Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc.

''Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc.'', 473 U.S. 614 (1985), is a United States Supreme Court decision concerning arbitration of antitrust claims. The Court heard the case on appeal from the United States Court of Appeals for the First Circuit, which had ruled that the arbitration clause in a Puerto Rican car dealer's franchise agreement was broad enough to reach its antitrust claim. By a 5–3 margin it upheld the lower court, requiring that the dealer arbitrate its claim before a panel in Tokyo, as stipulated in the contract.

Justice Harry Blackmun wrote for the majority that the Federal Arbitration Act (FAA) was broad enough to require arbitration of statutory claims as well as contractual ones, extending a recent line of Court decisions favorable to arbitration. A controversial footnote, creating a possible "prospective waiver" doctrine that would allow a party to avoid arbitration under foreign law, has been much criticized by commentators and at the same time raised by many litigants. In 2009 the Eleventh Circuit found it valid for an injured cruise-ship worker, but two years later cast doubt on that conclusion.

In dissent, Justice John Paul Stevens argued that antitrust claims were too complex and important to be left to arbitrators and that in any event none of the claims were arbitrable under the terms of the contract itself. He expressed incredulousness that his colleagues would require an American company to arbitrate a claim under American antitrust law before a panel of foreign arbitrators.

While the case formed an important part of the Court's expansion of arbitrability in the late 20th and early 21st centuries, it could not have reached a court today. In 2002, after years of lobbying by the National Automobile Dealers Association, Congress passed the Motor Vehicle Franchise Contract Arbitration Fairness Act, which prohibited mandatory predispute arbitration clauses in motor vehicle dealership franchise agreements. President George W. Bush signed it into law, the first time a specific exception to the FAA had been legislated since the Court began expanding its scope.

Underlying dispute

In 1979 Soler was incorporated in San Juan, Puerto Rico, and became a Chrysler-Plymouth dealer, doing business in the Pueblo Viejo district of the nearby suburb of Guaynabo.''Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth'' (''Mitsubishi Motors II''), , at 617, Blackmun, J. It and Mitsubishi Motors of Chrysler and Mitsubishi Heavy Industries, incorporated in Geneva, Switzerland, concluded two separate agreements to this effect: a distributor agreement with Chrysler and separate sales procedure agreements with Chrysler and Mitsubishi. The latter contained arbitration clauses requiring that any disputes under them be arbitrated in Japan under the rules of the Japan Commercial Arbitration Association (JCAA).
Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc.
' (''Mitsubishi Motors I''), 723 F.2d 155 ( 1st Cir., 1983) at 157. The goal of the manufacturer and dealer was to introduce the small cars Mitsubishi made for both Chrysler and itself to the Puerto Rican market, for which they were considered ideal.

Soler did excellent business in its first two years, selling more than twice the number of vehicles set in its quota. As the market began to slow down in late 1981, the relationship between Soler and Mitsubishi began to break down. The dealer had trouble meeting sales targets under a higher quota, and Mitsubishi withheld shipments of new vehicles. Eventually 966 destined for Soler were stored near its factories in Japan. Soler began having trouble financing its purchases of new vehicles.

Seeing that other Japanese car makers were allowing their dealers in Puerto Rico to transship excess inventory to Latin America and the continental United States, Soler asked if it could do the same. Mitsubishi refused, saying the vehicles were customized for the Puerto Rican market. They lacked heaters and defoggers that they would have needed on the mainland, and their engines could not run on the lower-grade leaded gasoline sold in many Latin American countries at that time. Further, Soler had no experience with maritime shipping and would not been able to meet its service obligations under warranty for transshipped cars and trucks. Mitsubishi also was concerned that transshipments to the continental U.S. would be seen as skirting the voluntary import restraints Japanese automakers had been practicing in the American market to mitigate the potential political backlash from their distressed American counterparts.''Mitsubishi Motors II'', at 618n1.

Soler would later claim that it was told the real reason for the refusal to allow transshipping was that Mitsubishi and Chrysler had divided their territories, informally agreeing that the former brand would have preference outside the mainland U.S. while Chrysler maintained it domestically. The dealership then began to suspect that Mitsubishi intended to sabotage its business in order to replace it with a wholly owned subsidiary once the brand had been established in Puerto Rico. Early in 1982 Soler stopped paying storage costs for the vehicles in Japan, claiming it had disowned them.''Mitsubishi Motors I'', at 160. Later that year the franchise agreement either ended or was terminated.

