(Slip Opinion) OCTOBER TERM, 2007 1
Syllabus
NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
being done in connection with this case, at the time the opinion is issued.
The syllabus constitutes no part of the opinion of the Court but has been
prepared by the Reporter of Decisions for the convenience of the reader.
See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.
SUPREME COURT OF THE UNITED STATES
Syllabus
HALL STREET ASSOCIATES, L. L. C. v. MATTEL, INC.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
THE NINTH CIRCUIT
No. 06–989. Argued November 7, 2007—Decided March 25, 2008
The Federal Arbitration Act (FAA), 9 U. S. C. §§9–11, provides expe
dited judicial review to confirm, vacate, or modify arbitration awards.
Under §9, a court “must” confirm an award “unless” it is vacated,
modified, or corrected “as prescribed” in §§10 and 11. Section 10 lists
grounds for vacating an award, including where the award was pro
cured by “corruption,” “fraud,” or “undue means,” and where the arbi
trators were “guilty of misconduct,” or “exceeded their powers.” Un
der §11, the grounds for modifying or correcting an award include
“evident material miscalculation,” “evident material mistake,” and
“imperfect[ions] in [a] matter of form not affecting the merits.”
After a bench trial sustained respondent tenant’s (Mattel) right to
terminate its lease with petitioner landlord (Hall Street), the parties
proposed to arbitrate Hall Street’s claim for indemnification of the
costs of cleaning up the lease site. The District Court approved, and
entered as an order, the parties’ arbitration agreement, which, inter
alia, required the court to vacate, modify, or correct any award if the
arbitrator’s conclusions of law were erroneous. The arbitrator de
cided for Mattel, but the District Court vacated the award for legal
error, expressly invoking the agreement’s legal-error review standard
and citing the Ninth Circuit’s LaPine decision for the proposition that
the FAA allows parties to draft a contract dictating an alternative re
view standard. On remand, the arbitrator ruled for Hall Street, and
the District Court largely upheld the award, again applying the par
ties’ stipulated review standard. The Ninth Circuit reversed, holding
the case controlled by its Kyocera decision, which had overruled LaP
ine on the ground that arbitration-agreement terms fixing the mode
of judicial review are unenforceable, given the exclusive grounds for
vacatur and modification provided by FAA §§10 and 11.
2 HALL STREET ASSOCIATES, L.L.C. v. MATTEL, INC.
Syllabus
Held:
1. The FAA’s grounds for prompt vacatur and modification of
awards are exclusive for parties seeking expedited review under the
FAA. The Court rejects Hall Street’s two arguments to the contrary.
First, Hall Street submits that expandable judicial review has been
accepted as the law since Wilko v. Swan, 346 U. S. 427. Although a
Wilko statement—“the interpretations of the law by the arbitrators
in contrast to manifest disregard are not subject, in the federal
courts, to judicial review for error in interpretation,” id., at 436–437
(emphasis added)—arguably favors Hall Street’s position, arguable is
as far as it goes. Quite apart from the leap from a supposed judicial
expansion by interpretation to a private expansion by contract, Hall
Street overlooks the fact that the Wilko statement expressly rejects
just what Hall Street asks for here, general review for an arbitrator’s
legal errors. Moreover, Wilko’s phrasing is too vague to support Hall
Street’s interpretation, since “manifest disregard” can be read as
merely referring to the §10 grounds collectively, rather than adding
to them, see, e.g., Mitsubishi Motors Corp. v. Soler Chrysler-
Plymouth, Inc., 473 U. S. 614, 656, or as shorthand for the §10 sub
sections authorizing vacatur when arbitrators were “guilty of mis
conduct” or “exceeded their powers.” Second, Hall Street says that
the agreement to review for legal error ought to prevail simply be
cause arbitration is a creature of contract, and the FAA is motivated
by a congressional desire to enforce such agreements. Dean Witter
Reynolds Inc. v. Byrd, 470 U. S. 213, 220. This argument comes up
short because, although there may be a general policy favoring arbi
tration, the FAA has textual features at odds with enforcing a con
tract to expand judicial review once the arbitration is over. Even as
suming §§10 and 11 could be supplemented to some extent, it would
stretch basic interpretive principles to expand their uniformly narrow
stated grounds to the point of legal review generally. But §9 makes
evident that expanding §10’s and §11’s detailed categories at all
would rub too much against the grain: §9 carries no hint of flexibility
in unequivocally telling courts that they “must” confirm an arbitral
award, “unless” it is vacated or modified “as prescribed” by §§10 and
11. Instead of fighting the text, it makes more sense to see §§9–11 as
the substance of a national policy favoring arbitration with just the
limited review needed to maintain arbitration’s essential virtue of re
solving disputes straightaway. Dean Witter, supra, at 217, 219, dis
tinguished. Pp. 7–12.
2. In holding the §10 and §11 grounds exclusive with regard to en
forcement under the FAA’s expedited judicial review mechanisms,
this Court decides nothing about other possible avenues for judicial
enforcement of awards. Accordingly, this case must be remanded for
Cite as: 552 U. S. ____ (2008) 3
Syllabus
consideration of independent issues. Because the arbitration agree
ment was entered into during litigation, was submitted to the Dis
trict Court as a request to deviate from the standard sequence of liti
gation procedure, and was adopted by the court as an order, there is
some question whether it should be treated as an exercise of the Dis
trict Court’s authority to manage its cases under Federal Rule of
Civil Procedure 16. This Court ordered supplemental briefing on the
issue, but the parties’ supplemental arguments implicate issues that
have not been considered previously in this litigation and could not
be well addressed for the first time here. Thus, the Court expresses
no opinion on these matters beyond leaving them open for Hall Street
to press on remand. Pp. 13–15.
