>> THE MINNESOTA SUPREME COURT
IS NOW IN SESSION.
>> GOOD MORNING.
WE HAVE TWO CASES FOR ARGUMENT
THIS MORNING, GLACIER PARK V.
UNITED STATES STEEL CORPORATION,
AND WALMART V. WINONA COUNTY ET
AL.
I AM CHIEF JUSTICE LORIE GILDEA,
THE ONLY MEMBER OF THE COURT
HERE IN THE COURTROOM.
THE OTHER MEMBERS ARE ATTENDING
REMOTELY.
COUNSEL, BEFORE WE START, LET'S
HAVE YOU IDENTIFY YOURSELF OR
THE RECORDS OF THE CONTEST YOUR
EQUIPMENT, STARTING WITH COUNSEL
FOR THE APPELLANT.
COULD YOU IDENTIFY YOURSELF
PLEASE?
>> GOOD MORNING, YOUR HONOR.
BEATRICE FRANKLIN ON BEHALF OF
THE APPELLANT, GLACIER PARK.
>> GOOD MORNING PAY COUNSEL FOR
THE APPELLANT, COULD YOU
IDENTIFY YOURSELF PLEASE?
>> GOOD MORNING, ANDY STANTON ON
BEHALF OF THE
UNITED STATES STEEL CORPORATION.
>> WE WILL GIVE YOU 3 MINUTES AT
THE BEGINNING OF YOUR ARGUMENT
UNINTERRUPTED, AND OF THE THREE
MINUTE MARK I'LL INTERRUPT YOU
AND SEE IF THE MEMBERS OF THE
COURT HAVE QUESTIONS.
WITH THAT, MS. FRANKLIN, YOU MAY
PROCEED.
>> THANK YOU, MADAM
CHIEF JUSTICE.
MAY IT PLEASE THE COURT, GLACIER
PARK'S CLAIM BELONGS IN
ARBITRATION.
TO GET TO THE HEART OF WHY
THAT'S TRUE, I WILL FOCUS ON THE
SECOND QUESTION PRESENTED.
LET'S START WITH THE TEXT OF THE
PROVISION ITSELF.
THE PROVISION SAYS THAT ANY
DISAGREEMENT OR CONTROVERSY THAT
ARISES BETWEEN THE PARTIES AS TO
ANY FACT RELATIVE TO THE
OBSERVANCE OR FULFILLMENT OF THE
TERMS AND OBLIGATIONS IS
ARBITRABLE.
THE PARTY SPECIFICALLY WROTE A
CLAUSE THAT COVERS ANY DISPUTES
ABOUT ANY FACT THAT RELATES TO
THE OBSERVANCE OF THE CONTRACT.
THE PARTIES SPECIFICALLY WROTE A
CLAUSE THAT SPEAKS OF THE
OBSERVANCE OF THE CONTRACT, NOT
SIMPLY THE INTERPRETATION OF THE
CONTRACT OR A BREACH OF THE
CONTRACT.
THE ARBITRATION CLAUSE DESCRIBES
THIS CASE, GLACIER PARK ALLEGES
THAT U.S. STEEL UNLAWFULLY
MANIPULATED THE NEGOTIATIONS
THAT LED TO THE ENTERPRISE
LEASE, OBTAINING A SWEETHEART
DEAL AT BELOW MARKET RATES.
GLACIER PARK ASKS THAT THE
CONTRACT BE RESCINDED, AND
U.S. STEEL DISPUTES AS
ALLEGATIONS.
A DISAGREEMENT HAS ARISEN
BETWEEN THE PARTIES AS TO FACTS
THAT RELATE TO WHETHER
GLACIER PARK WILL CONTINUE TO
OBSERVE ITS CONTRACT
OBLIGATIONS.
WE KNOW THAT A GENERALLY BROAD
ARBITRATION PROVISION COVERS
CONTRACTILITY CLAIMS.
THAT'S WHAT THIS COURT SAID IN
ONVOY.
ONVOY OVERRULED MINNESOTA
PRECEDENT THAT REQUIRED MAGIC
WORDS LIKE AN EXQUISITE
REFERENCE TO CLAIMS ABOUT THE
MAKING OF THE CONTRACT, IN ORDER
FOR VALIDITY CLAIMS TO BE
ARBITRABLE.
WE KNOW THAT THIS IS A BROAD
ARBITRATION CLAUSE.
LOOK AT CASES WHERE COURTS HAVE
ADDRESSED WHETHER SIMILAR
LANGUAGE COVERS VALIDITY CLAIMS.
WE INCLUDE A CHART OF THE
RELEVANT LANGUAGE AT PAGE 16 OF
OUR REPLY, BUT I'D LIKE TO FOCUS
THE COURT ON THE LANGUAGE FROM
ACE CAPITAL FROM THE SECOND
CIRCUIT.
THE ARBITRATION CLAUSE THERE
SAYS THAT ANY DISPUTE SHALL
ARISE BETWEEN THE PARTIES
HERETO, WITH REFERENCE TO THE
INTERPRETATION OF THE AGREEMENT
OR THEIR RIGHTS WITH RESPECT TO
ANY TRANSACTION INVOLVED, IT'S
ARBITRABLE.
JUDGE SOTOMAYOR SAID IT RELIED
IN THE PHRASE "WITH REFERENCE
TO," VERY SIMILAR TO THE LEASE
HERE.
OUR LANGUAGE IS EVEN BROADER.
OUR CLAUSE SPEAKS OF THE
OBSERVANCE AND FULFILLMENT OF
THE CONTRACT, NOT JUST THE
INTERPRETATION OF THE CONTRACT
OR PARTICULAR TRANSACTION.
HOW DID THE COURT OF APPEALS
CONCLUDED OTHERWISE?
FIRST, THE COURT DIDN'T EVEN
DISCUSS ONVOY, AND INSTEAD
FOLLOW THE OUT OF DATE APPROACH
FROM CASES LIKE MICHAEL CURRY
AND ATCAS.
THE COURT GAVE DISPOSITIVE
WEIGHT TO THE FACT THAT THE
CONTRACT HERE DOESN'T
SPECIFICALLY REFERENCE CLAIMS
ABOUT VALIDITY OR THE MAKING OF
THE CONTRACT, BUT THAT APPROACH
IS NO LONGER THE LAW.
SECOND, THE COURT OF APPEALS
MISREAD THE CLAUSE, IGNORING THE
PHRASE "ANY FACT RELATIVE TO,"
AND THE BREADTH OF THE TERM
"OBSERVANCE."
THEY ALSO ERRED, BUT EVEN IF THE
COURT DISAGREES WITH US ON THAT
FIRST QUESTION PRESENTED, THE
COURT CAN AND SHOULD STILL SEND
GLACIER PARK'S CLAIM TO
ARBITRATION.
>> COUNSEL, I'M GOING TO STOP
YOU THERE.
WE ARE AT THREE MINUTE MARK.
I AM WONDERING WHETHER OR NOT
THERE IS AN ISSUE AS SORT OF A
CHOICE OF LAW, AS TO WHETHER WE
ARE UNDER THE FEDERAL
ARBITRATION ACT OR WHETHER WE
ARE UNDER THE STATE ARBITRATION
ACT.
WHAT IS YOUR POSITION ABOUT
THAT?
>> THE PARTIES AGREE THAT THE
FEDERAL ARBITRATION ACT
GENERALLY GOVERNS THIS CASE
BECAUSE IT IS A DISPUTE THAT
INVOLVES INTERSTATE COMMERCE.
>> LET ME JUST STOP YOU THERE.
IF EVERYBODY AGREES THAT THE
FEDERAL STATUTE APPLIES, WHY
WOULDN'T WE APPLY THE FEDERAL
PRECEDENT, THE CLEAR AND
UNMISTAKABLE STANDARD, FROM
FEDERAL LAW AS WELL?
>> BECAUSE FEDERAL LAW POINTS
THE STATE LAW ON THE QUESTION OF
WHETHER PARTIES INTENDED TO
DELEGATE ARBITRABILITY.
THAT'S WHAT THE UNITED STATES
SUPREME COURT HAS MADE VERY
CLEAR, SO THE FAA IN TURN POINTS
TO MINNESOTA LAW ON THE FIRST
QUESTION PRESENTED.
THE ISSUES AT THE PARTIES
DISPUTE WHAT STANDARD THE COURT
APPLIES TO THE DELEGATION
QUESTION, THE REVISED UNIFORM
ARBITRATION ACT DOESN'T ANSWER
THAT QUESTION.
GLACIER PARK'S POSITION IS THAT
THERE IS NOTHING IN THE REVISED
ACT OR LEGISLATIVE HISTORY THAT
INDICATES AN INTENT TO IMPORT
THE FEDERAL COMMON LAW STANDARD
INTO MINNESOTA LAW.
NO CASE HAS EVER HELD THAT
FEDERAL COMMON LAW PREEMPTS
STATE LAW ON THIS STATE LAW
QUESTION.
INSTEAD, THE REASONABLY
DEBATABLE STANDARD, WHICH IS A
QUESTION THAT ARISES OUT OF
MINNESOTA'S GENERAL PRESUMPTION
IN FAVOR OF ARBITRATION, THAT'S
A STANDARD THAT THIS COURT
SHOULD APPLY ON THE FIRST
QUESTION PRESENTED.
>> BOTH THE FEDERAL STATUTE AND
THE STATE STATUTE SAY THAT THE
COURT DECIDES WHETHER THERE IS
AN AGREEMENT TO ARBITRATE.
IN PRETTY CLEAR LANGUAGE.
SO HOW IS THE REASONABLY
DEBATABLE STANDARD CONSISTENT
WITH THE STATUTORY LANGUAGE THAT
REQUIRES THE COURT TO DECIDE
WHETHER THERE IS AN AGREEMENT TO
ARBITRATE?
>> BECAUSE EVERYONE AGREES THAT
THE REVISED STATUTE STILL ALLOWS
PARTIES TO CONTRACT AROUND THAT
DEFAULT PRESUMPTION.
SO THE ISSUE IS, WHAT STANDARD
APPLIES IN THE ABSENCE OF THAT
DEFAULT PRESUMPTION?
WHAT HAPPENS WHEN PARTY A SAYS A
PARTICULAR CONTRACT SHOWS AN
INTENT TO DELEGATE
ARBITRABILITY, AND PARTY B SAYS
THE CONTRACT IS NOT IN FACT SHOW
SUCH AN INTENT?
THE COURT HAS TO APPLY SOME
STANDARD TO THAT QUESTION.
AGAIN, THERE IS NOTHING IN
EITHER THE STATUTE, IN MINNESOTA
LAW, OR IN FEDERAL PRECEDENT
SUGGESTING THE CLEAR AND
UNMISTAKABLE STANDARD PREEMPTS
AND USURPS STATE LAW ON THAT
QUESTION.
IN OTHER WORDS, THE QUESTION OF
WHAT HAPPENS, OR THE STATUTE
DOESN'T SPEAK TO THE INQUIRY.
>> JUSTICE ANDERSON?
>> IF WE DRILL ALL THE WAY DOWN
TO THE AGREEMENT BETWEEN
PARTIES, I SEE AN ARBITRATION
PROVISION THAT PROVIDES FOR
ARBITRATION OF ONLY FOUR
SPECIFICALLY LISTED DISPUTES,
AND THAT SUGGESTS TO ME THAT THE
PARTIES INTENDED THE PROVISION
TO BE RELATIVELY NARROW AND THAT
THE COURT SHOULD MAKE THE CALL
HERE.