Lower courts

Mitsubishi sued in federal district court for Puerto Rico, alleging various breaches of the sales procedure agreement. Soler countersued, alleging violations of the federal Automobile Dealers' Day in Court Act, which allowed civil suits by dealerships for damage due to bad faith on the part of the franchisor.P.L. 84-1026, Aug. 8, 1956, ch. 1038, 70 Stat. 1125 (). and its equivalent territorial statute. They also included antitrust claims under the Sherman Act, claiming that Mitsubishi was purposely driving it out of the motor vehicle retail business with the intent of replacing Soler with its own wholly owned subsidiary.''Mitsubishi Motors I'', at 158.

Mitsubishi's response was a motion to the judge to compel arbitration as mandated by the agreement. The court ordered most of the contractual claims arbitrated, but reserved jurisdiction on the statutory claims alleged by Soler, including antitrust. Soler made an interlocutory appeal to the First Circuit Court of Appeals, whose jurisdiction includes Puerto Rico, arguing that ''all'' its statutory counterclaims were not covered by the arbitration clause, and that Sherman Act claims could not be arbitrated in any event.

Appeals court

In 1983 a three-judge panel of Levin H. Campbell, then the circuit's chief judge, Frank M. Coffin and Hugh Henry Bownes, heard the case. Near the end of the year they handed down their decision. Unanimously they ruled for Mitsubishi on the statutory claims, holding them within the ambit of the arbitration clause. However, they also said, the Sherman Act claims could be litigated as they were not so parochial to American law, and were too important to U.S. public policy to leave to arbitrators.

Coffin wrote for the panel that although the agreement was governed by Swiss law, the scope of the arbitration clause was within the court's jurisdiction. The Federal Arbitration Act preempted Puerto Rican law on the subject, which, he noted, Soler tacitly acknowledged by arguing that the Puerto Rico Dealers' Act (PRDA) was implicitly incorporated into the agreement, since it explicitly incorporated savings and separability clauses from the distributorship agreement that violated the PRDA. He called this argument "tortured", since neither was actually incorporated into the sales procedure agreement as Soler claimed. Nor was the arbitration clause limited to contractual claims.''Mitsubishi Motors I'', at 159.

"Soler's Sherman Act counterclaim poses a murkier problem," Coffin wrote. It rested on the claim that, by refusing to allow transshipment of unsold vehicles, Mitsubishi was dividing markets. Further anticompetitive practices alleged were wrongful termination of Soler's franchise, and the refusal to ship cars and parts. Mitsubishi responded with its practical objections to the transshipments, that the franchise had expired without being renewed and that the shipments were halted sometimes at Soler's request and sometimes for lack of an acceptable letter of credit. Most of these, Coffin concluded, were differences over the execution of the contract and therefore covered by the arbitration clause.

"The important question now before us," Coffin continued, "is whether, despite such coverage, they are nonarbitrable because of a judicially created policy, hitherto applied only to 'domestic' contracts involving United States citizens, reserving antitrust issues for judicial determination." After oral argument, he recounted, the court had concluded this was a question of first impression and sought guidance from the federal government. The Justice Department responded with an '' amicus curiae'' brief, joined by the State Department's Legal Advisor, urging the court to uphold that tradition in this case. The First Circuit agreed.''Mitsubishi Motors I'', at 161–62.

Coffin found three issues relevant to that determination. The policy he referred to was the Second Circuit's holding in ''American Safety Equipment v. J.P. Maguire & Co.'': "We do not believe that Congress intended such claims to be resolved elsewhere than in the courts."
American Safety Equipment v. J.P. Maguire & Co.
', 391 F. 2d 821, at 827 ( 2nd Cir., 1968). Several other circuits had affirmed that precedent. "We conclude, therefore, that the nonarbitrability of antitrust issues in domestic contract disputes is established as solid and sound doctrine."''Mitsubishi Motors I'', at 162–163.