196 Fed. Appx. 476, vacated and remanded.
SOUTER, J., delivered the opinion of the Court, in which ROBERTS,
C. J., and THOMAS, GINSBURG, and ALITO, JJ., joined, and in which
SCALIA, J., joined as to all but footnote 7. STEVENS, J., filed a dissenting
opinion, in which KENNEDY, J., joined. BREYER, J., filed a dissenting
opinion.
Cite as: 552 U. S. ____ (2008) 1
Opinion of the Court
NOTICE: This opinion is subject to formal revision before publication in the
preliminary print of the United States Reports. Readers are requested to
notify the Reporter of Decisions, Supreme Court of the United States, Wash
ington, D. C. 20543, of any typographical or other formal errors, in order
that corrections may be made before the preliminary print goes to press.
SUPREME COURT OF THE UNITED STATES
_________________
No. 06–989
_________________
HALL STREET ASSOCIATES, L.L.C., PETITIONER v.
MATTEL, INC.
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE NINTH CIRCUIT
[March 25, 2008]
JUSTICE SOUTER delivered the opinion of the Court.*
The Federal Arbitration Act (FAA or Act), 9 U. S. C. §1
et seq., provides for expedited judicial review to confirm,
vacate, or modify arbitration awards. §§9–11 (2000 ed.
and Supp. V). The question here is whether statutory
grounds for prompt vacatur and modification may be
supplemented by contract. We hold that the statutory
grounds are exclusive.
I
This case began as a lease dispute between landlord,
petitioner Hall Street Associates, L. L. C., and tenant,
respondent Mattel, Inc. The property was used for many
years as a manufacturing site, and the leases provided
that the tenant would indemnify the landlord for any costs
resulting from the failure of the tenant or its predecessor
lessees to follow environmental laws while using the
premises. App. 88–89.
Tests of the property’s well water in 1998 showed high
levels of trichloroethylene (TCE), the apparent residue of
——————
* JUSTICE SCALIA joins all but footnote 7 of this opinion.
2 HALL STREET ASSOCIATES, L.L.C. v. MATTEL, INC.
Opinion of the Court
manufacturing discharges by Mattel’s predecessors be
tween 1951 and 1980. After the Oregon Department of
Environmental Quality (DEQ) discovered even more pol
lutants, Mattel stopped drawing from the well and, along
with one of its predecessors, signed a consent order with
the DEQ providing for cleanup of the site.
After Mattel gave notice of intent to terminate the lease
in 2001, Hall Street filed this suit, contesting Mattel’s
right to vacate on the date it gave, and claiming that the
lease obliged Mattel to indemnify Hall Street for costs of
cleaning up the TCE, among other things. Following a
bench trial before the United States District Court for the
District of Oregon, Mattel won on the termination issue,
and after an unsuccessful try at mediating the indemnifi
cation claim, the parties proposed to submit to arbitration.
The District Court was amenable, and the parties drew up
an arbitration agreement, which the court approved and
entered as an order. One paragraph of the agreement
provided that
“[t]he United States District Court for the District of
Oregon may enter judgment upon any award, either
by confirming the award or by vacating, modifying or
correcting the award. The Court shall vacate, modify
or correct any award: (i) where the arbitrator’s find
ings of facts are not supported by substantial evi
dence, or (ii) where the arbitrator’s conclusions of law
are erroneous.” App. to Pet. for Cert. 16a.
Arbitration took place, and the arbitrator decided for
Mattel. In particular, he held that no indemnification was
due, because the lease obligation to follow all applicable
federal, state, and local environmental laws did not re
quire compliance with the testing requirements of the
Oregon Drinking Water Quality Act (Oregon Act); that Act
the arbitrator characterized as dealing with human health
as distinct from environmental contamination.
Cite as: 552 U. S. ____ (2008) 3
Opinion of the Court
Hall Street then filed a District Court Motion for Order
Vacating, Modifying And/Or Correcting the arbitration
decision, App. 4, on the ground that failing to treat the
Oregon Act as an applicable environmental law under the
terms of the lease was legal error. The District Court
agreed, vacated the award, and remanded for further
consideration by the arbitrator. The court expressly in
voked the standard of review chosen by the parties in the
arbitration agreement, which included review for legal
error, and cited LaPine Technology Corp. v. Kyocera Corp.,
130 F. 3d 884, 889 (CA9 1997), for the proposition that the
FAA leaves the parties “free . . . to draft a contract that
sets rules for arbitration and dictates an alternative stan
dard of review.” App. to Pet. for Cert. 46a.
On remand, the arbitrator followed the District Court’s
ruling that the Oregon Act was an applicable environ
mental law and amended the decision to favor Hall Street.
This time, each party sought modification, and again the
District Court applied the parties’ stipulated standard of
review for legal error, correcting the arbitrator’s calcula
tion of interest but otherwise upholding the award. Each
party then appealed to the Court of Appeals for the Ninth
Circuit, where Mattel switched horses and contended that
the Ninth Circuit’s recent en banc action overruling LaP
ine in Kyocera Corp. v. Prudential-Bache Trade Servs.,
Inc., 341 F. 3d 987, 1000 (2003), left the arbitration
agreement’s provision for judicial review of legal error
unenforceable. Hall Street countered that Kyocera (the
later one) was distinguishable, and that the agreement’s
judicial review provision was not severable from the sub
mission to arbitration.