WHAT IS WRONG WITH THAT
ANALYSIS?
>> RESPECTFULLY, YOUR HONOR, I
DISAGREE THAT THE CLAUSE IS
NARROW.
THE ARBITRATION PROVISION
INCLUDES FOUR SUBCLASSES, WE CAN
SAY.
THE FIRST TO COVER DISPUTES
ABOUT MINING PRACTICES AND
ROYALTY RATES, BUT THEN THE
PARTIES WENT ON.
THE PARTIES WENT ON TO INCLUDE
AN EXTREMELY BROAD CATCH-ALL
CLAUSE THAT COVERS ANY DISPUTE
ABOUT ANY FACT THAT RELATES TO
THE OBSERVANCE OR FULFILLMENT OF
THE CONTRACT.
THAT LANGUAGE IS INCREDIBLY
BROAD.
THE PHRASE, "ANY FACT RELATIVE
TO," IS A BROADENING PHRASE.
IT'S JUST LIKE THE TYPICAL
"RELATING TO" LANGUAGE IN THE
PROTOTYPICALLY BROAD ARBITRATION
CLAUSES THAT OTHER COURTS HAVE
ADDRESSED.
THEY WROTE ABOUT THE OBSERVANCE
OR FULFILLMENT OF THE CONTRACT,
AND OBSERVANCE ESSENTIALLY MEANS
WHETHER OR NOT THE CONTRACT WILL
BE HONORED.
ONCE AGAIN, THE PARTIES INCLUDED
BROAD LANGUAGE.
THEN THEY WENT EVEN FURTHER.
THEY THEN SAID THAT IN ANY OTHER
DISPUTE THE PARTIES DECIDE TO
SPECIFICALLY INCLUDE IN THE
CONTRACT.
IT SHOWS THAT THE PARTIES DIDN'T
WANT THE ARBITRATORS ONLY TO
ADDRESS A NARROW SLICE OF THEIR
DISPUTES.
THEY WANTED ARBITRATORS TO BE
THE PREFERRED METHOD OF DISPUTE
RESOLUTION.
AGAIN, YOU KNOW WHAT A NARROW
ARBITRATION CLAUSE LOOKS LIKE,
AND IT'S NOT THIS.
THE COURTS THAT HAVE ADDRESSED
VERY SIMILAR LANGUAGE HAVE SAID
THAT THIS LANGUAGE IS BROAD, OR
LANGUAGE SIMILAR TO THIS
LANGUAGE IS BROAD.
BUT LOOK AT A CASE WHERE THE
COURT HAS ACTUALLY SAID THIS
ARBITRATION CLAUSE IS NARROW.
THAT IS STILL GOING TO -- THAT
IS AN ARBITRATION CLAUSE THAT
SPECIFICALLY LIMITS THE
AUTHORITY OF THE ARBITRATORS.
IT LIMITS THE AUTHORITY OF THE
ARBITRATORS TO THE
INTERPRETATION OF THE AGREEMENT,
AND IT SAYS THE ARBITRATOR SHALL
BE BOUND BY THE PROVISIONS OF
THE AGREEMENT.
THERE IS NO SUCH LIMITING
LANGUAGE HERE.
>> NO FURTHER QUESTIONS AT THIS
MOMENT, CHIEF.
>> JUSTICE HUDSON?
>> YES, MS. FRANKLIN, PICKING UP
WHERE JUSTICE ANDERSON LEFT OFF,
U.S. STEEL'S POSITION IS -- AND
IT SEEMS THERE IS SUPPORT FOR
IT -- THAT WHEN YOU TALK ABOUT
RELATIVE TO THE OBSERVANCE OR
FULFILLMENT OF THE TERMS AND
OBLIGATIONS, YOU ARE TALKING
ABOUT THE ACTUAL PERFORMANCE OF
THE ACTUAL CONTRACT ITSELF.
YOU ARE NOT TALKING ABOUT IT'S
COMMON SENSE PLAIN LANGUAGE.
YOU'RE NOT TALKING ABOUT
PRECONTRACT FORMATION TYPES OF
ACTIVITIES.
THAT IS CLEARLY HOW THE DISTRICT
COURT AND THE COURT OF APPEALS
SAW IT.
IT SEEMS TO ME THERE IS WEIGHT
THERE.
HOW IS IT THAT WE READ THIS TO
APPLY TO ANYTHING OTHER THAN
WHAT IS GOING ON IN THE ACTUAL
PERFORMANCE OF THE CONTRACT?
>> SO, THERE ARE A FEW
RESPONSES, YOUR HONOR.
I WILL TALK FIRST ABOUT THE TEXT
OF THE CLAUSE AND ABOUT CASES
ADDRESSING SIMILAR LANGUAGE.
THE FIRST POINT IS, AGAIN, THIS
IS A FAIRLY BROAD CLAUSE.
ANY DISPUTE ABOUT ANY FACT THAT
RELATES TO THE OBSERVANCE OF THE
CONTRACT.
IMAGINE THAT THE PARTIES HADN'T
INCLUDED THE PHRASE "ANY FACT,"
AND THE ARBITRATION PROVIDED FOR
ANY DISAGREEMENT THAT ARISES
BETWEEN THE PARTIES RELATIVE TO
THE OBSERVANCE OF THE CONTRACT.
THAT IS ESSENTIALLY A CLAUSE
THAT SAYS, "ANY DISPUTE RELATING
TO THE CONTRACT."
THAT LANGUAGE, STATE AND FEDERAL
COURTS AROUND THE COUNTRY HAVE
HELD THAT IT COVERS CONTRACT
VALIDITY CLAIMS.
>> COUNSEL, IF I COULD STOP YOU,
I THINK THAT'S THE POINT.
THAT IT'S ANY DISPUTE RELATIVE
TO THE OBSERVANCE OR FULFILLMENT
OF THE CONTRACT.
NOT PRECONTRACT, NOT THE
ALLEGATIONS THAT YOU ARE MAKING
UP FRONT.
BUT ABOUT OBSERVANCE OF THE
CONTRACT.
THAT SEEMS TO ME TO BE THE
QUALIFIER, OR IT CABINS IT IN A
WAY, SO IT ISN'T JUST THIS BROAD
"ANY FACT."
>> THAT SHIP HAS SAILED, YOUR
HONOR.
THIS COURT UPHELD IN ONVOY THE
ARBITRATION PROVISION THAT COVER
DISPUTES ARISING UNDER THE
CONTRACT, COVERED CONTRACT
VALIDITY CLAIMS ABOUT
PREFORMATION CONDUCT.
AGAIN, THAT CLAUSE SPOKE OF
DISPUTES THAT ARISE UNDER THE
CONTRACT.
IT HAD THE SAME LIMITATION.
AGAIN, TO POINT THE COURT TO THE
CASES THAT WE CITE AT PAGE OF
OUR BRIEF, YOU GOT LANGUAGE
THERE THAT SPEAKS OF ANY
COMPLAINT BELIEVED TO CONSTITUTE
A BREACH OR VIOLATION OF THE
CONTRACT.
THAT IS LANGUAGE FROM THE FOURTH
CIRCUIT.
THAT, ON ITS FACE, COULD BE READ
AS NARROW LANGUAGE THAT ASSUMES
THE CONTRACT IS VALID, AND THEN
ONLY POST-FORMATION DECEITS
WOULD BE COVERED.
AGAIN, NO FEDERAL COURT HAS
REALLY INTERPRETED ARBITRATION
LAW SO NARROWLY.
WE KNOW THAT
ARBITRATION -- EXCUSE ME --
>> IF I MAY INTERRUPT, ONE LAST
QUESTION.
THIS GOES BACK TO THE CHIEF'S
QUESTION.
IF WE DISAGREE WITH YOU AND
DECIDE THAT THE RELEVANT
STANDARD IS THE CLEAR AND
UNMISTAKABLE EVIDENCE STANDARD,
DO YOU STILL PREVAIL?
EVEN UNDER ONVOY AND THE RISE OF
THE LANGUAGE?
IF THE STANDARD IS CLEAR AND
UNMISTAKABLE EVIDENCE, WELL,
WHAT IS YOUR THOUGHT ABOUT THAT?
>> THIS IS AN IMPORTANT POINT,
YOUR HONOR.
THE CLEAR AND UNMISTAKABLE
EVIDENCE STANDARD, AT MOST,
WOULD APPLY TO THE QUESTION OF
DELEGATION.
U.S. STEEL DOES NOT CONTEND
THAT, ON THE SECOND QUESTION
PRESENTED, WHETHER THE CLAIM IS
ARBITRABLE.
U.S. STEEL DOES NOT CONTEND THAT
THE EVIDENCE APPLIES TO THAT
QUESTION.
THERE IS NO DOUBT THAT, UNDER
BOTH MINNESOTA AND FEDERAL LAW,
WHEN IT COMES TO WHETHER A CLAIM
IS SUBSTANTIVELY ARBITRABLE, IN
OTHER WORDS, WHETHER
GLACIER PARK'S BREACH OF
FIDUCIARY DUTY CLAIM IS
INARBITRABLE, THAT IS THE
STANDARD THAT APPLIES -- IT'S A
MUCH MORE PRO-ARBITRATION
STANDARD AND DOUBTS MUST BE
RESOLVED IN FAVOR OF
ARBITRATION, AND AT MOST IT
WOULD BE THE TYPICAL
PREPONDERANCE OF EVIDENCE
STANDARD THAT THIS COURT WOULD
APPLY TO CIVIL LAW QUESTIONS.
IF THE COURT DISAGREES WITH US
IN THE FIRST QUESTION PRESENTED,
THE CLAIM STILL GOES TO
ARBITRATION BECAUSE IT IS SO
CLEAR THAT THIS CLAIM IS
SUBSTANTIVELY ARBITRABLE.
TO THE EXTENT THE COURT IS
CONCERNED ABOUT UNIFORMITY
BETWEEN STATE AND FEDERAL LAW,
AND THAT MOTIVATES AN ADOPTION
OF THE CLEAR AND UNMISTAKABLE
EVIDENCE STANDARD ON THE FIRST
QUESTION, THAT SIMILE SUPPORTS
GLACIER PARK'S POSITION ON THE
SECOND QUESTION PRESENTED,
BECAUSE THE COURT OF APPEALS
TOOK MINNESOTA PRECEDENT BACK 20
YEARS, BACK TO BEFORE ONVOY AND
BEFORE THIS COURT ALIGNED
MINNESOTA AND FEDERAL FEDERAL
LAW AND WHETHER THESE CLAIMS
ARBITRABLE.
>> THANK YOU.
THANK YOU, CHIEF.
>> JUSTICE CHUTICH?
>> I HAD A QUESTION ABOUT -- I
DON'T KNOW EXACTLY WHY IT MAKES
SENSE REGARDING ARBITRABILITY TO
REQUIRE THE PARTIES TO PROVE
THAT THEY HAVE AGREED TO HAVE A
COURT DETERMINE ARBITRABILITY
WHEN BOTH THE FAA AND THE
MINNESOTA ACT ALREADY MANDATE
THAT THE COURTS SHALL DETERMINE
THAT ISSUE.
>> THE COMMENTARY TO THE REVISED
ARBITRATION ACT, WHICH IS WHAT
MINNESOTA ADOPTED AND CREATED,
THE COMMENTARY MAKES CLEAR THAT
PARTIES CAN STILL CONTRACT, THEY
CAN STILL PUT IN THEIR CONTRACT
LANGUAGE SUGGESTING THAT THEY
WANT ARBITRATORS TO DECIDE
THRESHOLD ARBITRABILITY
QUESTIONS.
