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Fifth Circuit Holds that Post-Award Review Encompasses Entire Record

Mark A Kantor


  • A rehearing panel of the Fifth Circuit held that courts can consider facts arising after the initial arbitration decision.
  • The panel rejected arguments to limit review to the original court record and allowed deference to the arbitrator's factual findings in certain circumstances.
  • In certain circumstances, federal courts are entitled to give deference to the arbitrator's findings of fact in resolving arbitrability and non-signatory/alter ego issues.
Fifth Circuit Holds that Post-Award Review Encompasses Entire Record
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On January 3, 2023, a rehearing panel of the Fifth Circuit issued a per curiam decision holding that the courts can consider facts relating to arbitrability and non-party signatory and alter ego issues that become part of the record after the district court first compelled arbitration. The rehearing panel also held that, in circumstances where the petitioner did not contest particular facts, it was appropriate to give deference to the arbitrator's findings of fact. In the Matter of: Jon Amberson (5th Cir. Docket No. 21-50960, January 3, 2023).

In Jon Amberson, a three-person appellate panel agreed to rehear parts of their previous appellate decision in the same case. The panel then denied petitioner Amberson’s arguments for vacatur.

On rehearing, the court of appeals made the following significant statements about the ability of the federal courts to consider the record developed at the arbitration, including the arbitrator's findings of fact, to resolve arbitrability and non-signatory issues in later vacatur/confirmation proceedings even though those facts were not in the judicial record at the time the lower court compelled arbitration.

Amberson is insisting that . . . our review after the arbitration is limited to the record that existed at the [time that the parties were compelled by the lower court to go to arbitration].

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In this appeal, . . . the questions are the arbitrability of a particular claim and the validity of an award against Amberson, individually. How those questions should have been answered early in the case before the record was as developed as it is now does not matter. 

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[It would be] wasteful . . . to disregard the final-judgment record that demonstrates arbitration was properly compelled and reject an arbitration award because the earlier record did not yet so demonstrate. If review is unavailable until after final judgment, it is senseless not to use the final-judgment record. 

Amberson also argued that the court of appeals should have undertaken de novo review of the arbitrator's factual findings. The rehearing panel rejected that argument in the particular circumstances.

Amberson insists we did not give de novo review to whether arbitration should have been compelled and instead deferred to the arbitrator[’s factual findings].

* * *

Amberson’s briefing, though, did not meaningfully dispute the accuracy of the arbitrator’s fact-findings. The arbitrator’s opinion contained the best summary of the facts. Absent any argument that the findings were erroneous, acceptance of the summary was proper. Our discussion identified the evidence, then gave de novo review by identifying the applicable legal standard and applying it.

* * *

As to alter ego, this court’s opinion . . . held that whether a non-signatory is bound by an arbitration agreement is to be decided by the court, absent agreement to the contrary. . . . We also stated that in Texas, the “trial court’s findings on whether an arbitration agreement exists among specific parties are entitled to deference.” . . . Our opinion quoted several findings by the arbitrator, pointed out that the bankruptcy court had incorporated the quoted findings into its own judgment (making those findings the court’s findings), and stated the district court had affirmed. . . . We found no basis to disturb the findings or the resulting legal conclusions. . . . As to this court’s statement that the arbitrator’s decision to arbitrate the Cannon Grove matters “must stand,” we meant no reason was shown in the appeal to reverse. . . In sum, all three federal courts that reviewed the award referenced the evidence on alter ego and found it compelling. Undue deference was not given to the arbitrator as to fact-findings.  

In sum, the lessons from In the Matter of Jon Amberson are that: 

  1. even if an earlier district court decision had compelled arbitration, when the resulting arbitration award returns to court as part of a confirmation/vacatur proceeding, the courts may look at the factual record developed in the arbitration (including the arbitrator's findings of fact) to resolve arbitrability and non-signatory/alter ego issues and is not limited to the original lower court record when the decision to compel arbitration was made; and
  2. in certain circumstances such as failure by the petitioner to challenge an arbitrator's factual findings and incorporation of those findings into a bankruptcy court judgment, federal courts are entitled to give deference to the arbitrator's findings of fact in resolving arbitrability and non-signatory/alter ego issues.