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The AAA Sent Me a List of Arbitrators. How Should My Business Choose One?

Philip J. Loree Jr. — Sat, 19 Sep 2026 16:33:19 +0000

This is a small business guide to the default method of arbitrator selection under the American Arbitration Association (“AAA”) Commercial Arbitration Rules and Mediation Procedures (the “AAA Commercial Rules”, available here). It picks up where our most recent article—a small business guide to the first few days of an AAA arbitration—left off.

Like our most recent article, it assumes there is a business-to-business dispute governed by AAA Commercial Rules, the parties’ agreement does not prescribe an arbitrator selection regime, and that the AAA has sent the parties a list of potential neutral arbitrators under AAA Commercial Rule R-13.

Arbitrator selection is one of arbitrator’s most important features. More than 20 years ago, U.S. Circuit Judge Richard A. Posner (ret.) explained that the “cornerstone of the arbitral process” was the “[s]election of the decision maker by or with the consent of the parties. . . .” Lefkovitz v. Wagner, 395 F.3d 773, 780 (2005); see also Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662, 668, 670 (2010) (one of the FAA’s “rules of fundamental importance” is parties “may choose who will resolve specific disputes”) (emphasis added; citations omitted).

An AAA-proffered list of arbitrator candidates is not routine paperwork. The business should treat arbitrator selection as a major strategic decision, begin promptly the process, and work closely with experienced arbitration counsel in an effort to ensure informed, deliberate choices are made throughout it.

The arbitrator will manage the proceeding, resolve discovery and procedural disputes, hear the evidence, apply the governing law and contract, and ultimately decide who wins and what relief, if any, should be awarded to whom. In most cases, judicial review of the resulting award will be extremely limited.

Given the stakes, the parties are likely to disagree on who an ideal candidate should be.

So what should a business do when it receives an AAA list of arbitrator candidates?

Arbitrator Selection—Understand the Rule R-13 Process and the Deadline

Understanding the procedures and process is critical. Under AAA Commercial Rule R-13, if the parties have not appointed an arbitrator and have not agreed on another appointment method, the AAA ordinarily sends each side an identical list of 10 names it selects from its National Roster. The parties are encouraged to agree on an arbitrator but if they cannot, then each side has 14 calendar days from the transmittal date of the list to strike objectionable candidates, rank in preference order the remaining candidates, and return to the AAA the revised list containing its strikes and setting forth the preference order for the remaining candidates.

The 14-day deadline builds in consequences. If a party does not return its list on time, Rule R-13 provides that all listed candidates will be deemed acceptable to the delinquent party. That effectively means that only the party submitting timely their strikes and preference rankings will have meaningful input into the process. And that may mean game over for the delinquent party once the merits are submitted to the arbitrator, who was deemed acceptable to the delinquent party by default.

The AAA Commercial Rules vest the AAA with discretion to limit the number of permitted strikes. The number, if limited, will ordinarily be specified in the AAA’s instructions accompanying the list. Do not assume that every candidate you find undesirable can be stricken.

Whether or not a party fails to submit its list timely, the AAA uses the parties’ approvals and rankings to invite an arbitrator to serve. If an appointment cannot be made from the list, the AAA can appoint someone else from the National Roster without circulating another list. AAA Commercial Rule R-13(a)-(b).

So do not wait until day 13 to begin the analysis. As discussed in the prior article, counsel and the business should start thinking about desired arbitrator qualifications and selection strategy even before the list arrives, and certainly no later than that.

Start With the Dispute, Not the Resumes

Unless the business has effectively a suicidal obsession with arbitrator credentials, the first question should never be “Which candidate has the most impressive biography?”

A technically impressive candidate may be a poor fit for the particular case, while a less prominent candidate may have exactly the experience and case-management skills for which the dispute calls. Or one candidate may have a very impressive background in dealing with the type of dispute at issue but most or all of that experience is focused on advocating positions adverse to the business’s arbitration position. A competing candidate, however, might have more limited experience in the subject matter of your dispute, but that experience may have been focused on advocating positions that align with the business’s expected arbitration position.

Counsel and the client should identify the issues likely to drive the case. Is the dispute principally about contract interpretation? Accounting and damages? Construction practices? Reinsurance or insurance? Software, intellectual property, financial products, distribution, or another specialized industry? Does the governing law present difficult questions? What are the relevant industry customs, practices, and norms that may bear on the dispute and are they in line with case law decided by courts? How are various arbitrators likely (or not) to interpret and apply those customs and practices? Is strict adherence to the law something that will favor or disfavor the businesses’ position? Are there other rules of decision that an arbitrator might (or not) be expected to consider in resolving the dispute? Will credibility be central? Is substantial electronic discovery likely? Are threshold or dispositive motions expected? Is there a genuine need for a hearing that may last several days? Those considerations should help inform what the business is looking for before anyone begins ranking names.

Several questions bearing on what kind of experience an ideal arbitrator would possess should be considered. These include the legal, industry, arbitration, judicial, case-management and business experience of the arbitrator; the extent to which each type of experience may be more or less likely to yield a desirable result for one party versus the other; whether the arbitrator’s experience is principally representing one particular side of a typical dispute—e.g., consumers versus businesses, small business versus large businesses and conglomerates, global business concerns versus “Main Street” businesses, policyholders versus insurers, and so forth—the institutional and other legitimate predispositions an arbitrator candidate is reasonably believed or known to have; and how those predispositions may bear on resolution of the dispute.

Without attempting to identify the myriad of questions that might legitimately bear on arbitrator selection in any given case, in general there are at least three things concerning individual arbitrator candidates that should be ascertained, analyzed, and considered: (a) what qualifications and experience any arbitrator deciding the particular dispute should have; (b) what qualifications, experience, and characteristics are likely to be shared or exhibited by arbitrators who, on the facts, would most likely to rule in the businesses’ favor; (c) what legitimate institutional and personal preferences are likely shared by arbitrators likely to rule in the business’s favor; and (d) which of the arbitrator candidates on the list have (or at least appear to have) these qualifications, this experience, and these legitimate institutional and personal preferences.

Other Qualifications That May be Material to Arbitrator Selection

There are other qualifications that should also be assessed. Case-management theory and style can be important. Some arbitrators actively narrow issues, control discovery, establish firm schedules, and decide procedural disputes promptly. Others take a more hands-off approach. Neither style is inherently right or wrong, but one—or one midway between the two—may fit a particular dispute far better than another. Some follow rules of evidence and procedural rules more strictly or loosely than others. Some construe contracts and statutes more strictly or loosely than others. And so on.

Counsel should also consider availability. An excellent candidate who cannot schedule a hearing for a long time may not serve well a business concerned about prompt resolution.

Cost belongs in the analysis too. Under Rule R-57, a neutral arbitrator generally is compensated at the stated rate disclosed when the AAA resume is presented to the parties. In a substantial case, differences in hourly rates can become meaningful, especially when lengthy hearings, discovery disputes, or extensive motion practice are anticipated. Cost should not control the selection, but it certainly should not be ignored.

Past Experience With a Candidate Can Be Invaluable in Arbitrator Selection

One of the most valuable sources of information is actual experience with the candidate. A lawyer who has appeared before a proposed arbitrator may know things that cannot be learned from a resume: whether the arbitrator comes prepared, listens carefully, moves the case along, handles discovery efficiently, asks useful questions, gives the parties a fair opportunity to be heard, and issues clear and timely rulings. Even if the lawyer handling the arbitration has had no experience with a particular candidate, feedback can sometimes (with proper attention to confidentiality) be obtained by friends and colleagues.

