Brister Dissent in In re Poly-America, LP, No. 04-1049 (Tex. Aug. 29, 2008)(O'Neill)
(arbitration in employment context, retaliatory discharge)
I agree with the Court that the court of appeals erred in reviewing and reversing the trial
court’s order compelling arbitration. But I disagree that we have any place reviewing
those matters either. To that extent, I respectfully dissent.
IN RE POLY-AMERICA, L.P., IND. AND D/B/A POL-TEX INTERNATIONAL, AND POLY-AMERICA GP, L.L.C.; from Chambers
County; 1st district
(01-03-01055-CV, 175 SW3d 315, 09-09-04)
The Court conditionally grants the petition for writ of mandamus.
Justice O'Neill delivered the opinion of the Court, in which Chief Justice Jefferson, Justice Hecht, Justice Wainwright,
Justice Medina, Justice Green, and Justice Johnson joined.
Justice Brister delivered a dissenting opinion.
(Justice Willett not sitting)
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Dissent by Justice Brister in In re Poly-America, LP (Tex. 2008)
═══════════════════════════════════════════════════════════════════
Justice Brister, dissenting.
The hard thing about granting mandamus relief is knowing when to stop. This Court has tried over
the years to set mandamus boundaries through various tests, all of which soon generated
exceptions, and most of which were met with objections that the “established” boundaries of
mandamus were being ignored.
Only two years ago, we held in In re Palacios that mandamus review was available for “orders that
deny arbitration, but not orders that compel it.”[1] We noted that this was a reversal of previous
practice,[2] but was necessitated by the Supreme Court’s 2000 opinion in Green Tree Financial
Corp. v. Randolph, which said that orders compelling arbitration “would not be appealable” unless
they included final dismissal of the case.[3] Today the Court comes full circle, saying once again
that mandamus review of orders compelling arbitration is “proper,” though courts should be
“hesitant” about it.[4] Apparently, so long as one expresses qualms, Palacios is a dead letter.
Of course, firm rules governing mandamus are made to be broken, as issuance of the writ is
primarily a matter of judgment and prudence.[5] As the United States Supreme Court said in
2004, mandamus is appropriate if a party shows a clear right, no alternative remedy, and that
mandamus is “appropriate under the circumstances.”[6] This test (especially the last prong) defies
precise application, but years of judicial effort have failed to produce a better one. As a result,
reasonable judges will sometimes disagree whether mandamus is “prudent” or “appropriate
under the circumstances,” and sometimes decide differently in one case than the next. But
departing from Palacios is neither prudent nor appropriate for at least five reasons.
First, Congress amended the Federal Arbitration Act in 1988 so that it “permits immediate
appeal of orders hostile to arbitration, . . . but bars appeal of interlocutory orders favorable to
arbitration.”[7] Texas law is to the same effect.[8] As the trial court’s order here was favorable to
arbitration, we should defer to the cost-benefit analysis already conducted by the federal and state
legislatures.[9] We cannot simply substitute mandamus when interlocutory appeal is prohibited
without running into serious Supremacy Clause problems;[10] “[f]requent pre-arbitration review
would inevitably frustrate Congress’s intent to move the parties to an arbitrable dispute out of
court and into arbitration as quickly and easily as possible.”[11]
Second, the trial court ordered these parties to arbitration five years ago. Had mandamus
proceedings not intervened, this dispute would have long since been concluded. Surely the time
and expense incurred arbitrating this case would have been less than that incurred in mandamus
review. And now that mandamus review is concluded, the parties must go to arbitration anyway.
Given our state’s strong public policy favoring freedom of contract,[12] claims that a contract is
unconscionable are asserted far more often than they are sustained. After today’s decision, it is
hard to see how any arbitration cannot be stopped in its tracks by alleging unconscionability.
Third, today’s opinion is purely advisory; if an arbitrator ignores it, there is little we can do. Both
federal and state law require courts to enforce an arbitrator’s decision, no matter what it is, with
very few exceptions.[13] The allowable exceptions concern extrinsic or procedural matters like
corruption, fraud, or refusing to hear evidence;[14] they do not include (as the Supreme Court just
held) disregarding the law, even if a legal error is “manifest.”[15] What is the benefit of mandamus
review if the resulting order can be ignored?
