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Oct 2007
October 01, 2007

Supreme Court Will Decide Whether Parties Can Contract for Heightened Judicial Review of Arbitration Awards

On November 7, 2007, the U.S. Supreme Court will hold oral arguments in Hall Street Assoc., L.L.C. v. Mattel, Inc., a case involving the power to give federal courts greater power to overturn arbitration awards than the Federal Arbitration Act envisions. The issues arise out of a plain vanilla lease dispute that the landlord, Hall Street, and the tenant, Mattel, agreed to resolve through arbitration. But the parties' arbitration agreement was unusual in that it purported to authorize the District Court to override the arbitrator's decision if "the arbitrator's conclusions of law are erroneous" (a standard the Michigan courts apply, but one the federal courts do not). After the arbitrator issued a decision in favor of Mattel, Hall appealed, and the District Court held that the arbitrator had misapplied the law. The Ninth Circuit reversed, holding that the parties did not have the power to contract around the Federal Arbitration Act's list of circumstances meriting judicial review.

It is likely that the Court will issue its decision in early 2008. Interested parties should contact the Chair of our Appellate Practice Group for more information about filing an amicus curiae brief in this case.

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