Term: 2007
Docket: 06-989
Hall Street Associates, L.l.c. v. Mattel, Inc
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06-989 HALL STREET ASSOC. V. MATTEL, INC DECISION BELOW: 196 Fed. Appx. 476 THE PARTIES ARE DIRECTED TO FILE SUPPLEMENTAL BRIEFS ADDRESSING THE FOLLOWING QUESTIONS: (1) DOES AUTHORITY EXIST OUTSIDE THE FEDERAL ARBITRATION ACT (FAA) UNDER WHICH A PARTY TO LITIGATION BEGUN WITHOUT RELIANCE ON THE FAA MAY ENFORCE A PROVISION FOR JUDICIAL REVIEW OF AN ARBITRATION AWARD? (2) IF SUCH AUTHORITY DOES EXIST, DID THE PARTIES, IN AGREEING TO ARBITRATE, RELY IN WHOLE OR PART ON THAT AUTHORITY? (3) HAS PETITIONER IN THE COURSE OF THIS LITIGATION WAIVED ANY RELIANCE ON AUTHORITY OUTSIDE THE FAA FOR ENFORCING THE JUDICIAL REVIEW PROVISION OF THE PARTIES’ ARBITRATION AGREEMENT? EXPEDITED BRIEFING SCHEDULE CERT. GRANTED 5/29/2007 QUESTION PRESENTED: 1. Did the Ninth Circuit Court of Appeals err when it held, in conflict with several other federal Courts of Appeals, that the Federal Arbitration Act (“FAA”) precludes a federal court from enforcing the parties’ clearly expressed agreement providing for more expansive judicial review of an arbitration award than the narrow standard of review otherwise provided for in the FAA? LOWER COURT CASE NUMBER: 05-35721
In the case of Hall Street Associates, L.L.C. v. Mattel, Inc., the U.S Supreme Court ruled that parties in arbitration cannot contract for judicial review of errors in an arbitrator's decision. The dispute began when Mattel terminated its lease with Hall Street and a disagreement arose over who should pay for cleaning up contaminated well water on the property. An initial arbitration agreement was made but both parties later agreed to have a federal judge review any arbitration award for legal error or clear factual mistake - effectively expanding upon standard grounds for vacating or modifying an arbitral decision under sections 10 and 11 of Federal Arbitration Act (FAA). However, when appealed to the Supreme Court after various lower court decisions, it held that FAA provisions were exclusive – meaning they could not be supplemented by agreement.
In the dissenting opinion for Hall Street Associates, L.L.C. v. Mattel, Inc., Justice Stevens argued that the majority's interpretation of sections 10 and 11 of the Federal Arbitration Act (FAA) was too narrow. He contended that these provisions should not be read as an exhaustive list of grounds on which a court may vacate or modify an arbitration award but rather as minimum guarantees to parties in arbitration proceedings. Furthermore, he disagreed with the majority’s view that allowing parties to contractually agree on additional grounds for judicial review would undermine arbitration's efficiency and speediness because such agreements are voluntary and can serve legitimate business interests by providing more certainty about potential legal risks involved in complex transactions.