The client’s experience is likewise very valuable. A business may have encountered a candidate in an earlier arbitration, mediation, transaction, industry matter, or professional setting. That experience may provide useful information about temperament, subject-matter knowledge, communication style, efficiency, and judgment. Counsel should ask the client at the outset whether anyone within the organization knows or has dealt with any of the candidates.

Experience-based information is often more useful than general reputation, but it must be evaluated carefully. A single prior ruling for or against a party says little by itself. Different disputes present different facts, contracts, law, and records. And counsel should distinguish first-hand professional experience from rumor or second-hand speculation. The objective is to obtain reliable information about how candidates work and the extent to which they may be more or less inclined to rule in favor of one party over another.

Research the Candidates – But Use Judgment

The AAA resume is the starting point, not necessarily the ending point. Counsel can review publicly available professional biographies, articles, speaking materials, reported decisions, prior judicial service, and other appropriate sources. Depending on the candidate and the nature of the case, counsel may also be able to obtain useful, non-confidential feedback from lawyers or clients who have had direct experience with the candidate.

The research should focus on fit and professional characteristics. An article expressing a legal view may be relevant if the arbitration is likely to turn on that precise issue, but it should not be given more credit than deserved in the circumstances. Likewise, a published judicial opinion or public arbitration-related ruling may reveal something about analytical style without reliably predicting how the candidate would decide a different dispute.

Read the Disclosures Carefully

Selection does not end when the parties submit their lists. Under Rule R-18, arbitrators, parties, and party-representatives must “disclose to the AAA any circumstance likely to give rise to justifiable doubt as to the arbitrator’s impartiality or independence, including any bias or any financial or personal interest in the result of the arbitration or any past or present relationship with the parties or their representatives.” AAA Commercial Rule R. 18(a). This disclosure obligation continues through the arbitration’s conclusion. Id.

A disclosure is not automatically a disqualification. Rule R-18 expressly states that disclosure does not itself mean “the
arbitrator considers the disclosed circumstance likely to affect impartiality or independence.” AAA Commercial Rule R-18(c).

Rule R-19(a) provides that neutral arbitrators must be impartial and independent and permits disqualification on specified grounds. Counsel should therefore analyze each disclosure in context, investigate further where appropriate, and raise any legitimate objection promptly rather than assuming it can be saved for later. (The author does not intend here to discuss meaningfully evident partiality as a ground for vacating an award where arbitrators fail to disclose material relationships or interests. You can read more about evident partiality here, here, and here.)

Do Not Communicate Improperly With a Candidate

There is an important boundary between researching a candidate and communicating with one. Rule R-20 generally prohibits a party or someone acting for a party from communicating ex parte with an arbitrator or arbitrator candidate concerning the arbitration. AAA Commercial Rule R-20(a). The Rule contains a limited exception: “a party, or someone acting on behalf of a party, may communicate ex parte with a candidate for direct appointment pursuant to Rule R-14 in order to advise the candidate of the general nature of the controversy and of the anticipated proceedings and to discuss the candidate’s qualifications, availability, or independence in relation to the parties or to discuss the suitability of candidates for selection as a third arbitrator where the parties or party-designated arbitrators
are to participate in that selection.” AAA Commercial Rule R-20(a).

That exception does not mean a party receiving an ordinary Rule R-13 list should simply call the candidates. Unless the applicable agreement, Rules, or AAA instructions authorize contact, counsel should use appropriate research channels and communicate through the AAA when required.

Arbitrator Selection—Use Strikes and Rankings Thoughtfully and Deliberately

Once the research is complete, counsel and the client should compare the candidates against the criteria and considerations previously discussed. A useful approach is to separate genuine reasons for striking a candidate from reasons for preferring one acceptable candidate over another. A material conflict, serious availability problem, a meaningful indication of a probable adverse predisposition concerning an important issue in the case, lack of a qualification essential to the case, or well-founded concern about case management may support a strike. Among the remaining acceptable candidates, rankings can reflect relative fit.

Because the AAA appointment process considers both sides’ lists, ranking is not the same as choosing the arbitrator unilaterally. The business should decide which candidates it would be comfortable having serve as arbitrators, then rank those candidates thoughtfully. Treating the exercise casually—or returning no list at all—surrenders (and squanders) an important opportunity arbitration gives the parties.

Before You Return the AAA List: A Practical Checklist

Confirm the deadline for returning strikes and rankings and calendar it with time to spare.
Review the arbitration agreement to make sure Rule R-13 is actually the governing selection method.
Identify, analyze, and consider the legal, factual, industry, procedural and other characteristics that the business believes to be exhibited by arbitrators who are most likely to be inclined to decide the dispute favorably to the business in the circumstances.
Review each candidate’s AAA resume, experience, availability, disclosed rate, and relevant public information.
Ask counsel and others involved in your business whether they have first-hand experience with any candidate—and give reliable first-hand experience substantial weight.
Consider, analyze, and determine which of the candidates are well suited to act as arbitrators and are also most likely, all else equal, to resolve the dispute in a way that is favorable to the business.
Review relationships and disclosures carefully, and promptly investigate any legitimate conflict concern.
Do not contact a candidate ex parte unless the governing agreement, AAA Rules, and applicable instructions permit it.
Use strikes to remove genuinely unacceptable candidates and rankings to distinguish among acceptable ones.

Conclusion

Choosing an arbitrator is one of the principal advantages commercial arbitration has to offer. For a small business, the best choice will, as a general rule, not necessarily be the person with the most famous name, the most experience, or the best credentials, but will result from carefully and methodically analyzing all pertinent information in an attempt to identify the candidates who are well qualified to decide the dispute and most likely to decide it in a way that aligns with the business’s best interests.

That does not mean that the business will necessarily prevail on the merits if such an arbitrator is chosen, or that there are any guarantees that the analysis discussed in this article will necessarily result in the business selecting the person who, with the benefit of 20-20 hindsight, might actually have been the best candidate.

There is also an element of chance involved. Your strikes and rankings may, for example, result in the AAA making a choice between two candidates, one of whom is a great candidate for the business with the other being an excellent candidate for the business’s adversary. The AAA might end up choosing the candidate that is better from the perspective of your adversary.

At most it is designed to attempt to increase the odds that the business will make wise choices about arbitration selection.

The key is identifying what the dispute requires, researching the candidates carefully, using reliable first-hand experience where available, examining disclosures and practical considerations, and making the strikes and rankings thoughtfully and deliberately.

The Rule R-13 process moves quickly. Experienced arbitration counsel can help the business use that short selection window effectively rather than allowing one of the most consequential decisions in the case to become a last-minute exercise in feckless administrative guesswork—or worse yet, a missed opportunity.

This article is for general informational purposes and, like all other Arbitration Law Forum articles, is not legal advice. It also does not purport to be an exhaustive recitation of all applicable or potentially applicable law that may bear on the issues discussed. In any event, the applicable law and deadlines, and their interpretation and scope, depend on the agreement, award, forum, and the facts, and are subject to judicial or other decision-maker interpretation.

Contacting the Author

If you have any questions about this article, arbitration, arbitration law, or arbitration-related litigation, then you may contact the author, Philip J. Loree Jr. at (516) 941-6094 or PJL1@LoreeLawFirm.com.

Philip J. Loree Jr. is principal of the Loree Law Firm, a New York attorney who focuses his practice on arbitration and associated litigation. A former BigLaw partner, he has more than 35 years of experience representing a wide variety of domestic and international corporate, other entity, and individual clients in trial-court and appellate matters arising under the Federal Arbitration Act—including matters arising under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards. He also has significant experience arbitrating and litigating insurance- and reinsurance-related and other commercial disputes, and in advising clients and co-counsel in arbitration-law-related matters.

