*1 bag the cocaine and teristics of cross-ex- the absence of such a basis re- amination, Libreros fails to demonstrate quires greater a general confluence of rulings that these constituted an abuse of present factors than are here. In this re- discretion, or, any event, in that he was gard, I note although majority prejudiced by them. asserts that Libreros’s statement that the bag false,” contained “evidently food was I
Conclusion am any finding by unaware of made judgments of district court concerning point. conviction are af- finding probable firmed. cause is further under- cut stopped the fact that Libreros when PIERCE, Judge, dissenting Circuit asked, he was voluntarily opened his part: bag. view, have, If we are to as we a failure to stop requested when by a law agree I majority that the convic- enforcement supporting official as “a ris- appellant tion of Moreno should be af- ing suspicion” involvement, tide drug However, firmed. as far as the affirmance id., might we view cooperation Libreros’s appellant Libreros’s conviction is con- supporting contrary inference. cerned, “I dissent from the conclusion that the confluence of earlier events and the sum, In brings this case us uncomfort- experience agent substantial of the federal ably holding close to that the mere viewing agent’s] ‘plain warranted view’ seizure [the package of a type present here, of the [brick-shaped] package appellant’s itself, probable constitutes cause. See id. open bag.” United States v. Barrios- at 17 (rejecting suggestion that “the mere Moriera, 12, (1989)(Pierce, J., 872 F.2d viewing and evaluation of the package dissenting). probable cause.”). alone constituted I feel constrained to reverse as to
Initially, I Libreros. note that in both v. Texas Brown, 730, 1535, 460 U.S. 103 S.Ct. (1983) (plurality opinion),
L.Ed.2d 502
Barrios-Moriera, upon today’s which ma-
jority relies, there particularized existed a suspecting
basis for the defendant drugs pos- involved with and that his
session particular item was not inno- Brown,
cent.
In
police
“the
officer ...
[,
CORPORATION,
uninflated,
saw in
GENERAL
addition to the
MOTORS
tied-off
Plaintiff-Appellee,
eventually
balloon
by him,]
seized
‘several
plastic
small
quantities
vials [and]
”
powder.’
loose
Barrios-Moriera,
white
ABRAMS, Attorney
Robert
General of
(Pierce, J.,
872 F.2d at
dissenting) (quot-
York,
the State of New
ing Brown,
age specifically itself—that links the defen-
dant drugs.
I do suggest particularized basis always view,
should required. my *2 Davis, (Weil City Richard J. New York address whether the instant FTC Consent Manges, City, Craig & New York Gotshal requiring Order Corpora- General Motors Allely, Corp., M.J. Gen. Motors (“GM” Francis H. Motors”) or “General oper- Dunne, counsel), for plaintiff-appellee. auspices ate under the of the Better Busi- (“BBB”) ness Bureau an informal arbitra- Brown, Atty. D. Ronna Asst. Gen. for *3 resolving consumer com- N.Y., Atty. Gen. of State New York plaints preempts either the substantive de- (Robert City, Abrams, N.Y. Atty. Gen. of cison-making procedural criteria or the and N.Y., State of Bureau of Consumer Frauds record-keeping requirements of the New Protection, Corwin, and John W. Asst. York New Car Lemon ch. Atty. Charge, Mary Hilgeman, Gen. N.Y., 1882, amending laws New York Gen- Azia, Gen., Attys. Jane Asst. Bureau of (“Lemon eral Business Law 198-a Law” Appeals Opinions, Harvey Berman, and M. “Statute”). Gen., Atty. counsel), Asst. for defen- dant-appellant. Kamp, Atty. John K. Van De Gen. of BACKGROUND Cal, Cal., Diego, State of San Andrea Sher- dispute arose after New York State Ordin, Gen., idan Atty. Chief Asst. Her- amended its require business code to Elkins, schel Gruskin, T. Sanford N. Sr. any existing manufacturer’s informal dis- Gen., Attys.