THAT'S NOT UNCOMMON THESE DAYS,
YOUR HONOR.
AS YOUR HONOR IS FAMILIAR, FROM
THE UNITED STATES APPEAR IN
COURT'S HENRY SCHEIN CASES, MANY
PARTIES INCORPORATE THAT
LANGUAGE IN THEIR CONTRACTS.
THAT'S BEEN HELD TO SHOW AN
INTENT TO DELEGATE ARBITRABILITY
DISPUTES.
AGAIN, PARTICULARLY WHEN YOU
HAVE SOPHISTICATED CORPORATE
PARTIES LIKE GLACIER PARK AND
LIKE UNITED STATES STEEL
CORPORATION, IT'S NOT UNCOMMON
FOR PARTIES TO DELEGATE
ARBITRABILITY.
THAT IS WHAT GLACIER PARK
BELIEVES THE PARTIES DID HERE.
>> REGARDING THE CLAUSE ITSELF,
I THINK THE COURT OF APPEALS
LOOKED AT THE PRECEDING PHRASES
BEFORE THE FACT RELATIVE TO THE
OBSERVANCE.
INCLUDING THE ONE AFTER THAT HAS
THE SPECIFICALLY STATED, DEFINED
THAT NARROWED IT.
WHY DOESN'T THAT SPECIFICALLY
STATE IN LANGUAGE NARROW THE
EFFECT OF THE CLAUSE THAT YOU
ARE RELYING ON?
>> I THINK PART OF THE WAY THE
COURT OF APPEALS WENT ASTRAY IN
THIS CASE IS THAT IT READ THOSE
FIRST CLAUSES TO NARROW THE
THIRD CATCHALL CLAUSE.
THAT, OF COURSE, VIOLATES THE
MANDATE THAT A COURT READ A
CONTRACT TO GIVE EFFECT TO ALL
OF ITS PROVISIONS.
AS THE FOURTH CAUSE OF THE
ARBITRATION PROVISION THAT SAYS
THE PARTIES CAN SPECIFICALLY
INCLUDE OTHER TYPES OF DISPUTES
FOR ARBITRATION, AND THAT COULD
BE THERE FOR A COUPLE REASONS.
ONE IS PERHAPS THE PARTIES
WANTED TO PRESERVE THE OPTION TO
INCLUDE DISPUTES THAT DON'T
ARISE BETWEEN THE PARTIES, THAT
ARISE BETWEEN THIRD PARTIES.
LIKE A SUB LESSEE, FOR EXAMPLE.
IT LEAVES THE PARTIES TO CALL
OUT SPECIFIC DISPUTES FOR
ARBITRATION, DISPUTES AT THE
PARTY'S THAT WOULD ARISE
PARTICULARLY FREQUENTLY.
FOR EXAMPLE, DISPUTES ABOUT MANY
PRACTICES.
THAT'S WHY THE PARTY INCLUDES
THIS TYPE OF DISPUTES
PARTICULARLY AT THE BEGINNING OF
THE CAUSE.
THEY WANTED TO AVOID HAVING
ARBITRABILITY DISPUTES LIKE THIS
WHEN THAT WANTED THOSE CLAIMS
THEY THOUGHT WOULD ARISE MOST
ARE GOING TO GO DIRECTLY TO
ARBITRATION.
AGAIN, THE PARTIES DIDN'T STOP
THERE.
HE SPECIFICALLY WROTE A CLAUSE
THAT COVERS ANY DISPUTE ABOUT
ANY FACTS THAT SIMPLY RELATE TO
THE OBSERVANCE OF THE CONTRACT.
THE PARTY'S EXPECTATION THAT THE
LANGUAGE OF THE HONORED, AND IT
WOULD BE READ BROADLY, THOSE
EXPECTATIONS SHOULD BE HONORED
BY THE COURT.
>> NOTHING FURTHER, THANKS.
>> JUSTICE MCKEIG?
>> THANK YOU, CHIEF.
IN REGARDS TO JUSTICE CHUTICH'S
FIRST POINT IN YOUR RESPONSE, IT
WOULD SEEM TO ME THAT, IF
PARTIES ARE ABLE, AS YOU SAY, TO
CONTRACT AROUND THE COURT MAKING
THAT DECISION ABOUT
ARBITRABILITY, IT WOULD SEEM TO
NEED TO BE MUCH MORE SPECIFIC
THAN WHAT WE HAVE HERE, OR MUCH
MORE DETAILED OR MUCH MORE
OBVIOUS.
TO TELL ME WHY THAT'S WRONG.
>> WE THINK IT IS PRETTY CLEAR
HERE, YOUR HONOR.
AGAIN, THE PARTIES SAY THAT ANY
DISPUTES ABOUT THE FULFILLMENT
OF THE TERMS AND OBLIGATIONS OF
THE CONTRACT, ALL OF THOSE
DISPUTES ARE ARBITRABLE.
IN A DISPUTE ABOUT HOW TO FOLLOW
THE ARBITRATION PROVISION, A
DISPUTE ABOUT WHETHER OR NOT THE
PARTIES INTENDED SUBSTANTIVE
ARBITRABILITY QUESTIONS, THAT'S
A DISPUTE ABOUT HOW TO FULFILL
THE TERMS OF THE CONTRACT.
HOW TO FULFILL THE TERMS OF THE
ARBITRATION PROVISION ITSELF.
AGAIN, GLACIER PARK'S POSITION
IS THAT THE PARTIES CLEARLY DO
EXPRESS AN INTENT TO DELEGATE
ARBITRABILITY QUESTIONS HERE.
>> BUT THAT DOESN'T REALLY SEEM
LIKE THAT GOES TO HOW TO
FULFILL, RATHER IT GOES TO WHO
DECIDES WHO IS RIGHT AS TO HOW
TO FULFILL.
>> SURE, YOUR HONOR.
BUT WE WOULD ARGUE THAT WHO
DECIDES WHO IS RIGHT IS THE
MANNER OF FULFILLING THE
PARTIES' WITH WHAT THE CONTRACT
MEANS.
IN OTHER WORDS, THE PARTIES HERE
ARE DISPUTING HOW TO GO ABOUT
SATISFYING THE TERMS OF THE
ARBITRATION PROVISION, AND THAT
IS IN AND OF ITSELF A DISPUTE
ABOUT HOW TO FULFILL THE TERMS
OF THE CONTRACT.
>> JUSTICE THISSEN?
>> I DON'T HAVE ANY QUESTIONS.
>> JUSTICE MOORE?
>> THANK YOU, CHIEF.
COUNSEL, HOW DO YOU RESPOND TO
THE POINT THAT U.S. STEEL MAKES,
THAT COURTS HAVE RECOGNIZED
GENERALLY DISPUTES ABOUT
FORMATION BEING ARBITRABLE WHEN
THAT INTENT IS REALLY STATED
PRETTY DIRECTLY AND
AFFIRMATIVELY IN THE ARBITRATION
BECAUSE CONNECTIVES CITATION IN
THEIR BRIEF TO A NUMBER OF CASES
REGARDING THAT.
HOW DO YOU RESPOND TO THAT?
TO BE HAVE THAT KIND OF DIRECT
INTENT LANGUAGE IN THIS CLAUSE
THAT COULD GUIDE US?
>> YOUR HONOR, THAT APPROACH IS
NO LONGER THE LAW.
NOT IN MINNESOTA AND NOT IN
FEDERAL COURTS.
I'M SORRY, I SHOULD SAY NOT AN
MINNESOTA CASE APPLYING TO FAA.
AND NOT IN FEDERAL CASES
APPLYING TO THE FAA.
IT RELIES ON CASES LIKE MICHAEL
CURRY.
THE COURT GAVE DISPOSITIVE
WEIGHT TO THE FACT THAT THE
ARBITRATION PROVISION SPOKE OF
THEM MAKING THE CONTRACT.
THE ARBITRATION PROVISION IN
THAT CASE COVER DISPUTES ARISING
UNDER OR RELATING TO THE
CONTRACT OR INVOLVING THE MAKING
OF THE CONTRACT.
IT WAS THAT LANGUAGE THAT THE
MAKING OF THE CONTRACT MEANT
THAT VALIDITY CLAIMS WERE
COVERED.
AGAIN, ONVOY OVERRULED THAT
APPROACH.
IN ONVOY THIS COURT SAID THAT
ARBITRATION PROVISIONS
PRESUMPTIVELY COVERED VALIDITY
CLAIMS, UNLESS THEY SHOW A CLEAR
INTENT TO EXCLUDE SUCH CLAIMS.
THE BURDEN IS ON U.S. STEEL TO
SHOW THAT CONTRACTILITY CLAIMS
ARE EXCLUDED, AND U.S. STEEL HAS
NEVER SATISFIED THAT BURDEN.
THEN, TURNING TO FEDERAL CASES
APPLYING THE FAA AND ADDRESSING
SAME QUESTION OF WHETHER IT
COVERS CONTRACT VALIDITY, COURTS
HAVE UNIFORMLY HELD THAT EVEN
MUCH NARROWER LANGUAGE, LANGUAGE
LIKE THE CLAUSE IN ACE CAPITAL,
THE CLAUSE IN PEOPLE'S SECURITY,
THAT THOSE CLASSES STILL COVERED
VALIDITY CLAIMS.
FRANKLY, YOUR HONOR, U.S. STEEL
IS SIMPLY WRONG TO SUGGEST THAT
COURTS NEED TO FIND SPECIFIC
LANGUAGE TO INCLUDE VALIDITY
CLAIMS.
RATHER THAT SUCH CLAIMS ARE
INCLUDED.
>> THANK YOU, COUNSEL.
THAT'S HELPFUL.
>> IT SEEMS TO ME THAT THE
ARBITRATION AGREEMENT IN ONVOY
IS DIFFERENT IN AT LEAST ONE
MATERIAL RESPECT FROM THE
PROVISION HERE.
THERE THE CONTRACT PROVIDED THE
CLAIMS ARISING UNDER THE
CONTRACT GO TO.
WE DON'T HAVE "ARISING UNDER"
LANGUAGE IN THIS LEASE.
ISN'T THAT A DIFFERENCE THAT
MATTERS QUITE A BIT?
>> IT IS A DIFFERENCE THAT
MATTERS, YOUR HONOR.
BECAUSE WE HAVE BROADER
LANGUAGE.
WE HAVE "RELATIVE TO."
COURTS HAVE HELD THAT "RELATIVE
TO" OR "RELATING TO," THAT'S
BROADER THAN "ARISING UNDER." TO
SAY CLAIM ARISES UNDER CONTRACT,
THAT DOES MAKE IT SEEM A LITTLE
BIT MORE LIKE THE CLAIM
PRESUPPOSES THE CONTRACT IS
VALID.
WHEREAS A CLAIM THAT RELATES TO
THE CONTRACT CLEARLY COVERS A
CLAIM THAT INVOLVES PREFORMATION
CONDUCT, OR AN ALLEGATION THAT
THE CONTRACT IS INVALID.
>> BUT THIS LEASE DOESN'T SAY
CLAIMS RELATING TO THE CONTRACT.
IT SAYS CLAIMS RELATIVE OR FACTS
RELATIVE TO THE OBSERVANCE OR
FULFILLMENT OF THE TERMS AND
OBLIGATIONS HEREOF BY EITHER
PARTY.
>> EXACTLY, YOUR HONOR.
