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

PETITIONER: Mitsubishi Motors Corporation
RESPONDENT: Soler Chrysler-Plymouth, Inc.
LOCATION: Soler Chrysler-Plymouth, Inc.

DOCKET NO.: 83-1569
DECIDED BY: Burger Court (1981-1986)
LOWER COURT: United States Court of Appeals for the First Circuit

CITATION: 473 US 614 (1985)
ARGUED: Mar 18, 1985
DECIDED: Jul 02, 1985
GRANTED: Oct 15, 1984

ADVOCATES:
Benjamin Rodriguez-Ramon - on behalf of Soler-Chrysler-Plymouth
Jerrold J. Ganzfried - on behalf of the United States as amicus curiae in support of Soler Chrysler-Plymouth
Wayne Alan Cross - on behalf of Mitsubishi

Facts of the case

These are two consolidated cases involving claims and counterclaims between the same parties. Soler Chrysler-Plymouth, Inc., a Puerto Rico corporation, entered into distribution and sales agreements with Mitsubishi Motors, a Japanese corporation that manufactures automobiles in Japan. The sales agreement provided for arbitration by the Japanese Commercial Arbitration Association of all disputes arising out of certain articles of the agreement. A dispute did arise from slowing automobile sales. When the dispute could not be resolved, Mitsubishi sued in the U.S. District Court for the District of Puerto Rico seeking an order to compel arbitration. Soler filed counterclaims, including Sherman Act antitrust violations. The district court ordered arbitration of all claims, holding that the international nature of the dispute required enforcement of the arbitration clause. The U.S. Court of Appeals for the First Circuit reversed as to the antitrust claims.

Question

Should an American court enforce an agreement to arbitrate antitrust claims when that agreement arises from an international transaction?

Media for Mitsubishi Motors Corporation v. Soler Chrysler-Plymouth, Inc.

Audio Transcription for Oral Argument - March 18, 1985 in Mitsubishi Motors Corporation v. Soler Chrysler-Plymouth, Inc.

Warren E. Burger:

Mr. Cross, I think you may proceed now whenever you are ready.

Wayne Alan Cross:

Thank you, Mr. Chief Justice, and may it please the Court:

This case presents an issue involving the tension between the unequivocal policy of the Federal Arbitration Act, that all private agreements to arbitrate shall be enforced except in those circumstances where countervailing federal policy found in another statute would create such an exception.

The tension is between that policy and the judge-made policy initiated in the Second Circuit and followed by four other circuits which holds that antitrust claims may not be subject to arbitration.

In Dean-Witter v. Byrd which was decided by this Court two weeks ago, the Court expressed the purpose of the Federal Arbitration Act in precisely the terms that I think are presented today.

It said

"The preeminent concern of Congress in passing the act was to enforce private agreements into which parties had entered, and that concern requires that we rigorously enforce agreements to arbitrate, even if the result is piecemeal litigation, at least absent a countervailing policy manifested in another federal statute. "

Mitsubishi in this case submits that the only issue before the Court is whether a party's contractual right to arbitrate antitrust disputes can be frustrated absent such a countervailing federal policy found in a federal statute.

The issue, despite the plethora of briefs and issues raised in those briefs, the issue is not what standard should a court apply on the enforcement of an arbitral award, nor is the issue the extent to which an arbitral award on an antitrust claim would have preclusive effect.

Nor is the issue whether or not antitrust cases are subject to arbitration.

Now, the parties and the courts agreed that under certain circumstances antitrust cases can in fact be arbitrated.

Finally, this Court is not today, we believe, properly presented with questions of arbitrability of the Puerto Rican State Franchise Act or the Dealers' Day in Court Act.

I say that because in the current state of this record, those two claims have been submitted to the Japanese Commercial Arbitration Association by the Respondent, not withdrawn, and I believe probably a decision with respect to their arbitrability on this record is moot.

Thus, I think the only issue that you have to address today is whether or not Mitsubishis right to arbitrate the Respondent's counterclaim against it brought under the Sherman Act can be frustrated by what has been denominated the American Safety Doctrine.

Byron R. White:

Is there any issue about the arbitrability under the agreement, I mean, that reach?

Wayne Alan Cross:

No, Your Honor, the Respondent has raised that issue in their brief in response to our brief, but the fact is that the district court and the circuit court have both reviewed the scope of the agreement and rendered findings.

Byron R. White:

That unless there is some policy against it, the arbitration would have gone forward under the agreement.

Wayne Alan Cross:

That's right.

The circuit court specifically reviewed the question of the scope of the agreement, affirmed the district court's decision that the antitrust claims reasonably fell within the scope of the arbitration agreement--

Byron R. White:

At least that is the way the case comes to us.

Wayne Alan Cross:

--That's right, and the way the case comes to you is, as the circuit court put it, a question of initial impression, may antitrust cases be arbitrated as a matter of public policy.

I believe that is the only issue presently before you.

Byron R. White:

I don't really understand that.

They argue the contrary, and maybe they are wrong.

You've got two courts with you.

But they squarely argue, as I read their brief, that the... it's not arbitrable within the meaning of the agreement.

Wayne Alan Cross:

Oh, no, I'm saying I believe the only issue before you is may it be arbitrated.

We are contending that antitrust cases can be arbitrated.

They are clearly maintaining that they are not arbitrable and that all the circuit court--

John Paul Stevens:

But they also maintain that it is not within the scope of the agreement.