The Ninth Circuit reversed in favor of Mattel in holding
that, “[u]nder Kyocera the terms of the arbitration agree
ment controlling the mode of judicial review are unen
forceable and severable.” 113 Fed. Appx. 272, 272–273
(2004). The Circuit instructed the District Court on re
4 HALL STREET ASSOCIATES, L.L.C. v. MATTEL, INC.
Opinion of the Court
mand to
“return to the application to confirm the original arbi
tration award (not the subsequent award revised after
reversal), and . . . confirm that award, unless . . . the
award should be vacated on the grounds allowable
under 9 U. S. C. §10, or modified or corrected under
the grounds allowable under 9 U. S. C. §11.” Id., at
273.
After the District Court again held for Hall Street and the
Ninth Circuit again reversed,1 we granted certiorari to
decide whether the grounds for vacatur and modification
provided by §§10 and 11 of the FAA are exclusive. 550
U. S. __ (2007). We agree with the Ninth Circuit that they
are, but vacate and remand for consideration of independ
ent issues.
II
Congress enacted the FAA to replace judicial indisposi
tion to arbitration with a “national policy favoring [it] and
plac[ing] arbitration agreements on equal footing with all
other contracts.” Buckeye Check Cashing, Inc. v.
Cardegna, 546 U. S. 440, 443 (2006). As for jurisdiction
over controversies touching arbitration, the Act does noth
ing, being “something of an anomaly in the field of federal-
court jurisdiction” in bestowing no federal jurisdiction but
rather requiring an independent jurisdictional basis.
Moses H. Cone Memorial Hospital v. Mercury Constr.
Corp., 460 U. S. 1, 25, n. 32 (1983); see, e.g., 9 U. S. C. §4
(providing for action by a federal district court “which,
——————
1 On remand, the District Court vacated the arbitration award, be
cause it supposedly rested on an implausible interpretation of the lease
and thus exceeded the arbitrator’s powers, in violation of 9 U. S. C. §10.
Mattel appealed, and the Ninth Circuit reversed, holding that implau
sibility is not a valid ground for vacating or correcting an award under
§10 or §11. 196 Fed. Appx. 476, 477–478 (2006).
Cite as: 552 U. S. ____ (2008) 5
Opinion of the Court
save for such [arbitration] agreement, would have jurisdic
tion under title 28”).2 But in cases falling within a court’s
jurisdiction, the Act makes contracts to arbitrate “valid,
irrevocable, and enforceable,” so long as their subject
involves “commerce.” §2. And this is so whether an
agreement has a broad reach or goes just to one dispute,
and whether enforcement be sought in state court or
federal. See ibid.; Southland Corp. v. Keating, 465 U. S. 1,
15–16 (1984).
The Act also supplies mechanisms for enforcing arbitra
tion awards: a judicial decree confirming an award, an
order vacating it, or an order modifying or correcting it.
§§9–11. An application for any of these orders will get
streamlined treatment as a motion, obviating the separate
contract action that would usually be necessary to enforce
or tinker with an arbitral award in court.3 §6. Under the
terms of §9, a court “must” confirm an arbitration award
“unless” it is vacated, modified, or corrected “as pre
scribed” in §§10 and 11. Section 10 lists grounds for vacat
ing an award, while §11 names those for modifying or
correcting one.4
——————
2 Because the FAA is not jurisdictional, there is no merit in the argu
ment that enforcing the arbitration agreement’s judicial review provi
sion would create federal jurisdiction by private contract. The issue is
entirely about the scope of judicial review permissible under the FAA.
3 Unlike JUSTICE STEVENS, see post, at 2 (dissenting opinion), we un
derstand this expedited review to be what each of the parties under
stood it was seeking from time to time; neither party’s pleadings were
amended to raise an independent state-law contract claim or defense
specific to the arbitration agreement.
4 Title 9 U. S. C. §10(a) (2000 ed., Supp. V) provides:
“(a) In any of the following cases the United States court in and for
the district wherein the award was made may make an order vacating
the award upon the application of any party to the arbitration—
“(1) where the award was procured by corruption, fraud, or undue
means;
“(2) where there was evident partiality or corruption in the arbitra
tors, or either of them;
6 HALL STREET ASSOCIATES, L.L.C. v. MATTEL, INC.
Opinion of the Court
The Courts of Appeals have split over the exclusiveness
of these statutory grounds when parties take the FAA
shortcut to confirm, vacate, or modify an award, with some
saying the recitations are exclusive, and others regarding
them as mere threshold provisions open to expansion by
agreement.5 As mentioned already, when this litigation
——————
“(3) where the arbitrators were guilty of misconduct in refusing to
postpone the hearing, upon sufficient cause shown, or in refusing to
hear evidence pertinent and material to the controversy; or of any other
misbehavior by which the rights of any party have been prejudiced; or
“(4) where the arbitrators exceeded their powers, or so imperfectly
executed them that a mutual, final, and definite award upon the
subject matter submitted was not made.”
Title 9 U. S. C. §11 (2000 ed.) provides:
“In either of the following cases the United States court in and for the
district wherein the award was made may make an order modifying or
correcting the award upon the application of any party to the arbitra
tion—
“(a) Where there was an evident material miscalculation of figures or
an evident material mistake in the description of any person, thing, or
property referred to in the award.
“(b) Where the arbitrators have awarded upon a matter not submit
ted to them, unless it is a matter not affecting the merits of the decision
upon the matter submitted.
“(c) Where the award is imperfect in matter of form not affecting the
merits of the controversy.