ATTORNEY ADVERTISING NOTICE: Prior results do not guarantee a similar outcome.

Photo Acknowledgment

The photo featured in this post was licensed from Yay Images and is subject to copyright protection under applicable law.

The post The AAA Sent Me a List of Arbitrators. How Should My Business Choose One? appeared first on The Arbitration Law Forum.

I Just Received an Arbitration Demand Under the AAA Commercial Rules. What Should I Do First?

Philip J. Loree Jr. — Mon, 14 Sep 2026 21:54:06 +0000

Introduction: Treat the AAA Demand as a Legal Proceeding, Not Routine Business Mail

Received an American Arbitration Association (“AAA”) arbitration demand? Wondering what to do?

The short answer is: contact experienced arbitration counsel immediately. Do not put the arbitration demand in the same pile as ordinary contract correspondence, and do not wait to see what happens next. An AAA commercial arbitration is an adjudicative proceeding that can end in a final, binding, confirmed award fully enforceable in court. Important deadlines can begin running as soon as the AAA sends notice that an arbitration demand has been filed.

This article assumes a business-to-business contract calling for AAA arbitration under the AAA Commercial Arbitration) Rules and Mediation Procedures (eff. June 1, 2026) (the “AAA Commercial Rules,” available here). It assumes the dispute is not subject to the AAA’s Expeditated Procedures or its Procedures for Large, Complex Commercial Disputes.

A respondent (i.e., a person against whom the arbitration demand is made) ordinarily has 14 calendar days after the AAA sends notice of the filing of the demand to file an answering statement. If no answer is filed, the claim is deemed denied, but the arbitration continues. AAA Commercial Rule R-5(a). Do not treat that deemed denial as permission to ignore the deadline, because other objections may have to be raised at or before the answer.

There is also an important timing wrinkle. Under Rule R-4, the claimant sends the respondent a copy of the demand when the case is filed, but the AAA separately notifies the parties when its administrative filing requirements have been satisfied. AAA Commercial Rule R-4(b)(iv). The Rule R-5 answer period runs from the AAA R-4(b)(iv) notice, that is, from the date the AAA notifies the parties that the its administrative filing requirements have been met. AAA Commercial Rules R-5(a).

Counsel should identify the operative AAA notice and calendar every deadline that runs from it. If you have the claimant’s papers but no AAA notice yet, get organized now rather than later.

Why it is Important to Get Counsel Involved Immediately when You Are Served with an AAA Arbitration Demand

AAA Rule R-27 permits a party to appear through counsel or another representative, subject to applicable law. The more important question is not whether the business entity can try to handle the matter itself (a matter that independently raises important legal questions), but whether it should. Arbitration moves quickly, the governing contract may modify the default AAA procedures, and strategic choices made at the outset can affect jurisdiction, defenses, counterclaims, arbitrator selection, discovery, settlement leverage, and cost.

Further, depending on the facts and circumstances, your business may be entitled to stay arbitration based on certain grounds, and to preserve its rights, it may need to make such a motion in Court within 20 days (or another very short period) after being served with a notice of intention to arbitrate. See New York CPLR 7503 (b) & (c); see also recent ALF post. Such service might be accomplished before the AAA notifies that administrative filing requirements have been satisfied.

In this respect, one AAA Commercial Rules deadline is particularly important. Rule R-7 gives the arbitrator power to rule on objections concerning the existence, scope, or validity of the arbitration agreement and arbitrability, and says those objections must be made no later than the answering statement to the claim or counterclaim that gives rise to them.

These kinds of objections, however, may overlap or conflict with objections that you might have the right, subject to timing considerations, to bring in court via a motion to stay arbitration. Coordinating the complex court versus arbitration issues that might arise requires legal skills and arbitration-law experience.

Whether a court, the arbitrator, or both may need to address a threshold issue can be legally complex and mistakes may lead to waiver or forfeiture. The practical point is simple: if your company, for example, never agreed to arbitrate, the wrong entity was named, or a claim may fall clearly outside the applicable arbitration agreement, , counsel should evaluate that immediately and recommend how best to deal with it procedurally. Do not assume the issue can safely be raised later.

Start With the Contract – Not Just the Demand

Give counsel the entire contract, not merely the arbitration clause. Include amendments, exhibits, purchase orders, incorporated terms, guarantees, assignments, side letters, and later agreements that may have altered parties’ rights. The clause may specify locale (i.e., situs), arbitrator selection, governing law, discovery limits, fee allocation, negotiation or mediation prerequisites, or other procedures that differ from AAA defaults. Under Rule R-1, the AAA Commercial Rules generally become part of the agreement when the contract calls for AAA arbitration under those Rules, but the parties may vary them by agreement.

Counsel should also compare the Demand with the contract and the transaction. Is the claimant the party that signed the agreement? Is your company the correct respondent? Do the claims arise from the contract containing the arbitration clause? Is another agreement potentially controlling? Has the claimant demanded relief that the contract may not authorize? These are ordinary business facts, but they can have important arbitration consequences. Those consequences may include, among other things, losing the right to raise objections designed to preserve post-award vacatur grounds if the arbitrators make an adverse award against the business.

Preserve Evidence Now

Treat the Demand much as you would treat the filing of a lawsuit for document-preservation purposes. Identify and preserve relevant contracts, emails, text messages, accounting records, invoices, purchase orders, project files, electronically stored information, and other records. Suspend routine deletion or auto-delete practices that could interfere with preservation of relevant material, which you may need to establish your defense or to defend a claim for spoilation of evidence. Identify the employees and former employees who know the facts. And it goes without saying: Do not edit, “clean up,” or reconstruct documents.

At the same time, coordinate substantive communications about the dispute with counsel. A hurried, ill-advised email to the claimant purporting to “explain what really happened” can (and probably will) be used as evidence against the business. Internal communications created without legal guidance may also result in waiver of otherwise applicable privileges. The goal is not to stop normal business operations but to ensure that the company responds deliberately, preserves the record it may need to defend itself and assert counterclaims, if any.

Calendar the Other Early AAA Deadlines

The answer period is not the only early deadline. Situs-related disputes are to be decided initially by the AAA and ordinarily must be raised within 14 calendar days after the AAA notice of filings, unless the AAA sets another date. AAA Commercial Rule R-12. If the AAA sends a list of potential arbitrators under Rule R-13, the parties ordinarily have 14 calendar days to strike names, rank the others, and return the list. If a party does not return the list, the candidates can be treated as acceptable. These are short periods for decisions that can materially affect the case. Familiarize yourself with all of them and consult with counsel to ensure timely and effective compliance.

The Rules permit extensions in appropriate circumstances: Rule R-43 allows the parties to modify many time periods by agreement and allows the AAA or arbitrator, for good cause, to extend many Rule-based periods. But just as it is in a litigation, a business should never assume an extension will be granted. Ask early if more time is genuinely needed, and support your request with good cause.

Think About Counterclaims, Insurance, and Emergency Issues

A small business receiving a Demand should not focus solely on defense. It may have contract, payment, warranty, indemnity, fraud, or other counterclaims arising out of the same relationship. Rule R-5 permits counterclaims after notice of filing, subject to Rule R-6, and a counterclaim requires a filing fee. Counsel should identify potential counterclaims early so they can be evaluated strategically rather than added seemingly as an afterthought.