IT COVERS ANY DISAGREEMENT THAT
ARISES BETWEEN THE PARTIES AS TO
ANY FACT THAT RELATES TO THE
OBSERVANCE OF THE CONTRACT.
A DISPUTE ABOUT WHETHER
U.S. STEEL AIDED AND ABETTED A
BREACH OF FIDUCIARY DUTY IS A
DISPUTE ABOUT FACTS THAT RELATE
TO THE OBSERVANCE OF THE
CONTRACT.
IF GLACIER PARK IS RIGHT ABOUT
THOSE FACTS, THEN GLACIER PARK
NO LONGER OBSERVES THE CONTRACT.
>> I FEEL LIKE WE ARE PLOWING
THE SAME PART OF THE FIELD HERE.
LET ME MOVE TO A DIFFERENT PART
OF THE FIELD.
EITHER ANY CASES BESIDES ONVOY
THAT YOU CONTEND SUPPORT YOUR
ARGUMENT THAT CONTRACT VALIDITY
CLAIMS ARE PRESUMPTIVELY
ARBITRABLE?
>> YES, YOUR HONOR.
PRIMA PAINT FROM THE U.S.
SUPREME COURT, THAT IS SORT OF
THE CASE THAT REALLY STARTED
THIS ALL.
ON THE FEDERAL CASES THAT WE
CITE FOLLOWING FROM PRIMA PAINT,
CASES LIKE ACE CAPITAL, PEOPLE'S
SECURITY, HOULIHAN, AND SWEET
DREAMS, ALL FEDERAL CIRCUIT
COURT CASES, APPLYING THE FAA,
AND CONCLUDING THAT EVEN THOUGH
THERE WASN'T A PARTICULARLY
BROAD ARBITRATION CLAUSE, IT
WASN'T AS BRIGHT AS IT COULD BE,
THAT EACH OF THOSE CASES THE
COURT FOUND THE LANGUAGE
NEVERTHELESS COVERED VALIDITY
CLAIMS.
BECAUSE THOSE CLAIMS ARE
PRESUMPTIVELY ARBITRABLE.
IT'S NOT JUST THE CASE LAW, YOUR
HONOR.
TURNING BACK TO THE REVISED
UNIFORM ARBITRATION ACT,
SUBSECTION B OF THE ACT, OF
527B.06, THAT SAYS THAT AN
ARBITRATOR SHALL DECIDE WHETHER
A CONTRACT CONTAINING A VALID
AGREEMENT TO ARBITRATE IS
ENFORCEABLE.
ENFORCEABILITY, THAT IS A
VALIDITY QUESTION.
THE STATUTE ITSELF SUGGESTS THAT
ENFORCEABILITY QUESTIONS --
>> SORRY, COUNSEL, I HAVE TO
STOP YOU.
WHAT ARE YOU READING FROM?
AS STATUTES AS THE COURT SHALL
DECIDE.
>> SHALL DECIDE WHETHER A CLAIM
IS COVERED BY AN ARBITRATION
CLAUSE.
THE NEXT SUBSECTION, SUBSECTION
C, SAYS AN ARBITRATOR SHALL
DECIDE WHETHER A CONDITION
PRESENT TO ARBITRABILITY HAS
BEEN FULFILLED AND WHETHER A
CONTRACT CONTAINING AN AGREEMENT
TO ARBITRATE IS ENFORCEABLE.
ENFORCEABILITY IS A TYPE OF
VALIDITY, AND THE STATUTE
REFLECTS THE FACT THAT PARTIES
NOW EXPECT THAT ARBITRATORS
DECIDE VALIDITY CLAIMS.
UNLESS, OF COURSE, THEY GO TO
FRAUDULENT INDUCEMENT IN THE
ARBITRATION PROVISION ITSELF.
SINCE PRIMA PAINT AND FEDERAL
CASES FOLLOWING PRIMA PAINT, AND
SINCE ONVOY, WHERE THIS COURT
BROUGHT MINNESOTA LAW IN LINE
WITH THAT LINE OF CASES, PARTIES
EXPECT THAT CONTRACT FORMATION
CLAIMS WILL PRESUMPTIVELY BE
INCLUDED.
>> ALL RIGHT, YOU HAVE A LITTLE
BIT MORE THAN FIVE AND HALF
MINUTES.
IF MEMBERS OF THE COURT HAVE
QUESTIONS, GO AHEAD.
JUSTICE HUDSON, GO AHEAD.
>> COUNSEL, HELP ME WITH THIS.
I'M LOOKING AT THE LANGUAGE IN
PRIMA PAINT, WHERE IT SAID ANY
CONTROVERSY RELATING TO THIS
AGREEMENT, AND I AM ASSUMING
THAT YOUR ARGUMENT IS THAT THE
LANGUAGE AND THE LEASE HERE, ANY
FACT RELATIVE TO THE OBSERVANCE
OR FULFILLMENT OF THE TERMS AND
OBLIGATIONS, THAT THOSE ARE
SYNONYMOUS IN YOUR VIEW.
THAT RELATING TO THE AGREEMENT
IS THE SAME AS SAYING "RELATIVE
TO THE OBSERVANCE OF THE
AGREEMENT."
>> EXACTLY, YOUR HONOR.
IT'S A FEW MORE WORDS, THAT IT
GETS TO THE SAME POINT.
AGAIN, ACE CAPITAL.
JUDGE SOTOMAYOR CONCLUDED THAT
"WITH REFERENCE TO," IT'S NOT
EXACTLY THE SAME WORD AS
"RELATING TO," BUT IT MEANS
CLOSE ENOUGH TO THE SAME THING.
IT'S OPERATED UNDER THE BACKDROP
OF THE FACT THAT VALIDITY CLAIMS
ARE PERCEPTIVELY INCLUDED, AND
DOUBTS MUST BE RESOLVED IN FAVOR
OF ARBITRATION, ON THE ISSUE OF
WHETHER OR NOT A CLAIM IS
SUBSTANTIVELY ARBITRABLE.
>> TELL ME AGAIN, I THINK THIS
WAS YOUR DISCUSSION WITH THE
CHIEF PAY BUT I'M NOT QUITE
CLEAR.
WHAT IS IT THAT BEST SUPPORTS
YOUR ARGUMENT OF VALIDITY CLAIMS
ARE PRESUMPTIVELY INCLUDED?
>> ONVOY.
>> SO WE ARE BACK TO ONVOY,
OKAY.
>> I THINK THAT IT IS REALLY
IMPORTANT TO NOTE THAT THE COURT
OF APPEALS HERE DIDN'T DISCUSS
ONVOY.
THE COURT OF APPEALS RELIED ON
MICHAEL CURRY WHEN IT CONCLUDED
THAT THE CONTRACT VALIDITY CLAIM
HERE ISN'T ARBITRABLE.
BUT, AGAIN, LOOK FOR THESE MAGIC
WORDS.
HE LOOKS FOR LANGUAGE THAT
SPECIFICALLY SAYS CLAIMS ABOUT
THE MAKING OF THE CONTRACT WERE
INCLUDED.
AND HERE THE COURT OF APPEALS
SAYS THERE IS NO LANGUAGE THAT
SPECIFICALLY REFERS TO A CLAIM
ABOUT THE MAKING OF THE
CONTRACT, THERE IS NO LANGUAGE
THAT EXPLICITLY COVERS A TORT
CLAIM ABOUT CONTRACT VALIDITY,
AND THEREFORE NO AXIS AT
LANGUAGE, THE CLAIM ISN'T
ARBITRABLE.
THAT APPROACH CAN'T BE SQUARED
WITH ONVOY.
>> CAN ASK YOU ONE MORE THING
ABOUT ONVOY?
SHOULD WE BE CONCERNED WITH SOME
OF THE PREFACING LANGUAGE THAT
THE COURT USED IN ONVOY?
FOR INSTANCE, WE MADE CLEAR THAT
WE SAID HERE, "WE DO NOT MEAN TO
INDICATE THAT WE WILL FIND ALL
FUTURE ARBITRATION CLAUSES BROAD
ENOUGH TO ENCOMPASS ALL CLAIMS."
I WONDER IF THAT DOESN'T TELL US
SOMETHING.
IN SOME SENSE IT SEEMS TO ME
THAT YOU COULD READ ONVOY TO
SIMPLY SAY, WHERE THERE IS
REALLY BROAD LANGUAGE, LIKE A
RISING OUT OF WITH NO
QUALIFIERS, YOU GET BROAD
RESULTS SUCH AS EVERYTHING GOING
TO THE ARBITRATOR.
CONVERSELY, WHERE YOU DON'T HAVE
THAT KIND OF REALLY BROAD
LANGUAGE, IT IS A REVERT BACK TO
THE PRESUMPTION THAT COURTS WILL
HANDLE THIS.
THAT SEEMS TO BE MAYBE SUPPORTED
BY THE SORT OF INTRO LANGUAGE
BEFORE THEY GET INTO THAT ACTUAL
HOLDING.
WHAT ARE YOUR THOUGHTS ABOUT
THAT?
>> I AGREE, YOUR HONOR, THAT
ONVOY DOES MAKE CLEAR THE COURT
NEEDS TO LOOK TO THE ACTUAL TEXT
OF THE PROVISION IN THAT CASE.
IT'S NOT GOING TO BE TRUE THAT
IN EVERY SINGLE CASE, EVERY
SINGLE ARBITRATION PROVISION,
WILL COVER CONTRACT VALIDITY
CLAIMS.
GLACIER PARK DOES NOT SUGGEST
THAT IS TRUE.
LOOKING TO THE SPECIFIC TEXT OF
THIS CLAUSE, WE THINK THIS TEXT
IS BROAD WITH REFERENCE TO ANY
DISAGREEMENT.
THOSE ARE ALL BROAD PHRASES.
THE LARGER POINT IS, OF COURSE,
THAT ONVOY OPENED THE DOOR TO
THIS APPROACH WHERE A COURT
DOESN'T LOOK FOR SPECIFIC
LANGUAGE INCLUDING VALIDITY
CLAIMS.
THE COURT IS LOOK FOR LANGUAGE
THAT SPEAKS OF THE MAKING OF THE
CONTRACT.
THAT'S NOT REQUIRED.
LOOKING BACK TO ATCAS, THE
ARBITRATION PROVISION IN ATCAS
AT ANY DISAGREEMENT WHATSOEVER
ARISING OUT OF OR RELATING TO
THE CONTRACT WAS ARBITRABLE.
IN ATCAS, THE COURT SAID THAT
LANGUAGE DOESN'T COVER
FRAUDULENT INDUCEMENT CLAIMS
BECAUSE THERE IS NO EXPLICIT
REFERENCE TO SUCH A CLAIM.
OF COURSE, THAT IS NO LONGER THE
LAW.
NOWADAYS ANY COURT WOULD READ A
BROAD ARBITRATION CLAUSE LIKE
THAT TO COVER VALIDITY CLAIMS.
THE ISSUE IS THAT THE COURT OF
APPEALS APPROACH HERE JUST
SIMPLY ISN'T CONSISTENT WITH
ONVOY AND ALSO WITH ONVOY'S
EFFORT, AND ONVOY'S INTENTION,
TO BRING MINNESOTA LAW IN LINE
WITH FEDERAL PRECEDENT ON THIS
QUESTION.
I WILL END WITH A POINT THAT
APPLIES TO BOTH QUESTIONS
PRESENTED, AND THAT POINT IS
THAT EXPECTATIONS MATTER.
