agreed statement of facts, and is there

anything, if we have that agreed statement of facts,

that would will stop the judge from saying I take this

agreed statement of facts; there's a difference about

how the law applies to it; I will resolve this case?

MS. BRINKMANN: There are a couple of

things. That's not an arbitration award.

JUSTICE BREYER: Well, no -- I just say --

well, I'll ask you the next question. I take the answer

to the first question is there's nothing wrong with

that.

MS. BRINKMANN: I have to say --

CHIEF JUSTICE ROBERTS: Isn't there --

MS. BRINKMANN: -- the court would not be

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buy an injunction. You cannot stipulate to the

erroneous law. The Article III judge maintained that

authority.

JUSTICE BREYER: All right. I'm trying to

get to my question; I'm not asking it very well.

What they agreed to is an agreed statement

of facts, subject to Section 9 standards, Section 9 and

10.

MS. BRINKMANN: That's difficult, because

it's an award --

JUSTICE BREYER: What I'm driving at,

whether I've asked it well or not --

MS. BRINKMANN: Yes, right.

JUSTICE BREYER: -- is is how is it any

different from coming in with an agreed statement of

facts?

MS. BRINKMANN: Because this is an

arbitration award. It is a contractual agreement where

the award gives -- imposes a legal obligation on someone

else, and that award is going to be entered as a

judgment of the court, against the parties.

JUSTICE STEVENS: May I ask this sort of

basic question? Forgetting the text for a minute, what

policy reason -- can you think of why would Congress

want to prohibit this particular form of agreement?

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MS. BRINKMANN: Congress wanted to give

parties an option for a quick, simple, cost-effective

and final way --

JUSTICE STEVENS: Why would they want to

prohibit an option that takes a little bit longer?

MS. BRINKMANN: Because that would be a

different action where you have to look to State

contract law, contract law defenses, whether there are

State arbitration laws -- it's a different animal. They

were looking at the animal of an arbitration agreement

and a streamlined method to have that enforced and

that's what Sections 9, 10, and 11 do.

CHIEF JUSTICE ROBERTS: I thought your

answer would be part the point Justice Stevens brought

up earlier. There was this State hostility to enforcing

arbitration agreements at all --

MS. BRINKMANN: Uh-huh.

CHIEF JUSTICE ROBERTS: And so what the

Federal Arbitration Act says is, all right, in the

narrow circumstances where the parties agreed, subject

to this narrow standard, you have to enforce it. But

that doesn't mean we are going to override the State law

across the board.

MS. BRINKMANN: That's right. It gives the

parties the option for choosing that, and if you choose

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that, you have to do what Congress says.

JUSTICE STEVENS: Why do they want to

prevent the parties from choosing the option they chose

in this case? I don't think that answer says why they'd

want to do that.

MS. BRINKMANN: They can choose another

option, but they may have a full-blown trial about

contract law in the award, and that's what Section 9

would --

JUSTICE STEVENS: But then there'd be no

arbitration at all. That's right.

MS. BRINKMANN: I also have --

JUSTICE STEVENS: But I just don't

understand why it makes any sense at all to say this

type of arbitration agreement is invalid.

JUSTICE KENNEDY: And I would add --

MS. BRINKMANN: Well, Your Honor, we're not

saying it's invalid.

JUSTICE KENNEDY: I would add that in

admiralty you don't have the back-up of State law.

MS. BRINKMANN: We're not saying it's

invalid, Your Honor. We're saying that there's

entitlement to confirmation of the award unless the

grounds of 10 and 11 are there. And Petitioner wants to

graft on the thing that says "or on any ground the

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parties agree on." There's no limit to that, Your

Honor. There's nothing for harmless error --

JUSTICE SOUTER: No, but the question is

still here: Why should there be a limit if the parties

themselves agree? Because if they didn't come in under

arbitration and they simply came in under contract or

whatever the causes of action might be in a diversity

case, the court would have to be dealing with these

issues anyway.

MS. BRINKMANN: It would be under a

different cause of action, Justice Souter.

JUSTICE SOUTER: Pardon me?

MS. BRINKMANN: You'd be under State

contract law. Here you'd have to develop a Federal

common law of when you took a Section 9 and you started

reviewing it for error. Are we really going to allow de

novo review and vacatur when it's harmless? There's a

whole body of Federal law that has developed about

harmless error to address those kinds of issues. This

would be a Federal --

JUSTICE SOUTER: That's true in any

diversity case.

MS. BRINKMANN: But, Your Honor, this would

be under the Federal Arbitration Act. Without any

guidance from Congress, contrary to the grounds they put

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forward. And they have no limit.

JUSTICE SOUTER: Okay, why didn't Congress

give any guidance? One suggestion that the Chief

Justice made, and it played through my mind, is maybe

the -- what seemed to be the plain language limits in

Section 9 represent not necessarily a kind of policy

choice in a perfect world, but a political policy

choice. Maybe that was the term as you -- as you read

Section 9, maybe that was the term upon which the act

could be passed.

