Ca_Law

case_law | United States Federal

Badgerow v. Walters

Summary

Federal jurisdiction in a petition to compel arbitration under Section 4 of the Federal Arbitration Act is determined by “looking through” the petition to the jurisdictional basis of the “underlying substantive controversy,” Vaden v. Discover Bank, 556 U. S. 49, 62, but that approach does not apply to petitions to confirm or vacate arbitral awards under Sections 9 and 10 of the FAA.

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  • #1

    PRELIMINARY PRINT Volume 596 U. S. Part 1 Pages 1–35 OFFICIAL REPORTS OF THE SUPREME COURT March 31, 2022 REBECCA A. WOMELDORF reporter of decisions Page Proof Pending Publication NOTICE: This preliminary print is subject to formal revision before the bound volume is published. Users are requested to notify…

  • #2

    guing that the federal court lacked jurisdiction to resolve the parties' requests—under Sections 10 and 9 of the FAA, respectively—to vacate or confrm the award. The District Court applied Vaden's look-through approach, fnding jurisdiction in the federal-law claims contained in Badgerow's underlying employment act…

  • #3

    Sections 9 and 10 of the FAA contain none of the statutory language on which Vaden relied. So under ordinary principles of statutory con- struction, the look-through method should not apply. “[W]hen Con- Page Proof Pending Publication Cite as: 596 U. S. 1 (2022) 3 Syllabus gress includes particular language in o…

  • #4

    clear statutory directive.” BP p.l.c. v. Mayor and City Council of Bal- timore, 593 U. S. –––, –––. And anyway, Walters oversells the superior- ity of his proposal. First, uniformity in and of itself provides no real advantage here because courts can easily tell whether to apply look- through or the normal jurisdi…

  • #5

    cial Markets Association by Thomas G. Saunders, Peter G. Neiman, Mark C. Fleming, and Eric L. Hawkins; and for Imre Stephen Szalai by Mr. Sza- lai, pro se. Page Proof Pending Publication Cite as: 596 U. S. 1 (2022) 5 Opinion of the Court we reasoned, instructs a federal court to “look through” the petition to t…

  • #6

    The District Court assessed its jurisdiction under the look through approach this Court adopted in Vaden v. Discover Bank. See 2019 WL 2611127, *1 (ED La., June 26, 2019). That approach, as just noted, allows a federal court to exer- cise jurisdiction over an FAA application when the parties' underlying substanti…

  • #7

    proach used in Vaden can establish jurisdiction in a case like this one—when the application before the court seeks not to compel arbitration under Section 4 but to confrm, vacate, or modify an arbitral award under other sections of the FAA. 1 We granted certiorari to resolve the confict, 593 U. S. ––– (2021), a…

  • #8

    Street, 552 U. S., at 581–582; Vaden, 556 U. S., at 59. (Were it otherwise, every arbitration in the country, however dis- tant from federal concerns, could wind up in federal district court.) A federal court may entertain an action brought under the FAA only if the action has an “independent juris- dictional bas…

  • #9

    the legality of Badgerow's fring but the enforceability of an arbitral award. That award is no more than a contractual resolution of the parties' dispute—a way of settling legal claims. See Vaden, 556 U. S., at 63. And quarrels about legal settlements—even settlements of federal claims—typi- cally involve only st…

  • #10

    But “[j]urisdiction over what?” Ibid. “The text of Section 4,” we continued, “refers us to `the controversy between the parties.' ” Ibid. And that “controversy,” we explained, could not mean the dispute before the court about “the exist- ence or applicability of an arbitration agreement”; after all, the preceding…

  • #11

    Section 4's look-through instruction in Sections 9 and 10. Or for that matter, it could have drafted a global look-through provision, applying the approach throughout the FAA. But Congress did neither. And its decision governs. Nothing in that conclusion changes because a jurisdictional question is before us. The…

  • #12

    same result as in Vaden: That would indeed be jurisdictional “expan[sion] by judicial decree.” Kokkonen , 511 U. S., at 377. Walters contests that view of the statute. Unlike the Courts of Appeals to have adopted his position, including the Fifth Circuit below, see supra, at 6–7, he offers a reading of the FAA's…

  • #13

    rule for all kinds of FAA applications. But Walters's understanding of Section 4 does not comport with what it says. The language of that provision never mentions “venue”; it refers only to “jurisdiction.” That is a signal, sharp and clear, that the section provides a jurisdic- tional rule. And even suppose (agai…

  • #14

    tion 4 alone, rather than also in Sections 9 and 10. See supra, at 11–12. Walters's theory fares no better in construing Section 6's mention of motions to prescribe a look-through rule for the whole FAA. Here, Walters commits the opposite of his fault in reading Section 4: He now reads a provision containing no …

  • #15

    rule, applying to all FAA applications alike, will necessarily promote “administrative simplicity” because a court will not have to fgure out which rule to apply. Brief for Respond- ents 27. Second, he claims, the look-through rule is “easier to apply” than a test that would ground jurisdiction on the face of the…

