Punitive Damages in Arbitration: Mastrobuono and the Need for Creation of a National Court of Commercial Appeals

Victor Williams, The Catholic University of America, Columbus School of Law


This article first discusses punitive damage awards in domestic and international arbitration and generally examines the national law conflict that exists over the recoverability of such awards. In the second section, the article reviews the conflictive decisions in Mastrobuono v. Shearson Lehman Hutton, Inc., J. Alexander Securities v. Mendez, and Baravati v. Josephthal, Lyon & Ross, Inc. The article next reviews and comments on the Supreme Court's 1995 Mastrobuono decision, which finally addressed the five year conflict of national law.

Fourth, the article suggests that these conflicting commercial cases raise a more general problem involving the inconsistency of national law in all jurisprudential areas. The article posits that allowing such chronic inconsistency to continued unabated is unacceptable; that the U.S. Supreme Court's incredible shrinking docket, which produced less than ninety published opinions during each of its two most recent terms, is unlikely or unable to provide any satisfactory measure of national law consistency, especially for the commercial and business law field. The article, therefore, proposes that the political branches, while planning generally for an expansion and subject matter restructuring of the federal judiciary (including a formal separation of criminal from civil cases by creating separate criminal courts) should "ordain and establish" a separate, third-tier, non-regional National Court of Commercial Appeals to insure foundational consistency in the area of national commercial law.