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Safety National Casuality Corp. v. Certain Underwriters at Lloyd's, London

Published online by Cambridge University Press:  27 February 2017

Joshua J. Newcomer
Joshua J. Newcomer*
Affiliation:
Houston, Texas
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Type
International Decisions
Information
American Journal of International Law , Volume 105 , Issue 2 , April 2011 , pp. 326 - 332
Copyright
Copyright ©by the American Society of International Law,2011

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References

1 587 F.3d 714 (5th Cir. 2009) (en banc), cert, denied, 131 S.Ct. 65 (Oct. 4, 2010).

2 Convention on the Recognition and Enforcement of Foreign Arbitral Awards, June 10, 1958, 21 UST 2157, 330 UNTS 3 [hereinafter New York Convention].

3 Federal Arbitration Act, 9 U.S.C. §201 et seq. [hereinafter FAA].

4 La. Rev. Stat. Ann. §22:868 (2009).

5 McCarran-Ferguson Act, 15 U.S.C. §1011 et seq.

6 Brief for the United States as Amicus Curiae Supporting Respondent, La. Safety Ass’n of Timbermen-Self Insurers Fund v. Certain Underwriters at Lloyd’s, London (filed Aug. 26, 2010) (No. 09-945), at http://www.justice.gov/osg/briefs/2010/2pet/6invit/2009-0945.pet.ami.inv.pdf [hereinafter U.S. Amicus Brief].

7 FAA §201.

8 Safety Nat’l Cas. Corp. v. Certain Underwriters at Lloyd’s, London, No. 02-1146-A, slip op. 3–4 (M.D. La. Dec. 5, 2005).

9 McCarran-Ferguson Act §1012(b). This statute preserves the states’ regulation of insurance, U.S. Dep’t of Treasury v. Fabe, 508 U.S. 491 (1993), and ensures that congressional silence “shall not be construed to impose any barrier to the regulation [of insurance]. . . by the several States,” §1011. In addition, the McCarran-Ferguson Act’s unique reverse-preemption language counteracts the typical presumption that a later-in-time statute—i.e., the FAA—preempts the earlier-in-time statute—i.e., the McCarran-Ferguson Act—if the two cannot be reconciled. See, e.g., Whitney v. Robertson, 124 U.S. 190, 194 (1888).

10 Safety Nat’l Cas. Corp. v. Certain Underwriters at Lloyd’s, London, 543 F.3d 744, 755 (5th Cir. 2008), vacated and reh’g granted by 558 F.3d 599 (5th Cir. 2009).

11 Id.at 750, 752,753.

12 See Stephens v. Am. Int’l Ins. Co., 66 F.3d 41 (2d Cir. 1995).

13 En Banc Brief for Intervenor Plaintiff-Appellee Louisiana Safety Ass’n at 37–40, 45–47, Safety Nat’l Cas. Corp. v. Certain Underwriters at Lloyd’s. London, 587 F.3d 714 (5th Cir. 2009) (No. 06–30262).

14 Id. at 44–45.

15 Id. at 14–15; see, e.g., Munich Am. Reins. Co. v. Crawford, 141 F.3d 585, 595 (5th Cir. 1998).

16 En Banc Brief for Appellants at 31–32, Safety Nat’l Cas. Corp., 587 F.3d 714 (No. 06-30262).

17 Id. at 17 (citing, e.g., Am. Ins. Ass’n v. Garamendi, 539 U.S. 396 (2003)).

18 Citing Mitsubishi Motors Corp., v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 629 (1985).

19 552 U.S. 491, 505–06 (2008) (holding that the interpretation of a treaty starts with its text as informed by its drafting history and post-ratification understanding).

20 The dissent concluded that, given the contents of die party’s en banc brief, “Underwriters explicitly waived their self-execution argument” (dissenting op., p. 751 n.31).

21 See generally Michael F. Sturley, International Uniform Laws in National Courts: The Influence of Domestic Law in Conflicts of Interpretation, 27 Va. J. Int’l L. 729 (1987).

22 U.S. Amicus Brief, supra note 6, at 8–11.

23 Id. at 11–17 (citing, e.g., Garamendi, 539 U.S. at 428; Murray v. Schooner Charming Betsy, 6 U.S. 64, 118 (1804)).

24 131 S.Ct. 65 (Oct. 4, 2010).

25 John F., Coyle, Incorporative Statutes and the Borrowed Treaty Rule, 50 Va. J. Int’l L. 655, 676 (2010)Google Scholar (noting that “it is well-established that a treaty that has been incorporated by reference in a statute, either in whole or in part, is indistinguishable in virtually all material respects from a self-executing treaty that has received the consent of two-thirds of the Senate”).

26 See ABA-ASIL, Report of The Joint Task Force on Treaties in U.S. Law (2009), at http://www.asil.org/files/TreatiesTaskForceReport.pdf [hereinafter Task Force Report]; Curtis A. Bradley, Intent, Presumptions, and Non-Self-Executing Treaties, 102 AJIL 540,542-43 (2008); Carlos Manuel Vázquez, Treaties as Law of the Land: The Supremacy Clause and the Judicial Enforcement of Treaties, 122 Harv. L. Rev. 599,654-55 (2008).