  • #16

    over which a federal court has jurisdiction. Post, at 23. Because Section 5 is not at issue here, we do not express any view about whether the relationship that the dissent hypothesizes would give the court jurisdic- tion over the appointment request. Page Proof Pending Publication Cite as: 596 U. S. 1 (2022) 17 …

  • #17

    The statutory plan, as suggested above, makes Section 9 and 10 applications conform to the normal—and sensible—judi- cial division of labor: The applications go to state, rather than federal, courts when they raise claims between non-diverse parties involving state law. See supra, at 8–9. As Walters notes, those …

  • #18

    It is so ordered. Justice Breyer, dissenting. When interpreting a statute, it is often helpful to consider not simply the statute's literal words, but also the statute's purposes and the likely consequences of our interpretation. Otherwise, we risk adopting an interpretation that, even if consistent with text, c…

  • #19

    tions' language seems explicitly to give federal courts the power to take such actions. Why does that language itself not also grant jurisdiction to act? The answer, as the Court notes, is that we have held that the FAA's “authorization of a petition does not itself create jurisdiction.” Ante, at 4. “Rather, the …

  • #20

    rious practical consequences,” including unduly limiting the scope of Section 4 and hinging jurisdiction upon distinctions that were “ `totally artifcial.' ” Ibid. (quoting 1 I. MacNeil, R. Speidel, & T. Stipanowich, Federal Arbitration Law § 9.2.3.3, p. 9:21 (1995) (hereinafter MacNeil)). Today, the majority hol…

  • #21

    raises a federal question, but the application to appoint an arbitrator raises no federal question and does not establish diversity? A party could ask a federal judge to order arbi- tration under Section 4, but they could not then ask that same (or any other) federal judge to appoint an arbitrator for that very s…

  • #22

    arbitration). And assume that a federal court fnds it does Page Proof Pending Publication 24 BADGEROW v. WALTERS Breyer, J., dissenting have jurisdiction over a Section 7 request, even though the underlying controversy involves neither a federal question nor diversity. “Why would Congress have wanted federal co…

  • #23

    order resulting from that arbitration under Section 9, 10, or 11. But why prohibit a federal court from considering the results of the very arbitration it has ordered and is likely familiar with? Why force the parties to obtain relief—con- cerning arbitration of an underlying federal-question dis- pute—from a sta…

  • #24

    the same can be said for Section 4 disputes about the enforce- ability of arbitration agreements. These, too, typically in- volve only questions of state law. That the dispute does not implicate federal questions thus does not explain why Con- gress would have wanted more federal court involvement at the Section …

  • #25

    Moses H. Cone Memorial Hospital v. Mercury Constr. Corp., 460 U. S. 1, 23 (1983)); see also id., at 22 (“Congress' clear intent, in the Arbitration Act, [was] to move the parties to an arbitrable dispute out of court and into arbitration as quickly and easily as possible”). We have thus interpreted the FAA to avo…

  • #26

    arbitrator, simply refers to “the court.” Those words, most naturally read, refer to the same court to which the immedi- ately preceding section—Section 4—refers: a “United States district court” with jurisdiction as determined by the look- through approach. Requests under the FAA's various sec- tions are also ge…

  • #27

    The FAA's legislative history reinforces the view of the statute that I have just described. The Senate Report on the bill that became the FAA refers to the FAA's general purposes. It makes clear Congress' hope to avoid proce- dural complexity. It refers to parties' “desire to avoid the delay and expense of litig…

  • #28

    statute that I would adopt. It suggests that Congress in- tended a single approach for determining jurisdiction of the Page Proof Pending Publication Cite as: 596 U. S. 1 (2022) 31 Appendix to opinion of Breyer, J. FAA's interrelated enforcement mechanisms, not one ap- proach for the mechanism provided in Sectio…

  • #29

    notice in writing of such application shall be served upon the party in default. Service thereof shall be made in the man- ner provided by the Federal Rules of Civil Procedure. The court shall hear the parties, and upon being satisfed that the making of the agreement for arbitration or the failure to comply there…

  • #30

    trators or umpire, as the case may require, who shall act under the said agreement with the same force and effect as if he or they had been specifcally named therein; and unless otherwise provided in the agreement the arbitration shall be by a single arbitrator.” “§ 7. Witnesses before arbitrators; fees; compelli…

  • #31

    adverse party, and thereupon the court shall have jurisdic- tion of such party as though he had appeared generally in the proceeding. If the adverse party is a resident of the district within which the award was made, such service shall be made upon the adverse party or his attorney as pre- scribed by law for ser…

  • #32

    “(a) Where there was an evident material miscalcula- tion of fgures or an evident material mistake in the descrip- tion of any person, thing, or property referred to in the award. “(b) Where the arbitrators have awarded upon a matter not submitted to them, unless it is a matter not affecting the merits of the de…