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07/17/2021

Judge Kevin Newsom on Substantive Canons
Michael Ramsey

Concurring in Calderon v. Sixt Rent a Car LLC, Judge Kevin Newsom (Eleventh Circuit) has some sharp words for "substantive canons" and specifically the presumption in favor of arbitration adopted by the Supreme Court in Moses H. Cone Memorial Hospital v. Mercury Construction Corp. From the introduction:

In Moses H. Cone Memorial Hospital v. Mercury Construction Corp., the Supreme Court held that contractual arbitration provisions should be broadly construed—in particular, that “any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration.” 460 U.S. 1, 24–25 (1983) (emphasis added). The Court purported to derive this strong presumption from the Federal Arbitration Act. But the Act’s pertinent text suggests nothing of the sort—it says only that certain written arbitration agreements “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. So far as I can tell, the Moses H. Cone canon is just made up. We should rethink it.

And from later on: 

First, and perhaps most obviously, the Moses H. Cone rule is a “substantive” interpretive canon, in that it directs courts to depart from a contract’s most natural interpretation in favor of—and to further—a policy preference for arbitration. For the uninitiated, canons of interpretation are conventionally divided between the “semantic” and the “substantive”—or some variation on that dichotomy. See, e.g., Brett M. Kavanaugh, Fixing Statutory Interpretation, 129 Harv. L. Rev. 2118, 2121 (2016) (book review); Caleb Nelson, What Is Textualism?, 91 Va. L. Rev. 347, 394 n.140 (2005) (“descriptive” vs.  normative”); William Baude & Stephen E. Sachs, The Law of Interpretation, 130 Harv. L. Rev. 1079, 1123 (2017) (“linguistic” vs. “legal”). Semantic canons do exactly what their name implies—they provide “the general rules by which we understand the English language.” Kavanaugh, supra, at 2145. They help courts ascertain the ordinary meaning of a legal text—such as by reminding us that that “[t]he expression of one thing implies the exclusion of others,” that “and combines items while or creates alternatives,” and that when words “are associated in a context suggesting that [they] have something in common, they should be assigned a permissible meaning that makes them similar.” Antonin Scalia & Bryan A. Garner, Reading Law: TheInterpretation of Legal Texts 107, 116, 195 (2012).

Substantive canons are an altogether different kettle of fish. They have little (if anything) to do with a text’s ordinary meaning, but rather instruct courts to favor certain substantive policies in interpreting that text. See John F. Manning, Textualism and the Equity of the Statute, 101 Colum. L. Rev. 1, 96 (2001); Nelson, supra, at 394. They express the law’s supposed preferences when certain close interpretive calls arise. Thus, the contra proferentem canon expresses a preference that an ambiguity in a contract provision be interpreted against its drafter. See Lamps Plus, Inc. v. Varela, 139 S. Ct. 1407, 1417 (2019). Likewise, the rule of lenity expresses a preference that an ambiguity in a criminal statute be interpreted in the defendant’s favor. See Yates v. United States, 574 U.S. 528, 547–48 (2015).

Substantive canons have been the subject of debate among textualists. Some, including then-Professor Barrett, have written that “[s]ubstantive canons”—at least those that operate as more than mere tiebreakers—“are in significant tension with textualism . . . insofar as their application can require a judge to adopt something other than the most textually plausible meaning of a statute.” Amy Coney Barrett, Substantive Canons and Faithful Agency, 90 B.U. L. Rev. 109, 123–24 (2010). While “[t]extualism, in its purest form, begins and ends with what the text says and fairly implies,” Scalia & Garner, supra, at 16, substantive canons “often require judges to depart from a [text’s] most natural interpretation,” Barrett, supra, at 121.

Others have suggested that a substantive canon’s validity depends not so much on whether it diverts courts from the most textually plausible reading, but rather on its legal pedigree. See Baude & Sachs, supra, at 1122–24. On this account, substantive canons may require courts to depart from the most natural interpretation of a legal text, but only when the common law, a statute, or a constitution commands that departure. So, for instance, the common-law rule of will construction “mak[ing] it difficult to disinherit one’s children,” although it “do[es]n’t necessarily track actual linguistic usage,” remains “binding on the parties simply because [it is] the law.” See id. at 1094–95; see also, e.g., Restatement (Second) of Contracts § 201(2) (1981) (providing default rules when parties attach different meanings to a contract term); 1 U.S.C. § 1 (“In determining the meaning of any Act of Congress, unless the context indicates otherwise . . . the words ‘person’ and ‘whoever’ include corporations, companies, associations, firms, partnerships, societies, and joint stock companies[.]”) ); U.S. Const., amend. XI (“The Judicial power of the United States shall not be construed to extend to [certain suits against States].”). Importantly, though, even the defenders of substantive canons reject them to the extent that judges just make them up. See Baude & Sachs, supra, at 1138–39.

Accordingly, whichever of these two camps has it right—or however much daylight really exists between them—substantive canons not firmly grounded in the written or common law are, in my view, on extremely thin ice.

Agreed -- both in general and as to Moses H. Cone, which as Judge Newsom goes on to say, isn't a longstanding common law canon or grounded in the text or original meaning of the Federal Arbitration Act. 

More broadly, this is an interesting example of an originalist/textualist lower court judge confronting a Supreme Court precedent with dubious originalist/textualist grounding, an issue Josh Blackman discusses here.  It's also an example of how originalism leads to liberal results (assuming that resisting arbitration is a liberal result).

(Via How Appealing.)