Publications

In last week's argument in Hall Street Assocs. v. Mattel, Inc., No. 06-989 (U.S.), the Supreme Court considered whether parties to an arbitration agreement can expand the scope of review beyond what the Federal Arbitration Act specifically provides. Several Justices appeared to support allowing parties to expand judicial review contractually, while Chief Justice Roberts and Justice Souter expressed the possibility that Congress made a deliberate, political choice to constrain judicial review of arbitration decisions. The Supreme Court also heard arguments last week in Department of Revenue of Kentucky v. Davis, No. 06-666 (U.S.), in which the Court will address whether a Kentucky state statute providing a tax exemption for interest income derived from bonds issued by Kentucky, but no exemption for bonds issued by other states, is constitutional. Justice Kennedy was skeptical that states should be allowed to exempt revenue from their own municipal bonds, whereas taxing revenue from those issued by other states. Nevertheless, several of the other Justices expressed the view that states may favor bonds issued in-state because such bonds finance the most basic governmental functions.