In 1925, Congress enacted a short statute to make arbitration agreements in maritime transactions and interstate commerce “valid, irrevocable, and enforceable.” Yet the Federal Arbitration Act’s (FAA) simple objective of facilitating the resolution of disputes outside of the courtroom has proven much easier to declare than to implement in practice. In the century since its enactment, the FAA has become a frequently litigated statute and the subject of 59 opinions of the Supreme Court, the majority of which have reversed lower courts’ interpretations of the Act. The Supreme Court’s FAA jurisprudence has not only been abundant but also controversial. For instance, the Court’s holdings that the Act applies in both federal and state courts and in employment disputes, and that it preempts contradictory state law, are frequently accused of being overly expansive and prejudicial to weaker individuals such as employees and consumers, prompting initiatives for legislative amendments of the FAA.
In this article I intend neither to sanction nor to dispel these accusations. Instead, on the occasion of its 40th anniversary, I revisit the Supreme Court’s seminal decision in Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp. (hereinafter Moses). A renewed examination of this decision is timely and necessary given growing calls for its reconsideration. In Moses, the Supreme Court held that § 2 of the FAA, which mandates that arbitration agreements “shall be valid, irrevocable, and enforceable,” manifests “a congressional declaration of a liberal federal policy favoring arbitration agreements.” This federal policy, according to the Court, in turn gives rise to what has become known as the “presumption . . . in favor of arbitration” (Presumption). According to the Moses Presumption, “as a matter of federal law, any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration . . . .”
Hundreds of lower court decisions have applied the Presumption in FAA cases since Moses. At the same time, the Presumption has also been accused of elevating arbitration agreements above other contracts without any basis for doing so in the FAA, and of “divert[ing] courts from the best reading of the text at the first hint of uncertainty, and thereby work[ing] a massive alteration of written contracts in America.” In the face of growing calls for the Moses Presumption to be reconsidered, it is likely that litigants will attempt, sooner or later, to challenge it before the Supreme Court. This is the first article to defend the Presumption.