Asst. Shelden, Albert Norman pute settlement mechanism conform to the Tapper, Deputy Gen., Lawrence Attys. requirements of the State’s new Lemon curiae, amicus State of Cal. Law. brought General Motors suit on De- KAUFMAN, WINTER, Before cember in federal Circuit district court MOTLEY, Judges, seeking and Judge.* a declaration provi- District that certain sions of the state Statute were unconstitu- KAUFMAN, R. IRVING Circuit injunction tional and an restraining the en- Judge: forcement of these respect federally As an GM’s independent federal mandated consumer arbi- administrative program. tration agency charged Attorney preventing “unfair moved to dismiss competition” methods of the suit under and Fed.R. “unfair or 12(b)(6) deceptive Civ.P. practices,” acts or for failure to the state a cause Federal (“FTC” of action for Trade which relief granted. Commission or “Commis- sion”) historically summary cross-moved for operated judgment. in areas of dual regulation. state-federal Consumer Denying the State’s motion to dismiss warranty example. law is one While the granting summary judgment, Judge protection of consumers from prac- unfair Haight of the Southern District of New tices is a traditional police power York held that the 1983 FTC Consent Or- function, federal laws and administrative der requiring GM to establish a consumer regulations may operate in tandem with— program preempts the New preempt even law under the Su- —state grounds. York Statute on several The dis- premacy Clause of the United States Con- trict court found that the FTC order “occu- stitution, VI, Article Cl. 2. field,” pies the to the exclusion of state appeal general raises question the regulation, within the narrow context of whether a consent order by entered into disputes between GM and its consumers. similarly the may preempt FTC F.Supp. 1103, state law. 703 (S.D.N.Y.1989). lili Unlike an regulation which has in- The district court further held that dustry-wide effect, a consent order is bind- Lemon Law conflicts with the arbitral ing only parties on the agreement. cesses mandated FTC Order Answering affirmative, in the we also creating must manner “an obstacle to the accom- * Honorable Motley, York, Constance Baker sitting by Senior District designation. of New Judge United States District for the Southern ar- are the use untrained characteristics the full execution plishment and segments of chosen from broad expressed objectives, as bitrators purposes community “make common sense who Id. the consent order.” own sense of adjudications based on their and order judgment We reverse include, might fairness.” complaint. GM’s dismiss preemption “lawyers, professors, account- example, may in some consent order anWhile FTC executives, housewives, ants, company law, we do not preempt state circumstances The third- personnel.” trade association into GM entered agreement believe wholly voluntary for party arbitration to have was intended the Commission only and the results consumers provisions of the state this effect on i.e., GM, 102 consumer F.T.C. issue. Law at 1761— participation in summary *4 begin We pursuing or a bar to precondition is not a legislation that form state negotiations and remedies. other dispute. In this background of the complaint against GM for ad- provides a for the BBB to the FTC issued The Order serious failing notify consumers about in Motors the minister in certain defects engine and transmission of the Con- provisions accordance Avoiding the light trucks. cars and Order, for the BBB’s Uniform Rules sent the litigation, delay and risks of expense, Arbitration, Motors Zone the General a Consent negotiated and entered into FTC and Party Arbitration for Third Handbook implement a nation- requiring GM to Order Consumer Arbitration General Motors the program, ad- third-party arbitration wide appeal, Significant to this Handbook. BBB, complaints by the to settle ministered documents, incorporated into the these relating to the defec- owners of individual Order, explicit two refer- contain Consent components. 102 F.T.C. powertrain tive law. to state ences preceded final Order was 1749. The Rules of the BBB’s Uniform Section 27B pub- proposal which was preliminary by a states: Arbitration for comment public and lished submitted decision, any make The arbitrator Fed.Reg. 20730 rules. under eq- and deems fair which the Arbitrator (1983). your agree- scope within uitable con- opposition of numerous Despite the arbitrate, law provided state ment (includ- attorneys general and state sumers part all or of that deci- prohibit does Abrams defendant-appellant Robert ing sion. settlement, the York) proposed New at 102 F.T.C. 1774. on Novem- Order issued the Consent of the provides that law Section 3 “[t]he case-by-case ar- 16, 1983, providing ber shall your dispute is arbitrated to con- than direct redress rather bitration at 1771. apply.” 