Also check insurance and indemnity arrangements promptly. Some disputes may implicate liability insurance—including errors-and-omissions and cyber coverage—or contractual indemnification rights. Policies and indemnity provisions usually contain prompt notice requirements, breach of which may result in loss of defense and indemnification rights.

Finally, ask whether either side needs immediate relief. Rule R-38 authorizes interim measures, including injunctive relief and measures to protect property. AAA Commercial Rules R-38. For many non-expedited arbitrations based on agreements entered on or after October 1, 2013, Rule R-39 also provides an emergency-arbitrator procedure before the merits arbitrator or panel is constituted. On a related matter, the AAA Commercial Rules also state that seeking interim relief from a court does not, by itself, waive arbitration. See AAA Commercial Rule R-38(c). If property, money, confidential information, or other interests face immediate harm, counsel should address that at once, and if necessary and available under applicable law, seek judicial injunctive relief in aid of arbitration. See, e.g., New York CPLR 7502(c) (injunctive relief and attachment in aid of arbitration).

Begin Thinking About the Arbitrator and the Economics of the AAA Case

Arbitrator selection is not clerical. The parties’ ability to select or to participate in the selection of arbitrators is one of the greatest benefits arbitration has to offer, and the choice of arbitrator(s) can be highly consequential and in certain cases even outcome determinative.

The parties’ arbitration agreement generally determines how arbitrators are selected, but where the parties’ agreement does not address that topic, then the default provisions of AAA Commercial Rule R-13 apply. See AAA Commercial Rules R-13 – R-17. R-13 provides for the AAA to supply a list of 10 AAA National Roster arbitrators to the parties, who are supposed to either agree to one of them or to strike an AAA-prescribed number from the list. Based on the arbitrators remaining on the lists, and in accordance with the parties’ preference rankings, the AAA is directed to “invite the acceptance of an arbitrator to serve. . . .” AAA Commercial Rule R-13(b). In the event the parties do not agree on who should serve, if acceptable arbitrators cannot act, or there is any other reason an appointment from the list cannot be made, then the AAA is empowered to make the selection from the National Roster without the parties submitting additional lists. AAA Commercial Rule R-13(b).

Before a list arrives, counsel and the business should identify what considerations they find most important in selecting an arbitrator for the dispute at hand. That may, for example, be knowledge of the industry, experience with the governing law, legal training, litigation and arbitration experience, other dispute resolution experience, contract type, case-management style, availability, billing rate, potential conflicts, and so forth.

Rule R-13 imposes a 14-day deadline, calculated from the list transmittal date, for the parties to rank in preference the remaining candidates and return to the AAA their strikes and ranked lists. That deadline can pass quickly, especially if the business waits until the list arrives without giving serious consideration to what they are looking for in an ideal arbitrator candidate.

The amount in dispute also affects procedure. Unless the parties agree or the AAA determines otherwise, the Expedited Procedures generally apply when no disclosed claim or counterclaim exceeds $100,000, excluding specified items, while the Large, Complex procedures generally apply when a disclosed claim or counterclaim is at least $1 million. AAA Commercial Rule R-1(b)-(c). This article assumes that the arbitration is not conducted pursuant to either the Expedited Procedures or the Large, Complex procedures, but those procedures can effect deadlines and other matters, and therefore must be consulted if the arbitration is conducted according to them.

The amount in dispute is also an important budgetary consideration. The AAA charges administrative fees, and arbitrator compensation and deposits are separate costs. See Rules R-55 through R-59. Pay careful attention to information concerning these costs, including the AAA’s administrative fee schedule. Arbitration costs may be far higher than you might expect. A realistic early budget can influence staffing, discovery, counterclaims, settlement, and the decision whether to pursue mediation.

Do Not Ignore Mediation or the Preliminary Hearing

When a claim or counterclaim exceeds $100,000, Rule R-10 generally calls for mediation while the arbitration is pending, although any party may opt out by notifying the AAA and the other parties. AAA Commercial Rule R-10. Mediation may still deserve serious consideration even when the company believes it has a strong case. The question is whether a negotiated business resolution offers a better risk-adjusted result than continuing to spend time and money on the arbitration.

If the case does not settle, the preliminary hearing will shape what follows. The AAA’s preliminary-hearing checklist calls for discussion of governing law and rules, threshold issues, document exchange, electronically stored information, cybersecurity, dispositive issues, and scheduling. See Preliminary Hearing Procedures P-1 and P-2. A business that gathers facts, identifies witnesses, and thinks about proportional discovery from day one will be better positioned when the arbitrator asks how the case should proceed.

The First 48 Hours: A Checklist

Contact counsel experienced in commercial arbitration. Once you find suitable counsel, and have understood and agreed all terms, engage them without delay.
2. Identify the AAA R-4(b)(iv) notice notice date and immediately calendar the answer, jurisdiction, situs-related, and any other pertinent deadlines. Share this information with counsel and ensure that both of you are aware of, and prepared to meet, all upcoming deadlines.
Preserve relevant paper and electronic records and suspend routine deletion practices that could affect them.
Identify possible threshold objections, defenses, counterclaims, insurance coverage, indemnity rights, and emergency issues.
Avoid an improvised substantive response to the claimant before counsel has reviewed the facts and the arbitration agreement.
Begin thinking about arbitrator qualifications, likely discovery needs, business objectives, settlement possibilities, and a realistic budget.

Contacting the Author

ATTORNEY ADVERTISING NOTICE: Prior results do not guarantee a similar outcome.

Photo Acknowledgment

The photo featured in this post was licensed from Yay Images and is subject to copyright protection under applicable law.

The post I Just Received an Arbitration Demand Under the AAA Commercial Rules. What Should I Do First? appeared first on The Arbitration Law Forum.

No Agreement to Arbitrate in a Case Governed by New York CPLR Article 75?

Philip J. Loree Jr. — Mon, 24 Aug 2026 17:51:52 +0000

Introduction: Same Hypothetical but New York Article 75 Changes the Timing Analysis

New York’s arbitration statute is New York Civ. Prac. L. & R. (“CPLR”) Article 75. It is essentially New York’s version of the Federal Arbitration Act (“FAA”). The FAA was modeled on the statutory predecessor of Article 75. That said, Article 75 and the FAA differ in some material respects.

Our recent Arbitration Law Forum article (the “FAA No Agreement Article”) addressed whether, under the FAA, a business that never agreed to arbitrate may oppose confirmation of an adverse default award even though it did not serve within FAA Section 12’s three-month limitation period a timely motion to vacate, modify, or correct the award.

How would Article 75 resolve the question posed in the FAA No Agreement Article? As we’ll see, the ultimate outcome under both statutes is similar but there are some materially different timing and procedural rules in play. This post discusses how and why that is so.

The Article 75 Hypothetical

Suppose the applicable arbitration law is not the FAA, but New York’s CPLR Article 75. Assume that the claimant properly serves an ordinary demand for arbitration or a notice of intention to arbitrate that meets the requirements of CPLR 7503(c), except that the parties have not agreed to arbitrate, and there is no state contract law basis for binding the respondent party to arbitrate as a nonsignatory.

The business does not participate in the demanded arbitration and objects in writing on the ground no arbitration agreement exists. The arbitration proceeds, the arbitrator makes an adverse default award; more than 90 days pass after delivery of the award; the business does not make a timely CPLR 7511(a) motion to vacate, modify, or correct; and the award winner then moves to confirm. The business appears and opposes confirmation on one ground only: no arbitration agreement was ever made, and there is no state law basis on which the business could be bound to arbitrate as a nonsignatory or otherwise.