MS. BRINKMANN: It was --

JUSTICE SOUTER: We will, in effect -- we

will say: Look, you got to enforce these contracts,

arbitration contracts, but you don't have to go one step

further. Maybe that was the political deal. Is there

any indication that that was the case and that's the

explanation for this limit?

MS. BRINKMANN: With all respect, I think

not. I think that the Section 2 and 3, the enforcement

of the arbitration agreement, is about the private

parties determining the process. But when you get to

the entry of a judgment by a court on the award, what

Congress did said: We're going to give you an option to

have an efficient, streamlined way for that also, and

here it is: 9, 10 and 11. Now, you still have

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something else and you have to agree to this in your

agreement, but if you agree to it, this is what you

have.

And I have to say Petitioner's argument is

so broad, as Justice Ginsburg pointed out, there were

questions of fact in this. We were -- we were

litigating under this agreement also in the district

court, and we brought a question of fact to the district

court. When the district court first sent this back to

the arbitrator, it went through and basically told the

arbitrator: You know, you haven't looked at these

facts; you haven't looked at these fact; you haven't

looked at these facts. I believe it's Pet. App. 57a.

And it sent it back to show the arbitrator's work. I

mean that is what --

JUSTICE GINSBURG: Is that what --

MS. BRINKMANN: -- courts would get mired in

under a common law development standard of review,

according to what --

JUSTICE BREYER: Has that been a nightmare

-- has it been the nightmare you suggest in labor

arbitration? Because I think labor arbitration falls

outside the act, doesn't it?

MS. BRINKMANN: It does.

JUSTICE BREYER: And has that turned into

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some kind of terrible nightmare where there are dozens

of rules and they have a long complicated labor set of

regulations on it? I don't think so, but has it?

MS. BRINKMANN: Well, Your Honor, I'm not as

familiar with that perhaps as I should be, but I know --

JUSTICE BREYER: Well, if we run that pretty

well, why wouldn't you run this pretty well --

MS. BRINKMANN: I think the --

JUSTICE BREYER: -- given a back-up, looking

at it as a default?

MS. BRINKMANN: I think they're very

different policies and different statutory frameworks

that apply.

JUSTICE GINSBURG: Well, let's take this

statute and let's take the circuits that have the rule,

the opposite rule. In fact, the Ninth Circuit had the

opposite rule until rather recently. What has been the

experience -- I think the Fifth Circuit is on the other

side?

MS. BRINKMANN: Yes.

JUSTICE GINSBURG: What has been the

experience there?

MS. BRINKMANN: There has not been

widespread use of this provision. I think that our

amici briefs really speak to this, Your Honor, because

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the difference would be a statement by the U.S. Supreme

Court that says parties can now create whatever other

grounds they want and go in through Section 9 in a

streamlined process and are going to impose on Federal

courts, not appellate arbitrators, on Federal courts,

whatever grounds they want -- de novo review of fact, no

harmless error, perhaps create different appellate

standards when it goes up.

And I think that the amici really point out

that that is so contrary to the finality and

efficiencies that the animal of arbitration --

JUSTICE GINSBURG: I think a lot of those

horribles, Mr. Phillips would agree with you because he

hesitated even on de novo, and I think he thought that

trying to control an appeal from the district court,

that would be out of the ballpark.

MS. BRINKMANN: I think it would create a

hybrid animal that is not what the Arbitration Act is

about.

JUSTICE SCALIA: Why couldn't you limit it

reasonably by saying the parties can agree to anything?

We would only have to say at least, the parties can at

least agree to anything that the court would be able to

do if this had been brought as an action in the court,

rather than initially as an arbitration.

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MS. BRINKMANN: With all due respect --

JUSTICE SCALIA: Which means the court would

decide the questions of law.

MS. BRINKMANN: With all due respect, Your

Honor, that would be for Congress to do, not this Court.

This is a statutory framework, a statutory cause of

action that Congress wrote.

JUSTICE SCALIA: I understand, but that

would be a limit. You say it's limitless. It doesn't

have to be limitless.

MS. BRINKMANN: No, but you're putting --

you are, I think, as this Court itself has said, you're

breeding litigation from a statute whose whole point was

to minimize and limit litigation. You're creating a new

body of Federal common law that's really antithetical to

the core purpose of the Arbitration Act. And I think

that the -- that overriding principle of Federal

Arbitration Act should really motivate the Court to

realize what Congress did and the exclusive grounds that

they set forth.

JUSTICE GINSBURG: But one problem that I

have with your position is you say that the -- you

should continue to prevail, although that would be in

violation of the parties' agreement. Under the Ninth

Circuit decision, you win, what the arbitrator says

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goes, and there isn't the review that the parties

bargained for.

MS. BRINKMANN: That's the severability

point that they lost on, Your Honor. They had

petitioned for cert on severability and tried to say

because the judicial review became legally impossible

the rest should have followed. We'd be arguing a

different case. They petitioned for rehearing en banc

review on that and did not petition for cert on that.

But that is answered by the severability ruling below.

JUSTICE KENNEDY: Could the parties have an

arbitration agreement in which they said, if there are

contested issues of law, either party may seek

declaratory judgment?