“The order may modify and correct the award, so as to effect the
intent thereof and promote justice between the parties.”
5 The Ninth and Tenth Circuits have held that parties may not con
tract for expanded judicial review. See Kyocera Corp. v. Prudential-
Bache Trade Servs., Inc., 341 F. 3d 987, 1000 (CA9 2003); Bowen v.
Amoco Pipeline Co., 254 F. 3d 925, 936 (CA10 2001). The First, Third,
Fifth, and Sixth Circuits, meanwhile, have held that parties may so
contract. See Puerto Rico Tel. Co. v. U. S. Phone Mfg. Corp., 427 F. 3d
21, 31 (CA1 2005); Jacada (Europe), Ltd. v. International Marketing
Strategies, Inc., 401 F. 3d 701, 710 (CA6 2005); Roadway Package
System, Inc. v. Kayser, 257 F. 3d 287, 288 (CA3 2001); Gateway Tech
nologies, Inc. v. MCI Telecommunications Corp., 64 F. 3d 993, 997 (CA5
1995). The Fourth Circuit has taken the latter side of the split in an
unpublished opinion, see Syncor Int’l Corp. v. McLeland, 120 F. 3d 262
(1997), while the Eighth Circuit has expressed agreement with the
former side in dicta, see UHC Management Co. v. Computer Sciences
Cite as: 552 U. S. ____ (2008) 7
Opinion of the Court
started, the Ninth Circuit was on the threshold side of the
split, see LaPine, 130 F. 3d, at 889, from which it later
departed en banc in favor of the exclusivity view, see
Kyocera, 341 F. 3d, at 1000, which it followed in this case,
see 113 Fed. Appx., at 273. We now hold that §§10 and 11
respectively provide the FAA’s exclusive grounds for expe
dited vacatur and modification.
III
Hall Street makes two main efforts to show that the
grounds set out for vacating or modifying an award are not
exclusive, taking the position, first, that expandable judi
cial review authority has been accepted as the law since
Wilko v. Swan, 346 U. S. 427 (1953). This, however, was
not what Wilko decided, which was that §14 of the Securi
ties Act of 1933 voided any agreement to arbitrate claims
of violations of that Act, see id., at 437–438, a holding
since overruled by Rodriguez de Quijas v. Shear-
son/American Express, Inc., 490 U. S. 477, 484 (1989).
Although it is true that the Court’s discussion includes
some language arguably favoring Hall Street’s position,
arguable is as far as it goes.
The Wilko Court was explaining that arbitration would
undercut the Securities Act’s buyer protections when it
remarked (citing FAA §10) that “[p]ower to vacate an
[arbitration] award is limited,” 346 U. S., at 436, and went
on to say that “the interpretations of the law by the arbi
trators in contrast to manifest disregard [of the law] are
not subject, in the federal courts, to judicial review for
error in interpretation,” id., at 436–437. Hall Street reads
this statement as recognizing “manifest disregard of the
law” as a further ground for vacatur on top of those listed
in §10, and some Circuits have read it the same way. See,
e.g., McCarthy v. Citigroup Global Markets, Inc., 463 F. 3d
——————
Corp., 148 F. 3d 992, 997–998 (1998).
8 HALL STREET ASSOCIATES, L.L.C. v. MATTEL, INC.
Opinion of the Court
87, 91 (CA1 2006); Hoeft v. MVL Group, Inc., 343 F. 3d 57,
64 (CA2 2003); Prestige Ford v. Ford Dealer Computer
Servs., Inc., 324 F. 3d 391, 395–396 (CA5 2003); Scott v.
Prudential Securities, Inc., 141 F. 3d 1007, 1017 (CA11
1998). Hall Street sees this supposed addition to §10 as
the camel’s nose: if judges can add grounds to vacate (or
modify), so can contracting parties.
But this is too much for Wilko to bear. Quite apart from
its leap from a supposed judicial expansion by interpreta
tion to a private expansion by contract, Hall Street over
looks the fact that the statement it relies on expressly
rejects just what Hall Street asks for here, general review
for an arbitrator’s legal errors. Then there is the vague
ness of Wilko’s phrasing. Maybe the term “manifest disre
gard” was meant to name a new ground for review, but
maybe it merely referred to the §10 grounds collectively,
rather than adding to them. See, e.g., Mitsubishi Motors
Corp. v. Soler Chrysler-Plymouth, Inc., 473 U. S. 614, 656
(1985) (STEVENS, J., dissenting) (“Arbitration awards are
only reviewable for manifest disregard of the law, 9
U. S. C. §§10, 207”); I/S Stavborg v. National Metal Con
verters, Inc., 500 F. 2d 424, 431 (CA2 1974). Or, as some
courts have thought, “manifest disregard” may have been
shorthand for §10(a)(3) or §10(a)(4), the subsections au
thorizing vacatur when the arbitrators were “guilty of
misconduct” or “exceeded their powers.” See, e.g., Kyocera,
supra, at 997. We, when speaking as a Court, have merely
taken the Wilko language as we found it, without embel
lishment, see First Options of Chicago, Inc. v. Kaplan, 514
U. S. 938, 942 (1995), and now that its meaning is impli
cated, we see no reason to accord it the significance that
Hall Street urges.
