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01-800 Howsam v. Dean Witter Reynolds, Inc.

By: dmc-admin//December 16, 2002//

01-800 Howsam v. Dean Witter Reynolds, Inc.

By: dmc-admin//December 16, 2002//

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“[A]rbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.” Steelworkers v. Warrior & Gulf Nav. Co., 363 U.S. 574, 582. The question whether parties have submitted a particular dispute to arbitration, i.e., the “question of arbitrability,” is “an issue for judicial determination [u]nless the parties clearly and unmistakably provide otherwise.” AT&T Technologies, Inc. v. Communications Workers, 475 U.S. 643, 649. The phrase “question of arbitrability” has a limited scope, applicable in the kind of narrow circumstance where contracting parties would likely have expected a court to have decided the gateway matter. But the phrase is not applicable in other kinds of general circumstance where parties would likely expect that an arbitrator would decide the question-“procedural questions which grow out of the dispute and bear on its final disposition,” John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 557, and “allegation[s] of waiver, delay, or a like defense to arbitrability,” Moses H. Cone Memorial Hospital v. Mercury Constr. Corp., 460 U.S. 1, 24-25. Following this precedent, the application of the NASD rule is not a “question of arbitrability” but an “aspec[t] of the [controversy] which called the grievance procedures into play.” John Wiley & Sons, Inc., supra, at 559. NASD arbitrators, comparatively more expert about their own rule’s meaning, are comparatively better able to interpret and to apply it. In the absence of any statement to the contrary in the arbitration agreement, it is reasonable to infer that the parties intended the agreement to reflect that understanding. And for the law to assume an expectation that aligns (1) decisionmaker with (2) comparative expertise will help better to secure the underlying controversy’s fair and expeditious resolution.

Reversed.

Local effect:

The decision overrules the governing Seventh Circuit law, J.E. Liss & Co. v. Levin, 201 F.3d 848 (7th Cir. 2000).

Certiorari to the United States Court of Appeals for the Tenth Circuit, Breyer, J.; Thomas, J., concurring; O’Connor, J., took no part.

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