102 F.T.C. sumers.1 1, 1983, Sept. York Effective by the Consent program established Law, original Lemon legislature enacted by the FTC “experiment” marks an Order of the Gen- 198-a State as section codified re- the consumer designed to assure The Law created Business Law. eral equitable treatment ceives fair and warranty requiring a manufac- statutory principal Its manufacturer. of the hands win, many deserving truly will consumers Consent Order issued the The Commission reme- only rational won’t. The Pertschuk Commissioner to one. a vote of four injury in a case dy suffered 102 F.T.C. for the common separate statement. in a dissented compensation dam- position this is automatic of his like thrust 1743-44. pitting the following excerpt: ages, standardless mini-trials evident against largest com- consumer individual de- a common case-by-case arbitrations of pany in the world! prove a fect, each consumer in which Id. redress, concept wrong right George Bailey P. Patricia Commissioners clear, binding without operation. Arbitration separate Douglas ex- also filed statements W. still responsibility will establishing rules for of the in favor Order. plaining their votes dice"—some a "roll than be little more repair charge any free of “lemons,” turer to new determined automotive that does not compared motor vehicle conform to its equitable” with the “fair and express statutorily speci- open warranties for a standard of program; years period eighteen fied of time—two 3) Law, Under the Lemon arbitrators miles, thousand whichever comes sooner. arbitration,” must be “trained “famil- 198-a(b). § iar Law, with” the New York Lemon “provided with a copy written addition, any during defect period provisions of” the Lemon rather “substantially impairing] the value of the merely than community untrained proves unrepairable motor vehicle” that af- Order; trators called for in the attempts” ter a “reasonable number of ren- 4) The “lemon,” recordkeeping Statute adds ders re- entitling the vehicle quirements reporting to the purchase consumer to a refund of the full contained in the price 198-a(c). Consent Order. replacement. § Statute defines “reasonable number of at- The New York Statute also directed the tempts” if as four or the vehicle is out for Attorney General to create an “alternative repair for a cumulative total of 30 or more arbitration mechanism” to be conducted 198-a(d). days. These remedies are professional appointed by available to consumer who first resorts Attorney General apply who must *5 to a dispute manufacturer’s informal mech- Law standards and remedies.2 sepa- (if exists) anism one complies with rate arbitration forum has been available to minimum federal standards. 198-a(g). § 1, January consumers since 1987.
The 1986 amendments to the Lemon Law added that a manufacturer has estab- “[i]f DISCUSSION lished dispute an informal settlement mech- I. Authority Preempt anism, such comply mechanism shall in all respects initially address, We provisions must of this sec- as a matter of impression court, first 198-a(g). (m) tion-” Subsection whether a sets § forth consent by the “minimum” order entered into require- Lemon Law a federal agency ments for a administrative preempt manufacturer’s informal can ever dis- pute state agree settlement law. We primarily Judge Haight’s mechanism. challenges conclusion requirements below that consent may that arbitra- orders preemptive tors be afforded weight be “trained in arbitration and familiar some cir- cumstances. [the Law]” they and that apply Lemon Law remedies. Supremacy The Clause of the United 198-(m)(l)(i), (iii). § Constitution, VI, States 2, Article Cl. vides: major differences between the Con- sent Order and the New Car Lemon Law Constitution, “This and the Laws of the may be summarized as follows: United States which shall be made in
1) Pursuance thereof ... shall requires Statute the consumer be the Su- preme Law of the Land resort to a the Constitu- dispute manufacturer’s reso- or Laws of lution State to the seeking judicial mechanism before Con- trary notwithstanding.” relief under the Lemon whereas the Consent participation Order makes in the While the Framers of the Constitution program wholly op- GM-BBB arbitration could not have envisioned the burgeoning tional; procedure, modern administrative 2) The specifies Supreme standards interpreted Court “laws” un- for liability statutorily Supremacy and redress for der the Clause to embrace both a(k) provides: pursuant regulations N.Y.Gen.Bus.Law lished promulgated 198— by hereunder option attorney New York Each consumer shall have the mitting any of sub- general. Upon application dispute arising under this section of the consumer fee, upon payment payment filing prescribed filing of a fee to all manufactur- an alternate arbitration mechanism estab- ers shall submit to such alternate arbitration.
39
itself;
by Congress
taken
regula
only from action
and administrative
statutes
federal
agency acting
scope
within the
a federal
v.
Savings
Loan Ass’n.
Fidelity
&
tions.
congressionally delegated authority may
its
141, 153,
S.Ct.
Cuesta,
102
458 U.S.
de la
regulation.”
pre-empt state
Louisiana
(1982)(“Federal
L.Ed.2d 664
73
FCC,
v.
476
Public Service Commission
effect
pre-emptive
have no less
regulations
355, 369,
1890, 1899,
106 S.Ct.
90
U.S.
also,
statutes.”).
Hills
federal
See
than
(1986).
L.Ed.2d 369
Just as when review-
Med.