Can the business still obtain a judicial determination of the threshold issue of whether the parties agreed to arbitrate in the first place? The better answer is yes, if the defense is a genuine Matter of Matarasso (Continental Casualty Co.) “no agreement” defense and not an ordinary arbitrability or vacatur objection that questions the validity, enforceability, or scope of an arbitration agreement, not the existence vel non of that agreement. But care and caution is advisable because CPLR 7503(c), 7510, and 7511 point strongly toward preclusion in other cases. The New York Court of Appeals’ narrow Matarasso exception governs: the dispute must concern the existence of the arbitration agreement, and nothing else. See Matter of Matarasso (Continental Cas. Co.), 56 N.Y.2d 264, 266-68 (1982).

There is yet another important twist. At least where the FAA does not apply, New York’s 90-day deadline for an affirmative CPLR 7511(a) vacatur application is not necessarily the end of the road when the award winner later seeks confirmation, and the loser seeks to vacate on a ground other than arbitration agreement non-existence. At least the First and Second Departments hold, contrary to the FAA Florasynth rule, that a party may raise CPLR 7511 objections defensively in opposition to a timely confirmation application even after elapse of the 90-day limitation period. Matter of Pine St. Assocs., L.P. v. Southridge Partners, L.P., 107 A.D.3d 95, 100 (1st Dep’t 2013); Jurcec v. Moloney, 164 A.D.3d 1431, 1432 (2d Dep’t 2018). So, unlike the FAA Florasynth scenario discussed in our prior post, the more vexing New York problem is usually the missed 20-day deadline under CPLR 7503(c), not simply the passage of 90 days after the award.

This article addresses New York arbitration law only. It assumes that CPLR Article 75 supplies the relevant post-award procedural rules and that those rules are not displaced by the FAA or another governing arbitration regime. Whether the FAA governs or preempts a particular state-law procedural rule can require a separate analysis outside the scope of this post.

New York Article 75: Two Different Timing Rules

Article 75 20-Day Rule: CPLR 7503(c)

CPLR 7503(c) provides a person served with a proper demand for arbitration or notice of intention to arbitrate only a very brief period within which to seek judicial intervention. The notice must specify the agreement pursuant to which arbitration is sought, supply the required identifying information, and advise that unless the recipient applies to the court for a stay arbitration within 20 days, the recipient “shall thereafter be precluded from objecting that a valid agreement was not made or has not been complied with and from asserting in court the bar of a limitation of time.” CPLR 7503(c).

The Court of Appeals has repeatedly treated that 20-day period as strict when an arbitration agreement exists. Aetna Life & Casualty Co. v. Stekardis, 34 N.Y.2d 182, 185-86 (1974); Matter of Fiveco, Inc. v. Haber, 11 N.Y.3d 140, 144-45 (2008). If a CPLR 7503(c)-compliant notice of intention to arbitrate is properly served—or if the party challenging the award participated in the arbitration—and the objection concerns validity, enforceability, contractual compliance, scope, or statute of limitations, it must be made by a timely application for a stay as contemplated by CPLR 7503(c). See CPLR 7503(b) & (c); CPLR 7511(b)(2)(i)-(iv).

The 90-Day Rule: CPLR 7511(a)

For its part, CPLR 7511(a) provides that an application to vacate or modify an award may be made within 90 days after delivery. That sounds like a hard post-award cutoff. But New York law distinguishes an affirmative application to vacate from a defense asserted when the award winner asks for confirmation.

The First Department has stated that a party may challenge an award either by moving under CPLR 7511(a) within 90 days or by objecting to the award in opposition to a later confirmation application notwithstanding expiration of the 90-day period. Pine Street, 107 A.D.3d at 100. The Second Department says the same thing. Jurcec, 164 A.D.3d at 1432. A recent Appellate Term decision applied that rule to a default award: although the respondent’s cross-motion to vacate was untimely, the court treated the supporting affidavit as opposition to confirmation and considered the asserted CPLR 7511 ground. Slomin’s, Inc. v. Kyprianides, 2024 N.Y. Slip Op. 51539(U), at *2 (App. Term 2d Dep’t Sept. 27, 2024).

For businesspersons, the practical point is important: missing the 90 days is generally not the recommended course, but under New York law it does not necessarily mean that every objection disappears when the prevailing party later moves to confirm. By contrast, ignoring a proper CPLR 7503(c) demand can cause the loss of arbitrability objections before the arbitration even begins.

Matarasso: Under CPLR Article 75 an Arbitration Notice Cannot Create an Arbitration Agreement That Never Existed

Matarasso is the starting point because its facts eliminated an easy escape route: the Court of Appeals expressly noted that the insurer had been served with a proper notice of intention to arbitrate and did not seek a stay until roughly 60 days later. 56 N.Y.2d at 266-67. The claimant argued that CPLR 7503(c)’s 20-day rule therefore ended the inquiry. The Court of Appeals said no.

The Court held that an untimely stay application may be entertained where its basis is that the parties “never agreed to arbitrate,” as distinguished from a case in which an arbitration agreement exists but is claimed to be invalid, unenforceable, unfulfilled, or inapplicable. Id. at 266. CPLR 7503(c) speaks in terms of “parties,” naturally referring to parties to an arbitration agreement, and the Legislature could not be understood to have intended that a person become bound to arbitration merely by remaining inactive for 20 days where “no agreement to arbitrate has ever been made.” Id. at 267.

The Court of Appeals reaffirmed Matarasso in Fiveco, 11 N.Y.3d at 144-45. Recent decisions spanning all four Appellate Divisions continue to recognize the narrow exception Matarasso carved. See Matter of Government Employees Insurance Co. v. De Liriano, 237 A.D.3d 613, 613 (1st Dep’t 2025); Matter of Continental Casualty Co. v. Anderson, 245 A.D.3d 935, 936 (2d Dep’t 2026); Matter of Klein (Human Care Services for Families & Children, Inc.), 250 A.D.3d 1316 (3d Dep’t 2026); Matter of Allstate Insurance Co. (Cappadonia), 143 A.D.3d 1266, 1267 (4th Dep’t 2016).

The recurring lesson is that the exception is about the absence of any arbitration commitment, not about whether an existing arbitration agreement should be enforced, invalidated, or construed in the way the challenger prefers.

Why the Matarasso Defense Should Carry Through to Confirmation

The Court of Appeals has not, in a fact pattern identical to our hypothetical, expressly held that a properly served, nonparticipating respondent may wait until a motion to confirm is served and then invoke Matarasso after both the 20-day and 90-day periods have passed. The better reading of Article 75 and existing case law nevertheless supports that result in a genuine no-agreement case.

The Matarasso rationale is not about forgiving a late filing

Matarasso did not create an equitable extension of the 20-day period. It held that the statutory preclusion rule does not operate in the first place where no agreement to arbitrate exists. 56 N.Y.2d at 267. If 20 days of inaction cannot manufacture assent to arbitration, the same inaction should not create it post award in circumstances where the arbitrator proceeded and made an award ex parte.

Article 75 makes a written arbitration agreement a sine qua non for confirmation

CPLR 7501 begins with a “written agreement” to arbitrate and provides that such an agreement “confers jurisdiction on the courts of the state to enforce it and to enter judgment on an award.” CPLR 7514(b) reinforces the point by requiring the judgment roll to “consist of[,]” among other things, “the original or a copy of the [arbitration] agreement. . . .” CPLR 7514(b).

Those provisions make the agreement a threshold statutory predicate for using Article 75’s summary enforcement machinery against the person to be bound.