MS. BRINKMANN: In court?

JUSTICE KENNEDY: In a Federal court, under

the Declaratory Judgment Act.

MS. BRINKMANN: I don't know if that would

be an arbitration agreement. I'm not sure what the --

JUSTICE KENNEDY: My hypothetical is it's in

the arbitration agreement. If the arbitrator gets stuck

on a difficult question of law, either party can seek

declaratory relief, and the arbitration proceedings are

held in abeyance pending that declaration.

MS. BRINKMANN: I hesitate because it sounds

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like that may just be an advisory opinion, and there

might be an Article III problem with that.

JUSTICE KENNEDY: No. There's the advisory

-- we've been through this. This is a real controversy,

not an advisory opinion.

MS. BRINKMANN: Then they can go and have --

JUSTICE KENNEDY: I think the reason you

hesitated to answer yes might be inconsistent with your

position.

(Laughter.)

MS. BRINKMANN: No, I don't think so, Your

Honor. I think that if they have a declaratory

judgment, then they'll have a judgment. I don't know

why they would ever go back to the arbitrator. That's

what I'm not --

JUSTICE KENNEDY: There are lots of other

things for the arbitrator to do. He's got some specific

issues of law that are contested.

MS. BRINKMANN: I don't see how that is

inconsistent with a party independently going for a

declaratory judgment action. I don't think that's

contrary to our position, Your Honor.

Thank you.

CHIEF JUSTICE ROBERTS: Thank you, Ms.

Brinkmann.

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Mr. Phillips, you have you 5 minutes

remaining.

REBUTTAL ARGUMENT OF CARTER G. PHILLIPS

ON BEHALF OF THE PETITIONER

MR. PHILLIPS: Thank you, Mr. Chief Justice.

I'll try to give you back some of that time before I'm

done.

In my experience in evaluating cases like

this, it seems to me that in some ways where you end up

depends in large measure on where you start. And the

parties fundamentally disagree about whether or not this

is an agreement that should be -- you know, who's got

the burden? Do we have to show that this agreement is

authorized by something or are we entitled to have this

agreement and it's their burden to demonstrate clearly

that Congress meant not to allow this to be enforced?

And it seems to me clear that the answer to that is that

it's their burden to find something specific in the

Federal Arbitration Act or otherwise that precludes

this.

Section 9 doesn't get them there because

Section 9 is predicated always on an agreement of the

parties in the first instance, and so that's not a basis

for doing that, but even if you thought Section --

JUSTICE SOUTER: What do you say about her

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argument that we are limited in considering your

argument by the severability ruling that you didn't

appeal?

MR. PHILLIPS: I don't see how the

severability ruling has any relevance to this particular

problem, because what we're saying is we are entitled to

enforce the -- the agreement of the parties with respect

to exactly what the district court has the authority to

do. The fact that it -- whether it's severable or not

severable doesn't mean that we're not entitled to the

enforcement of the agreement as written by the parties.

Severability doesn't eliminate our right to have that

part of the agreement --

JUSTICE SOUTER: No, but it does -- it does

preclude -- I mean, her answer is an answer to the

argument that you were making in response to a question

of mine earlier, that in fact you don't have an

agreement within the meaning of the preamble portion of

Section 9. She says you do because you have one after

severance and you didn't appeal severability.

MR. PHILLIPS: Right, but all I'm saying is

that I think that puts the cart before the horse.

Remember, severability only comes up after the court of

appeals had decided that this provision in the contract

was unenforceable. And then the question is, is there

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any part -- you know, is the entire arbitration set

aside.

And what I'm saying is that initial decision

is wrong. And, therefore, you don't have to worry about

severability. And the reason why it's wrong is because

it's their burden to show something in the Federal

Arbitration Act that's, that precludes enforcement of

this provision. Section 9 doesn't get you there.

Section 10 wouldn't get you there because it's not --

JUSTICE SCALIA: Remind me why Section 9

doesn't get you there -- because of the "if" clause.

MR. PHILLIPS: Right. Because of the "if"

clause.

JUSTICE SCALIA: If the parties in their

agreement have agreed that a judgment of a court shall

be entered upon the award made pursuant to -- but they

have agreed to that, haven't they?

MR. PHILLIPS: Well no --

JUSTICE SCALIA: The question is simply --

MR. PHILLIPS: Subject to the condition that

the district court would make a determination that there

was no error in law. And that -- I mean, that's -- you

know, they had -- I mean --

JUSTICE SCALIA: Why is, why is that

condition excluded from the "if" clause, but all of the

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other conditions that are set forth in 10 are not

excluded from the "if" clause? I mean, it seems to me

the "if" clause must embrace any conditions.

MR. PHILLIPS: Right. But the point is if,

if all you do is agree to an arbitration, then Section 9

and Section 10 apply directly. But if you agree to an

arbitration that is subject to legal error or review,

okay, then the "if" clause doesn't prevent you from

being allowed to have that portion enforced, Your Honor.

JUSTICE ALITO: Well, if you agree on

condition and the conditions are satisfied, are you

saying that the district court must enforce under

Section 9, or are you saying that enforcement would be

under some other authority?