Fourth, even if most arbitrators would comply with an appellate court’s mandamus rulings, issuing
them creates a hybrid procedure unknown to the arbitration acts. As already noted, those statutes
commit matters concerning the law and the merits to the arbitrators and foreclose judicial review
of the details of the result. This also appears to violate the parties’ agreement in this case, which
authorized the arbitrator to address unconscionability:
Should any term of this Agreement be declared illegal, unenforceable, or unconscionable, the
remaining terms of the Agreement shall remain in full force and effect. To the extent possible, both
Employee and Company desire that the Arbitrator modify the term(s) declared to be illegal,
unenforceable, or unconscionable in such a way as to retain the intended meaning of the term(s)
as closely as possible.
Telling the arbitrators in advance what legal rulings they should make (as the Court does today) is
an improper way to circumvent these restrictions.
Fifth and finally, the Court decides an important question in the abstract that the arbitration may
render moot. The Court concedes that unconscionability of the fee-splitting and discovery-limiting
clauses should be deferred to the arbitrator. But unconscionability of the remedy-stripping clause
is just as fact-based, and just as speculative until all the facts are arbitrated. The fairness of such
clauses is not as one-sided as the Court suggests; many employees might actually prefer cash for
lost wages (and no appellate delays) rather than reinstatement or a long shot at punitive
damages. As the Court notes, several courts have held that such “limitations of remedies are
permissible.”[16] Twice in 2003 the Supreme Court declined to hold that a remedy-stripping
arbitration clause violates the FAA — each time deferring the question until after arbitrators had
addressed it.[17] We should do the same here.
We have never held (as the Court holds repeatedly today) that an arbitration agreement is invalid
unless an employee can “effectively vindicate his statutory rights.”[18] We did not say so in In re
Halliburton Co. (as the Court’s citations aver), where that phrase appears only in a parenthetical
describing an opinion by an intermediate appellate court in Michigan, an opinion we neither
approved nor adopted.[19] Nor does the Court’s judgment comply with this new standard. Despite
the remedy limits imposed here, an arbitrator could still award Johnny Luna 50 years of future lost
wages, which would certainly seem to “effectively vindicate his statutory rights.” Even more than
the fee-splitting or discovery-limiting provisions, it is simply too early to tell whether the remedy-
stripping provisions will be unfair to Luna at all.
Such an important and controversial question should not be decided in such an offhanded and
abstract way. We should instead wait to see whether the arbitration award makes such a decision
necessary; “if it is not necessary to decide more, it is necessary not to decide more.”[20]
The Court overlooks all these problems on the ground that mandamus “has been broadly applied”
by federal courts to review orders compelling arbitration.[21] But the string citations that follow do
not support that claim. Of the five cases cited, three predated Green Tree,[22] and a fourth did not
involve a trial court order favorable to arbitration.[23] The single case granting mandamus relief
from an order favorable to arbitration was by the Ninth Circuit, the court widely recognized as the
“most hostile,”[24] “far to the left of center,”[25] and “renegade” court in the country in employment
arbitration cases.[26] Even so, mandamus was granted in that case only because arbitrating the
single class representative’s case could moot the class action he had brought, wiping it out
without appellate review.[27] In short, there is no “broad” consensus for doing precisely the
opposite of what Congress and the Texas Legislature intended.
It is certainly true that leaving matters like unconscionability to arbitrators will mean development
of the law is “substantially hindered,”[28] but the same could be said of arbitration in all cases. It is
hard to see the allure of a system in which decision-makers can ignore the law, unless of course
one is planning to ignore the law oneself. Based on its popularity, few arbitrators apparently go
that far. But even carefully selected judges and jurors make mistakes, and carefully selected
arbitrators are surely no less fallible. Nevertheless, these are policy matters that only Congress
can address or amend; we cannot disregard the express legislative limits on interlocutory review
merely by calling it mandamus when we think the questions are important and the issues well-
briefed.