PARTIES WRITING THE CONTRACT,
PARTICULARLY SOPHISTICATED
PARTIES LIKE GLACIER PARK AND
LAKE UNITED STATES STEEL
CORPORATION, THEY READ A
CONTRACT, THEY WRITE AN
ARBITRATION PROVISION WITH AN
UNDERSTANDING OF THE BACKGROUND
LEGAL PRINCIPLES THAT APPLY.
AND THAT MEANS THAT WHEN THEY
ARE WRITING A CONTRACT THAT
APPLIES TO MINNESOTA LAW, THEY
ARE GOING TO ASSUME THAT
DELEGATION QUESTIONS,
ARBITRABILITY QUESTIONS, WILL BE
RESOLVED IN FAVOR OF ARBITRATION
AND THE 60-YEAR-OLD REASONABLY
DEBATABLE STANDARD WILL APPLY.
WHEN THEY ARE WRITING THE
PROVISION, THEY WILL ASSUME THAT
CONTRACT FORMATION AND CONTRACT
VALIDITY CLAIMS ARE INCLUDED AND
WILL GO TO THE ARBITRATORS,
UNLESS THEY SPECIFICALLY WRITE
LANGUAGE THAT EXCLUDES SUCH A
CLAIM.
THERE IS NO SUCH LANGUAGE IN THE
ARBITRATION PROVISION HERE, AND
GLACIER PARK RESPECTFULLY
REQUESTS THAT THE COURT HONORED
THE EXPECTATIONS OF THE PARTIES
HERE AND HONOR THE EXPECTATIONS
OF CONTRACTING PARTIES THAT HAVE
BEEN APPLYING MINNESOTA LAW FOR
DECADES AND SEND GLACIER PARK'S
CLAIM TO ARBITRATION.
THANK YOU.
>> THANK YOU, COUNSEL.
YOU HAVE 5 MINUTES FOR REBUTTAL.
MR. STANTON?
>> GOOD MORNING, AND MAY IT
PLEASE THE COURT, ANDY STANTON
ON BEHALF OF RESPONDENT
UNITED STATES STEEL CORPORATION.
THIS APPEAL PRESENTS THREE
SIMPLE QUESTIONS.
FIRST, IN A CASE GOVERNED BY THE
FAA, WHAT STANDARD APPLIES TO
DETERMINE WHETHER COURTS OR
ARBITRATORS DETERMINE
ARBITRABILITY?
THE ANSWER TO THIS FIRST
QUESTION IS CLEAR.
THE UNITED STATES SUPREME COURT
AND COURTS AND 42 STATES HAVE
UNANIMOUSLY ANSWERED THIS
QUESTION THAT COURTS DECIDE
ARBITRABILITY UNDER THE FAA,
UNLESS THE PARTIES DELEGATE THAT
QUESTION BY CLEAR AND
UNMISTAKABLE EVIDENCE.
THERE IS NO ROOM TO APPLY THE
REASONABLY DEBATABLE STANDARD
UNDER A CASE GOVERNED BY THE
FAA, AND THERE WOULD BE NO ROOM
TO APPLY IT IF MINNESOTA'S
REVISED UNIFORM ARBITRATION ACT
CONTROLLED.
THE SECOND QUESTION IS WHETHER
THIS ARBITRATION AGREEMENT
EVIDENCES AN INTENT TO DELEGATE
ARBITRABILITY DECISIONS TO
ARBITRATORS, AND A CLEAR ANSWER
HERE IS NOW.
THERE IS SIMPLY NO TEXTUAL
SUPPORT FOR THE COURT TO FIND
THERE IS CLEAR AND UNMISTAKABLE
EVIDENCE, OR EVEN THAT IT WOULD
BE REASONABLY DEBATABLE.
THE THIRD QUESTION IS, OF
COURSE, WHETHER THE CLAIM IS
ARBITRABLE.
HERE AGAIN THE ANSWER IS NOW.
GPIOP CLAIMS IN THE COMPLAINT
THAT U.S. STEEL AIDED AND
ABETTED A BREACH OF FIDUCIARY
DUTY BY THE TRUSTEES OF THE NOW
DISSOLVED TRUST, WHEN U.S. STEEL
WAS NEGOTIATING ACROSS THE TABLE
FROM THOSE TRUSTEES IN ITS OWN
SELF-INTEREST TO EXECUTE THIS
LEASE.
GLACIER PARK, WHICH IS A
CORPORATE SUCCESSOR TO THE
ORIGINAL REVERSIONER OF THE
TRUST, NOW BRINGS THIS AIDING
AND ABETTING CLAIM.
ALL OF THE CASES THAT GPIOP HAS
CITED TO THIS COURT INVOLVE
CLASSICALLY BROAD ARBITRATION,
AND THAT IS THE KEY DISTINCTION.
JUSTICE HUDSON'S QUESTION HIT ON
IT, JUSTICE ANDERSON'S QUESTION
HIT ON IT, SEVERAL OTHER
QUESTIONS HIT ON IT, AS WELL.
IF AN ARBITRATION PROVISION IS
BROAD, FAIR ENOUGH.
IT CAN BE READ TO ENCOMPASS
PREFORMATION CLAIMS.
BUT THIS ARBITRATION PROVISION
IN THIS LEASE IS NARROWER BY FAR
THAN ANY ARBITRATION PROVISION
AT ISSUE IN ANY CASE CITED TO
THIS COURT BY EITHER PARTY.
THIS PROVISION COVERS DISPUTES
OVER MINING PRACTICES, DISPUTES
OF THE FACT THAT WOULD AFFECT
ROYALTY PAYMENTS, DISPUTES OF
FACT RELATIVE TO THE OBSERVANCE
OR FULFILLMENT OF THE TERMS OR
OBLIGATIONS OF THE CONTRACT, AND
THE REAL CATCHALL PROVISION, ANY
OTHER MATTER THE PARTIES
SPECIFICALLY SAY IS ARBITRABLE.
IT HAS A CARVE OUT FOR LEGAL
CLAIMS.
ANY LEGAL DETERMINATION BY THE
ARBITRATORS IS APPEALABLE TO
COURT, WHICH IS UNUSUAL AND
NARROWING, AND IN SUBSTANCE,
YOUR HONORS, IT IS A NARROW
PROVISION.
THERE IS NO EVIDENCE OF AN
INTENT THAT THIS CLAIM BE
ARBITRABLE, AND U.S. STEEL
RESPECTFULLY REQUESTS THIS COURT
CONFIRM.
>> EVEN THOUGH THIS IS A CASE
UNDER THE FAA, THAT WE SHOULD
STILL LOOK TO PRINCIPLES OF
STATE LAW?
>> THANK YOU, MADAME
CHIEF JUSTICE.
THE ANSWER TO THAT QUESTION WAS
PROVIDED BY THIS COURT IN THE
FIRST SYLLABUS POINT OF ONVOY,
WHERE THIS COURT SAID IN CASES
GOVERNED BY THE FAA ARE GOING TO
APPLY FEDERAL LAW.
COUNSEL HAS CITED IN AN ARGUMENT
IN THE BRIEFING, GPIOP DECIDED
CASES LIKE THE CHURCHILL
DECISION FOR THE PROPOSITION
THAT STATE LAW STILL APPLIED IN
FAA CASES IN STATE COURTS, BUT
THIS PREDATES ONVOY.
THE SUPREME COURT HAS BEEN VERY
CLEAR, THE FIRST OPTION
DECISIONS THAT SPECIFICALLY,
NORMALLY STATE COURTS APPLY
STATE LAW PRINCIPLES WHEN
INTERPRETING ARBITRATION
PROVISIONS.
BUT IT GOES ON TO SAY THAT IT
SHOULDN'T BE THE CASE WHEN
DECIDING THE THRESHOLD QUESTION
OF DELEGATION.
THEY ARE, THE SUPREME COURT
SAID, THE CLEAR AND UNMISTAKABLE
EVIDENCE STANDARD APPLIES.
IT IS IMPORTANT THAT THAT
STANDARD APPLY, BECAUSE THERE IS
A STRONG PRESUMPTION IN FAVOR OF
ARBITRABILITY.
THERE ARE LIMITED GROUNDS UPON
WHICH PARTIES CAN NORMALLY
APPEAL FROM THE DECISIONS OF
ARBITRATORS AND OF BINDING
ARBITRATION.
PRESERVING THIS THRESHOLD
STATUTORY MANDATE THAT COURTS
DECIDE THIS ISSUE, ABSENT THE
PARTIES EXPRESSING IN
UNEQUIVOCAL TERMS THEIR INTENT
TO COME OUT OF WHAT THE COURT
SHALL DO, IS AN IMPORTANT
SAFEGUARD.
>> THE OTHER QUESTION I WANTED
TO ASK YOU, COUNSEL, OPPOSING
COUNSEL CITES PARAGRAPH C AS IN
CHARLIE AND THE MINNESOTA
STATUTE, SECTION 527B.06,
PARAGRAPH C, AND CONTENDS THAT
IS RELEVANT.
HOW DO YOU RESPOND TO THAT
ARGUMENT?
>> FRANKLY, YOUR HONOR, I DON'T
SEE THE RELEVANCE OF THAT
PARAGRAPH TO THE ISSUE.
I THINK THE ARGUMENT THAT
COUNSEL WAS MAKING, IF I
UNDERSTOOD IT, IS THAT STATUTORY
PROVISION SHOWS THERE IS AN
UNDERSTANDING THAT VALIDITY
CLAIMS ARE SORT OF PART AND
PARCEL OF THE JURISDICTION OF
ARBITRATORS.
I THINK TO CUT THROUGH TO THE
SUBSTANCE ON THE ISSUE, WHETHER
THE CLAIM IS ARBITRABLE, THE
ISSUE IS FOR US THAT YOU HAVE TO
DECIDE, DO WE HAVE A BROAD OR
NARROW ARBITRATION CLAUSE?
THAT IS THE FIRST QUESTION.
IF THE CLAUSE IS BROAD, AND
PEOPLE'S SECURITY IS THE CASE
THAT COUNSEL CITED IN THE
ARGUMENT, IT'S THE CASE THAT
GPIOP HAS DISPLAYED IN A CHART.
THE PROVISION READS, AND I
QUOTE, FULL COMPLIANCE WITH THE
SPIRIT AND TERMS OF THIS
AGREEMENT IS INTENDED AND
EXPECTED BY BOTH SIDES.
ANY QUESTION, CHARGE, COMPLAINT,
OR GRIEVANCE BELIEVED TO
CONSTITUTE A BREACH OR VIOLATION
IS SUBJECT TO ARBITRATION.
THAT CLAUSE LITERALLY, BY ITS
TEXT, REQUIRED ARBITRATION OF
"VIOLATIONS" OF THE "SPIRIT" OF
THE CONTRACT.
THAT'S A BROAD CLAUSE.
IT'S BEEN AN EXPANSIVE AND VAGUE
TERMS, BECAUSE THERE IS THE
PERFECT TIME I PRESUMPTION IN
FAVOR OF ARBITRABILITY, BECAUSE
IT IS BROAD, THE TIE GOES TO
ARBITRATION.
THE CLAUSE AT ISSUE IN THIS
LEASE IS NARROW.
IT IS SPECIFIC.
YOU CAN'T TAKE THE OBSERVANCE OR
FULFILLMENT CLAUSE OUT OF THE
TEXT OF THE REST OF THE
PROVISION.
AND PREVENTS THE ONLY THING THE
CONTRACT SAYS.