MR. PHILLIPS: I think the enforcement would

be under the existing authority that the district court

had in this particular case, because this was a case

that was pending before the district court under

diversity jurisdiction seeking to enforce the lease

agreement. And we have a final decision from the

arbitrator. The judge has now made a decision that that

is wrong as a matter of law and has enforced the lease

in a particular way.

And so the question is, is that judgment of

the district court subject to challenge? And our answer

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to that is no. There is nothing in the Federal

Arbitration Act that prevents the district judge from

doing precisely what it did.

JUSTICE KENNEDY: I'm not sure why you have

to give the answer you just gave to Justice Alito, if

what you told Justice Scalia is correct, that the "if"

clause includes the condition that the court reviewed

for issues -- for errors of law.

MR. PHILLIPS: I'm not sure there is any

inconsistency between those two things, between those

two things -- statements.

JUSTICE KENNEDY: Well -- but you're arguing

to Justice Scalia that Section 9 works because you could

interpret the "if" clause that way.


JUSTICE KENNEDY: Now you're telling Justice

Scalia, oh, well, it's a different action. We have got

the action here anyway.

MR. PHILLIPS: Right. Well, all I'm saying

is that we can win on either theory.

My whole point here has been Section 9

doesn't prevent us from being able to do this. Section

10 is not an exhaustive list and, therefore, we are

allowed to add to Section 10. And at the end of the

day, regardless, you ought to interpret this under

66




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Section 2, consistent with the intent of the parties to

ensure that we get what we want.

The one point I did want to make about how

all of this operates is, you know, in the relationship

between the courts and arbitrators, it seems to there is

probably no more important issue than who decides

whether something is arbitratable. And yet, this Court

held quite clearly in First Options that even though the

statute says it's the arbitrator -- I mean, that it's

the court, it can be made the arbitrator by the parties.

Thank you, Your Honor.

CHIEF JUSTICE ROBERTS: Thank you,

Mr. Phillips. The case is submitted.

(Whereupon, at 11:06 a.m., the case in the

above-entitled matter was submitted.)

67





A abeyance 60:24able 15:14 58:23

66:22above-entitled

1:12 67:15abroad 47:6absence 12:18absolutely 9:8

11:15 16:830:8 47:19

accommodate 10:1

accounts 41:2act 3:20 8:22 9:3

9:20,25 10:10

10:20 11:1012:9,10 13:1315:15,17,20,2216:1 17:16,1818:17,18 26:831:24 32:2333:1,3 34:335:25 42:1,2143:19 44:2,644:10 47:2,1052:19 54:24

55:9 56:2358:18 59:16,1860:17 62:1964:7 66:2

action 10:7,811:12 14:2415:2,3 16:1634:19 36:1039:13 44:1545:4 46:7 48:652:7 54:7,1158:24 59:761:21 66:17,18

actions 45:5add 53:16,19

66:24added 44:9additional 32:4

47:20address 45:1,24

54:19addressed 37:19adequate 44:19adjudicated

5:17

admiralty 48:148:5,15 53:20

admit 19:4advisory 61:1,3

61:5aggressive 21:4

21:4agree 6:11 18:3

19:23 20:125:4,10 32:534:6 35:12,13

35:13 37:2342:22 47:15,2549:5 50:5,6,1350:13 54:1,556:1,2 58:1358:21,23 65:565:6,10

agreed 3:1223:19,21 25:125:6,17,1934:7 38:2039:3 42:1249:1,4,12,1349:15 50:3,2251:6,6,1552:20 64:15,17

agreement 3:143:22,24 4:4,184:25 5:1,7 6:187:6,14 9:2311:1,4,4,2112:4 13:1514:4 15:14

17:4,25 18:619:21 20:3,1222:19 23:1925:1 27:19,2229:7,16 30:1932:13 37:7,1438:17 42:15,1744:13 51:18,25

52:10 53:1555:20 56:2,759:24 60:12,1960:21 62:12,1362:15,22 63:7

63:11,13,1864:15 65:20

agreements 8:937:25 52:16

agrees 35:20,20ahead 47:9alien 8:10Alito 6:17 65:10

66:5allow 8:2 22:11

40:12 45:15

48:16 54:1662:16

allowed 46:1165:9 66:24

allows 33:15alternative

12:13 16:10alternatives

16:7ambiguity 28:11

28:12amici 8:13 57:25

58:9amount 12:17analysis 8:23animal 41:25

52:9,10 58:1158:18

answer 11:2212:20 13:12,1516:6 19:1622:17 23:1526:2 27:13

28:7,21 37:1140:17 48:649:20 52:1453:4 61:862:17 63:15,1565:25 66:5

answered 60:10antithetical

59:15anyway 10:11

54:9 66:18App 3:16 56:13appeal 58:15

63:3,20appeals 11:5

37:18 63:24APPEARAN...