Fla. v. Automated
borough County,
regulation,
ing a federal
we should not
707, 713,
Inc.,
S.Ct.
Labs,
471
105
U.S.
agency’s
action intended
disturb
(1985) (“We
2371, 2375,
L.Ed.2d
preempt state law which embodies
“rea-
that state
can be
repeatedly
laws
have held
conflicting poli-
sonable accommodation
regulations as well
by federal
pre-empted
agency’s
cies that were committed to the
statutes.”); Capital Cities
federal
Savings, 458
Fidelity
care
statute.”
104 S.Ct.
Cable,
Crisp,
v.
U.S.
Inc.
153-54,
{quot-
eral anything there is whether determine 683, 613 must L.Ed.2d 93 272, S.Ct. 107 479 U.S. require- Inc., the Statute’s Airlines, about objectionable v. Delta (1987)(citing Shaw 2898, resort to GM’s 77 2890, that consumers 95, ments 103 S.Ct. 85, 463 U.S. to seek- precondition as a (1983)). tration 490 L.Ed.2d Law; Lemon under the in court ing relief Preempt apply community II. Intent that GM’s procedures. Law standards fashioned has Court Supreme for in search guiding our rules clear an indication Absent Requirement in this area. tent A. The of "First Resort" regulation, state preclude express intent No one contests that New York ways. in two implied would preemption separate dispute establish a consumer reso may be regulation scheme federal mechanism, replete lution with substantive it area that specific in a comprehensive so procedural regulations, in addition to an intent to infer may be reasonable federally program. GM's stead, mandated In leaving room field,” no “occupy the challenges 198-a(g)'s purport GM v. Rice regulation. state supplemental requirement seeking ed relief under the Lemon Law first submit to that a consumer 218, 331 Corp., U.S. Elevator Fe Santa 1447 1152, L.Ed. existing pro a manufacturer's gram-e.g., been there (1947). Even program. the instant GM-BBB of state displacement complete argues provision that this eliminates area, preempted law state particular in a voluntary aspect pro the gram of the GM-BBB law, federal actually conflicts it when and forecloses consumer choice federal both compliance with so that "requir [ing] consumers to resort to the impossible, physically regulations state FTC-GM consumer arbitration as Growers, v. Inc Avocado Lime & Florida precondition seeking relief under the 142-43, 83 S.Ct. Paul, 373 U.S. urges New York Statute." GM us to im (1963),or the 1217-18, 10 L.Ed.2d legislation munize its from state accom to the obstacle “stands law preserve so that it would for the consumer pur full execution plishment and opting non-binding the "choice of for a Congress objectives poses [or system eq informal arbitration based on Davidowitz, 312 Hines agency], judgments by lay persons.""4 uitable 399, 404, L.Ed. 52, 67, 61 S.Ct. *7 U.S. leg (1941). state that the recognizing While clarity, we a from model is far islation in the FTC explicit statement nois There partially dissenter and the that believe preclude to an intention Order Consent the Lemon provisions of misinterpret these ex- Accordingly, we must regulation. state require 198-a(g) to section We read Law. was intend- 1983 the Order amine whether a manufacturer’s submit to a consumer to GM-sponsored field” of “occupy the ed to bring before program existing arbitration warranty dis- over consumer Law, but the Lemon under ing suit to impossible it would putes or whether newly under the relief pursuing to prior the Order the FTC comply with both General arbitra Attorney State’s created compliance whether Lemon Law or prior applying Lemon pur- the frustrate would the F.Supp. But Statement at 1106. 703 binding under issue. on GM are cf. ... which Arbitration (Consent omitted) Order (citation Oliver is woeful- “princi- FTC Chairman consent decree" the ly Law). Id. is the dissenter’s Lemon misguided. preempts Yet this the opinion. Adherence disagreement” with our pal effect, view, opinion replaces the that to to this allusions makes several 4. General Motors judgment of this for the W. Determan Dean varying slightly aspect Law of the Lemon reasons, we have declined For similar court. See, Appellee's at e.g., Brief interpretations. view, weight to the FTC's even give talismanic Dunne, 9, 23; H. Assistant of Francis Affidavit curiae submitted expressed brief amicus in its Counsel, Corporation. Motors General court, that its of the district upon the invitation at preempt the statute does not Order Consent
41
the Lemon
now
the
seeking judicial relief outside
We
address
thrust of GM’scom-
effect,
plaint:
(g)
namely,
requirement
creates an
the
Law.5 In
subdivision
requirement
par-
comply
which makes
must
with the
exhaustion
existing
substantive decisional criteria
ticipation in a manufacturer’s
dis-
and record-
keeping procedures
prerequisite
of the Lemon Law.
pute resolution mechanism a
relief
the
seeking judicial
under
Lemon
Requirements
B. Other
view,
statutory
scheme
Law.