IT IS SPECIFIC, IT IS CLEARLY
INTENDED TO OUTLINE THE KINDS OF
FACTUAL DISPUTES THAT ARE LIKELY
TO RECUR IN A 50-YEAR MINING
LEASE, IT CLEARLY SAYS
ARBITRATORS AREN'T EVEN GOING TO
HAVE THE FINAL SAY --
>> COUNSEL, I WANT TO STOP YOU
FOR A MINUTE.
PAIR C SAYS "AN ARBITRATOR SHALL
DECIDE WHETHER A CONTRACT
CONTAINING A VALID AGREEMENT TO
ARBITRATE IS ENFORCEABLE."
SO DOESN'T THAT SUPPORT
GLACIER PARK'S ARGUMENT HERE
THAT THERE BREACH OF FIDUCIARY
DUTY CLAIMS SHOULD GO TO
ARBITRATION?
>> NO, YOUR HONOR, IT DOESN'T.
THE QUESTION THAT IS PRESENTED
IS WHETHER OR NOT, FIRST OF ALL,
ARBITRATORS SHOULD DETERMINE
ARBITRABILITY.
ON THAT, THE STATUTE IS CLEAR.
THE COURTS SHALL DECIDE.
LET'S START --
>> SO YOU'RE SAYING PARAGRAPH C
ONLY COMES INTO PLAY AFTER THE
COURT HAS ALREADY DECIDED THERE
IS SOMETHING THAT IS GOING TO
ARBITRATION?
>> THAT'S RIGHT, YOUR HONOR.
>> THANK YOU.
JUSTICE ANDERSON, DO YOU HAVE
QUESTIONS?
>> I DO.
COUNSEL, I HEARD FROM OPPOSING
COUNSEL THAT "RELATING TO" IS A
BROADER PHRASE THAN "ARISING
UNDER."
HOW DO YOU RESPOND TO THAT?
>> YES, YOUR HONOR.
IF YOU LOOK AT THE FEDERAL CASE
LAW, AGAIN, THIS GOES BACK TO
THE DISTINCTION BETWEEN BROAD
AND NARROW PROVISIONS.
THERE ARE A LINE OF CASES CITED
IN THE BRIEF THAT HOLD THAT
CLAUSES WHICH REQUIRE
ARBITRATION OF DISPUTES ARISING
UNDER OR RELATING TO, AND BOTH
OF THOSE PHRASES HAVE BEEN HIT
ON AS KEY PHRASES, ARE
INDICATORS OF BREADTH.
BUT THE KEY IS, COUNSEL IS
CORRECT.
THE PHRASE, "RELATING TO," IS A
PHRASE THAT COME IN AND OF
ITSELF, EDUCATES BREADTH.
IT DOESN'T SAY RELATING TO THE
CONTRACT, IT SAYS DISPUTING THE
FACT RELATIVE TO THE OBSERVANCE
OR FULFILLMENT OF THE TERMS AND
OBLIGATIONS OF THE CONTRACT.
BUT THE MORE IMPORTANT POINT,
JUDGE, IN ANSWERING YOUR
QUESTION, IS ALL OF THIS CLAUSES
THAT INVOLVE THOSE PHRASES ARE
VAGUE ON THE BACK END OF THAT
PHRASE.
THEY SAY "ARISING UNDER THE
AGREEMENT," OR AS AN ONVOY,
"ARISING UNDER THE LEASE."
THEY DON'T SAY, "HERE ARE THE
DISPUTES THAT ARBITRABLE."
DISPUTES OF THE RENT PAYMENTS,
OVER HABITABILITY, AND DISPUTES
RELATING TO THE OBSERVANCE OF
OTHER TERMS OF THE LEASE.
THE MORE SPECIFIC A PROVISION
GETS --
>> BUT, COUNSEL, THE OPPOSING
COUNSEL, I THINK SHE
ADMITS -- AND SHE WILL CORRECT
ME IF I'M WRONG, BUT I THINK SHE
ADMITS THAT THREE OF THOSE
PROVISIONS WOULD CLEARLY LOSE.
SO WE'RE REALLY, REALLY TALKING
ABOUT ONE PROVISION, THE
OBSERVANCE PROVISION, THAT IT IS
SOMEHOW DETERMINATIVE HERE, AND
THAT IS A VERY GENERAL AND VAGUE
EXPRESSION.
AT LEAST I THINK THAT IS WHAT
SHE IS SAYING.
HOW DO YOU RESPOND TO THAT?
>> YES, YOUR HONOR.
TWO ANSWERS TO THAT.
THE FIRST IS THAT YOU CAN'T TAKE
THAT CLAUSE OUT OF THE
ARBITRATION PROVISION AS A WHOLE
AND IGNORE THE REST OF WHAT THE
PROVISION SAYS.
ALL OF THE CLAUSES THAT COUNSEL
IS ANALOGIZING ARE CLAUSE 2,
STAND-ALONE PROVISIONS THAT
DON'T HAVE ANY SPECIFICITY LIKE
OURS.
THE SECOND ANSWER, YOUR HONOR,
IT WAS TELLING AN ARGUMENT AS
COUNSEL SAID, AS THEY SIT IN THE
REPLY BRIEF, IF YOU JUST TAKE
OUT THE QUALIFYING PHRASE, "ANY
FACT," THIS CLAUSE LOOKS LIKE
THE BROAD CLAUSE AT ISSUE IN
ONVOY IN OTHER CASES.
WELL, YOU CAN'T TAKE OUT THE
QUALIFYING LANGUAGE.
>> IN OTHER WORDS, THE FACT
THAT -- NOW I'M DOING IT.
BUT BECAUSE THAT CLAUSE MAKES
REFERENCE TO ANY FACT, THAT IS A
LIMITING CHARACTERISTIC OF THE
WHOLE CLAUSE?
>> YES, YOUR HONOR.
IT CLEARLY IS A LIMITING
CHARACTERISTIC.
IT IS CLEARLY LIMITING THAT
CLAUSE TO DISPUTES OF FACT, NOT
RELATING TO THE CONTRACT.
RELATIVE TO THE OBSERVANCE OR
FULFILLMENT OF THE TERMS AND
OBLIGATIONS HEREUNDER.
LET'S GO BACK TO THIS CLAIM.
THIS CLAIM, LIT DISPUTES OF THIS
ACT WILL EXIST IN GPIOP'S CLEAN?
WELL, THEY ALLEGE THAT
U.S. STEEL AIDED AND ABETTED A
BREACH OF FIDUCIARY DUTY, BY THE
TRUSTEES OF A TRUST WHICH HAS
NOW BEEN DISSOLVED, AND THAT
U.S. STEEL SOMEHOW, NEGOTIATING
ITS OWN SELF-INTEREST, AIDED AND
ABETTED.
THERE ARE AT LEAST FOUR OR FIVE
THRESHOLD ISSUES THAT WILL BE
RAISED IN THIS CASE, LIKE
WHETHER GPIOP HAS STANDING TO
BRING THIS CLAIM, WHETHER
LEGALLY YOU CAN ASSERT A BREACH
OF FIDUCIARY DUTY, AND AIDING
AND ABETTING THEORY, AGAINST A
PARTY NEGOTIATING IN ITS OWN
SELF-INTEREST ACROSS THE TABLE
ADVERSELY FROM THE FIDUCIARY.
ALL OF THOSE ISSUES UNDER THIS
ARBITRATION PROVISION, IF
DECIDED BY ARBITRATORS, WOULD BE
IMMEDIATELY APPEALABLE TO COURT.
BECAUSE THIS ARBITRATION
PROVISION DOES NOT EMPOWER
ARBITRATORS TO HAVE THE LAST
WORD ON LEGAL ISSUES.
WHEN YOU COMPARE THIS CLAUSE TO
THE LANGUAGE OF THE CLAUSES THAT
ISSUES IN CASES IT LOOKED AT
TRULY BROAD CLAUSES, YOU CAN SEE
THIS ONE FAR NARROWER, FAR MORE
SPECIFIC, FOR MORE PARTICULAR.
>> ONE MORE QUESTION, AND THEN I
WILL RELEASE YOU.
THERE IS SOME DISCUSSION IN
OPPOSING COUNSEL'S ARGUMENT
ABOUT THE FACT THAT THE COURT OF
APPEALS DID NOT RELY ON ONVOY.
IT IS A LITTLE ODD THAT THEY
DON'T DO THAT.
WHAT SIGNIFICANCE IS THAT, IF
ANY?
>> YOUR HONOR, I DON'T THINK YOU
HAVE TO RELY ON ONVOY TO GET TO
THE RIGHT RESULT HERE, BUT
CERTAINLY I DO AGREE WITH YOUR
HONOR THAT ONVOY IS INSTRUCTIVE.
I THINK IT IS INSTRUCTIVE IN A
COUPLE OF WAYS.
THE FIRST WAY IT'S INSTRUCTIVE
IS IT TELLS US WHEN WE ARE
DEALING WITH A CASE WHERE THE
FAA APPLIES.
WE LOOK TO FEDERAL LAW TO
DETERMINE THE LEGAL STANDARDS
THAT WE APPLY WHEN INTERPRETING
THE AGREEMENT.
THAT IS WHY IT MAKES NO SENSE TO
ARGUE FOR ANY STANDARD OTHER
THAN THE CLEAR AND UNMISTAKABLE
EVIDENCE STANDARD DUTCH
DELEGATION.
IT ALSO TELLS US THAT THE KEY
DRIVER OF DETERMINING THE SCOPE
OF ARBITRATION PROVISIONS IS
ASSESSING WHETHER THEY ARE BROAD
OR NOT.
THE ONVOY COURT LOOKED, QUITE
RIGHTLY, AS ARBITRATION
PROVISION AT ISSUE IN THAT LEASE
AND SAID, "THIS IS A CLAUSE THAT
IS A BROAD CLAUSE, IN LINE WITH
FEDERAL AUTHORITY."
BROAD CLAUSES CAN BE READ TO
ENCOMPASS CERTAIN PREFORMATION
CLAIMS.
THE CASE DOES NOT STAND FOR THE
PROPOSITION THAT THERE IS A
FREESTANDING PRESUMPTION THAT
ALL CLAIMS WILL BE ARBITRABLE,
IRRESPECTIVE OF WHAT ARBITRATION
PROVISION SAY.
THAT IS NOT WHAT THE CASE STANDS
FOR.
>> JUSTICE HUDSON, DO YOU HAVE
ANY QUESTIONS?
>> IDEA.
THANK YOU, CHIEF.
COUNSEL, A COUPLE OF THINGS.
IF I UNDERSTOOD YOUR ARGUMENT
HERE, YOUR ANSWER TO JUSTICE
ANDERSON, YOU ARE SAYING THAT
WHAT MAKES THE PHRASE IN SECTION
19 OF THE AGREEMENT, "NARROW" IS
A REFERENCE TO ANY FACT.
I DON'T THINK THAT IS HOW THE
DISTRICT COURT OR THE COURT OF
APPEALS ANALYZED IT.
I THINK THEY SAID WHAT MADE IT
NARROW IS THE OBSERVANCE OR
FULFILLMENT LANGUAGE, BECAUSE IT
SEEMED TO POINT TO WHAT WAS
GOING ON IN TERMS OF THE
CONTRACT ITSELF, NOT
PRECONTRACT.
DO YOU HAVE THAT RIGHT?
OR MAYBE I'M NOT RECALLING THE
DISTRICT COURT AND COURT OF
APPEALS OPINIONS.
HELP ME WITH THAT.
>> JUSTICE HUDSON, I THINK YOU
ARE RIGHT.