MBNA America Bank, N.A. v. Straub, a post-award confirmation decision, reasoned that a court must have the written arbitration agreement before it and must establish its binding nature. 12 Misc. 3d 963, 965-68 (Civ. Ct. N.Y. Co. 2006). Its footnote 5 explains that use of CPLR 7503(c)’s notice procedure does not bar an argument that no arbitration commitment exists, so long as the objector did not participate. Id. at 969 n.5. Cach, LLC v. Viscuso likewise declined to treat service of an arbitration notice as conclusive where a nonparticipating respondent appeared at the confirmation hearing and disputed that the agreement bound him individually. 2009 N.Y. Slip Op. 32031(U), at *3-4 (Sup. Ct. Nassau Co. Aug. 18, 2009).

CPLR 7511(b)(2) and Case Law Suggests the No Agreement Principle Should Apply Post Award Even if the Challenger is Served with a Notice of Intent to Arbitrate and does not Move for a Stay

CPLR 7511(b)(2) provides that that the no agreement principle applies in the post-award context in situations where the challenging party was not served with a notice of intention of arbitrate and did not participate in the arbitration. It states:

The award shall be vacated on the application of a party who neither participated in the arbitration nor was served with a notice of intention to arbitrate if the court finds that:

(i) the rights of that party were prejudiced by one of the grounds specified in paragraph one [i.e., ordinary vacatur grounds, not no agreement grounds]; or

(ii) a valid agreement to arbitrate was not made; or

(iii) the agreement to arbitrate had not been complied with; or

(iv) the arbitrated claim was barred by limitation under subdivision (b) of section 7502.

CPLR 7511(b)(2).

CPLR 7511(b)(2) raises the question whether a no agreement objection to confirmation, and in support of CPLR 7511(b)(2)(ii) vacatur, would be valid post award, despite the challenger’s failure to move for a stay pre-award in response to a notice of intent to arbitrate. As we’ve seen, Matarasso and Article 75 suggest an affirmative answer.

In light of Matarasso, CPLR 7511(b)(2) can be interpreted to support a post-award no agreement argument as a defense to confirmation, and a basis for a CPLR 7511(b)(2) vacatur, even where: (a) the challenger did not move within 20 days for a stay in response to a notice of intent to arbitrate; and (b) the arbitrator made an ex parte default award.

CPLR 7511(b)(2)’s predicate is “the application of a party who neither participated in the arbitration nor was served with a notice of intention to arbitrate. . . .” Such a person can move to vacate on the ground, among others, that there was no arbitration agreement between the parties. See CPLR 7511(b)(2).

Under Matarasso, however, CPLR 7503(c)’s 20-day “rule barring judicial intrusion into the arbitral process operates only when an agreement to arbitrate exists.” 56 N.Y.2d at 267. The Court found “[s]upport for this view” in CPLR 7503(c)’s text, which “speaks in terms of ‘parties’ (e.g., ‘A party may serve upon another party’), the natural connotation being that the statute is directed toward parties to an agreement to arbitrate.” 257 N.Y.2d at 267.

The reference to the service of a “notice of intention to arbitrate” in CPRL 7511(b)(2) must, as a matter of logic and statutory construction, be to a CPLR 7503(c) notice of intention to arbitrate. One can therefore legitimately argue that under CPLR 7511(b)(2) a party has not been “served with a notice of intention to arbitrate” if the notice expresses an intention to arbitrate in a situation where the parties never agreed to arbitrate and are not otherwise bound by an arbitration agreement under applicable state contract law. And if a person has not been served with a notice of intention to arbitrate, and did not participate in the arbitration, then it can unquestionably assert the non-existence of an arbitration agreement as a ground for vacatur or a defense to confirmation. See CPLR 7511(b)(2).

The Second Department’s decision in Matter of Fiduciary Insurance Co. v. American Bankers Insurance Co. of Florida, 132 A.D.3d 40 (2d Dep’t 2015), further supports the argument. American Bankers arose from a statutory mandatory arbitration rather than an ordinary consensual commercial arbitration, so it is not a perfect match. The no agreement argument was raised for the first time post award and the respondent did not participate. The Court explained that the challenger’s failure to seek a CPLR 7503 stay did not render the dispute arbitrable where “no agreement to arbitrate was ever made.” Id. at 45-46 (citing Matter of Commerce & Industry Insurance Co. v. Nester, 90 N.Y.2d 255, 262 (1997), and Matarasso).

The Most Important Qualification: “I Did Not Sign” Does Not Necessarily Mean “No Agreement” under Article 75

This is where the New York analysis becomes considerably more demanding than a simple nonsignatory test. A straightforward Matarasso case is a true stranger-to-the-arbitration-agreement scenario: no signature, no assent, no incorporation by reference, no agency, no assumption, no third-party-beneficiary theory, no estoppel, no alter-ego basis, no other state-law doctrine binding the business, and no prior judicial order determining that it must arbitrate.

But Matarasso itself cautions that nonsignatory status is not always enough. The Court distinguished Matter of Lane (Abel-Bey), 50 N.Y.2d 864 (1980). In that case there was an arbitration agreement among the corporation’s shareholders but the corporation, though named a party, did not execute the agreement. The question was whether the corporation was bound by that existing agreement could not be considered on an untimely stay motion. See Matarasso, 56 N.Y.2d at 267-68 n.; Lane, 50 N.Y.2d at 865-66

The First Department made the same distinction in Matter of Arbitration of Woodcrest Fabrics, Inc., 98 A.D.2d 52 (1st Dep’t 1983). There, the parties had reached a commercial agreement reflected in an unsigned sales contract containing an arbitration agreement. The court held that the challenger’s contention concerned the validity or enforceability of that arbitration provision, not the complete absence of an agreement, and the missed 20-day deadline was fatal. Id. at 54-56.

A more recent warning is Matter of Kucker Marino Winiarsky & Bittens, LLC v. Neiman, 226 A.D.3d 480 (1st Dep’t 2024). The individual contended that he signed a retainer only as agent for a company and that the arbitration clause was between the law firm and the company. But the agreement provided that the firm “would have ‘a claim’ against any director, officer, or member of the company if the legal fees were not timely paid by the company.” He did not appear in the arbitration and also defaulted on the confirmation proceeding. When he later sought to vacate the judgment, the First Department held, among other things, that by failing to seek a stay he had waived the argument that an agreement requiring him to arbitrate was lacking. Id. at 481-82. The procedural posture was much worse than our hypothetical because he also defaulted at confirmation, but the case demonstrates why a business should not assume that the word “nonsignatory” automatically invokes Matarasso.

On the other side of the line are cases in which the claimant is genuinely outside the contractual relationship. For example, the First Department in De Liriano and the Second Department in Anderson treated the question whether a claimant was an “insured” covered by an insurance policy’s arbitration commitment as a true no agreement issue that survived the 20-day period. 237 A.D.3d at 613; 245 A.D.3d at 936.

What Is Not a True Matarasso No Agreement Defense?

Several common objections do not fall within the exception, which requires the nonexistence of an agreement and no other state-law-imposed contract obligation.

An existing contract allegedly expired or ceased to be enforceable

In Fiveco, the contracts contained arbitration clauses and the challenger alleged the contracts had expired. That was an attack on the present viability of existing agreements, not proof that the parties never agreed to arbitrate. 11 N.Y.3d at 144-45.

A contractual coverage or condition-precedent dispute

Where the policy concededly contains an arbitration clause, a contention that coverage conditions were not satisfied ordinarily concerns compliance with the contract, not the existence of the arbitration agreement. Matter of Steck (State Farm Insurance Co.), 89 N.Y.2d 1082, 1084 (1996); Cappadonia, 143 A.D.3d at 1267.