While appeal from arbitration awards is very limited, that appeal is an adequate remedy unless
the benefits of mandamus outweigh the costs.[29] Considering the costs expended so far, I doubt
Johnny Luna would consider them outweighed by getting the right to seek reinstatement in
arbitration (which employees rarely request) and punitive damages (which they rarely get).
Accordingly, I agree with the Court that the court of appeals erred in reviewing and reversing the
trial court’s order compelling arbitration. But I disagree that we have any place reviewing those
matters either. To that extent, I respectfully dissent.
__________________________________
Scott Brister
Justice
OPINION DELIVERED: August 29, 2008
--------------------------------------------------------------------------------
[1] 221 S.W.3d 564, 566 (Tex. 2006) (emphasis added).
[2] Id. at 565 (noting abrogation of Freis v. Canales, 877 S.W.2d 283, 284 (Tex. 1994)).
[3] 531 U.S. 79, 87 n.2 (2000).
[4] ___ S.W.3d ___, ___.
[5] See, e.g., CSR Ltd. v. Link, 925 S.W.2d 591, 597 (Tex. 1996) (“Because of the size and complexity of the asbestos
litigation, the most prudent use of judicial resources in this case is to permit a preliminary resolution of the fundamental
issue of personal jurisdiction by writ of mandamus.”) (emphasis added); In re Dean, 527 F.3d 391, 396 (5th Cir. 2008)
(“The decision whether to grant mandamus is largely prudential.”); In re Atlantic Pipe Corp., 304 F.3d 135, 140 (1st Cir.
2002) (concluding mandamus was “prudent under the circumstances”); In re Chimenti, 79 F.3d 534, 539 (6th Cir. 1996)
(noting availability of interlocutory appeal was merely one of several factors affecting court’s “prudential considerations”
regarding issuance of mandamus).
[6] Cheney v. U.S. Dist. Court for Dist. of Columbia, 542 U.S. 367, 380–81 (2004) (holding mandamus should issue when
there is (1) no other adequate remedy, (2) a “clear and indisputable” right, and (3) “the writ is appropriate under the
circumstances”).
[7] Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79, 86 (2000) (construing 9 U.S.C. § 16) (emphasis added).
[8] See Tex. Civ. Prac. & Rem. Code § 171.098; In re Palacios, 221 S.W.3d 564, 566 (Tex. 2006).
[9] In re McAllen Med. Ctr., Inc., ___ S.W.3d ___, ___ (Tex. 2008) (“Although mandamus review is generally a matter within
our discretion, our place in a government of separated powers requires us to consider also the priorities of the other
branches of Texas government.”).
[10] See U.S. Const. art. VI, cl. 2 (“[T]he Laws of the United States . . . shall be the supreme Law of the Land; and the Judges
in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.”).
[11] Perry Homes v. Cull, ___ S.W.3d ___, ___ (Tex. 2008) (quoting Preston v. Ferrer, ___ U.S. ___, ___ (2008) and Moses
H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 22 (1983)) (internal quotations omitted).
[12] Fairfield Ins. Co. v. Stephens Martin Paving, LP, 246 S.W.3d 653, 664 (Tex. 2008); Fortis Benefits v. Cantu, 234 S.W.3d
642, 649 (Tex. 2007); Lawrence v. CDB Servs., Inc., 44 S.W.3d 544, 553 (Tex. 2001).
[13] See 9 U.S.C. §§ 9–11; Tex. Civ. Prac. & Rem. Code §§ 171.087–171.088, 171.091.
[14] Id.
[15] Hall St. Assocs., L.L.C. v. Mattel, Inc., ___ U.S. ___, ___, 128 S.Ct. 1396, 1404 (2008).
[16] ___ S.W.3d at ___.
[17] See PacifiCare Health Sys., Inc. v. Book, 538 U.S. 401, 406–07 (2003) (holding that “since we do not know how the
arbitrator will construe the remedial limitations” barring treble damages, “the proper course is to compel arbitration”); Green
Tree Fin. Corp. v. Bazzle, 539 U.S. 444, 454 (2003) (remanding for arbitrator to determine whether contracts prohibited class
arbitration).