I THINK YOU'RE RIGHT, AND --
FIRST OF ALL, YOU'RE RIGHT THAT
THE COURT OF APPEALS IN
PARTICULAR LOOKED AT THE
DICTIONARY DEFINITIONS OF THE
WORDS "OBSERVANCE" AND
"FULFILLMENT."
ANY FACT RELATIVE TO THE
OBSERVANCE OR FULFILLMENT OF THE
TERMS AND OBLIGATIONS, AND SAID,
"THIS CLAUSE COVERS DISPUTES OF
FACT THAT I RELATIVE TO THE
PERFORMANCE OF EXISTING DUTIES."
BASED ON THE DICTIONARY
DEFINITION OF THOSE TERMS.
WHEN I SAY YOU ARE RIGHT AND, IT
IS ALSO NARROWING THAT IT IS
LIMITED TO DISPUTES OF FACT
RELATING TO THE PERFORMANCE OF
EXISTING DUTIES.
AND IT IS ALSO NARROWING THAT IT
IS 1 OF 4 SPECIFICALLY
IDENTIFIED DISPUTES THAT ARE
SUBJECT TO ARBITRATION.
IN OTHER WORDS, THE PARTIES
DIDN'T SAY -- AND WE CAN'T
IGNORE THAT THEY DIDN'T SAY
THIS -- "ANY DISPUTES RELATING
TO THE CONTRACT."
LIKE MANY ARBITRATION PROVISION
STATED.
THEY DIDN'T.
THEY STARTED WITH MINING
PRACTICES, ROYALTY DISPUTES, AND
THEN THIS OBSERVANCE OR
FULFILLMENT CLAUSE.
THAT, AGAIN, THE REAL CATCHALL,
THE TRUE CATCHALL, ANYTHING ELSE
THIS CONTRACT SPECIFICALLY SAYS,
WE ARE GOING TO ARBITRATE.
>> THANK YOU, THAT IS HELPFUL.
THAT'S VERY HELPFUL.
AND MY OTHER QUESTION WAS, IS
THERE ANY SIGNIFICANCE TO THE
FACT THAT THE COURT OF APPEALS
DID NOT ADOPT THE CLEAR AND
UNMISTAKABLE EVIDENCE STANDARD?
THEY DON'T SAY THAT, AND MY
UNDERSTANDING IS, IN YOUR
BRIEFING AND ARGUMENT FOR THEM,
AS YOU ARE ASKING US TO DO, YOU
ASK THEM TO ADOPT THAT, AS WELL.
IS THERE ANY SIGNIFICANCE TO THE
FACT THAT THEY DIDN'T?
>> I'LL ANSWER IT TWO WAYS.
FIRST, I THINK NO IN THAT THERE
IS NO EVIDENCE IN OUR VIEW THAT
WOULD SUPPORT A FINDING OF AN
INTENT TO DELEGATE UNDER ANY
STANDARD.
IN THAT SENSE, IT IS NOT
SIGNIFICANT THAT THEY DIDN'T
ANNOUNCE WHICH STANDARD APPLIES,
BECAUSE EVEN IF YOU APPLIED THE
REASONABLY DEBATABLE STANDARD
HERE, THE IDEA THAT THIS
OBSERVANCE OR FULFILLMENT CLAUSE
EXPRESSES AN INTENT TO HAVE
ARBITRATORS DECIDE ARBITRABILITY
UNDER STATUTES THAT SAY COURTS
SHALL DO THAT IS NOT SUPPORTIVE.
>> OKAY.
>> BUT IT WOULD BE, I THINK,
USEFUL TO CLARIFY WHAT THE
CORRECT STANDARD SHOULD BE.
IN OUR VIEW, IT IS CLEAR UNDER
THE FAA.
SUPREME COURT HAS SAID TWICE
NOW, STATE COURTS IN 42 STATES
HAVE SAID, MANY FEDERAL CIRCUIT
COURTS HAVE SAID, UNDER THE FAA,
YOU NEED CLEAR AND UNMISTAKABLE
EVIDENCE OF AN INTENT TO
DELEGATE OUT OF THAT STATUTORY
PRESUMPTION.
>> MY LAST QUESTION, KIND OF
RELATED TO THAT, MS. FRANKLIN
SAID TO ME WHEN WE WERE TALKING
ABOUT ONVOY, THIS IDEA THAT YOU
HAVE TO -- THAT YOU NEED MORE
THAN WHAT IS IN THIS PROVISION.
SHE SAID, "ONVOY, THAT SHIP HAS
SAILED, ONVOY STANDS FOR THE
PROPOSITION THAT YOU DON'T NEED
THE MAGIC LANGUAGE SORT OF
THING."
AND I THINK SHE SAYS IN -- MAYBE
IT'S THE REPLY BRIEF, THAT THE
REAL YOU ARE SEEKING IS THAT
CONTRACTING PARTIES MUST
EXPRESSLY INCLUDE CONTRACT OR
VALIDITY CLAIMS WITHIN THE
AGREEMENT, POINTING TOWARD,
AGAIN, MAYBE ANOTHER WAY OF
SAYING THAT MIGHT BE YOU NEED
THE MAGIC LANGUAGE OR YOU NEED
SOME DIRECT LANGUAGE.
WHAT IS YOUR RESPONSE TO THE
SHIP HAS SAILED ARGUMENT THERE?
AND IS THAT WHAT YOU ARE ASKING
FOR?
>> NO, WE ARE NOT ASKING FOR
THAT.
MY RESPONSE TO THE SHIP HAS
SAILED ARGUMENT IS THAT COUNSEL
IS RIGHT AND WRONG.
COUNSEL IS RIGHT THAT THE CASE
LAW CLEARLY HOLDS THAT A BROAD
ARBITRATION PROVISION IS FAIRLY
READ TO ENCOMPASS FORMATION
CLAIMS, AND YOU DON'T NEED MAGIC
WORDS.
IF YOU HAVE A BROAD ARBITRATION
PROVISION, YOU DON'T NEED MAGIC
WORDS TO CAPTURE FORMATION
CLAIMS.
IF YOU HAVE A NARROW ARBITRATION
PROVISION, THAT PROVISION COVERS
WHAT IT SAYS IT COVERS, AND
UNDER TRADITIONAL PRINCIPLES OF
CONTRACT INTERPRETATION, IT
DOESN'T COVER WHAT IT DOESN'T
SAY IT COVERS.
JUST LOOKING AT THE LANGUAGE IN
THE CASES, PRIMA PAINT, THE
SUPREME COURT HELD THAT
PROVISION A BROAD PROVISION.
A COVERED "ANY CONTROVERSY OR
CLAIM ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE BREACH
THEREOF."
>> COUNSEL, LET ME STOP YOU AND
SEE IF OTHER MEMBERS OF THE
COURT HAVE QUESTIONS.
JUSTICE CHUTICH?
>> YES, I HAD A QUESTION ABOUT
ONVOY.
THAT FOLLOWED FIRST OPTIONS, AND
YET THE COURT SAID PARTIES WHO
WANT THE COURTS TO RETAIN
JURISDICTION OVER MATTERS OF
CONTRACT FORMATION MUST
EXPRESSLY STATE SUCH AN INTENT
WHEN DRAFTING THE ARBITRATION
CLAUSE IN THE CONTRACT.
DO WE NEED TO OVERRULE OR
CLARIFY ONVOY IN ANY SENSE, IF
WE FOLLOW -- IF WE AGREE WITH
YOU?
>> JUSTICE CHUTICH, NO, YOU
DON'T.
HE READ THE HOLDING OF THE ONVOY
COURT IN CONTEXT, THE COURT
FIRST FINDS AFTER DISPENSING
WITH THE QUESTION OF WHETHER
STATE OR FEDERAL LAW APPLIES,
FINDING ITS FEDERAL LAW, THE
COURT FINDS THAT THE ARBITRATION
PROVISION AT ISSUE IS A BROAD
ONE.
I WOULD AGREE THAT BROAD
ARBITRATION PROVISIONS, WHEN
YOU'RE DEALING WITH A BROAD
ARBITRATION PROVISION, CLAIMS
ARE PRESUMPTIVELY ARBITRABLE.
IF I HAVE AN ARBITRATION
PROVISION LIKE THE ONE AT ISSUE
IN ONVOY, ANY UNRESOLVED
DISPUTES ARISING UNDER THIS
LEASE SHALL BE ARBITRATED, AND
THAT IS ALL IT SAYS, THEN I
MIGHT NEED -- IF I WANT TO OMIT
FORMATION, I MIGHT NEED TO SAY
THAT EXPLICITLY.
WHEN I HAVE A NARROW CLAUSE,
LIKE THIS ONE, THAT ARTICULATES
WITH PRECISION AND SPECIFICITY
THE DISPUTES THAT ARE
ARBITRABLE, THEN TRADITIONAL
PRINCIPLES OF CONTRACT
INTERPRETATION WOULD SAY, UNDER
A NARROW CLAUSE, ONLY THOSE
CLAIMS THAT ARE SAID TO BE
ARBITRABLE ARE ARBITRABLE.
>> NOTHING FURTHER.
>> JUSTICE MCKEIG?
>> JUST TO CONFIRM, YOU WOULD
SAY THE FACT THAT THERE IS THIS
ENUMERATION OF FIVE THINGS
MATTERS?
>> YES, JUSTICE MCKEIG.
THE FOUR ENUMERATED TYPES OF --
>> SORRY, FOUR, NOT FIVE.
THANK YOU.
>> THAT'S OKAY.
IT IS IMPORTANT TO CONTRAST THIS
PROVISION, WHICH IS VERY
PARTICULAR, WITH THE PROVISIONS
AT ISSUE IN THE CASES WITH BROAD
CLAUSES.
IN STATUTORY CONSTRUCTION AND
CONSTITUTIONAL LAW, VAGUENESS
AND OVER-BREADTH ARE VERY CLOSE
COUSINS, AS THIS COURT KNOWS
PALE EASY WITH ARBITRATION
PROVISIONS THAT ARE
CHARACTERIZED AS BROAD, THEY ARE
VERY FREQUENTLY SO BROAD AS TO
BE ALMOST VAGUE.
ACE CAPITAL, "ANY DISPUTE WITH
REFERENCE TO THE INTERPRETATION
OF THIS AGREEMENT WHERE THE
PARTY'S RIGHTS WITH RESPECT TO
ANY TRANSACTION INVOLVED," AND
THAT'S ALL IT SAYS.
THAT IS VAGUE AND USES EXPANSIVE
TERMS.
THE PRIMA PAINT LANGUAGE, WHICH
I READ TO THE COURT, THE
PEOPLE'S SECURITY CASE, WHICH
INVOLVED A PROVISION WHICH
REQUIRES ARBITRATION OF NOT JUST
BREACHES OF CONTRACT BUT
VIOLATIONS OF THE SPIRIT OF THE
AGREEMENT, THOSE ARE BROAD AND
VAGUE PROVISIONS, AND IT IS FAIR
GIVEN THE OVERALL PRESUMPTION IN
FAVOR OF ARBITRABILITY WHEN
DEALING WITH PROVISIONS LIKE
THAT TO FIND THAT THEY COVER A
BROAD SCOPE OF CLAIMS.
BUT THIS --
>> HANG ON, COUNSEL.
JUSTICE THISSEN, ANY QUESTIONS?
>> THANKS, CHIEF.