A scope objection

A party cannot avoid CPLR 7503(c) merely by saying, “We never agreed to arbitrate this particular claim,” when the real issue is whether an existing arbitration clause covers the claim. Matter of Colonial Cooperative Insurance Co., 46 A.D.3d 1012, 1013-14 (3d Dep’t 2007).

Does a Written Pre-Arbitration Objection Preserve the Defense under Article 75?

A prompt written objection is useful, but it should not be confused with a properly made CPLR-7503(c)-compliant stay application. For ordinary arbitrability objections, the statute requires resort to court within 20 days after proper service; a letter to the claimant or arbitration administrator does not replace that step.

For a genuine Matarasso defense, however, the written objection helps demonstrate that the business did not assent by conduct and consistently treated itself as outside the arbitration relationship. It also can help establish nonparticipation. In Matter of Blamowski, the Court of Appeals held that repeated letters to the AAA stating that the employer believed it was not obligated to arbitrate did not transform its refusal to participate into participation. 91 N.Y.2d 190, 195-96 (1997). Blamowski involved a defective CPLR 7503(c) notice, so its ultimate vacatur holding is not our hypothetical, but its treatment of nonparticipation is instructive.

If the notice itself is defective – for example, it omits the statutory 20-day warning – the analysis becomes substantially easier for a nonparticipant. Blamowski held that such a person was not properly “served with a notice of intention to arbitrate” for purposes of CPLR 7511(b)(2), allowing the broader post-award grounds specified there. 91 N.Y.2d at 194-96; see also Albert Bialek Associates Inc. v. Northwest-Atlantic Partners, Inc., 251 A.D.2d 145, 145-46 (1st Dep’t 1998). Our hypothetical deliberately assumes a procedurally compliant notice, so that escape route is unavailable.

Participation Creates a Separate and Potentially Serious Article 75 Risk

The hypothetical also assumes complete nonparticipation. New York law can treat participation as a waiver of the right to obtain a later judicial determination of arbitrability when the participant failed to pursue available judicial remedies. Matter of Commerce & Industry Insurance Co. v. Nester, 90 N.Y.2d 255, 262-64 (1997).

A strict reservation of rights therefore does not necessarily make participation safe. The better practice, when feasible, is to seek judicial relief and preserve appellate or stay remedies before proceeding on the merits. The Third Department’s recent Klein decision illustrates the safer sequence: after an order compelling arbitration, the respondent sought a stay from the appellate court before participating; the court held that the respondent had not waived judicial review of arbitrability. 250 A.D.3d 1316.

For a business that intends to rely on the narrow no agreement defense, abstention remains the cleanest version of the hypothetical. Participation may create arguments about implied assent, waiver, estoppel, or acceptance of the arbitral forum that do not exist when the business consistently refuses to arbitrate.

What Happens If the Confirmation Court Finds That the Business Was Bound to Arbitrate?

This is one of the—if not the—most serious risk posed in the no agreement scenario. The company may be convinced that it is a stranger to the arbitration agreement, yet the confirmation court may find otherwise—for example, because the company assumed the contract, acted through an agent, knowingly accepted contractual benefits, is an intended third-party beneficiary, is estopped under governing state law, or is otherwise bound.

If the court finds an arbitration agreement binds the business, the premise for the Matarasso exception collapses. CPLR 7503(c)’s preclusion rule then becomes formidable. The business ordinarily cannot revive the arguments it might have raised in a stay application made within the 20-day period. Fiveco, 11 N.Y.3d at 144-45; Steck, 89 N.Y.2d at 1084; Woodcrest Fabrics, 98 A.D.2d at 54-56.

But the consequences of missing the 90-day period are not identical to the federal consequences discussed in our prior FAA article. If the award winner moves to confirm and the business timely appears in that confirmation proceeding, Pine Street and Jurcec indicate that otherwise available CPLR 7511(b)(1) grounds can still be raised defensively despite expiration of 90 days. That does not make those grounds easy to prove, and it does not resurrect arbitrability objections already forfeited under CPLR 7503(c). It simply means that the New York 90-day rule should not be confused with the FAA Section 12 rule discussed in our prior post.

The business also must actually appear at confirmation. Kucker Marino illustrates the danger of defaulting twice – first in arbitration and then in the confirmation proceeding – and later trying to undo a judgment. 226 A.D.3d at 481-82. The defensive route recognized in Pine Street and Jurcec assumes that the respondent timely opposes the application to confirm.

Practical Takeaways for Businesspersons

Treat a CPLR 7503(c) demand as an emergency. Even if management believes there is no arbitration agreement, have arbitration-law counsel analyze the demand immediately and calendar and comply with the 20-day period. Matarasso provides a safety-valve exception, not a preferred litigation strategy.
Separate “no agreement” from “no signature.” The key question is not simply whether your business signed the paper. Counsel must determine whether an existing arbitration agreement can bind the business through contract, agency, assumption, estoppel, corporate, or other generally applicable principles.
If the business will not participate, make the position unmistakable. A prompt written objection should state that the business has not agreed and does not agree to arbitrate, is not required to submit to arbitration of any issues, does not voluntarily submit such issues, and will not participate in any purported arbitration proceeding. That letter does not substitute for a stay application where one is required, but it can build a helpful record if carefully drafted protect the factual record.
Do not assume that 90 days means “nothing can be done.” Under First- and Second-Department authority, at least in a case where the FAA does not apply, or the parties have clearly and unmistakably selected New York arbitration law to govern and supersede all procedural and substantive provisions of the FAA, respondent may raise vacatur objections defensively when opposing a confirmation application after 90 days. The precise available grounds still depend on CPLR 7503, CPLR 7511, the parties’ conduct, and the facts.
Never default on the confirmation proceeding. A business that wants a court to decide whether it ever agreed to arbitrate must actually present that issue when confirmation is sought. Waiting until judgment has been entered creates an entirely different and much more difficult problem.

Conclusion

Under the strongest version of the hypothetical—a fully compliant CPLR 7503(c) notice, no stay application within 20 days, no participation, an adverse default award, the elapse of more than 90 days after delivery, and a timely opposition to confirmation asserting only that no arbitration agreement ever bound the business (as a signatory or otherwise)—New York law provides a substantial basis for judicial consideration of the no agreement defense.

The argument rests principally on Matarasso: CPLR 7503(c)’s preclusion rule operates only when an arbitration agreement exists and cannot manufacture consent from 20 days of silence. CPLR 7501 and 7514 reinforce the threshold importance of a written arbitration agreement, while post-award cases such as Straub, Cach, and, in a different statutory-arbitration setting, Fiduciary Insurance, support judicial scrutiny of that premise at the enforcement stage. Separately, Pine Street and Jurcec show that expiration of the 90-day CPLR 7511(a) period does not necessarily prevent a respondent from asserting vacatur objections defensively against confirmation.

But the defense is narrower than the phrase “nonsignatory” suggests. Matarasso’s discussion of Lane, Woodcrest Fabrics, Fiveco, and the recent Kucker Marino decision all demonstrate that a court may characterize the dispute as one about whether an existing arbitration agreement binds the challenger, rather than one in which no arbitration agreement ever existed. If the court makes that finding, the missed 20-day deadline can be decisive.

The business lesson is therefore the same one that runs throughout award-challenge practice: timing rules and characterization of the legal issue are extremely important. A true no agreement defense may survive deadlines that would defeat ordinary objections, but it is far safer to identify and litigate the issue promptly than to rely on an exception after an adverse award has already been made.