However, this was not a domestic contract dispute but one between an American company and a Japanese one, whose contract, governed by Swiss law, called for any disputes to be arbitrated in Tokyo. Coffin said there were two more questions. "The first is: is the American antitrust ethic and system of law so 'parochial' that insistence on the application of the nonarbitrability of antitrust issues to international agreements would be anathema to other countries and would incite retaliation?" This concern had motivated the Supreme Court in deciding to hold an American firm to its agreement to litigate in London." in '' The Bremen v. Zapata Off-Shore Co.'', a key forum selection case.'' The Bremen v. Zapata Off-Shore Co.'', .

"We doubt that other nations are ignorant of the primacy we accord to antitrust law," Coffin wrote. The government's ''amicus'' brief had advised that German law similarly prohibited disputes under its corresponding statutes from being arbitrated, and the Treaty of Rome which established what was then known as the European Union had five articles devoted to forbidding or restricting anti-competitive practices. " ether or not other nations agree with United States law and attitudes relating to competition, it is extremely doubtful that they would describe them as 'parochial' in the sense of being petty provincialisms," he concluded.

The second question was whether any policy applied that would specifically prevent foreign concerns from arbitrating antitrust claims brought against them by American companies. Coffin again readily found the answer:

But that conclusion was not enough. The court next had to look at that policy in light of whether it would be permitted under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, known as the New York Convention, negotiated in 1958 under United Nations auspices and acceded to by the United States in 1958. " twas preceded by very little helpful history, and followed by very little illuminating history or adjudication," wrote Coffin. "We work with a scattering of crumbs—and, hopefully, a sound sense of the balance struck by the Convention between deeply felt national policies and the desire to facilitate international arbitration." He found its language at first contradictory, requiring that any matter found arbitrable in a member country be arbitrated, but also saying that awards need not be enforced if they were found against the public policy of the country being asked to do so."''Mitsubishi Motors I'', at 164.

Coffin found guidance in resolving this problem first from an opinion he'd written in another case two years earlier
Ledee v. Ceramiche Ragno
', 684 F. 2d 184 (1st Cir., 1982). which led him to exclude from Convention coverage those arbitration clauses found defective though fraud, mistake, duress, and waiver. This was not one of those cases. "The precise question we ask," he wrote, "is whether a matter that has been barred by unanimous judicial precedent for a decade and a half from resolution by arbitration, because of a multiplicity of solid reasons that lose no pertinence or weight in an international context, is a matter 'capable of settlement by arbitration'". He found this very broad, as any dispute could theoretically be solved that way.

For guidance, Coffin found a State Department memo to the Senate at the time of ratification to be useful. It noted that that clause was meant to account for the laws in member states that forbade certain matters from being arbitrated, and cited laws in some U.S. states that specifically applied that prohibition to real estate title disputes. Commentary on the Convention noted the same issue with the language. "We therefore conclude that an agreement to arbitrate antitrust issues is not 'an agreement within the meaning of' ... the Convention because such an agreement does not concern 'a subject matter capable of settlement by arbitration'", he concluded."''Mitsubishi Motors I'', at 165–166.

There was nevertheless still "a considerable roadblock" in the form of '' Scherk v. Alberto–Culver, Inc.'', a 1971 case where, again faced with a dispute between a domestic and a foreign company where arbitrability was at issue, the Supreme Court had ordered the parties to arbitration.'' Scherk v. Alberto-Culver, Inc.'', . If that case were applied broadly, Coffin noted, again there would be almost no inarbitrable dispute. And, since part of the claim involved allegations of securities fraud, the respondent relied on ''Wilko v. Swan'', where the Court had held such claims were inarbitrable.''Wilko v. Swan'', .

Coffin distinguished the case at hand in several ways. First, the ''Scherk'' Court had not considered the case within the context of the Convention. Second, the older case had involved a dispute over the status of foreign trademarks, a decision which necessarily involved foreign law, whereas "the parties here could not be blind to the obvious fact that American law would normally apply to any claim of monopolization or restraint of trade". Third, as he had already discussed, antitrust was not a peculiar and parochial American concern. Fourth was the different policies underlying the respective laws: while the securities laws in ''Scherk'' were meant to protect individual investors,

Before the Court

Both parties appealed to the Supreme Court. Arbitration proceedings continued, as both parties paid the fees and the JCAA assembled a panel to hear the case. In September 1984, immediately after Mitsubishi presented its case to the panel, Soler declared bankruptcy, resulting in an automatic stay.
Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth
(Mitsubishi Motors III)'', 814 F. 2d 844 (1st Cir., 1987). Shortly afterward, the Court granted '' certiorari''.

