Contracting Around Hall Street

Abstract

This Article examines the extent to which expanded court review of arbitration awards remains available after the Supreme Court’s decision in Hall Street Associates, L.L.C. v. Mattel, Inc. - that is, whether parties can contract around Hall Street. It finds only a limited likelihood that expanded-review provisions are enforceable after Hall Street in federal court, but a greater likelihood in state court (assuming the state arbitration law permits parties to contract for expanded review). First, contract provisions limiting the arbitrators’ authority to make legal errors should permit expanded review under the FAA (in both federal court and state court), but courts since Hall Street have not been receptive to the argument. Second, under a narrow interpretation of the Supreme Court’s decision in Volt, parties are unlikely to be able to contract out of the FAA altogether. As a result, confirmation of an award in federal court under the FAA likely would preclude a court from relying on an expanded-review provision authorized by state law to vacate the award. Third, whether expanded review is available in state court depends on (1) whether state arbitration law authorizes expanded review; and (2) the scope of FAA preemption. Under at least some theories of FAA preemption, state laws authorizing expanded review would not be preempted by the FAA in state court.