Justice Brett Kavanaugh, the U.S. Supreme Court’s newest member, issued his first written opinion on Tuesday this week, writing for a unanimous court, in upholding the power of contract arbitration bolstering companies’ ability to use arbitration to resolve disputes with customers or other businesses.
The arbitration case involved price-fixing claims. It centered on whether courts can prevent arbitrators from deciding if an issue can be arbitrated at all. Companies prefer to arbitrate claims because it is cheaper and faster that ligation in court, which is harder to fight and carries a greater risk of hefty damages awarded by juries.
The case involved a dispute between two companies who entered into a contract agreeing to have any dispute settled through arbitration unless a party sought injunctive relief. Once their relations went bad, one of the companies took the other to court alleging federal antitrust violations, among other infractions, seeing injunctive relief.
When a contract allows arbitrators to decide whether a dispute can be resolved through arbitration, “a court may not override the contract,” Justice Kavanaugh said.
The court decided 9-0 to throw out a lower-court ruling that had kept a case involving dental equipment companies from being resolved through arbitration because the court had determined the demand for arbitration was groundless. Justice Kavanaugh wrote that the Federal Arbitration Act and earlier precedents show that if parties agree to turn that power over to an arbitrator, there is no reason for judges to later question it.
Newly appointed justices are generally assigned noncontroversial, unanimous cases as their first opinions. Although Tuesday’s ruling was Kavanaugh’s first opinion for the court, his first known vote as a member of the court was in December when he joined other justices to reject appeals by Louisiana and Kansas seeking to end their public funding to women’s healthcare and abortion provider Planned Parenthood through the Medicaid program.
