March 31, 2022
Decided March 31, 2022
Badgerow v. Walters, No. 20-1143
Today, the Supreme Court held 8-1 that federal jurisdiction to confirm or vacate an arbitral award under Sections 9 and 10 of the Federal Arbitration Act must exist independent of the underlying controversy—that is, courts cannot “look through” to the underlying dispute to establish federal subject-matter jurisdiction.
Background: Under the Federal Arbitration Act (FAA), a party to an arbitration agreement may ask a federal court to confirm or vacate an arbitral award. 9 U.S.C. §§ 9, 10. A Louisiana resident initiated an arbitration against her Louisiana employer, alleging unlawful termination under federal and state law. After the arbitrators dismissed the claims, the plaintiff sued in state court to vacate the arbitral award. The defendant removed the case to federal court based on the underlying federal employment claims and asked the court to confirm the arbitrators’ decision. The Fifth Circuit held that the federal court had jurisdiction by “looking through” the plaintiff’s petition to the underlying federal employment claims.
Issue: Do federal courts have subject-matter jurisdiction to confirm or vacate an arbitral award under Sections 9 and 10 of the Federal Arbitration Act when the only basis for jurisdiction is that the underlying dispute involved a federal question?
Court’s Holding: No. Federal jurisdiction to confirm or vacate an arbitration award must exist independent of the underlying controversy, and it is not sufficient for federal jurisdiction that the underlying claim the parties arbitrated arose under federal law.
“Congress has made its call. We will not impose uniformity on the statute’s non-uniform jurisdictional rules.”
Justice Kagan, writing for the Court
What It Means:
The Court’s opinion is available here.
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