'' Amici'' briefs were filed by several parties. The American Arbitration Association urged reversal of the holding on the Sherman Act claims; the National Automobile Dealers Association (NADA) urged reversal of the other aspect of the holding. The Solicitor General's office filed one on behalf of the federal government in support of Soler. The International Chamber of Commerce and the commonwealth of Puerto Rico also shared their thoughts on the case in briefs.

Oral argument

The Court heard oral arguments in March 1985. Wayne Cross argued for Mitsubishi and Benjamin Ramon-Rodriguez for Soler. In addition, Jerrold Joseph Ganzfried was allowed some time to argue for the federal government in support of Soler.

Mitsubishi

Cross repeatedly asserted that there was just one question for the justices to consider: "Whether a party's contractual right to arbitrate antitrust disputes can be frustrated absent such a countervailing federal policy found in a federal statute." In support of this he cited a case the Court had decided unanimously two weeks earlier, '' Dean Witter Reynolds Inc. v. Byrd'', where it had upheld a request for arbitration of securities fraud claims under state law even though the parallel claims under federal law were still to be litigated.'' Dean Witter Reynolds Inc. v. Byrd'', . "The preeminent concern of Congress in passing the AA" Cross quoted from Justice Thurgood Marshall's opinion in that case, "was to enforce private agreements into which parties had entered, and that concern requires that we rigorously enforce agreements to arbitrate ... at least absent a countervailing policy manifested in another federal statute."

Cross initially rebuffed efforts by the justices to ask about the issue still being argued by Soler, that the other statutory claims were non-arbitrable as well. He declined initially, reminding them that the two lower courts had held otherwise. After he was reminded that they were still making the argument, he said that he did not think it would be applicable to their specific claims.

He continued to the specifics of his argument. "We submit that the circuit court's reliance upon the ''American Safety'' case is fundamentally at odds with the purpose of the Federal Arbitration Act." In ''Byrd'' and other recent cases, the court had affirmed "a strong national policy favoring arbitration," as it had put it in ''Moses H. Cone Memorial Hospital v. Mercury Construction Corp.'',''Moses H. Cone Memorial Hospital v. Mercury Construction Corp.'', , at 24. and he saw no reason to stop here. However, when challenged on how the Court could reach his desired result without overruling ''American Safety'' and thus avoid the question of whether purely domestic antitrust claims were arbitrable, he pointed the justices to ''Scherk''. "I did not read t... as overruling ''Wilko'' so much as a limitation on ''Wilko'' in international conduct."

The justices had some concerns about the international nature of the case. Could arbitrators overseas simply decide to ignore American law in deciding the antitrust claim? Cross said that it was not likely, from what he understood, and that in any event arbitrators had handled cases as complex, if not more than, antitrust claims and so were not incapable of the instant case. He called the ''American Safety'' doctrine "a usurpation of power."

Soler

Rodriguez-Ramon laid out the facts of the case at length in order to bolster his case that the arbitration clause should not be applied to matters the parties had not expressly agreed to arbitrate such as the statutory claims. "You have a fairly hard row to hoe here in getting us to change that," one justice told him, acknowledging the lower-court rulings. Rodriguez-Ramon cited the efficiency and expediency offered by arbitration as factors the Court had held in its favor, and contrasted that with his now-bankrupt client, who would have to take all his witnesses and evidence to Japan for a case to be heard in that country's language.

Asked why, given the clear advantage that seemed to offer, Mitsubishi would have written into what Rodriguez-Ramon contended was an adhesion contract such a narrow arbitration clause, the lawyer insisted that "Mitsubishi only considered the possibility of arbitrating commercial contractual controversy." Why else, he suggested, would the language of the arbitration clause have specifically mentioned the sections of the contract to which it applied? And even if it had been intended so broadly, he reminded the Court that it had held in many other cases that some statutory claims could not be arbitrated.

Further, both the FAA and the Convention allowed for this distinction. "Finally, in terms of antitrust litigation, what are we talking about?" Rodriguez-Ramon concluded. "An antitrust litigant in this country has a right to litigate before a court and before his peers. He is entitled to have a trial by jury. He is entitled to be heard by 12 of his peers concerning whether the defendant has committed ... a restraint of trade."

