The Institute in the Courts: Supreme Court Cites International Commercial Arbitration, Servitudes for the First Time

The Institute’s publications, both old and new, continue to provide valuable guidance to the U.S. Supreme Court, as evidenced by the Court’s citations to several ALI publications in recent months, including two that the high court cited for the first time.

In a dissenting opinion to BG Group, PLC v. Republic of Argentina, 134 S.Ct. 1198, March 05, 2014 (No. 12-138), Chief Justice Roberts looked to a draft of ALI’s ongoing project, Restatement of the Law Third, The U.S. Law of International Commercial Arbitration (Tentative Draft No. 2, 2012). In that case, the United Kingdom and Argentina entered into an investment treaty that contained a dispute-resolution provision allowing one of the contracting nations and an investor from the other nation to “submit a dispute to the decision of the competent tribunal of the Contracting Party in whose territory that investment was made,” and, if that tribunal did not give a final decision within 18 months, to seek arbitration for their claims. After a British company that had an interest in an Argentine enterprise objected to certain changes in Argentine law that it believed violated its interests under the treaty, it sought arbitration in the United States under the disputeresolution provision, contending that Argentina, in enacting its new laws, had engaged in conduct that excused it from first seeking resolution of its dispute in an Argentine court. After the arbitrators awarded damages to the British company, the U.S. District Court for the District of Columbia denied Argentina’s petition to vacate or modify the award and confirmed the award, but the Court of Appeals reversed. Reversing, Justice Breyer, writing for the majority, concluded that an arbitrator’s decision interpreting a treaty provision was entitled to deference, and, in this case, the “arbitrators’ jurisdictional determinations [were] lawful.” In his dissent, Chief Justice Roberts argued that “[b]ecause an arbitrator’s authority depends on the consent of the parties, the arbitrator should not as a rule be able to decide for himself whether the parties have in fact consented,” and cited § 4-12 of the Restatement for the proposition that “a court determines de novo…the existence of the arbitration agreement.”

The Restatement Third of Property (Servitudes), has also received its first citations from the Court. In Marvin M. Brandt Revocable Trust v. U.S.,134 S.Ct. 1257, March 10, 2014 (No. 12-1173), the United States sought to quiet title to an abandoned railroad right-of-way that crossed over private property. Chief Justice Roberts, writing for the majority, relied on various Restatement provisions in holding that the right-of-way was an easement that terminated following its abandonment, giving the owners of the servient estate full title to that strip of land. The court employed the definition of “easement” found in Restatement Third, Property (Servitudes) § 1.2 to support its argument and quoted other language in that section and in § 7.4 to support the proposition that “if the beneficiary of the easement abandons it, the easement disappears.” In rejecting the government’s argument that the 1875 Act that created the right-of-way “granted the railroads something more than an easement, reserving an implied reversionary interest in that something more to the United States,” the Court relied on the definition of “reversionary interest” found in § 154 of the original Restatement of Property, and concluded that the government did not reserve to itself any such interest when it conveyed the servient estate, in fee simple, to the current owners. In a dissenting opinion, Justice Sotomayor contended that, when the government granted the right-of-way to the railroad, it only granted a defeasible fee, as defined by § 16 of the Restatement of Property, which included an “implied condition of reverter” to the government.

In addition to these first-time citations, the Court has recently relied on ALI publications in several other opinions, including: citations to Chapter 35 of the original Restatement of Torts and § 870 of Restatement Second of Torts in Lexmark Intern., Inc. v. Static Control Components, Inc., 2014 WL 1168967, March 25, 2014 (No. 12-873); to Restatement of Torts § 431, Model Penal Code § 2.03, and excerpts from the 39th Annual Meeting Proceedings in Burrage v. United States, 134 S.Ct 881, January 27, 2014 (No. 12-7515); to §§ 577 and 558 of Restatement Second of Torts in Walden v. Fiore, 134 S.Ct. 1115, February 25, 2014 (No. 12-574); to § 28 of Restatement Second of Judgments in Medtronic, Inc. v. Mirowski Family Ventures, LLC, 134 S.Ct. 843, January 22, 2014 (No. 12-1128); and to Model Penal Code § 2.06 in Rosemond v. U.S.,134 S.Ct. 1240, March 05, 2014 (No. 12-895).