Source: http://supreme.nolo.com/us/552/06-989/
Timestamp: 2020-04-08 04:18:53
Document Index: 656935627

Matched Legal Cases: ['§10', '§10', '§10', '§10', '§9', '§10', '§11', '§9', '§10', '§9', '§10', '§11']

Hall Street Associates, L. L. C. v. Mattel, Inc. - Volume 552 - Docket Number 06-989 - 2008 - Syllabus - US Supreme Court Center - USSC Cases - Nolo
US Supreme Court Center > Volume 552 > Hall Street Associates, L. L. C. v. Mattel, Inc. 06-989 (2008)
Hall Street Associates, L. L. C. v. Mattel, Inc. - 06-989 (2008)
After a bench trial sustained respondent tenant’s (Mattel) right to terminate its lease with petitioner landlord (Hall Street), the parties proposed to arbitrate Hall Street’s claim for indemnification of the costs of cleaning up the lease site. The District Court approved, and entered as an order, the parties’ arbitration agreement, which, inter alia, required the court to vacate, modify, or correct any award if the arbitrator’s conclusions of law were erroneous. The arbitrator decided for Mattel, but the District Court vacated the award for legal error, expressly invoking the agreement’s legal-error review standard and citing the Ninth Circuit’s LaPine decision for the proposition that the FAA allows parties to draft a contract dictating an alternative review standard. On remand, the arbitrator ruled for Hall Street, and the District Court largely upheld the award, again applying the parties’ stipulated review standard. The Ninth Circuit reversed, holding the case controlled by its Kyocera decision, which had overruled LaPine on the ground that arbitration-agreement terms fixing the mode of judicial review are unenforceable, given the exclusive grounds for vacatur and modification provided by FAA §§10 and 11.
1. The FAA’s grounds for prompt vacatur and modification of awards are exclusive for parties seeking expedited review under the FAA. The Court rejects Hall Street’s two arguments to the contrary. First, Hall Street submits that expandable judicial review has been accepted as the law since Wilko v. Swan, 346 U. S. 427. Although a Wilko statement—“the interpretations of the law by the arbitrators in contrast to manifest disregard are not subject, in the federal courts, to judicial review for error in interpretation,” id., at 436–437 (emphasis added)—arguably favors Hall Street’s position, arguable is as far as it goes. Quite apart from the leap from a supposed judicial expansion by interpretation to a private expansion by contract, Hall Street overlooks the fact that the Wilko statement expressly rejects just what Hall Street asks for here, general review for an arbitrator’s legal errors. Moreover, Wilko’s phrasing is too vague to support Hall Street’s interpretation, since “manifest disregard” can be read as merely referring to the §10 grounds collectively, rather than adding to them, see, e.g., Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U. S. 614, 656, or as shorthand for the §10 subsections authorizing vacatur when arbitrators were “guilty of misconduct” or “exceeded their powers.” Second, Hall Street says that the agreement to review for legal error ought to prevail simply because arbitration is a creature of contract, and the FAA is motivated by a congressional desire to enforce such agreements. Dean Witter Reynolds Inc. v. Byrd, 470 U. S. 213, 220. This argument comes up short because, although there may be a general policy favoring arbitration, the FAA has textual features at odds with enforcing a contract to expand judicial review once the arbitration is over. Even assuming §§10 and 11 could be supplemented to some extent, it would stretch basic interpretive principles to expand their uniformly narrow stated grounds to the point of legal review generally. But §9 makes evident that expanding §10’s and §11’s detailed categories at all would rub too much against the grain: §9 carries no hint of flexibility in unequivocally telling courts that they “must” confirm an arbitral award, “unless” it is vacated or modified “as prescribed” by §§10 and 11. Instead of fighting the text, it makes more sense to see §§9–11 as the substance of a national policy favoring arbitration with just the limited review needed to maintain arbitration’s essential virtue of resolving disputes straightaway. Dean Witter, supra, at 217, 219, distinguished. Pp. 7–12.
2. In holding the §10 and §11 grounds exclusive with regard to enforcement under the FAA’s expedited judicial review mechanisms, this Court decides nothing about other possible avenues for judicial enforcement of awards. Accordingly, this case must be remanded for consideration of independent issues. Because the arbitration agreement was entered into during litigation, was submitted to the District Court as a request to deviate from the standard sequence of litigation procedure, and was adopted by the court as an order, there is some question whether it should be treated as an exercise of the District Court’s authority to manage its cases under Federal Rule of Civil Procedure 16. This Court ordered supplemental briefing on the issue, but the parties’ supplemental arguments implicate issues that have not been considered previously in this litigation and could not be well addressed for the first time here. Thus, the Court expresses no opinion on these matters beyond leaving them open for Hall Street to press on remand. Pp. 13–15.
Powered by Justia US Supreme Court Center: Hall Street Associates, L. L. C. v. Mattel, Inc. - 06-989 (2008)