Lastly, Rodriguez-Ramon distinguished Soler's case from ''Scherk'' by two factors. First, the contract had not been negotiated as it had been in the older case; and second, the contract in ''Scherk'' called for performance overseas while Soler had to make its performance in a U.S. territory. Nor did he find '' Southland Corp. v. Keating'', in which the Court held the FAA applied to contracts executed under state law,'' Southland Corp. v. Keating'', . applicable, since in that case the Court had considered a law unique to California whereas here it was dealing with a law parallel to a federal statute that almost every state had enacted.

"The consequence of a contrary holding by this honorable Court, I respectfully submit, are ominous," said Rodriguez-Ramon. If it allowed arbitration such as the one his client was preparing for, almost any large international corporation would be able to word contracts so as to skirt American law. l these people will have to go to arbitrate outside of the continental United States, in foreign arbitration areas different from the United States, possibly under different languages, under different juridical criteria for the adjudication of controversies."

United States

"The Court of Appeals properly accommodated the three interests that are at issue in this case," Ganzfried told the justices. " ose interests are, one, the primacy of antitrust law in preserving our economic system of free competition; two, the general encouragement of arbitration as a means of resolving private disputes; and three, our commitment to an international convention that requires enforcement of agreements to arbitrate with very limited exceptions."

An agreement to arbitrate antitrust claims would not be enforceable, he maintained, even if it specified members of Congress or senior federal judges as arbitrators. "The fact is that they are operating in a system in which there is no substantive appellate review." Even if that was part of what the parties bargained for, he maintained, the underlying public policy was too important.

Private actions had always been intended under antitrust law, Ganzfried reminded the justices. He raised the possibility that a manufacturer could, through agreements with all its distributors, create "a nice, tidy buffer from the American antitrust laws", since the indirect purchasers would likewise lack standing to sue under the ''Illinois Brick'' doctrine. When it was pointed out that the FAA was passed after the antitrust laws, "the history of the enforcement of the antitrust laws strongly indicates that it was not even considered a remote possibility worth discussing that antitrust actions would be subject to arbitration." There was no record anyone had been able to find of private parties arbitrating one.

Cross, allowed five minutes for rebuttal, addressed Ganzfried's closing observation that under JCAA rules, testimony was not taken under oath. " may be that the oath taking process has something to do with the culture of Japan where taking an oath doesn't have quite the significance that it does here." He admitted that the arbitrators still had to consider the credibility of the witnesses, but called Ganzfried's claim "a straw man."

Decision

The Court announced its decision in July, near the end of term. Harry Blackmun wrote for a five-justice majority that affirmed the First Circuit's holding that the statutory claims were arbitrable and reversed it by holding the antitrust claims arbitrable as well. John Paul Stevens' lengthy dissent argued primarily that the arbitration clause was inapplicable to the dispute, and the precedent against arbitrating antitrust claims was far stronger than the majority represented it to be. Justice Lewis Powell took no part in the case.

Majority opinion

" find no warrant in the Arbitration Act for implying in every contract within its ken a presumption against arbitration of statutory claims," Blackmun wrote in response to Soler's claims under the Car Dealers' Day In Court Act. The Court's own recent decisions on arbitration had been very supportive, and he saw no reason to hold, in their light, that they did not apply only to contractual disputes. While conversely not every statutory claim was suitable for arbitration, "the Act itself provides no basis for disfavoring agreements to arbitrate statutory claims by skewing the otherwise hospitable inquiry into arbitrability ... Soler's concern for statutorily protected classes provides no reason to color the lens through which the arbitration clause is read."''Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc.'', , at 625–628.

The antitrust claims led to a lengthier discussion. First, Blackmun noted that in both ''Scherk'' and ''The Bremen'', the Court had found the international nature of the dispute was a special circumstance justifying arbitration. "We must weigh the concerns of ''American Safety'' against a strong belief in the efficacy of arbitral procedures for the resolution of international commercial disputes and an equal commitment to the enforcement of freely negotiated choice-of-forum clauses."''Mitsubishi Motors II'', at 628–631.