JUST COMING BACK TO 527B.06 C
THAT THE CHIEF ASKING ABOUT, B
SAYS THE COURTS DECIDE
ARBITRABILITY, BUT C SAYS
THERE'S A PERCEPTION THAT THE
QUESTION OF VALIDITY IS
ARBITRABLE, AND HE SEEMED TO
WANT TO SEPARATE THOSE INQUIRIES
OUT, BUT WHY, AS WE ARE
CONSIDERING ARBITRABILITY, IT
WOULD BE NOT CONSIDER THAT
PRESUMPTION AS TO VALIDITY?
THAT SEEMS TO BE WHAT OPPOSING
COUNSEL'S ARGUING, THAT YOU CAN
READ THIS TOGETHER.
AS WE ARE DOING WE ARE SUPPOSED
TO DO UNDER B, WHERE THE COURT
DECIDES ARBITRABILITY, WHETHER
AND ISSUE IS ARBITRABLE, WE LOOK
TO C AND APPLY THAT PRESUMPTION.
>> I THINK TWO THINGS,
JUSTICE THISSEN.
THE FIRST IS THIS CASE, AS THE
PARTIES BOTH AGREE, IS GOVERNED
BY THE FAA, NOT THE MUAA.
I DON'T KNOW THAT ANY STATUTORY
DRIVEN ANALYSIS HAS ANY BEARING
ON THE OUTCOME HERE, GIVEN THAT
IT'S AN FAA CASE.
SECONDLY, I THINK --
>> LET ME ASK YOU ON THAT, THEN.
FINISH YOUR ANSWER, I'M SORRY.
GO AHEAD.
>> I THINK SECONDLY THE WAY THE
ANALYSIS SHOULD WORK IS, FIRST,
THE COURT SHALL DECIDE WHETHER
THE CLAIM IS ARBITRABLE,
ASSUMING THERE IS NOT A CLEAR
EVIDENCE OF INTENT TO DELEGATE.
SECONDLY, IF THERE IS A QUESTION
AS TO THE VALIDITY OF THE
CONTRACT ITSELF, A THRESHOLD
ISSUE, AND AN OTHERWISE
ARBITRABLE DISPUTE WITH THE
COURT HAS DETERMINED THE CLAIM
IS ARBITRABLE, THEN ARBITRATORS
DECIDE THAT QUESTION.
PRESUMPTIVELY.
THAT IS HOW I WOULD READ THE
STATUTE, ALTHOUGH I DON'T THINK
THAT ANALYSIS HAS A PLACE HERE
IN THIS CASE.
>> THANK YOU.
>> JUSTICE MOORE?
>> NO QUESTIONS, CHIEF.
>> ALL RIGHT, COUNSEL.
YOU HAVE COME TO THE END OF YOUR
TIME AND WE'LL SEE MS. FRANKLIN
ON REBUTTAL FOR 5 MINUTES.
MEMBERS OF THE COURT, IF YOU
HAVE QUESTIONS, JUST GO AHEAD
AND UNMUTE YOURSELF.
>> THANK YOU, YOUR HONOR.
THE PARTIES AGREE THAT VALIDITY
CLAIMS ARE PRESUMPTIVELY
ARBITRABLE, AND THAT A BROAD
ARBITRATION CLAUSE, ONE THAT
DOESN'T INCLUDE DOMINIC EXCLUDE
SUCH CLAIMS, MEANS THAT THOSE
CLAIMS WOULD GO TO THE
ARBITRATORS.
WHAT IS IT ABOUT THIS CLAUSE
THAT SHOWS AN INTENT TO EXCLUDE
VALIDITY CLAIMS?
THIS CLAUSE HAS BROAD LANGUAGE.
ANY DISAGREEMENT AS TO ANY FACT
RELATIVE TO THE OBSERVANCE OF
THE CONTRACT, AND U.S. STEEL
EVEN AGREES THAT THE CONTRACT
HAS SAID ANY DISAGREEMENT
RELATING TO THE OBSERVANCE OF
THE CONTRACT, THEN THAT WOULD BE
ARBITRABLE.
WHAT IS IT ABOUT THAT PHRASE,
"ANY FACT," THAT SOMEHOW LIMITS
THE SCOPE OF THE ARBITRATION
PROVISION?
THERE ARE DISPUTED FACTS IN THIS
CASE.
U.S. STEEL DISPUTES
GLACIER PARK'S ALLEGATIONS ABOUT
U.S. STEEL UNLAWFULLY
MANIPULATED THE LEASE
NEGOTIATIONS.
THERE ARE PLENTY OF FACTS THAT
WILL HAVE TO BE ADDRESSED BY THE
ARBITRATORS.
WE KNOW THAT THE ARBITRATORS ARE
EMPOWERED TO ADDRESS QUESTIONS
OF LAW, BECAUSE THAT IS INCLUDED
LATER IN THE PROVISION.
WHETHER OR NOT THOSE QUESTIONS
ARE ULTIMATELY APPEALABLE
DOESN'T MEAN THE FACT THAT THERE
ARE QUESTIONS OF LAW INVOLVED IN
THE CASE, THAT IT SOMEHOW
EXCLUDES A VALIDITY CLAIM FROM
THE SCOPE OF ARBITRATION.
AND THEN, LET'S LOOK AT THE TEXT
OF OTHER ARBITRATION PROVISIONS
THAT U.S. STEEL SAYS ARE BROAD.
AND THAT'S WHY THEY COVER
VALIDITY.
AGAIN, POINTING TO THE LANGUAGE
OF ACE CAPITAL, IF ANY DISPUTE
SHALL ARISE BETWEEN THE PARTIES
WITH REFERENCE TO THE
INTERPRETATION OF THE AGREEMENT
OR THE RIGHTS WITH RESPECT TO
ANY TRANSACTION INVOLVED, WHAT
ABOUT THAT CLAUSE IS BROADER
THAN THE ONE WE HAVE HERE?
THE CLAUSES RUN IN PARALLEL
UNTIL YOU GET TO THE
INTERPRETATION OF THE AGREEMENT.
BUT THE OBSERVANCE OF THE
CONTRACT, WHETHER A PARTY WILL
OBSERVE THE CONTRACT, WHICH IS
THE LANGUAGE IN OUR ARBITRATION
PROVISION, THAT IS BROADER THAN
SIMPLY A DISPUTE ABOUT HOW TO
INTERPRET THE AGREEMENT.
>> DOES IT MATTER THAT THE WORDS
"TERMS AND OBLIGATIONS" ARE USED
AS OPPOSED TO THE WORD
"CONTRACT," BECAUSE THAT SEEMS
MORE SPECIFIC.
THE CONTRACT I CAN SEE IN AN
ARGUMENT THAT IT IS BROAD ENOUGH
TO GET TO THE EXISTENCE OF THE
CONTRACT.
BUT "TERMS AND OBLIGATIONS"
SEEMS TO FOCUS IN ON SOMETHING
IT'S ALREADY EXISTING POND THAT
ASSUMES THE EXISTENCE OF THE
CONTRACT.
>> SURE.
I HAVE BEEN PARAPHRASING, THE
CLAUSE ACTUALLY SAYS THE TERMS
AND OBLIGATIONS HEREOF.
HEREOF IS BEING THE CONTRACT.
THAT JUST MEANS OBSERVANCE OF
THE CONTRACT, BECAUSE WHAT IS A
CONTRACT BESIDES ITS TERMS AND
OBLIGATIONS?
I DON'T THINK THAT ONE CAN READ
THE TERMS AND OBLIGATIONS PHRASE
TO BE SOMEHOW LIMITING.
AGAIN, BECAUSE ANY DOUBTS ARE
RESOLVED IN FAVOR OF
ARBITRABILITY ON THIS QUESTION.
DRAWING THE CONTRAST, THE ONE
CASE THAT U.S. STEEL IS
ANALOGOUS TO THIS ONE, THE
ARBITRATION CLAUSE SAYS THE
AUTHORITY SHALL BE LIMITED TO
THE INTERPRETATION OF THE
AGREEMENT AND THE ARBITRATOR
SHALL, IN EACH CASE, BE BOUND BY
THE PROVISION OF THIS AGREEMENT,
AND SHALL NOT HAVE THE AUTHORITY
TO CHANGE, AMEND, OR MODIFY THE
PROVISIONS OF THIS AGREEMENT.
THAT IS THE ONE CASE THAT
U.S. STEEL SAYS IS SIMILAR TO
THIS ONE.
THAT ARBITRATION PROVISION IS
RADICALLY DIFFERENT.
THERE ARE EXPRESS LIMITATIONS ON
THE AUTHORITY OF THE ARBITRATORS
IN THAT CASE, AND THAT IS THE
KIND OF THING THAT A COURT
SHOULD LOOK TO TO SAY, "OKAY, IN
THIS CASE THE PARTIES INTENDED
TO EXCLUDE VALIDITY CLAIMS."
U.S. STEEL CAN POINT TO NO SUCH
LANGUAGE HE.
>> COUNSEL, IF I MAY, AND AGAIN,
MAYBE WE HAVE PLOWED THIS COUNT
TOO MUCH, I THINK MAYBE WE
OVERTHINK THINGS, MAYBE IT'S NOT
SO SIMPLE AS THE DISTRICT COURT.
THEY TOOK A PAGE AND A HALF TO
EXPLAIN THE RULINGS.
ON THIS ISSUE, ABOUT WHAT
OBSERVANCE ON FULFILLMENT OF THE
TERMS MEANS, HE SAID THAT THIRD
SECTION REFERS TO ANY OTHER
TERMS AND OBLIGATIONS HERE OF,
AND THEN HE PUT IT, "I.E. THE
LEASE AND OPERATING AGREEMENT."
WHAT I TOOK HIM TO MEAN BY THAT
IS WE ARE NOT TALKING ABOUT
PRECONTRACT CONDUCT.
WHY ISN'T IT THAT SIMPLE?
>> YOUR HONOR, WE THINK IT IS
SIMPLE.
BUT WHAT SIMPLE AS THAT CONTRACT
VALIDITY CLAIMS ARE
PRESUMPTIVELY INCLUDED.
THE DISTRICT COURT, LIKE THE
COURT OF APPEALS, DIDN'T ADDRESS
ONVOY, APPLY THE OUT OF DATE
APPROACHED FROM PRIOR CASES THAT
REQUIRES MAGIC WORDS THAT LOOKS
FOR SPECIFIC LANGUAGE INCLUDING
SUCH CLAIMS, SO THE AGREE.
THIS IS SIMPLE.
BUT WHAT IS IMPORTANT AND WHAT
GIVES THIS CASE RELEVANCE TO
THOUSANDS OF OTHER CONTRACTS
THAT APPLY IN MINNESOTA LAW IS
THAT COURTS CAN'T FOLLOW THE
APPROACH OF THE COURT OF APPEALS
AND LOOK FOR THOSE MAGIC WORDS.
CONTRACT VALIDITY CLAIMS ARE
PRESUMPTIVELY INCLUDED, UNLESS A
CONTRACT SHOWS AN INTENT TO
EXCLUDE SUCH CLAIMS.
SO IT IS SIMPLE, THERE IS NO
SUCH LANGUAGE HERE, AND
GLACIER PARK RESPECTFULLY
REQUESTS THAT THE COURTS IN THIS
CASE TO ARBITRATION.
>> THANK YOU, COUNSEL.
THANKS TO BOTH COUNSEL FOR THE
HELP YOU PROVIDED THE COURT IN
THIS CASE.
THIS MATTER IS SUBMITTED.
WE WILL ISSUE AN OPINION IN DUE
COURSE.
COUNSEL, YOU ARE FREE TO EXIT
THE HEARING WITH THE THANKS OF