Second, Hall Street says that the agreement to review
for legal error ought to prevail simply because arbitration
is a creature of contract, and the FAA is “motivated, first
and foremost, by a congressional desire to enforce agree
Cite as: 552 U. S. ____ (2008) 9
Opinion of the Court
ments into which parties ha[ve] entered.” Dean Witter
Reynolds Inc. v. Byrd, 470 U. S. 213, 220 (1985). But,
again, we think the argument comes up short. Hall Street
is certainly right that the FAA lets parties tailor some,
even many features of arbitration by contract, including
the way arbitrators are chosen, what their qualifications
should be, which issues are arbitrable, along with proce
dure and choice of substantive law. But to rest this case
on the general policy of treating arbitration agreements as
enforceable as such would be to beg the question, which is
whether the FAA has textual features at odds with enforc
ing a contract to expand judicial review following the
arbitration.
To that particular question we think the answer is yes,
that the text compels a reading of the §§10 and 11 catego
ries as exclusive. To begin with, even if we assumed §§10
and 11 could be supplemented to some extent, it would
stretch basic interpretive principles to expand the stated
grounds to the point of evidentiary and legal review gen
erally. Sections 10 and 11, after all, address egregious
departures from the parties’ agreed-upon arbitration:
“corruption,” “fraud,” “evident partiality,” “misconduct,”
“misbehavior,” “exceed[ing]. . . powers,” “evident material
miscalculation,” “evident material mistake,” “award[s]
upon a matter not submitted;” the only ground with any
softer focus is “imperfect[ions],” and a court may correct
those only if they go to “[a] matter of form not affecting the
merits.” Given this emphasis on extreme arbitral conduct,
the old rule of ejusdem generis has an implicit lesson to
teach here. Under that rule, when a statute sets out a
series of specific items ending with a general term, that
general term is confined to covering subjects comparable
to the specifics it follows. Since a general term included in
the text is normally so limited, then surely a statute with
no textual hook for expansion cannot authorize contract
ing parties to supplement review for specific instances of
outrageous conduct with review for just any legal error.
10 HALL STREET ASSOCIATES, L.L.C. v. MATTEL, INC.
Opinion of the Court
“Fraud” and a mistake of law are not cut from the same
cloth.
That aside, expanding the detailed categories would rub
too much against the grain of the §9 language, where
provision for judicial confirmation carries no hint of flexi
bility. On application for an order confirming the arbitra
tion award, the court “must grant” the order “unless the
award is vacated, modified, or corrected as prescribed in
sections 10 and 11 of this title.” There is nothing malle
able about “must grant,” which unequivocally tells courts
to grant confirmation in all cases, except when one of the
“prescribed” exceptions applies. This does not sound
remotely like a provision meant to tell a court what to do
just in case the parties say nothing else.6
In fact, anyone who thinks Congress might have under
stood §9 as a default provision should turn back to §5 for
an example of what Congress thought a default provision
——————
6 Hall Street claims that §9 supports its position, because it allows a
court to confirm an award only “[i]f the parties in their agreement have
agreed that a judgment of the court shall be entered upon the award
made pursuant to the arbitration.” Hall Street argues that this lan
guage “expresses Congress’s intent that a court must enforce the
agreement of the parties as to whether, and under what circumstances,
a judgment shall be entered.” Reply Brief for Petitioner 5; see also
Brief for Petitioner 22–24. It is a peculiar argument, converting
agreement as a necessary condition for judicial enforcement into a
sufficient condition for a court to bar enforcement. And the text is
otherwise problematical for Hall Street: §9 says that if the parties have
agreed to judicial enforcement, the court “must grant” confirmation
unless grounds for vacatur or modification exist under §10 or §11. The
sentence nowhere predicates the court’s judicial action on the parties’
having agreed to specific standards; if anything, it suggests that, so
long as the parties contemplated judicial enforcement, the court must
undertake such enforcement under the statutory criteria. In any case,
the arbitration agreement here did not specifically predicate entry of
judgment on adherence to its judicial-review standard. See App. to Pet.
for Cert. 15a. To the extent Hall Street argues otherwise, it contests
not the meaning of the FAA but the Ninth Circuit’s severability analy
sis, upon which it did not seek certiorari.
Cite as: 552 U. S. ____ (2008) 11
Opinion of the Court
would look like:
“[i]f in the agreement provision be made for a method
of naming or appointing an arbitrator. . . such method
shall be followed; but if no method be provided
therein, or if a method be provided and any party
thereto shall fail to avail himself of such method, . . .
then upon the application of either party to the
controversy the court shall designate and appoint an
arbitrator. . . .”
“[I]f no method be provided” is a far cry from “must grant
. . . unless” in §9.
Instead of fighting the text, it makes more sense to see
the three provisions, §§9–11, as substantiating a national
policy favoring arbitration with just the limited review
needed to maintain arbitration’s essential virtue of resolv
ing disputes straightaway. Any other reading opens the
door to the full-bore legal and evidentiary appeals that can
“rende[r] informal arbitration merely a prelude to a more
cumbersome and time-consuming judicial review process,”
Kyocera, 341 F. 3d, at 998; cf. Ethyl Corp. v. United Steel
workers of America, 768 F. 2d 180, 184 (CA7 1985),
and bring arbitration theory to grief in post-arbitration
process.
Nor is Dean Witter, 470 U. S. 213, to the contrary, as
Hall Street claims it to be. Dean Witter held that state-
law claims subject to an agreement to arbitrate could not
be remitted to a district court considering a related, non-
arbitrable federal claim; the state-law claims were to go to
arbitration immediately. Id., at 217. Despite the opinion’s
language “reject[ing] the suggestion that the overriding
goal of the [FAA] was to promote the expeditious resolu
tion of claims,” id., at 219, the holding mandated immedi
ate enforcement of an arbitration agreement; the Court
was merely trying to explain that the inefficiency and
difficulty of conducting simultaneous arbitration and
12 HALL STREET ASSOCIATES, L.L.C. v. MATTEL, INC.
Opinion of the Court
federal-court litigation was not a good enough reason to
defer the arbitration, see id., at 217.
