In the case of Rodriguez de Quijas et al. v. Shearson/American Express, Inc., 1988, the U.S Supreme Court ruled that federal law did not prevent parties from agreeing to arbitrate claims under the Securities Act of 1933. The plaintiffs had purchased securities through Shearson/American Express and later alleged that they were misled about their investments' riskiness. They filed a lawsuit in Texas state court but were compelled by a federal district court to abide by an arbitration agreement they had signed when opening their accounts with Shearson/ American Express. The Fifth Circuit Court of Appeals reversed this decision, citing Wilko v Swan (1953), which held that agreements to arbitrate future disputes are unenforceable under section 14 of the Securities Act because it would diminish investor protection rights provided by Congress. However, upon reaching the Supreme Court, it was decided in favor of Shearson/American Express on grounds that Wilko's rationale was flawed and should be overruled as it underestimated arbitration's ability to protect statutory rights adequately.

In the dissenting opinion for Rodriguez de Quijas et al. v. Shearson/American Express, Inc., Justice Blackmun argued that the majority's decision to overrule Wilko v. Swan was a departure from established legal principles and an unnecessary intrusion into Congress' domain. He contended that there were no compelling reasons to overturn precedent, especially since it had been reaffirmed multiple times by previous courts and relied upon in numerous lower court decisions. Furthermore, he believed that this move would undermine investor confidence in securities markets as arbitration may not provide adequate protection against fraud or misconduct by brokers-dealers due to its informal nature compared with judicial proceedings.