In our
harms the consumer nor unconsti-
neither
GM claims that it is inconceivable that
tutionally
regulation.
burdens federal
permit
FTC intended to
of issues covered
the Consent Order in
only permits
The Lemon Law not
three
light
“having
of its
negotiated a detailed
separate avenues of relief to remain avail-
agreement, having gone through
lengthy
pro-
able to the consumer—the GM-BBB
process,
having
comment
resolved de-
gram,
Attorney
New York’s
General arbi-
bated issues about the decree.” We draw
mechanism,
judicial
tration
relief—but
opposite
inference.
meaningful
these routes of redress become
under its terms.
various subtle but
Congress legislates
When
in a
ways these
as ve-
significant
forums differ
traditionally occupied by
states,
field
affording
example,
hicles
relief—for
“we start
assumption
pay filing
fee
police
the consumer
have
powers
historic
of the States were
under the
mechanism while
is
superseded by
State’s
GM’s
not to be
law and
[federal
free;6
program binding
generally
unless that was the clear
action]
purpose
Congress.”
manufacturer while
State’s
and manifest
only on the
Pa
Accordingly, we view
Energy
both.7
Gas & Electric Co. v.
Re
cific
Comm’n,
190, 206,
requirement
the Statute’s exhaustion
as
sources
U.S.
1713, 1723,
merely inducing
(1983)
use
manufacturer’s
S.Ct.
Hillsborough
of state law.
verter
contravention
This concern is reinforced
at 2377.
S.Ct.
could not order
Similarly, an arbitrator
finding
preemp-
by the imbalance that
remedy,
part
removed as
seat belts
manufactur-
among
create
car
tion would
them.
required
cars were
to have
pre-
provision
ers.
If we read
Consent Order
does not
Again,
regulation of the GM-BBB
to substitute state
clude all state
and is not intended
gain an
law for the sense of fairness
program, GM would
substantive
judgment of the arbitrator as to what
state law while manufactur-
immunity from
any
appropriate.
remedy, if
voluntary dispute resolu-
establish
ers who
comply
would have to
tion mechanisms
of Dean W. Determan.9
Affidavit
Although we are
the Lemon Law.8
last statements are
Determan’s first and
the GM-BBB
mindful
examples
he
by the
on which
contradicted
“experimental,” we are un-
intended to be
correct,
relies. While his scenarios
also in-
infer that the FTC Order
able to
in Section 27B a distinc-
we fail to discern
special
grant
such
insulation.
tended to
state law which establishes a
tion between
Moreover,
to state law
obligations
respect
the references
manufacturer’s
incorporated into
(personal
in the documents
or environ-
safety
found
features
mental)
indicate that the FTC
law which estab-
the Consent Order
of a car and state
“occupy
respect
intend the Order to
a manufacturer’s duties with
did not
lishes
view,
warranty
remedying
In our
field” of consumer
law
defects.
logically from
disgruntled
example,
and its
it should follow
tration between GM
Conceivably,
boilerplate
these illustrations that an arbitrator should
consumers.
-
-,
Cir.1989),
denied,
(8th
Warranty.
Magnuson-Moss
cert.
U.S.