" confess to some skepticism of certain aspects of the ''American Safety'' doctrine," Blackmun wrote. Where the First Circuit had expressed concern that the underlying contract may have been adhesive, he said that suspicion was too narrow a ground to defeat the arbitration clause, especially since the Court's '' Prima Paint'' separability doctrine had held that the validity of the arbitration clause itself could be attacked in court.'' Prima Paint Corp. v. Flood & Conklin Mfg. Co.'', He also doubted that even some of the appellate courts which had followed ''American Safety'' truly believed that antitrust cases were too complex for arbitrators to handle. Nor did he believe that arbitators might inherently be too conflicted.''Mitsubishi Motors II'', at 632–634.

The last of the First Circuit's justifications Blackmun considered was the public policy doctrine argument. While he agreed that this was demonstrated by the treble damages provision, " tsimportance ... does not compel the conclusion that it may not be sought outside an American court." In fact, the Court itself had found when inquiring into the legislative history of the Sherman Act in '' Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc.'' that the treble damages were primarily intended to help individual litigants and not to serve a greater public policy.'' Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc.'', , at 485–86.''Mitsubishi Motors II'', at 634–640.

"To be sure," Blackmun qualified,

The interests of American law and the American courts would, he noted, be served on the enforcement of the claim, which under the New York Convention individual countries could refuse to do if the verdict or award were contrary to their public policy.

Blackmun concluded by noting the increase in international trade, and with it arbitration to resolve disputes. "The controversies that international arbitral institutions are called upon to resolve have increased in diversity as well as in complexity," he observed. "Yet the potential of these tribunals for efficient disposition of legal disagreements arising from commercial relations has not yet been tested." He exhorted American courts "to subordinate domestic notions of arbitrability to the international policy favoring commercial arbitration" when faced with similar cases in the future.

Dissent

Stevens' lengthy dissent was joined by William Brennan and, with the exception of Part II, where Stevens argued against allowing statutory claims to be arbitrated, Thurgood Marshall. "I am convinced," Stevens began, "that the Court of Appeals' construction of the arbitration clause is erroneous, and because I strongly disagree with this Court's interpretation of the relevant federal statutes, I respectfully dissent."''Mitsubishi Motors II'', at 641, Stevens, J., dissenting.

First, Stevens observed that the arbitration clause was in the sales procedure agreement, to which Chrysler as well Soler and Mitsubishi were party. It only applied to two-party disputes, yet Soler's antitrust claim was against both manufacturers. "Only by stretching the language of the arbitration clause far beyond its ordinary meaning could one possibly conclude that it encompasses this three-party dispute." Second, it only covered five of the 15 articles of the contract, and none of those five addressed areas which had given rise to Soler's antitrust claim. "The federal policy favoring arbitration cannot sustain the weight that the Court assigns to it. A clause requiring arbitration of all claims 'relating to' a contract surely could not encompass a claim that the arbitration clause was itself part of a contract in restraint of trade."''Mitsubishi Motors II'', at 643–645.

This, Stevens noted, was the first time the Court had held a statutory claim, as opposed to a merely contractual one, to be arbitrable. However, in its longer line of cases on labor arbitration, the Court had consistently held that statutory claims could not be arbitrated. "It is reasonable to assume that most lawyers and executives would not expect the language in the standard arbitration clause to cover federal statutory claims."''Mitsubishi Motors II'', at 647–650.

He reiterated past holdings in antitrust cases where the Court had indeed recognized the public-policy role of private actions, particularly by noting the uniqueness of the treble-damages provision when first passed. "There are, in addition, several unusual features of the antitrust enforcement scheme that unequivocally require rejection of any thought that Congress would tolerate private arbitration of antitrust claims in lieu of the statutory remedies that it fashioned": Only federal courts had jurisdiction, Congress had required that depositions in Sherman Act cases be made public, and the Clayton Act allowed that a judgement or decree in a Sherman Act case was '' prima facie'' proof of wrongdoing for actions under it. " is not surprising that all of the federal courts that have considered the question have uniformly and unhesitatingly concluded that agreements to arbitrate federal antitrust issues are not enforceable," he wrote, citing ''American Safety'' once again.

In his final section, Stevens responded to the majority's arguments about the international nature of the dispute making arbitration more important. The Convention had fully anticipated that signatory nations had or were likely to declare, through their own laws, that certain disputes were not arbitrable. " e international obligations of the United States permit us to honor Congress' commitment to the exclusive resolution of antitrust disputes in the federal courts," much as how foreign courts had held that certain categories of disputes, including analogous competition-law disputes, in their countries could not be arbitrated. The State Department's brief had promised that other signatory countries to the Convention would not be upset if antitrust claims were exempted due to those policies, he reminded the majority.''Mitsubishi Motors II'', at 658–661.

