02-1359 Metro East Center v. Qwest Communications International, Inc.

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“Under §3 of the Federal Arbitration Act, 9 U.S.C. §3, only the parties’ ‘agreement’ supports arbitration. Yet a tariff is a set of terms created and filed unilaterally by a carrier. Customers do not ‘agree’ to these terms, though they are binding unless the federal agency with which they have been filed disapproves them. See, e.g., AT&T v. Central Office Telephone, Inc., 524 U.S. 214 (1998); Cahnmann v. Sprint Corp., 133 F.3d 484 (7th Cir. 1998). No private agreement can displace a tariff’s terms. See Maislin Industries, U.S., Inc. v. Primary Steel, Inc., 497 U.S. 116 (1990). Because the Federal Arbitration Act makes an ‘agreement’ essential, the district court concluded, Qwest’s customers need not arbitrate any dispute with it. 182 F. Supp. 2d 726 (S.D. Ill. 2002). The order denying Qwest’s motion to compel arbitration is immediately appealable under 9 U.S.C. §16(a)(1)(B).

“The district court’s approach has a ‘gotcha!’ quality: The clause requiring arbitration refers to the Federal Arbitration Act and as a consequence precludes arbitration. Yet it is almost never right to read legal language as self-defeating. The district judge understood the clause as saying: ‘Every dispute must be arbitrated, provided, however, that no dispute is arbitrable.’ Why would someone put such a clause in a tariff, a contract, or any other document? People draft documents to achieve some objective, and although the meaning of words can be elusive even after taking into account both linguistic and economic contexts, see Beanstalk Group, Inc. v. AM General Corp., 283 F.3d 856 (7th Cir. 2002), and some words may turn out to be redundant or otherwise carry no weight, it is not sensible to construe a substantial passage of a legal text as pointless.”

Reversed and remanded.

Appeal from the United States District Court for the Southern District of Illinois, Herndon, J., Easterbrook, J.