1:15appellate 47:22

58:5,7appendix 23:18

24:22,24applicable 20:16

33:17

applied 29:1537:19

applies 20:347:25 49:16

apply 14:1924:11,16,17,1829:10 33:1,233:18 40:1049:5 57:1365:6

applying 10:4appoint 39:9approach 8:20

34:21 35:10arbitral 5:18arbitratable

67:7arbitrate 3:12

15:12 26:1627:15,18

arbitration 3:153:20 4:4 5:1,76:17 7:14 8:9

8:22 9:3,20,2410:10,20,2511:4,10,2112:10 13:13,1815:11,15,17,1915:22 16:1,1216:18,24 17:317:4,16,18,24

18:6,17,18,1918:24,24 19:919:11,21 20:420:8 22:9,1023:7,10,11

26:8 29:1530:7 31:24,2533:2,6,16,2233:25 34:3,2134:24 35:3,635:25 36:2237:24 38:2141:12 42:1,1342:15,21,22,2543:7,23 44:2,844:22,24 45:4

47:2,11,2248:5,16 49:1851:18 52:9,1052:16,19 53:1153:15 54:6,2455:14,20 56:2256:22 58:11,1858:25 59:16,1860:12,19,21,2362:19 64:1,765:5,7 66:2

arbitrations 23:4

arbitration's 5:25

arbitrator 5:105:16 7:15,199:13 25:8 33:238:23 41:19,2142:5,23 47:849:3 56:10,1159:25 60:2161:14,17 65:21

67:9,10arbitrators 34:8

47:6,7 58:567:5

arbitrator's 3:18 33:742:14 56:14

area 13:7





changed 10:2249:8

chaos 11:19Chief 3:3,9 7:4

9:1,9,14,16,18

10:9,14,19,2311:2,8,1114:21 15:7,1015:18 17:3,717:10,12 18:518:11,14 19:719:13,17,2220:1,7,18,2231:16,21 34:1935:18 36:1339:15 44:14,17

49:24 50:8,1252:13,18 55:361:24 62:567:12

choice 16:6 22:823:9 28:2529:5 55:7,8

choose 5:1823:11 43:1644:12 47:1348:17 52:2553:6

choosing 52:2553:3

chose 22:1023:11 53:3

chosen 22:841:23

circuit 41:2,557:16,18 59:25

circuits 57:15circumstances

5:14 16:13

21:6,16 52:20citation 15:10cite 8:12,13cited 29:13cites 33:20citizen 50:14,14clause 64:11,13

64:25 65:2,3,8

66:7,14clear 7:1 12:6

30:8 45:962:17

clearest 17:21

clearly 7:1312:15 16:7,2016:21 33:1735:4 36:462:15 67:8

client 37:3closer 4:5coin 8:18collusion 50:17come 8:9 26:12

27:10,11 28:18

33:23 35:1542:10 43:2347:16 48:549:3,11 50:350:21 54:5

comes 18:2123:2 39:1340:20 63:23

coming 51:15commentators

45:6commerce 18:8committed 6:24

7:1common 13:18

13:20 23:2,434:18 36:947:17 54:1556:18 59:15

common-law 45:4 46:6

complete 28:9completely 8:10

13:19 16:11complex 5:9complicated

16:11 48:2557:2

components 31:9

concern 8:7

concerned 4:1concerning 18:7concerns 47:23conclude 9:19conclusions 3:18

conclusively 5:16

concurring 8:15condition 37:16

64:20,25 65:1166:7

conditions 65:165:3,11

conference 41:17

confidence 42:21 44:848:15

confirm 9:410:21 15:2416:1 19:11,1520:8 35:1637:14 39:1348:7

confirmation 24:8,9 25:2335:14 47:1653:23

confirmed 25:1548:7

confuse 45:6confusion 45:3Congress 16:6,7

22:8 28:2431:3,4 33:1134:22 35:8,1736:4 41:2543:8,25 51:2452:1 53:1

54:25 55:2,2359:5,7,1962:16

congressional 34:3

conscious 28:25consent 35:20

36:2,8,11

considerable 47:6

considering 63:1

consistent 24:8

27:19 42:2444:9 48:1567:1

construed 22:15construing

28:12consummation

26:23contested 60:13

61:18context 6:5 9:9

24:11contingencies

22:24continue 59:23contract 3:22

4:11 9:6,7,219:24 10:8,1511:12,13 12:1114:24 15:2,315:11,12,2416:2,16,1717:4,8,14 18:618:13 19:1927:5 30:1533:16,17 34:834:12,16 35:2536:10,16,1940:13 42:12,1344:15,20 45:545:8 46:2 52:852:8 53:8 54:654:14 63:24

contracts 55:13

55:14contractual 12:4

27:2 42:1751:18

contrary 37:1754:25 58:1061:22

control 41:20

42:4,4,7 43:2358:15

controlled 42:5controlling

21:15,16,21

22:1controls 21:6

43:25controversy

41:16 61:4conundrum

19:17core 18:20 59:16correct 3:17

20:13,14,2324:4 25:13,16

29:25 31:2543:17,17 47:1966:6

correction 48:8Corruption

32:14cost 36:23costs 43:6cost-effective

52:2country 41:3couple 13:16

36:1 49:17course 28:2 33:2

36:4,11 40:23court 1:1,13

3:10,13,16,193:25 4:3 5:1,65:17 6:3,9,136:14,25 7:168:1,5,17,24 9:49:6,11,12,2210:7,12,16,18

