Less clear, however, is whether federal question jurisdiction is similarly construed in the context of a petition to confirm, vacate, or modify an arbitration award. Sections 9 through 11 of the FAA, which govern such petitions, lack Section 4’s language permitting a federal court to compel arbitration where it “would have jurisdiction” over the parties’ dispute “save for” the agreement to arbitrate. As a result, federal circuit courts are split as to the circumstances in which a federal court may exercise federal question jurisdiction over post-arbitration proceedings to confirm, vacate or modify an award.
On one hand, a majority of federal appellate courts have concluded that the same “look through” analysis employed under Section 4 of the FAA should be extended to motions to confirm, vacate, or modify arbitration awards under Sections 9 through 11. Quezada v. Bechtel OG & C Constr. Servs., Inc., 946 F.3d 837, 843 (5th Cir. 2020); Landau v. Eisenberg, 922 F.3d 495, 498 (2d Cir. 2019); McCormick v. Am. Online, Inc., 909 F.3d 677, 682 (4th Cir. 2018); Ortiz-Espinosa v. BBVA Sec. of Puerto Rico, Inc., 852 F.3d 36, 47 (1st Cir. 2017); Doscher v. Sea Port Grp. Sec. LLC, 832 F.3d 372, 382 (2d Cir. 2016). Thus, in these circuits, federal courts may take those actions if they would have been able to exercise federal question jurisdiction over the underlying dispute absent an arbitration clause. These courts’ reasoning has varied, but they have generally been guided by the practical notion that there is no reason a federal court should be able to compel arbitration on the grounds of federal question jurisdiction but lack jurisdiction to confirm or modify the resulting arbitration award. See, e.g., McCormick, 909 F.3d at 682.
On the other hand, a minority of federal appellate courts have held that the “look through” analysis is improper because Sections 9 through 11 of the FAA facially do not grant a federal court jurisdiction over post-arbitration proceedings if it “would have jurisdiction” over the parties’ dispute “save for” the agreement to arbitrate. 9 U.S.C. § 4. Thus, in these circuits, the fact that an arbitration wholly or partially concerned an issue of federal law does not supply federal question jurisdiction. Goldman, 834 F.3d at 253; Magruder, 818 F.3d at 288. These courts have reasoned that it makes sense to dispense with the “look through” analysis in the post-arbitration context because “[w]hen seeking to vacate the result of an arbitration that has already occurred, the movant is challenging the procedural propriety of the arbitration, which is unrelated to the subject matter of the underlying dispute.” Goldman, 834 F.3d at 254.
This split in authority can have significant practical consequences: In circuits adhering to the minority view, parties arbitrating questions of federal law may lack access to a federal court for purposes of confirming, vacating or modifying the resulting arbitration award, even if a federal court initially compelled the arbitration. They could instead be left to litigate disputes regarding the validity of the arbitration award in local state courts, which may lack expertise in federal law or have different standards for confirming or vacating an arbitration award than the federal courts. And that is to say nothing of the risk that parties could potentially engage in lengthy post-award litigation, only to find out the federal court lacked jurisdiction over the dispute.
Fortunately, clarity is on the horizon: On May 17, 2021, the Supreme Court granted certiorari in Badgerow v. Walters, a case in which the Fifth Circuit reiterated its adherence to the majority view. Dkt. No. 20-1143. By the end of next term, then, there should be a single standard for determining federal question jurisdiction in post-arbitration proceedings under the FAA. In the meantime, practitioners should carefully assess the prevailing standard in their jurisdiction and think creatively about their best options for seeking confirmation, vacatur or modification of an arbitration award.
