Abstract

This article takes federal courts to task for failing to analyze systematically the question of who - court or arbitrator - should determine whether a prior decision bars subsequent arbitration under the Federal Arbitration Act because of res judicata. When federal courts improperly determine that they rather than arbitrators should so decide, they frustrate legislative policies embodied in the Federal Arbitration Act favoring arbitration and impose on the parties a court resolution process that they did not bargain for. Such judicial intervention effectively denies parties the freedom to contract as they see fit and the benefits of arbitration to which they are entitled.To reconcile the divergent federal appellate cases on the question, this article proposes the following rule: Arbitrators should decide the res judicata question unless the prior decision whose preclusive effects are at issue is a judgment of the court being asked to compel arbitration, in which case, that court decides the question. Significantly, as elaborated upon in this article, this rule provides a coherent framework for analyzing the issue under the Federal Arbitration Act that derives from and is justified by the fundamental, contractual nature of arbitration.