[18] ___ S.W.3d at ___, ___, ___, & ___.
[19] 80 S.W.3d 566, 572 (citing Rembert v. Ryan’s Family Steak Houses, Inc., 596 N.W.2d 208, 226 (Mich. Ct. App. 1999)).
[20] PDK Labs. Inc. v. U.S. D.E.A., 362 F.3d 786, 799 (D.C. Cir. 2004) (Roberts, J., concurring).
[21] ___ S.W.3d at ___.
[22] Geourgiou v. Mobil Exploration & Prod. Servs., Inc. US, 190 F.3d 538 (5th Cir. 1999); Cofab Inc. v. Phil. Joint Bd.,
Amalgamated Clothing & Textile Workers Union, 141 F.3d 105 (3d Cir. 1998); McDermott Intern., Inc. v. Underwriters at
Lloyds Subscribing to Memorandum of Ins. No. 104207, 981 F.2d 744 (5th Cir. 1993).
[23] Manion v. Nagin, 255 F.3d 535, 540 (8th Cir. 2001) (involving injunction to obtain salary payments pending arbitration);
see also Cofab, 141 F.3d at 110 (involving temporary stay of motion to enforce arbitration award pending NLRB review of
related matter).
[24] See Adam Borstein, Arbitrary Enforcement: When Arbitration Agreements Contain Unlawful Provisions, 39 Loy. L.A. L.
Rev. 1259, 1275 (2006) (“This combination of finding unconscionability and favoring public policy over enforcement of the
FAA has made the Ninth Circuit more hostile towards unlawful arbitration provisions than any other federal circuit.”); Michael
G. McGuinness & Adam J. Karr, California’s “Unique” Approach to Arbitration: Why This Road Less Traveled Will Make All
the Difference on the Issue of Preemption Under the Federal Arbitration Act, 2005 J. Disp. Resol. 61, 91-92 (2005)(“[T]he
conclusion that California courts—and the Ninth Circuit—are imposing their own biases against arbitration is
inescapable.”); Steven M. Warshawsky, Gilmer, the Contractual Exhaustion Doctrine, and Federal Statutory Employment
Discrimination Claims, 19 Lab. Law. 285, 303 n.180 (2004) (“The Ninth Circuit continues to be hostile to mandatory
arbitration agreements.”); Dennis R. Nolan, Employment Arbitration After Circuit City, 41 Brandeis L.J. 853, 890 (2003) (“[D]
espite Congress’s broad endorsement of arbitration in the FAA and the Supreme Court’s repeated confirmation of that
policy, many judges (not all of them on the Ninth Circuit) remain deeply skeptical if not openly hostile.”); Hai Jiang, Do We
Allow Contract Law to Administer Civil Rights Remedies? Casenote on Haskins v. Prudential Insurance Co., 2003 L. Rev.
Mich. St. U. Det. C.L. 251, 260 (2003) (“The Ninth Circuit is the most hostile to arbitration of employment discrimination
claims among the circuit courts . . . .”).
[25] See Earl Greene III, Note, Armendariz v. Foundation Health Psychcare Services, Inc.: The California Supreme Court
Searches For a Middle Ground, 1 J. Am. Arb. 105, 108-09 (2001) (“On a mandatory arbitration agreement enforcement
continuum, the Ninth Circuit would be sitting far to the left of center as it seems to be more concerned with protecting the
statutory rights of employees than toeing the line with the Supreme Court.”)
[26] See Jennifer LaFond, Notes, The Private Enforcement of Public Laws in Armendariz v. Foundation Health Psychcare
Servs., 29 Pepp. L. Rev. 401, 414 n.127 (2002) (“The Ninth Circuit is the renegade circuit with respect to . . . [whether]
employees can be compelled to arbitrate statutory claims.”).
[27] Douglas v. U.S. Dist. Court, 495 F.3d 1062, 1068-69 (9th Cir. 2007).
[28] ___ S.W.3d at ___.
[29] In re BP Products N. Am., Inc., 244 S.W.3d 840, 845 (Tex. 2008); In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 136
(Tex. 2004).