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Editor: Mitchell H. Rubinstein
New York Law School

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Tuesday, May 29, 2007

Supreme Court Grants Cert. To Determine If Parties To An Arbitration Agreement Can Alter The Standard of Judicial Review Set Forth in FAA

Last year, I wrote a law review article entitled Altering Judicial Review Of Labor Arbitration Awards, 2006 Mich. St. L. Rev. 235 (Summer). In it I discussed the conflict in the Circuits concerning whether parties can contractually alter the standard of judicial review governed by statute.  On May 29, 2007, the Supreme Court granted cert. to resolve this conflict. The case under review is Hall Street Associates v. Mattel, Inc., 196 Fed. Appx. 476, 2006 WL 2193411 (9th Cir. Aug. 1, 2006)(westlaw registration required). However, this issue actually arose at an earlier stage of the litigation. Hall Street Associates v. Mattel, Inc., 113 Fed. Appx. 272 (westlaw registration required).

This case is an important case to watch because it has implications for contract law as well as arbitration and alternative dispute resolution law. Amazingly, both of these cases which are now headed to the Supreme Court were not officially reported.

The focus of my article was on labor arbitration which is very different from commercial arbitration because the parties are involved in a continuing relationship and a different statute (29 U.S.C. Sec. 185) governs judicial review of labor arbitration decisions. I maintained that parties to a collective bargaining agreement should have the authority to alter the standard of judicial review as a result of freedom of contract and labor law principles.

Michael T. Garone and Michael A. Cohen of Schwabe Williamson & Wayatt represents Hall Street and Marc D. Blackman of Ransom & Blackman as well as  Shirley Hufstedler, Peter Hsiao and Siegmund Shyu of Morrison & Foster represent Mattel.

Update: July 12, 2007. The July 12, 2007 New York Law Journal has an excellent article about this case written by Professor Sam Estreicher and Steven Bennett. It is available here.  

Mitchell H. Rubinstein      

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Comments

Suppose parties had agreed to a an arbitration agreement governed by English arbitration law, before the 1996 Arbitration Act was enacted. Lesotho Highlands Develop. Auth. v. Impregilo SpA, [2005] UKHL 43. Under Volt v Leland Stanford, the parties choice of arbitration law would be enforceable. English law before 1996 allowed broader judicial review of an award. If the contracting parties want a broader judicial review, they can so contract. Enforcement may not be by the expedited FAA, but the federal district court has jurisdiction provided there is diversity and a sufficient amount in controversy. A challenge to the "award" should be treated as an attack on an expert's certification. Restatement of Contracts First Section 303; U.S. v. Moorman, 338 U.S. 457 (1950); cf. Ranger v. Great Western R.R., 5 HLC 72 (1854)(Isambard Kingdom Brunel as dispute decider) E Goldberg

Posted by: E Goldberg | Sep 21, 2007 8:56:10 AM

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