Eugene, In your mind does the constitutional difficulty arise from the court choosing a Muslim arbitrator under the contract or from the enforcement of a contract involving religious terms?
The former; I don't see any inherent problem in enforcing the results of a religious arbitration. Suppose, for example, that the parties had -- pursuant to the contract -- chosen Muslim arbitrators, who had arbitrated the dispute, and then one the parties sought to enforce the arbitration award in court. Could the other party defend on the ground that the court was being asked to enforce an arbitration that was infected with unconstitutional religious discrimination? Frankly, I am skeptical of the equal protection argument here. I don't see how you can get an equal protection violation without doing some sort of Shelly v. Kramer end run around the state action doctrine, and I think that such an end run is both unlikely to succeed and as a normative matter should be done only sparingly. I'm no great fan of the more expansive readings of Shelly. But when a government actor is deciding who gets a particular (lucrative) position based on that person's religion, it seems to me that state action is eminently present, or more specifically that the government actor is discriminating based on religion in presumptive violation of the Free Exercise Clause and the First Amendment. To be sure, the government actor isn't motivated by religious animus; it's just trying to enforce a contract. But it is still deliberately treating people different from other people based on whether they are Muslims or not. (When the court just enforces an arbitration conducted by a private party, there is not such discrimination by a government entity, even if the private party discriminates based on religion or sex in selecting the arbitrators.) I think that we want to allow people to use the law to create illiberal arrangements, so long as such arrangements don't pose a threat to the basic liberal order. The widespread use of racially restrictive covenants given the American experience with race posed such a threat. I have a hard time seeing that voluntary commercial arbitration under sharia law poses such a threat. Hence, in response to Marci's initial question of what about a contract that called for an arbiter based on race or gender, my default position is to say "No problem. Let people write the contracts that they wish to write." This, however, is only a default. If Marci and other skeptics can tell a sufficiently compelling story about how this particular practice or form of private discrimination threatens the liberal order, then I think that we have a reason for denying enforcement. (I suspect that Marci and I would differ on what constitutes a threat to the liberal order.) Even in these cases, I think that as a doctrinal matter it makes more sense to do this via things like the void as against public policy doctrine under contract law rather than through a convoluted reading of the equal protection clause. I think that the neutral principles doctrine has a bit more traction, although even there I am skeptical. At some point I think that the first amendment is implicated when a court makes religious identifications, but it seems to me that in order for courts to be cognicient of religion in ways that I am assuming are uncontroversial -- such as for purposes of providing free exercise protection or policing establishment clause violations -- courts will have to be able to make religious identifications. It is not clear to me that a contract calling for a Saudi national who is a Muslim will -- as a practical matter -- raise these sorts of problems. A contract calling for "a pious and orthodox Muslim" in contrast, might.
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