In Defense of Southland: Re-Examining the Legislative History of the Federal Arbitration Act

Abstract

This article challenges the conventional wisdom that the Supreme Court's decision in Southland Corp. v. Keating, holding that the Federal Arbitration Act ("FAA") applies in state court and preempts state law, was an illegitimate exercise of judicial lawmaking. Justices' O'Connor and Thomas, and numerous commentators, have strongly criticized Chief Justice Burger's majority opinion in Southland as disregarding Congress's unambiguous intent that the FAA apply only in federal court. But a reexamination of the legislative history of the FAA suggests that, while the "primary purpose" of the FAA was to make arbitration agreements enforceable in federal court, a secondary purpose was to make arbitration agreements enforceable in state court as well. Submissions to Congress by the principal drafter of the Act provide strong evidence that the FAA was intended to apply in state court. A contemporaneous commentary, overlooked by Southland critics, likewise supports that conclusion. Conversely, the vast majority of statements in the legislative history relied on by commentators to criticize the Southland holding state simply that the FAA applies in federal court, not that it applies only in federal court. Although Chief Justice Burger's analysis in Southland leaves much to be desired, this analysis supports his conclusion: that "although the legislative history is not without ambiguities, there are strong indications that Congress had in mind something more than making arbitration agreements enforceable only in the federal courts."