10:21,25 11:111:5,12 13:1314:2 15:4,6,1315:23,25 17:117:1,1 18:4,1718:25 19:1020:2,8,1323:20 24:4





25:1 30:2031:22,25 32:2533:5 35:11,1536:25 37:18,2138:8,19,24

39:5,6,9,10,1239:14,16,1740:23 43:14,1443:24 47:9,1548:1,11 49:2550:24,25 51:2154:8 55:2256:8,9,9 58:258:15,23,2459:2,5,12,1860:15,16 63:8

63:23 64:15,2165:12,16,18,2566:7 67:7,10

courts 12:1134:10 36:1238:2,3,6 43:747:11 48:1656:17 58:5,567:5

court's 5:2014:4 26:6 30:8

covered 18:733:15 35:4,5

create 58:2,7,17created 21:18

34:20creating 59:14criteria 9:4

19:14crystal 49:11customer 33:6customers 32:24

D D 3:1day 5:17 13:4

15:5 66:25de 3:24 4:18 5:2

5:21 6:1454:16 58:6,14

dead 8:19

deal 7:8 9:2015:21 34:1055:15

dealing 4:6 54:8decide 3:19 5:15

6:9,13 16:2317:1 34:8,1040:16 41:1659:3

decided 5:1563:24

decides 67:6decision 7:2

8:15,19 29:459:25 64:365:20,21

decisions 26:730:8

declaration 25:760:24

declaratory 60:14,17,2361:12,21

decree 36:2,8,11decrees 35:20default 29:10,21

29:24 30:2,1744:1 46:1157:10

defend 4:19 7:97:20,21

defenses 52:8defer 14:3definition 30:18deliberate 23:9deliberately

22:8demonstrate

62:15

depart 46:12depended 50:24depends 62:10despite 10:21determination

15:9 64:21determine 14:24determining

55:21develop 54:14developed 54:18development

23:7 56:18

developments 33:21

dictating 6:15difference 49:15

58:1differences 36:2different 4:5

7:13 8:16 10:515:20 16:320:24 22:9,1927:1,2 29:7

32:22 33:19,2140:16 41:22,2551:15 52:7,954:11 57:12,1258:7 60:866:17

differentiate 45:12

differently 18:19 29:1632:18

difficult 13:148:3 51:960:22

difficulty 12:9direct 19:10directly 65:6dirty 37:24disagree 17:9

62:11discovery 41:10discussion 16:15disfavor 45:23

dismiss 40:24dispose 28:18dispute 3:12disregard 30:13

32:11,12,1533:3,9

dissenting 7:1distinction 33:8

district 3:13,143:16,25 4:2 5:15:5,6,11,20 6:36:13,14,257:16 8:1,17 9:4

9:6,11,12,2210:7,21,2511:1,12 12:1914:4 15:4,8,1315:23,25 18:419:10 20:7,1224:4 39:1040:15,23 41:348:16 56:7,8,958:15 63:864:21 65:12,16

65:18,25 66:2distrust 47:6diversity 10:13

10:15 15:439:16 54:7,2265:19

doing 10:18 39:243:3 62:2466:3

door 49:2double 42:23doubt 38:25dozens 57:1draw 8:2drive 8:23driving 51:11dual 7:10due 59:1,4D.C 1:9,16,18

E E 2:1 3:1,1earlier 48:14

52:15 63:17early 13:17easy 18:1effect 6:2 22:11

22:15 27:655:12

efficiencies 58:11

efficiency 17:18efficient 18:1

36:6 41:1555:24

effort 38:22

either 3:20 8:1812:6,20 46:2460:13,22 66:20

elect 4:12elements 41:22eliminate 63:12embodied 26:8embrace 65:3embracing 8:20emissions 5:9emphasize

47:21empirical 8:11en 37:20 60:8enacted 34:2

35:8 44:21,24encouraging

48:15enforce 9:6,22

9:23 11:1,1415:6,14 16:4,926:9 30:1534:20,24 35:1536:15,19 37:845:4 52:2155:13 63:765:12,19

