On September 29, 2023, the United States Supreme Court (“SCOTUS”) granted certiorari in Bissonnette v. LePage Bakeries Park St., LLC, No. 23-51 (U.S.), a case that concerns the scope of Section 1 of the Federal Arbitration Act (“FAA”). Section 1 exempts from the FAA “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” 9 U.S.C. § 1. A key question presented by the text of Section 1 is whether the contract is a “contract[] of employment” of a “class of workers engaged in foreign or interstate commerce.”  SCOTU ..read more

On November 3, 2023, the United States Supreme Court (“SCOTUS”) granted certiorari in Coinbase, Inc. v. Suski, No. 23-3 (U.S.) (“Coinbase II”), a case that is related to Coinbase, Inc. v. Bielski, 143 S. Ct. 1915 (2023) (“Coinbase I”), which was decided on June 23, 2023, and discussed here. Coinbase II involves an issue entirely different from Coinbase I: the application of a “delegation provision”—an agreement to arbitrate arbitrability disputes. That issue arises in a unique context: who decides whether a dispute concerning a later agreement is arbitrable when that later agreement, among oth ..read more

The U.S. Supreme Court decision, Badgerow v. Walters, 142 S. Ct. 1310 (2022) (discussed here), requires that an independent basis for subject matter jurisdiction (usually diversity) must appear on the face of petitions to confirm, vacate, or modify arbitration awards, and, by extension, petitions to enforce arbitral subpoenas or appoint arbitrators. See Badgerow, 142 S. Ct. at 1314, 1320. That independent basis for subject matter jurisdiction cannot be established by “looking through” to the underlying arbitration proceeding. In other words, the federal court cannot base subject matt ..read more

Introduction The U.S. Court of Appeals for the Eighth Circuit recently decided a case that provides a good—and simple—example of how subject matter jurisdiction can be a trap for the unwary, especially for parties seeking to confirm or vacate arbitration awards under the Federal Arbitration Act (the “FAA”). In Prospect Funding Holdings (N.Y.) v. Ronald J. Palagi, P.C., No. 22-1871, slip op. (8th Cir. Aug. 7, 2023), the Eighth Circuit vacated a district court’s judgment vacating two arbitration awards because the petitioner failed to plead the citizenship of the parties and therefore could not ..read more

Forum Selection Clauses: Introduction to Kelman Sometimes appellate courts render opinions that helpfully explain somewhat complexed or arcane procedural rules. The Second Circuit’s decision in Rabinowitz v. Kelman, No. 22-1747, slip op. (July 24, 2023) is of this ilk, and is one that should be consulted not only when litigating forum-selection-related issues, but also for purposes of drafting forum selection clauses. Kelman— which arose out of a petition filed in U.S. District Court for the Southern District of New York (the “SDNY”) to confirm a rabbinical arbitration award—addressed two issu ..read more

Introduction: Assignment and the Separability Doctrine  Suppose A and B enter a contract imposing mutual obligations on them. The contract contains an arbitration agreement requiring arbitration of all disputes arising out of or related to the contract. The contract does not purport to prohibit assignment, and the parties’ rights under the contract are otherwise capable of assignment. A assigns to assignee C its rights to receive performance under the contract. B commences an action against A under the contract and A demands arbitration. B resists arbitration, arguing that A has assigned ..read more

Introduction: Third Circuit’s Ruling on Expert-Determination Clauses Versus Arbitration Clauses Not every dispute resolution clause contained in a contract is an arbitration clause, let alone an arbitration clause governed by the Federal Arbitration Act (“FAA”). Absent a statute stating otherwise, dispute resolution clauses that are not arbitration agreements must be enforced via ordinary contract-law rules only, not through FAA- or state-arbitration-statute-authorized motions to compel arbitration, motions to stay litigation pending arbitration, or motions to confirm, vacate, or modify award ..read more

Introduction: Must District Courts Grant a Stay Pending Appeal of an Order Denying a Motion to Compel?   Section 16(a) of the Federal Arbitration Act authorizes interlocutory appeals of orders denying motions to compel arbitration. 9 U.S.C. § 16(a)(1)(B) & (C). This is a “rare statutory exception to the usual [federal] rule that parties may not appeal before final judgment.”   Coinbase, Inc. v. Bielski, 599 U.S. ___, No. 22-105, slip op. at 3 (June 23, 2023).  It authorizes interlocutory “appeals of orders denying—but not of orders granting—motions to compel arbit ..read more

Failure to Follow Procedural Rules: Introduction Under both the Federal Arbitration Act (the “FAA”) and Section 301 of the National Labor Relations Act (the “NLRA”), arbitrators exceed their powers by making awards that do not “draw [their] essence” from the parties’ agreement. See Oxford Health Plans LLC v. Sutter, 569 U.S. 564, 568-69 (2013) (FAA); Stolt-Nielsen S.A. v. Animalfeeds Int’l Corp., 559 U.S. 662, 671-72 (2010) (FAA); Eastern Associated Coal v. United Mine Workers, 531 U.S. 57, 62 (2000) (NLRA). (See, e.g., here, here, here, and here.) In a case arising under Section 301 of the NL ..read more

Introduction: Presumption of Arbitrability Thurgood Marshall U.S. Courthouse, 40 Centre Street, New York, NY 10007 The presumption of arbitrability—grounded in the federal policy in favor of arbitration—is an important but sometimes misunderstood rule of Labor-Management-Relations-Act (“LMRA”)- and Federal-Arbitration-Act (“FAA”) arbitration law. According to the presumption, “where. . . parties concede that they have agreed to arbitrate some matters pursuant to an arbitration clause, the law’s permissive policies in respect to arbitration counsel that any doubts concerning the scope of arbi ..read more