8. The
—Federal
§§
Act,
(state
(1989)
Improvement
101 et
Trade Commission
Ostensibly, purpose a federal question of whether preemption consumers fair and is to assure sent Order poli- a state procedure invalidates submitting policy com- equitable treatment when procedure.... whether cy performance vehicle’s plaints [but] about a unnecessarily interfering with does not York is program. GM fail to procedure.” We remedial Lemon Law federal application of the argue that untraditional anything novel or discern liability and redress necessar- standards Moreover, Instead, of the law. this restatement inequitable. unfair or ily would be given regulation in a dual state and federal legislation is argues that the state forms; e.g., the may assume various disrupts goal area it preempted because in tandem may operate in the uniformity engendered nationwide *10 program law. that would be a man- arbitration independent or datory step Order does first for consumers under FTC Consent instant pro- insulate GM’s for the defendants intent to Lemon Law. Counsel indicate regu- supplementation argument provi- at oral that this conceded gram from primarily was for the benefit of manufacturers. lation. Since sion what is fair and However, mandatory for appears standards it for supplies of its standards and application equitable, the arbitration GM because discretion to (which leave wide remedies consent decree are treated as a arbitrator) in the by arbitrators GM manufacturer’s arbitration unnecessarily interfere program does question.1 purposes of the law federal remedial mea- open-ended happen- appears to be the result of sheer sures. legislative drafting, for there is stance legislature no evidence that New York our that the emphasize belief Finally, we single intended to out or that New ever GM and fair—not principled we reach result any policy goal York has or reason to make unwisely “mischie[vous],” as the dissenter maintenance of arbitration Companies will not be it. characterizes competitors. mandatory for GM and not its de- entering into consent from dissuaded involving BBB arbitration because of crees aspect The second unusual arises from Rather, they will be mindful our decision. legal before us is not first. issue preemption in bargain of the need preemption question the traditional wheth- they reach. compromises specific policy procedure er a federal or invalidates policy procedure. No one is a state or CONCLUSION arguing that York cannot enact a reverse the foregoing reasons we arbitration, For the provide Lemon Law and includ- summary judgment dismiss order of arbitration, ing optional manufacturers’ complaint below. remedy. New York could also have one programs mandat- declared WINTER, Judge, dissenting: Circuit ed federal law are not to be used for colleagues Lemon Law enforcement but that manufac- my that a con- agree I programs turers bound to such federal the force of federal law sent decree with However, separate programs I could establish for Lem- a state statute. may preempt preemptive purposes. on Law Even if New York want- as to the disagree with them single mandate that it ed to out GM and the Federal Trade Commission effect of program, maintain an it could (“FTC”) in issue. This case consent decree required have to establish a second legal unusual and factual highly involves a situation, program separate from that under the con- approach I it rather differ- Every policy goal legis- colleagues. sent decree. ently my from question easily lation in could thus have aspect is that the New The first unusual creating achieved without even an been effect on appears to have an York statute arguable preemption issue. (“GM”) entirely different Motors every question not whether a New York other manufactur- from its effect question policy procedure statutory provision can coexist with fed- er. The procedure policy manufacturers to eral but whether New designed to allow programs provide federally York can that a mandated operate their own arbitration require procedure remedial be used to enforce its they choose to do so and though it could have policy resort in the first instance to local even consumers to procedure if one exists. vided an identical under state program, the manufacturer’s preemption finding thus intended to allow law. A here would The statute was way power lessen New York’s voluntarily to establish an thus no manufacturers applies present question the statute case. 1. The whether raised in the GM's arbitration is not *11 actually operated has provide and enact substantive proce- of remedial comprehensive many years regard arsenal and without to how or other con- concerning automobiles dures parties rules, BBB and other to these upon by my Cases relied products. sumer present have no connection who against unneces- caution colleagues that litigation, interpret them. of state with the exercise sary interference quality of available evidence as to point. The powers are beside the police meaning operation BBB York is rather is whether New question exceptional. In rules is the record and a federal re- unnecessarily interfering with unchallenged by the is an defendants affi- procedure. medial Determan, davit of Dean W. former Gener- York colleagues conclude that New My al of Better Counsel Council Busi- use of the any other state’s Bureaus, Inc., and ness Vice President in the FTC consent procedure is valid because charge of its Media/Arbitration Division. for the designed to a vehicle decree was ques- Mr. Determan authored the rules I law. of state substantive enforcement years many supervised tion and for indisputable that disagree. virtually It is program, during BBB arbitration which he was intended to authorize the decree responsible interpreting was the rules. solely on to issue decisions based trators equity of common sense their view Among things other stated Mr. Deter- law, regard to state substantive without man in that affidavit is that the BBB rules expressly forbade the re- unless that law “provided incorporated the FTC order incorporated into the language sult. that decisions were to be arbitrators’ based that the arbitrator original decree stated legal equity principles. and not on state decision, any which the Arbi- “may make operating This has continued to be the ..., fair and deems to be trator program.” premise of the Mr. Determan prohibit all or provided state law does not further stated that the BBB 27B, Rule Uniform part of that decision.” 