enforceability 14:24

enforceable 9:29:5 14:5,8,1117:8,11,13,1434:25

enforced 9:21

16:12 17:1624:1 25:1526:15 27:16,1937:25 43:352:11 62:1665:9,22

enforcement 11:21 25:24





26:24 27:334:21 35:636:3 40:1245:8 55:1963:11 64:7

65:13,15enforces 9:7enforcing 4:8

10:15 13:1444:19 48:2052:15

engaged 8:8ensure 43:16

67:2ensuring 44:8enter 11:6

entered 23:2025:2,5,6 30:2030:22 51:2064:16

entire 64:1entitled 62:14

63:6,10entitlement

53:23entrails 8:18entry 43:24

55:22environmental

20:16envisions 23:23equal 38:21equitable 36:12erroneous 3:18

24:5 51:2error 6:24 7:1,7

7:23 19:2532:2,12,1633:10 41:20

54:2,16,1958:7 64:2265:7

errors 32:1343:17,17 66:8

ESQ 1:16,18 2:32:5,8

essentially 5:6

42:8establish 46:10evaluate 5:21evaluating 62:8evidence 6:20

7:7,15,17 8:11exactly 10:17

11:16 29:2235:17 63:8

exceeding 32:1132:14 33:4

exceeds 12:17excluded 64:25

65:2exclusive 30:10

31:24 48:9,20

59:19exclusivity 37:1Excuse 16:14exhaustive

66:23exhaustively

30:6existing 65:16experience

57:18,22 62:8expertise 48:22explain 45:22explanation

55:17express 15:23expressing

32:18extending 43:14extends 20:17extent 4:11extreme 8:20

F FAA 11:20

28:14 31:932:1 34:2535:2,7 36:7

face 9:25 21:11faced 41:7facet 27:18,22fact 5:22 6:14,19

10:21 12:613:16 14:2222:7 24:7 32:740:9 50:3,4,2256:6,8,12

57:16 58:663:9,17

facts 5:2 40:2149:1,4,12,1349:15 51:7,1656:12,13

factual 7:18factually 48:25failure 34:16fair 21:4fall 9:19 15:19

19:13 29:18fallback 48:11falls 15:16 18:13

56:22familiar 57:5fanciful 8:7far 9:22fashion 25:22Federal 3:20,21

5:17 9:2,19,2410:6,10,12,1610:20 11:912:10,13 13:1215:4,14,17,1915:22,25 17:1617:18 18:16,1826:8 31:2333:24 34:238:6 39:5,1739:24 40:4,1540:23 41:9,1241:25 44:247:2 50:25

52:19 54:14,1854:20,24 58:458:5 59:15,1760:16 62:1964:6 66:1

field 19:9Fifth 57:18filed 37:20

final 11:6 36:652:3 65:20

finality 36:2244:6 58:10

find 5:1 39:4

45:14 49:1062:18

findings 5:66:19 7:18

fine 50:5finish 40:8first 3:4 10:14

12:8 21:2222:19,25 23:1624:21 25:1126:21 28:12,23

37:6 40:1949:21 56:962:23 67:8

fit 39:6flipped 10:24flipping 8:18fly 9:25followed 60:7following 16:15footnote 46:3footnotes 45:22Forgetting

51:23form 51:25forth 40:22 44:7

59:20 65:1forward 55:1found 6:25 46:1framework 36:5

59:6frameworks

57:12framing 26:20

fraud 32:14free 5:14,20

38:1friend 36:14

49:2,4full 46:7full-blown 53:7function 4:6

5:22functions 4:21

4:25 7:25 8:4fundamentally

62:11

further 31:1343:6 55:15

G G 1:16 2:3,8 3:1

3:7 62:3gain 36:20,21gather 12:8general 13:20generally 23:10

33:1,16

genesis 38:18getting 20:23

Ginsburg 3:234:9,14 6:7 7:530:1,11 33:1238:16 39:2240:22 41:1342:2,12 45:1645:18 46:2547:5 56:5,1657:14,21 58:1259:21

give 7:24 35:952:1 55:3,2362:6 66:5

given 23:2 41:941:11 57:9

gives 9:3 12:1515:23 51:1952:24

go 5:11,18 10:412:2 17:2422:24 28:16

29:6 32:17,1735:10,11 38:138:2 39:1541:19 46:1847:9,11 48:149:10,11 50:755:14 58:361:6,14





goes 32:13 48:1950:18 58:860:1

going 7:9 11:2228:18 34:11

35:9 36:1838:4,5,6,8,940:3,7,1041:17,18,1945:10 46:1947:16 49:1051:20 52:2254:16 55:2358:4 61:20

good 34:12governed 14:7

Grace 30:9,1433:20

graft 32:3 53:25granted 40:24grapple 24:6great 17:14 37:3grips 27:10,12ground 32:4,5,8

53:25grounds 30:6

31:24 32:143:4,4,25 46:246:5,6,18 48:953:24 54:2558:3,6 59:19

guess 13:1guidance 54:25

55:3

H Hall 1:3 3:4 7:17handle 18:19happen 22:22

34:5happened 37:18

39:11happens 10:3

17:22 22:1835:18,19 45:2

harmless 54:254:17,19 58:7

hate 35:1hear 3:3 35:11held 33:5 60:24

67:8herring 28:9,18

28:21,22 45:1hesitate 60:25hesitated 58:14

61:8historical 22:7

22:16history 23:2

28:24 29:345:2,25

hold 40:3 47:25holding 41:2,4

holds 46:16,22Honor 10:13

13:4 19:6 21:331:15 32:1036:3 38:1139:8,18 40:2041:7 43:1,2044:12,25 45:2147:14,19 48:453:17,22 54:254:23 57:4,2559:5 60:461:12,22 65:967:11

hopefully 24:19horribles 58:13horse 63:22hostility 52:15hundred 40:8hybrid 58:18hypothetical