Since the majority had tacitly accepted this by not grounding its argument to the contrary in any outside support, Stevens noted, it "seeks refuge in an obtuse application of Scherk''.html" ;"title="Scherk_v._Alberto-Culver,_Inc..html" ;"title="' Scherk''">Scherk_v._Alberto-Culver,_Inc..html"_;"title="'Scherk_v._Alberto-Culver,_Inc.">Scherk''"_Soler's_case_was,_for_him,_distinguished_from_''Scherk''_by_the_same_issue_that_Court_had_distinguished_it_from_'' Scherk''">Scherk_v._Alberto-Culver,_Inc..html"_;"title="'Scherk_v._Alberto-Culver,_Inc.">Scherk''"_Soler's_case_was,_for_him,_distinguished_from_''Scherk''_by_the_same_issue_that_Court_had_distinguished_it_from_''Wilko_v._Swan">Wilko'':_the_claim_involved_purely_American_law._"I_consider_it_perfectly_clear_that_the_rules_of_American_antitrust_law_must_govern_the_claim_of_an_American_automobile_dealer_that_he_has_been_injured_by_an_international_conspiracy_to_restrain_trade_in_the_American_automobile_market_..._the_same_antitrust_questions_would_be_presented_if_Mitsubishi_were_owned_by_two_American_companies_instead_of_by_one_American_and_one_Japanese_partner._When_Mitsubishi_enters_the_American_market_and_plans_to_engage_in_business_in_that_market_over_a_period_of_years,_it_must_recognize_its_obligation_to_comply_with_American_law_and_to_be_subject_to_the_remedial_provisions_of_American_statutes."_And_that,_to_Stevens,_meant_the_Car_Dealers'_Day_in_Court_Act_as_much_as_the_Sherman_Act.

"The_Court's_repeated_incantation_of_the_high_ideals_of_'international_arbitration'_creates_the_impression_that_this_case_involves_the_fate_of_an_institution_designed_to_implement_a_formula_for_world_peace,"_Stevens_concluded.

_Subsequent_proceedings

On_Scherk''">Scherk_v._Alberto-Culver,_Inc..html"_;"title="'Scherk_v._Alberto-Culver,_Inc.">Scherk''"_Soler's_case_was,_for_him,_distinguished_from_''Scherk''_by_the_same_issue_that_Court_had_distinguished_it_from_''Wilko_v._Swan">Wilko'':_the_claim_involved_purely_American_law._"I_consider_it_perfectly_clear_that_the_rules_of_American_antitrust_law_must_govern_the_claim_of_an_American_automobile_dealer_that_he_has_been_injured_by_an_international_conspiracy_to_restrain_trade_in_the_American_automobile_market_..._the_same_antitrust_questions_would_be_presented_if_Mitsubishi_were_owned_by_two_American_companies_instead_of_by_one_American_and_one_Japanese_partner._When_Mitsubishi_enters_the_American_market_and_plans_to_engage_in_business_in_that_market_over_a_period_of_years,_it_must_recognize_its_obligation_to_comply_with_American_law_and_to_be_subject_to_the_remedial_provisions_of_American_statutes."_And_that,_to_Stevens,_meant_the_Car_Dealers'_Day_in_Court_Act_as_much_as_the_Sherman_Act.

"The_Court's_repeated_incantation_of_the_high_ideals_of_'international_arbitration'_creates_the_impression_that_this_case_involves_the_fate_of_an_institution_designed_to_implement_a_formula_for_world_peace,"_Stevens_concluded.