When all these arguments based on prior legal authority
are done with, Hall Street and Mattel remain at odds over
what happens next. Hall Street and its amici say parties
will flee from arbitration if expanded review is not open to
them. See, e.g., Brief for Petitioner 39; Brief for New
England Legal Foundation et al. as Amici Curiae 15. One
of Mattel’s amici foresees flight from the courts if it is.
See Brief for U. S. Council for Int’l Business as Amicus
Curiae 29–30. We do not know who, if anyone, is right,
and so cannot say whether the exclusivity reading of the
statute is more of a threat to the popularity of arbitrators
or to that of courts. But whatever the consequences of our
holding, the statutory text gives us no business to expand
the statutory grounds.7
——————
7 The history of the FAA is consistent with our conclusion. The text of
the FAA was based upon that of New York’s arbitration statute. See
S. Rep. No. 536, 68th Cong., 1st Sess., 3 (1924) (“The bill . . . follows the
lines of the New York arbitration law enacted in 1920 . . .”). The New
York Arbitration Law incorporated pre-existing provisions of the New
York Code of Civil Procedure. See 1920 N. Y. Laws p. 806. Section
2373 of the code said that, upon application by a party for a confirma
tion order, “the court must grant such an order, unless the award is
vacated, modified, or corrected, as prescribed by the next two sections.”
2 N. Y. Ann. Code Civ. Proc. (Stover 6th ed. 1902) (hereinafter Stover).
The subsequent sections gave grounds for vacatur and modification or
correction virtually identical to the 9 U. S. C. §§10 and 11 grounds. See
2 Stover §§2374, 2375.
In a brief submitted to the House and Senate Subcommittees of the
Committees on the Judiciary, Julius Henry Cohen, one of the primary
drafters of both the 1920 New York Act and the proposed FAA, said,
“The grounds for vacating, modifying, or correcting an award are
limited. If the award [meets a condition of §10], then and then only the
award may be vacated. . . . If there was [an error under §11], then and
then only it may be modified or corrected . . . .” Arbitration of Inter
state Commercial Disputes, Joint Hearings before the Subcommittees
of the Committees on the Judiciary on S. 1005 and H. R. 646, 68th
Cong., 1st Sess., 34 (1924). The House Report similarly recognized that
Cite as: 552 U. S. ____ (2008)
13
Opinion of the Court
IV
In holding that §§10 and 11 provide exclusive regimes
for the review provided by the statute, we do not purport
to say that they exclude more searching review based on
authority outside the statute as well. The FAA is not the
only way into court for parties wanting review of arbitra
tion awards: they may contemplate enforcement under
state statutory or common law, for example, where judicial
review of different scope is arguable. But here we speak
only to the scope of the expeditious judicial review under
§§9, 10, and 11, deciding nothing about other possible
avenues for judicial enforcement of arbitration awards.
Although one such avenue is now claimed to be revealed
in the procedural history of this case, no claim to it was
presented when the case arrived on our doorstep, and no
reason then appeared to us for treating this as anything
but an FAA case. There was never any question about
meeting the FAA §2 requirement that the leases from
which the dispute arose be contracts “involving com
merce.” 9 U. S. C. §2; see Allied-Bruce Terminix Cos. v.
Dobson, 513 U. S. 265, 277 (1995) (§2 “exercise[s] Con
gress’ commerce power to the full”). Nor is there any
doubt now that the parties at least had the FAA in mind
at the outset; the arbitration agreement even incorporates
FAA §7, empowering arbitrators to compel attendance of
——————
an “award may . . . be entered as a judgment, subject to attack by the
other party for fraud and corruption and similar undue influence, or for
palpable error in form.” H. R. Rep. No. 96, 68th Cong., 1st Sess., 2
(1924).
In a contemporaneous campaign for the promulgation of a uniform
state arbitration law, Cohen contrasted the New York Act with the
Illinois Arbitration and Awards Act of 1917, which required an arbitra
tor, at the request of either party, to submit any question of law arising
during arbitration to judicial determination. See Handbook of the
National Conference of Commissioners on Uniform State Laws and
Proceedings 97–98 (1924); 1917 Ill. Laws p. 203.
14 HALL STREET ASSOCIATES, L.L.C. v. MATTEL, INC.
Opinion of the Court
witnesses. App. to Pet. for Cert. 13a.
While it is true that the agreement does not expressly
invoke FAA §9, §10, or §11, and none of the various mo
tions to vacate or modify the award expressly said that the
parties were relying on the FAA, the District Court appar
ently thought it was applying the FAA when it alluded to
the Act in quoting LaPine, 130 F. 3d, at 889, for the then-
unexceptional proposition that “ ‘[f]ederal courts can ex
pand their review of an arbitration award beyond the
FAA’s grounds, when . . . the parties have so agreed.’ ”
App. to Pet. for Cert. 46a. And the Ninth Circuit, for its
part, seemed to take it as a given that the District Court’s
direct and prompt examination of the award depended on
the FAA; it found the expanded-review provision unen
forceable under Kyocera and remanded for confirmation of
the original award “unless the district court determines
that the award should be vacated on the grounds allow
able under 9 U. S. C. §10, or modified or corrected under
the grounds allowable under 9 U. S. C. §11.” 113 Fed.