60:20

I idea 40:2identify 17:21identifying 4:2,3idle 39:2ignoring 23:6,6

23:8III 42:4,6,9 51:2

61:2Illinois 28:8

29:1,3,12,1429:20 45:14,2046:8

imagine 49:6implement

28:13implementing

4:7implicate 5:22implicated 4:22implication

40:25important 26:7

30:3 39:11

40:18 67:6impose 58:4imposes 51:19impossible

37:15 60:6improperly

40:24include 32:1

44:13includes 66:7inconsistency

66:10inconsistent

23:12 25:2427:23 44:561:8,20

indemnification 20:17

independently 61:20

indication 55:16indisputable

16:8

inherent 12:1840:14

initial 4:8 64:3initially 58:25injunction 51:1insist 50:7instance 10:3

62:23

intended 31:4intent 4:7 21:6

22:13 26:9,1426:16 27:15,1727:19 28:13

34:3 67:1interest 37:3interested 39:1interesting

13:23interests 10:1interfere 8:4interpret 8:24

43:10,11 66:1466:25

interpretation 20:15 21:533:7 43:11

interrupt 44:16introduces

41:22intrusive 43:15invalid 53:15,18

53:22invalidate 20:2involved 29:14involving 18:8

40:21irrational 7:2issue 4:5 6:21,22

7:16,19,2213:25 26:17,1929:8 37:1938:23 39:441:18 67:6

issued 3:15issues 5:15 6:10

40:9 54:9,1960:13 61:18

66:8

J judge 5:11 7:2

8:14 12:15,1935:21 36:17,1838:18,21,2539:3,10 40:4,4

40:4,15 41:3,741:9,15,19,2342:5,7 48:2549:5,10,1450:5,6 51:2

65:21 66:2 judges 39:24

41:9,12 47:7 judge's 12:14

15:8 judgment 11:6

16:2 19:11,1523:19 25:1,5,626:4,5 30:2035:11,23 36:739:13 43:24

51:21 55:2260:14,17 61:1361:13,21 64:1565:24

judicata 38:5 judicial 4:6,25

5:22 8:10 33:745:7,15 60:6

Judiciary 4:21 juries 41:10 jurisdiction

10:11 15:538:7 65:19

jurisdictional 12:17

jury 46:7 justice 3:3,9,23

4:9,14,24 5:85:24 6:1,2,7,177:4,5,24 9:1,99:14,16,1810:9,14,19,2311:2,8,11,18

11:25 12:2313:6,16 14:614:10,12,15,1714:21 15:7,1015:18 16:14,2116:23 17:3,717:10,12 18:518:11,14,15,23





19:3,7,13,1719:22 20:1,720:18,22 21:721:10,20,23,2422:2,4,20 23:3

23:5,8,13,2524:6,14,2325:3,9,14,1725:21 26:11,1426:23 27:1,5,827:9,13,2128:1,2,4,15,1729:8,19,2330:1,11,1631:1,6,12,1631:21 32:6,9

32:17,20 33:1234:5,15,19,2335:18 36:1337:4,23 38:1438:16 39:15,2039:22 40:2141:1,13 42:242:12,18 43:944:3,14,1645:16,17,18,2446:8,15,21,2547:5,24 48:1048:13,23 49:949:19,24 50:250:8,9,12,1550:19 51:4,1151:14,22 52:452:13,14,1853:2,10,13,1653:19 54:3,1154:12,21 55:255:4,12 56:556:16,20,25

57:6,9,14,2158:12,20 59:259:8,21 60:1160:16,20 61:361:7,16,2462:5,25 63:1464:10,14,19,2465:10 66:4,5,6

66:12,13,16,1667:12

Justice's 44:18

K keep 30:4KENNEDY

4:24 5:8 7:2442:18 43:944:3 47:2448:10,13 53:1653:19 60:11,1660:20 61:3,761:16 66:4,1266:16

kept 38:18

kind 9:3 12:1515:23 16:10

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65:1,6 66:2366:24

10(A)(4) 33:1010(A)(5) 32:510:05 1:14 3:211 10:22 30:2

31:23 35:1736:5 37:243:25 48:852:12 53:2455:25

11:06 67:1416 41:14

16A 3:161814 13:171925 34:22 47:4

2 2 8:22 13:12

18:7,13 19:1919:23 20:2,1120:21 21:524:2,7 25:18

25:20,23 26:526:9 33:15,1535:4 43:2255:19 67:1

2007 1:10

3 3 2:4 55:19





30 46:431 2:6

44 32:11,2043 14:22

55 62:157a 56:13

66 30:2062 2:9

77 1:10

88 43:13 46:3

48:2

99 8:25 10:3,22

16:8 17:2519:18 20:4,1021:3,8,8,10,1521:17,19 22:222:3 23:21,2324:9,11,16,2124:25 25:2526:6,21 27:328:11 29:931:23 34:2035:1,5,5,12,1336:3,5 37:1,637:25 38:7,1238:12 39:1340:10 42:1643 3 44 13 14

US Supreme Court: 06-989

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