_Subsequent_proceedings

On_Remand_(court_procedure)">remand_almost_two_months_later,_the_First_Circuit_affirmed_the_entire_original_district_court_decision,_allowing_for_arbitration_to_resume._In_September_Mitsubishi_moved_in_ Scherk''">Scherk_v._Alberto-Culver,_Inc..html"_;"title="'Scherk_v._Alberto-Culver,_Inc.">Scherk''"_Soler's_case_was,_for_him,_distinguished_from_''Scherk''_by_the_same_issue_that_Court_had_distinguished_it_from_''Wilko_v._Swan">Wilko'':_the_claim_involved_purely_American_law._"I_consider_it_perfectly_clear_that_the_rules_of_American_antitrust_law_must_govern_the_claim_of_an_American_automobile_dealer_that_he_has_been_injured_by_an_international_conspiracy_to_restrain_trade_in_the_American_automobile_market_..._the_same_antitrust_questions_would_be_presented_if_Mitsubishi_were_owned_by_two_American_companies_instead_of_by_one_American_and_one_Japanese_partner._When_Mitsubishi_enters_the_American_market_and_plans_to_engage_in_business_in_that_market_over_a_period_of_years,_it_must_recognize_its_obligation_to_comply_with_American_law_and_to_be_subject_to_the_remedial_provisions_of_American_statutes."_And_that,_to_Stevens,_meant_the_Car_Dealers'_Day_in_Court_Act_as_much_as_the_Sherman_Act.

"The_Court's_repeated_incantation_of_the_high_ideals_of_'international_arbitration'_creates_the_impression_that_this_case_involves_the_fate_of_an_institution_designed_to_implement_a_formula_for_world_peace,"_Stevens_concluded.

_Subsequent_proceedings

On_Remand_(court_procedure)">remand_almost_two_months_later,_the_First_Circuit_affirmed_the_entire_original_district_court_decision,_allowing_for_arbitration_to_resume._In_September_Mitsubishi_moved_in_United_States_Bankruptcy_Court">Bankruptcy_Court_

United_States_bankruptcy_courts_are__courts_created_under_Article_I_of_the_United_States_Constitution._The_current_system_of_bankruptcy_courts_was_created_by_the_United_States_Congress_in_1978,_effective_April_1,_1984._United_States_bankruptcy_c_...
_to_vacate_the_automatic_stay_that_had_been_in_place_pending_the_outcome_of_the_case_at_the_Supreme_Court._Soler_began_an_adversary_proceeding_in_bankruptcy_court,_reiterating_its_original_complaints_against_the_manufacturer._A_separate_answer_to_Mitsubishi's_motion_was_filed_in_October,_in_which_Soler_argued_that_its_desperate_financial_straits_prevented_it_from_being_"legally_or_ Scherk''">Scherk_v._Alberto-Culver,_Inc..html"_;"title="'Scherk_v._Alberto-Culver,_Inc.">Scherk''"_Soler's_case_was,_for_him,_distinguished_from_''Scherk''_by_the_same_issue_that_Court_had_distinguished_it_from_''Wilko_v._Swan">Wilko'':_the_claim_involved_purely_American_law._"I_consider_it_perfectly_clear_that_the_rules_of_American_antitrust_law_must_govern_the_claim_of_an_American_automobile_dealer_that_he_has_been_injured_by_an_international_conspiracy_to_restrain_trade_in_the_American_automobile_market_..._the_same_antitrust_questions_would_be_presented_if_Mitsubishi_were_owned_by_two_American_companies_instead_of_by_one_American_and_one_Japanese_partner._When_Mitsubishi_enters_the_American_market_and_plans_to_engage_in_business_in_that_market_over_a_period_of_years,_it_must_recognize_its_obligation_to_comply_with_American_law_and_to_be_subject_to_the_remedial_provisions_of_American_statutes."_And_that,_to_Stevens,_meant_the_Car_Dealers'_Day_in_Court_Act_as_much_as_the_Sherman_Act.

"The_Court's_repeated_incantation_of_the_high_ideals_of_'international_arbitration'_creates_the_impression_that_this_case_involves_the_fate_of_an_institution_designed_to_implement_a_formula_for_world_peace,"_Stevens_concluded.

_Subsequent_proceedings

On_Remand_(court_procedure)">remand_almost_two_months_later,_the_First_Circuit_affirmed_the_entire_original_district_court_decision,_allowing_for_arbitration_to_resume._In_September_Mitsubishi_moved_in_United_States_Bankruptcy_Court">Bankruptcy_Court_

United_States_bankruptcy_courts_are__courts_created_under_Article_I_of_the_United_States_Constitution._The_current_system_of_bankruptcy_courts_was_created_by_the_United_States_Congress_in_1978,_effective_April_1,_1984._United_States_bankruptcy_c_...