Appx., at 273. In the petition for certiorari and the princi
pal briefing before us, the parties acted on the same prem
ise. See, e.g., Pet. for Cert. 27 (“This Court should accept
review to resolve this important issue of statutory con
struction under the FAA”); Brief for Petitioner 16 (“Be
cause arbitration provisions providing for judicial review
of arbitration awards for legal error are consistent with
the goals and policies of the FAA and employ a standard of
review which district courts regularly apply in a variety of
contexts, those provisions are entitled to enforcement
under the FAA”).
One unusual feature, however, prompted some of us to
question whether the case should be approached another
way. The arbitration agreement was entered into in the
course of district-court litigation, was submitted to the
District Court as a request to deviate from the standard
sequence of trial procedure, and was adopted by the Dis
Cite as: 552 U. S. ____ (2008) 15
Opinion of the Court
trict Court as an order. See App. 46–47; App. to Pet. for
Cert. 4a–8a. Hence a question raised by this Court at oral
argument: should the agreement be treated as an exercise
of the District Court’s authority to manage its cases under
Federal Rules of Civil Procedure 16? See, e.g., Tr. of Oral
Arg. 11–12. Supplemental briefing at the Court’s behest
joined issue on the question, and it appears that Hall
Street suggested something along these lines in the Court
of Appeals, which did not address the suggestion.
We are, however, in no position to address the question
now, beyond noting the claim of relevant case manage
ment authority independent of the FAA. The parties’
supplemental arguments on the subject in this Court
implicate issues of waiver and the relation of the FAA both
to Rule 16 and the Alternative Dispute Resolution Act of
1998, 28 U. S. C. §651 et seq., none of which has been
considered previously in this litigation, or could be well
addressed for the first time here. We express no opinion
on these matters beyond leaving them open for Hall Street
to press on remand. If the Court of Appeals finds they are
open, the court may consider whether the District Court’s
authority to manage litigation independently warranted
that court’s order on the mode of resolving the indemnifi
cation issues remaining in this case.
* * *
Although we agree with the Ninth Circuit that the FAA
confines its expedited judicial review to the grounds listed
in 9 U. S. C. §§10 and 11, we vacate the judgment and
remand the case for proceedings consistent with this
opinion.
It is so ordered.
Cite as: 552 U. S. ____ (2008) 1
STEVENS, J., dissenting
SUPREME COURT OF THE UNITED STATES
_________________
No. 06–989
_________________
HALL STREET ASSOCIATES, L.L.C., PETITIONER v.
MATTEL, INC.
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE NINTH CIRCUIT
[March 25, 2008]
JUSTICE STEVENS, with whom JUSTICE KENNEDY joins,
dissenting.
May parties to an ongoing lawsuit agree to submit their
dispute to arbitration subject to the caveat that the trial
judge should refuse to enforce an award that rests on an
erroneous conclusion of law? Prior to Congress’ enactment
of the Federal Arbitration Act (FAA or Act) in 1925, the
answer to that question would surely have been “Yes.”1
Today, however, the Court holds that the FAA does not
merely authorize the vacation or enforcement of awards on
specified grounds, but also forbids enforcement of perfectly
reasonable judicial review provisions in arbitration
agreements fairly negotiated by the parties and approved
by the district court. Because this result conflicts with the
primary purpose of the FAA and ignores the historical
context in which the Act was passed, I respectfully
dissent.
Prior to the passage of the FAA, American courts were
generally hostile to arbitration. They refused, with rare
exceptions, to order specific enforcement of executory
——————
1 See Klein v. Catara, 14 F. Cas. 732, 735 (C. C.D. Mass. 1814) (“If the
parties wish to reserve the law for the decision of the court, they may
stipulate to that effect in the submission; they may restrain or enlarge
its operation as they please”) (Story, J.).
2 HALL STREET ASSOCIATES, L.L.C. v. MATTEL, INC.
STEVENS, J., dissenting
agreements to arbitrate.2 Section 2 of the FAA responded
to this hostility by making written arbitration agreements
“valid, irrevocable, and enforceable.” 9 U. S. C. §2. This
section, which is the centerpiece of the FAA, reflects Con
gress’ main goal in passing the legislation: “to abrogate
the general common-law rule against specific enforcement
of arbitration agreements,” Southland Corp. v. Keating,
465 U. S. 1, 18 (1984) (STEVENS, J., concurring in part and
dissenting in part), and to “ensur[e] that private arbitra
tion agreements are enforced according to their terms,”
Volt Information Sciences, Inc. v. Board of Trustees of
Leland Stanford Junior Univ., 489 U. S. 468, 478 (1989).
Given this settled understanding of the core purpose of the
FAA, the interests favoring enforceability of parties’ arbi
tration agreements are stronger today than before the
FAA was enacted. As such, there is more—and certainly
not less—reason to give effect to parties’ fairly negotiated
decisions to provide for judicial review of arbitration
awards for errors of law.
Petitioner filed this rather complex action in an Oregon
state court. Based on the diverse citizenship of the par
ties, respondent removed the case to federal court. More
than three years later, and after some issues had been
resolved, the parties sought and obtained the District
Court’s approval of their agreement to arbitrate the re
maining issues subject to de novo judicial review. They
neither requested, nor suggested that the FAA authorized,
any “expedited” disposition of their case. Because the
arbitrator made a rather glaring error of law, the judge
refused to affirm his award until after that error was
corrected. The Ninth Circuit reversed.
——————
2 See
Red Cross Line v. Atlantic Fruit Co., 264 U. S. 109, 120–122
(1924); The Atlanten, 252 U. S. 313, 315–316 (1920). Although agree
ments to arbitrate were not specifically enforceable, courts did award
nominal damages for the breach of such contracts.
