In Badgerow v. Walters, No. 20-1143 (U.S. 3/31/22) the Supreme Court settled a circuit court split on the scope of federal court jurisdiction in motions to vacate or confirm arbitration awards under Sections 9 and 10 of the Federal Arbitration Act (“FAA”). Contrary to motions to compel arbitration under Section 4 of the FAA where the federal courts can “look through” to the underlying action to find a basis for federal jurisdiction (Vaden v. Discover Bank, 566 U.S. 49 (2009)), the court held the same approach does not apply in motions to confirm or vacate an arbitration award under Sections 9 and 10 of the FAA. In this case, the plaintiff Badgerow received an unfavorable arbitration decision on her claim against her employer which asserted violations of state and federal employment law. She filed a petition to vacate the award in state court, and the employer filed a motion to confirm the award in federal court. (Both parties were residents of the same state, so no diversity of jurisdiction was present). Irrespective of the federal law claims in the underlying action, based on the statutory language in the FAA the court held the employer’s motion to compel did not raise a federal question, and there was no basis for federal jurisdiction. (Justice Breyer filed a dissent).
Supreme Court Settles “Look Through” Jurisdictional Issue for Motions to Confirm or Vacate under FAA
