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Applied Legal History
Background
On June 29, 1789, Zephaniah Turner of Charles County, Maryland, wrote to President George Washington and observed:
Our Laws are too Numerous. Is it not possible that an alteration might take place for the benefit of the public?...Could it not be possible to curtail the Number of Lawyers in the different States? Suppose each State was to have but Two Lawyers to be paid liberally...[and] where a real dispute subsisted between Plaintiff and Defendant a reference [to arbitration] should be proposed, and arbitrators [be] indifferently chosen by both parties...whose determination shall be final. 1
Arbitration had been in use in Maryland since at least the early 1600s, as was true in a number of the original colonies. However, centuries later, a notion developed that the courts in the United States had always been jealous of the arbitration process and that they consistently refused to grant enforcement of arbitration agreements. In Gilmer v. Interstate/Johnson Lane Corp.,2Mr. Justice White wrote that the purpose of the Federal Arbitration Act (FAA), first passed in 1925 and reenacted in 1947, "was to reverse the longstanding judicial hostility to arbitration agreements that had existed at English common law and had been adopted by American courts, and to place arbitration agreements upon the same footing as other contracts." The point was explained more fully in the 1924 House Report on the bill that became the FAA:
The need for the law arises from an anachronism of our American law. Some centuries ago, because of the jealousy of the English courts for their own jurisdiction, they refused to enforce specific agreements to arbitrate upon the grounds that the courts were thereby ousted from their jurisdiction. This jealousy survived for so long a period that the principle became firmly embedded in the English common law and was adopted with it by the American courts. The courts have felt that the precedent was too strongly fixed to be overturned without legislative enactment. 3
A good illustration of the attitude of the American courts is the opinion by Justice Story in Tobey v. Bristol.4The ultimate holding in the case was narrow,5but in a rambling opinion issued only months...