Cite as: 552 U. S. ____ (2008) 3
STEVENS, J., dissenting
This Court now agrees with the Ninth Circuit’s (most
recent) interpretation of the FAA as setting forth the
exclusive grounds for modification or vacation of an arbi
tration award under the statute. As I read the Court’s
opinion, it identifies two possible reasons for reaching this
result: (1) a supposed quid pro quo bargain between Con
gress and litigants that conditions expedited federal en
forcement of arbitration awards on acceptance of a statu
tory limit on the scope of judicial review of such awards;
and (2) an assumption that Congress intended to include
the words “and no other” in the grounds specified in §§10
and 11 for the vacatur and modification of awards. Nei
ther reason is persuasive.
While §9 of the FAA imposes a 1-year limit on the time
in which any party to an arbitration may apply for confir
mation of an award, the statute does not require that the
application be given expedited treatment. Of course, the
premise of the entire statute is an assumption that the
arbitration process may be more expeditious and less
costly than ordinary litigation, but that is a reason for
interpreting the statute liberally to favor the parties’ use
of arbitration. An unnecessary refusal to enforce a per
fectly reasonable category of arbitration agreements de
feats the primary purpose of the statute.
That purpose also provides a sufficient response to the
Court’s reliance on statutory text. It is true that a wooden
application of “the old rule of ejusdem generis,” ante, at 9,
might support an inference that the categories listed in
§§10 and 11 are exclusive, but the literal text does not
compel that reading—a reading that is flatly inconsistent
with the overriding interest in effectuating the clearly
expressed intent of the contracting parties. A listing of
grounds that must always be available to contracting
parties simply does not speak to the question whether
they may agree to additional grounds for judicial review.
Moreover, in light of the historical context and the
4 HALL STREET ASSOCIATES, L.L.C. v. MATTEL, INC.
STEVENS, J., dissenting
broader purpose of the FAA, §§10 and 11 are best under
stood as a shield meant to protect parties from hostile
courts, not a sword with which to cut down parties’ “valid,
irrevocable and enforceable” agreements to arbitrate their
disputes subject to judicial review for errors of law.3 §2.
Even if I thought the narrow issue presented in this
case were as debatable as the conflict among the courts of
appeals suggests, I would rely on a presumption of over
riding importance to resolve the debate and rule in favor
of petitioner’s position that the FAA permits the statutory
grounds for vacatur and modification of an award to be
supplemented by contract. A decision “not to regulate” the
terms of an agreement that does not even arguably offend
any public policy whatsoever, “is adequately justified by a
presumption in favor of freedom.” FCC v. Beach Commu
nications, Inc., 508 U. S. 307, 320 (1993) (STEVENS, J.,
concurring in judgment).
Accordingly, while I agree that the judgment of the
Court of Appeals must be set aside, and that there may be
additional avenues available for judicial enforcement of
parties’ fairly negotiated review provisions, see, ante, at
13–15, I respectfully dissent from the Court’s interpreta
tion of the FAA, and would direct the Court of Appeals to
affirm the judgment of the District Court enforcing the
arbitrator’s final award.
——————
3 In
the years before the passage of the FAA, arbitration awards were
subject to thorough and broad judicial review. See Cohen & Dayton,
The New Federal Arbitration Law, 12 Va. L. Rev. 265, 270-271 (1926);
Cullinan, Contracting for an Expanded Scope of Judicial Review in
Arbitration Agreements, 51 Vand. L. Rev. 395, 409 (1998). In §§10 and
11 of the FAA, Congress significantly limited the grounds for judicial
vacatur or modification of such awards in order to protect arbitration
awards from hostile and meddlesome courts.
Cite as: 552 U. S. ____ (2008) 1
BREYER, J., dissenting
SUPREME COURT OF THE UNITED STATES
_________________
No. 06–989
_________________
HALL STREET ASSOCIATES, L.L.C., PETITIONER v.
MATTEL, INC.
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE NINTH CIRCUIT
[March 25, 2008]
JUSTICE BREYER, dissenting.
The question presented in this case is whether “the
Federal Arbitration Act . . . precludes a federal court from
enforcing” an arbitration agreement that gives the court
the power to set aside an arbitration award that embodies
an arbitrator’s mistake about the law. Pet. for Cert. i.
Like the majority and JUSTICE STEVENS, and primarily for
the reasons they set forth, I believe that the Act does not
preclude enforcement of such an agreement. See ante, at
13 (opinion of the Court) (The Act “is not the only way into
court for parties wanting review of arbitration awards”);
ante, at 3–4 (STEVENS, J., dissenting) (The Act is a “shield
meant to protect parties from hostile courts, not a sword
with which to cut down parties’ ‘valid, irrevocable and
enforceable’ agreements to arbitrate their disputes subject
to judicial review for errors of law”).
At the same time, I see no need to send the case back for
further judicial decisionmaking. The agreement here was
entered into with the consent of the parties and the ap
proval of the District Court. Aside from the Federal Arbi
tration Act itself, 9 U. S. C. §1 et seq., respondent below
pointed to no statute, rule, or other relevant public policy
that the agreement might violate. The Court has now
rejected its argument that the agreement violates the Act,
and I would simply remand the case with instructions that
2 HALL STREET ASSOCIATES, L.L.C. v. MATTEL, INC.
BREYER, J., dissenting
the Court of Appeals affirm the District Court’s judgment
enforcing the arbitrator’s final award.