27 U.S. Amicus Brief, supra note 6, at 11. The executive branch’s interpretation of a treaty is entitled to great weight. Eg., Abbott v. Abbott, 130 S.Ct. 1983, 1993 (2010).

28 See John H., Jackson, Status of Treaties in Domestic Legal Systems: A Policy Analysis, 86 AJIL 310, 329 (1992)Google Scholar (explaining that “a court. . . might find itself bound to uphold the international obligation so that it will not cause the nation to breach that obligation”).

29 Medellín v. Texas, 5 52 U.S. 491,521 (2008). The Safety National majority may give the Medellín dictum too much weight. As the concurrence notes, the Court was discussing Article III, which obligates signatories to recognize arbitral judgments, not Article II, which mandates that domestic courts compel arbitration (concurring op., p. 736). Yet, giving effect to this distinction risks anomalous real-world results: conceivably, a court would be obligated to compel arbitration pursuant to Article II but could not enforce the resulting award under Article III.

30 Bradley, supra note 26, at 548 (noting that this issue was left unresolved by Medellín).

31 See Coyle, supra note 25, at 675 (identifying the “well-accepted proposition that there is, in practice, very little difference between incorporating a text by reference (a ‘referential’ statute) and copying that text directly into a statute (a statute that is ‘directly incorporative’)”).

32 Restatement (Third) of Foreign Relations Law of The United States §111 cmt. h; see, e.g., David, Sloss, The Domestication of International Human Rights: Non-Self-Executing Declarations and Human Rights Treaties, 24 Yale j. Int’l L. 129, 145 (1999)Google Scholar (“When courts apply treaties indirectly, some provision of law other than the treaty itself provides a rule of decision in the particular case.”); Vázquez, supra note 26, at 637 (“When a treaty is non-self-executing, judges apply the implementing statute, not the treaty itself.”). The existing scholarship is often inconsistent. Compare Louis Henkin, Foreign Affairs and The United States Constitution 200 n.* (2d ed. 1996) (“Strictly, if a treaty is not self-executing it is not the treaty but the implementing legislation that is effectively ‘law of the land.”‘), with id. (“Sometimes die implementing legislation gives the treaty itself legal effect or incorporates it by reference.”). See generally Bradley, supra note 26, at 547 (noting that Medellín is “highly ambiguous about the domestic status of a non-self-executing treaty”).

33 E.g., 552 U.S. at 504 (“This Court has long recognized the distinction between treaties that automatically have effect as domestic law, and those that—while they constitute international law commitments—do not by themselves function as binding federal law.”).

34 E.g., id. (“[N]ot all international law obligations automatically constitute binding federal law enforceable in United States courts.”).

35 The majority does not explore whether its implication that die FAA is facilitating is at odds with its refusal to find the New York Convention self-executing. Cf Coyle, supra note 25, at 666 (“A treaty-facilitating statute is one that spells out how a given provision in a self-executing treaty should be applied by courts . . . .” (emphasis added)).

36 While the distinction arises rarely in the courts, where the relevant “law” is usually that which is “judicially enforceable,” the issue is fundamental to the executive branch’s obligation to “take care” that the laws are faithfully executed. See Task Force Report, supra note 26, at 12-13; Edward T. Swaine, Taking Care of Treaties, 108 Colum. L. Rev. 331 (2008).

37 The majority’s position adheres more closely with the Supremacy Clause’s instruction that all treaties are supreme law. See, e.g., Henkin, supra note 32, at 203 (“Whether a treaty is self-executing or not, it is legally binding on the United States. Whether it is self-executing or not, it is supreme law of the land.”); Yuji, Iwasawa, The Doctrine of Self-Executing Treaties in the United States, A Critical Analysis, 26 Va. J. Int’l L. 627, 645 (1986)Google Scholar (same).

38 Assuming arguendo that the McCarran-Ferguson Act preempts the FAA, passages of the majority opinion— those emphasizing that the relevant commands are provided by the New York Convention (pp. 724–25)—arguably support that implementation grants the Convention attributes of a self-executing treaty. Such a position, if followed, threatens to contravene the authority of the president, with the Senate, to shape the treaty’s self-executing character. Although an open question, one theory is that such character is established at the time of formation. See, e.g., Trans World Airlines, Inc. v. Franklin Mint Corp., 466 U.S. 243, 252 (1984).Google Scholar

39 Typically, an act of Congress will not be presumed to violate a treaty obligation absent a clear statement of that intent. See id. at 252; Murray v. Schooner Charming Betsy, 6 U.S. 64, 118 (1804). The conclusion that Convention is supreme law thus potentially obligates the court to avoid interpreting the McCarran-Ferguson Act to negate the treaty obligation, regardless of whether that obligation is domesticated by the FAA

40 See Sloss, supra note 32, at 144 (stating that “despite repeated exhortations by scholars to either clarify or dispense with the concept of self-execution, courts continue to employ the term, and the ambiguity surrounding its usage has only increased with the passage of time”).