WASHINGTON, DC (March 31, 2008) – The Supreme Court gave Morrison & Foerster LLP a victory in a much-watched Federal Arbitration Act case. In Hall Street Associates LLC v. Mattel, Inc., No. 06-989 (March 25, 2008), the Court held that an arbitrator’s award under the Federal Arbitration Act is subject to judicial review under the statute only on the limited grounds set forth by Congress.
In an opinion authored by Justice Souter, the Court explained that the federal statute supports “a national policy favoring arbitration with just the limited review needed to maintain arbitration’s essential virtue of resolving disputes straightaway.” Efforts to expand judicial review of arbitration awards are contrary to the intent of Congress and cannot be enforced when the parties seek to rely on the expedited enforcement proceedings provided in the statute, the Court held. Three Justices dissented. This significant ruling applies to all arbitration agreements governed by the Federal Arbitration Act.
“The Court’s decision makes clear that Congress did not intend for the value of arbitration to be undermined by allowing an arbitration award to be subjected to a ‘do over’ in court,” explains Beth S. Brinkmann of Morrison & Foerster LLP, who argued the case for Mattel, Inc. before the Supreme Court.