CEI Files Amicus Curiae In The Case Of Karen Howsam vs. Dean Witter Reynolds, Inc.
STATEMENT OF INTEREST OF AMICUS CURIAE
The interest of the Competitive Enterprise Institute in this case is set out in the previous motion for leave to file this amicus brief.
SUMMARY OF ARGUMENT
This case presents the question of whether the application of a time limit on the arbitrability of a dispute is he province of the arbitrator, or whether a court may apply the limit. The time limit in question is an NASD rule, incorporated in the contract between petitioner Karen Howsam and respondent Dean Witter. We urge the Court to resolve this dispute over the meaning of a contract providing for arbitration primarily by looking to the text of the contract and the rules incorporated into it for guidance, as these parties must have, and as other parties to other similar contracts will in the future.
In the first part of our argument, we review this Court’s precedents on the interpretation of arbitration contracts, which explain that the Federal Arbitration Act (FAA) was not intended to displace focus on the intent of the parties to the contract by federal statutory policy. Rather, the FAA set arbitration contracts on the same footing as other contracts.
We then offer a broad perspective on the mutual benefits of contract for both contracting parties. We conclude by examining standardized contracts, sometimes called “form contracts,” of the type often at issue in arbitration cases such as this one.
In the second part of our argument, we look more closely at the contested contractual and regulatory text in this case. This Court has in the past looked first and foremost to the text of arbitration contracts to resolve arbitrability disputes; in this instance, that approach should result in a ruling in favor of respondent.