25,000 persons more nation- trained than Bureau Arbitra- Rules for Better Business BBB and has in- wide to be arbitrators Order, tion, reprinted in FTC Consent them structed Moreover, the lack of F.T.C. federal standards was the either state or concept apply their own of fairness to Commissioner Pertschuk’s basis they They facts in the cases hear. Attorney General dissent and defendant taught state laws are not various it opposition to the decree before Abrams’ disputes they apply would if the which adopted by the FTC. brought in hearing had been court. were language Whatever the evidence fact, the arbitrators are told while intent, the matter is settled they may parties present allow that Rules for Bet- examination Uniform law from the state substantive Arbitration, Bureau ter Business sitting, or even from other they are 1771-74, are on GM F.T.C. at which states, they specifically instructed It should be under the consent decree. apply any particular they are not to Business Bu- understood that the Better law, they instead are to do what but (“BBB”) application rules have an be- reau personally right. believe They bind yond the FTC consent decree. specifically It is understood all kinds across the nation businesses of Rules should under the BBB participate in the BBB agreed have who legal principles established not enforce program. They thus have a life Code, Commercial such as the Uniform litigation, in- apart their own from this law, substantive warranty other op- cluding history interpretation law, principles might except as those disagree- practice. My principal erational inde- of the arbitrator’s form the basis my colleagues concerns their ment with ideas of fair- common sense and pendent that these rules are somehow view regard to how the BBB ness. interpreted without *12 light also shed statute commands that arbitrators be Determan’s affidavit
Mr. trained in the Lemon Law and it. follow to state law in the references on the two Compliance GM with the consent decree specifically He stated that Sec- BBB rules. interpreted with the Lemon Law as is your of the state where tion 3—“The law possible, not Florida Lime Avo- thus see & apply,” shall dispute is arbitrated Growers, Paul, 373 U.S. cado Inc. designed only “to set- at 1771—was F.T.C. 1217-18, 142-43, 10 L.Ed.2d law,” procedural questions tle of choice BBB, (1963), unless the which is not and was legal duty comply any under anticipate situations in which included to Law, voluntarily cooperates in both state, in one a consumer lives but arbi- revising the standards followed its by BBB located in a different serviced allowing and in its trators arbitrators example, state. For New York law re- retrained. eight days’ notice an arbitration quires my colleagues’ I would note further that hearing, Jersey only requires but potential for decision creates the considera- provision seven. This does not and is not extending beyond mischief far this ble incorporate state intended to substantive Companies hereafter rather case. will be pro- the arbitration decisional law into entering federal con- more cautious into cess. providing pro- sent decrees for arbitration colleagues rely heavily upon My Section grams may put later to unantic- may any 27B—“The Arbitrator make deci- ipated Certainly, uses. no counsel for a sion, the Arbitrator deems to be fair which agreeing manufacturer recommend will ..., provided involving state law does BBB a consent decree arbitration. decision,” Moreover, part this decision concludes prohibit all or of that because particular warranty gov- that a law compelling at 1774—as an 102 F.T.C. erns BBB arbitration and that BBB arbitra- trator to follow state substantive law. trained, properly tors are not the decision Section, regard to that Mr. Determan With suggests that a matter BBB as of law the stated, misinterpreting has been and misadminis- provision means that no decision can tering its arbitration all these require any party perform an action result, years. As a mischief follow put party jeopardy that would for businesses and consumers in other in- example, other law. For if under Litigation claiming dustries as well. decides a vehicle would arbitrator applied BBB arbitration has not state sub- economy fuel if the cata- achieve better law, unthinkable, stantive until now removed, may were he lytic converter likely. been made more catalytic the removal of the con- “award” Finally, I my colleagues’ would note that of state verter contravention law. pointless exertions are rather other than to Similarly, an arbitrator could not order single out GM for harsher treatment. If part remedy, removed as seat belts we were to hold that New York could not required where cars were to have them. use the FTC arbitration as a ve- provision Again, does not law, impose hicle to its own substantive and is not intended to substitute state position GM would be restored to the held law for the sense of substantive fairness by all other automobile manufacturers in judgment of arbitrator as to what State New York and would have a remedy, any, appropriate. if up choice whether to set an arbitration that the Lemon I thus conclude (in case, program) a second palpable interpreted, is conflict with the use under the Lemon I Law. therefore The BBB arbitration consent decree. dissent. expressly precludes application
gram law. The New York stat-
state substantive it. BBB are not
ute commands in state law and are instructed that
trained mandatory. is not The New York
its use