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No Agreement to Arbitrate? Defending Against an Award Without a Timely FAA Motion to Vacate

Philip J. Loree Jr. — Mon, 10 Aug 2026 15:11:59 +0000

No Agreement: A Businessperson’s Guide to a Narrow but Important Defense to Award Confirmation

What if your adversary obtains a default award against your business but your business never agreed to arbitrate the dispute?

Suppose your business receives an arbitration demand, but it never signed the alleged arbitration agreement, never otherwise agreed to arbitrate, and is not bound to an arbitration agreement under generally applicable state-law contract principles. Your business promptly objects and refuses to appear in response to the arbitration demand and does not participate in the demanded arbitration.

Undaunted, the claimant proceeds, obtains a default award, waits until the Federal Arbitration Act (the “FAA”)’s three-month period for moving to vacate has expired, and then asks a court to confirm the award. Assume that if there were a binding arbitration agreement, then it would be governed exclusively by the FAA, not state arbitration law.

Must the Court confirm the award simply because your business failed to serve and file a Section 10(a) motion to vacate within FAA Section 12’s three-month limitation period for service of a motion to vacate under Section 10, or modify or correct the award under Section 11?

While the U.S. Supreme Court has not definitively decided the question, there is persuasive federal authority (including Supreme Court authority) suggesting the answer is “no”—provided the facts and applicable law establish that the business never agreed to arbitrate, was not otherwise bound, did not participate, and limited its defense to the parties’ failure to enter into an agreement to arbitrate.

Sections 10 and 12 of the FAA do not ordinarily operate that way. A party that wants to vacate, modify, or correct an FAA-governed award must serve its application within Section 12’s short deadline and file it. A losing party ordinarily cannot wait for a confirmation application and then, after the three-month vacatur deadline has elapsed, oppose the application on Section 10(a) vacatur grounds—such as “the arbitrators exceeded their powers[.]” See 9 U.S.C. §§ 10(a)(4), 9-12; Florasynth, Inc. v. Pickholz, 750 F.2d 171, 175, 177 (2d Cir. 1984).

But this hypothetical—a true no agreement objection— presents an unusual and very different situation. It does not ask the court to address an arbitrator’s material violation of an arbitration agreement within the context of an agreed arbitration process. It denies that the supposed arbitration agreement ever existed in the first place. The distinction is narrow and fact dependent but consequential.

The FAA makes arbitration agreements valid and enforceable to the same extent as other contracts, and sets forth summary procedures for enforcing those agreements and awards resulting from them. The predicate for FAA applicability is an arbitration agreement falling within the scope of Sections 1 and 2 of the FAA. Without it, there is nothing on which the FAA’s provisions can, by their terms, have any force or effect. The statute’s deadlines and other procedural provisions should not apply when there is no agreement to arbitrate.

You should be able—in this limited and fairly rare factual scenario—to have a Court decide whether there exists the precondition for FAA enforcement: an arbitration agreement that has been formed and exists. But if it turns out that you were mistaken, and the parties did agree to arbitrate, then you will likely have forfeited or waived any other defense you might have against the application to confirm the default award.

The No Agreement Hypothetical That Presents the Strongest Defense

The defense is strongest where the business can establish all of the following:

It did not sign, accept, or otherwise assent to the arbitration agreement.
It is not bound through assumption, agency, alter ego, veil piercing, incorporation by reference, third-party-beneficiary status, estoppel, or another generally applicable state contract-law doctrine. See Arthur Andersen LLP v. Carlisle, 556 U.S. 624, 631 (2009).
It did not participate in selecting the arbitrator, presenting the merits, asserting counterclaims, requesting affirmative relief, or by otherwise invoking or recognizing the arbitral process.
When arbitration was demanded, it clearly and promptly objected in writing that it had not agreed—and would not agree—to arbitrate.
No court previously determined, in a proceeding binding on the business, that it was required to arbitrate.
At the confirmation proceedings, it challenges only the arbitrator’s authority over the business vel non—not the integrity of the proceeding, the arbitrator’s qualifications or impartiality, alleged procedural misconduct, or alleged manifest disregard of the parties’ agreement or the law.

These facts separate a true no agreement case from the far more common situation in which a signatory or other bound party argues that the arbitrator’s decision was not even arguably an interpretation of the contract; decided a non-arbitrable claim; committed prejudicial, procedural misconduct; or exceeded an otherwise existing grant of or limitation on authority. The objections ordinarily must be raised by a Section 10 or 11 application timely served under Section 12. But the objection in our hypothetical is that the arbitrator never had any authority to decide any disputes between the parties because the parties never consented to it.

The Ordinary FAA Rule: Section 12 Is Strict

FAA Section 9 says that, when the parties have agreed that judgment may be entered on the award, the court “must grant” confirmation “unless the award is vacated, modified, or corrected as prescribed in” FAA Sections 10 and 11. 9 U.S.C. § 9. Section 12 requires “[n]otice of a motion to vacate, modify, or correct” to be served “within three months after the award is filed or delivered.” 9 U.S.C. §§ 9, 12.

Courts enforce the limitation period strictly. The Second Circuit’s Florasynth decision states that a party may not, after expiration of the period, assert grounds for a motion to vacate, modify, or correct even as a defense to confirmation. 750 F.2d at 175. Once the three months pass, a successful party ordinarily can assume that the award is immune from Section 10 or 11 attack, and summary confirmation should follow. Id. at 177.

That finality rule is central to the FAA. It prevents an arbitration loser from ignoring the deadline, waiting to see whether the winner pursues confirmation, and then litigating untimely Section 10 or 11 objections. But it presupposes the parties were beholden to the arbitral process because the were parties to or otherwise bound by an arbitration agreement.

Why a True No-Agreement Defense Is Different

The FAA’s first principle is consent, not coercion. (See, e.g., here.) Section 2 makes a written arbitration provision enforceable as other contracts. Section 4 requires the decisionmaker—ordinarily a court, provided the parties have not entered into an agreement clearly and unmistakably delegating arbitrability determinations to an arbitrator—to determine whether an arbitration agreement was made when that issue is genuinely disputed. Section 9 authorizes confirmation when “the parties in their agreement” agreed that judgment upon the award could be entered. Section 13 requires the agreement to be filed with the court as part of the confirmation record. 9 U.S.C. §§ 2, 4, 9, 13.

These provisions do not confer upon arbitrators adjudicatory power over persons who have not agreed to arbitrate and have not otherwise empowered them to decide any disputes. The Supreme Court has repeatedly emphasized that arbitration is “strictly a matter of consent” and that the first question in a dispute about arbitration is: To what have the parties agreed? Coinbase, Inc. v. Suski, 602 U.S. 143, 148 (2024); First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 942-44 (1995). A contract ordinarily cannot bind a nonparty, and the FAA does not enlarge the range of parties or controversies covered by the agreement. EEOC v. Waffle House, Inc., 534 U.S. 279, 289, 294 (2002).

A no-agreement defense therefore attacks an antecedent condition to the FAA’s operation against the business. The business is not saying, “The arbitrator materially violated the parties’ arbitration agreement.” It is saying, “The parties never agreed to arbitrate any disputes and thus did not consent to the arbitrator making an award, let alone one on which the parties agreed the Court could under FAA Section 9 enter judgment. Under these facts the award proponent has not established the precondition for FAA enforcement– the existence of an agreement falling under the scope of FAA Sections 1 and 2.

This distinction is what New Prime Inc. v. Oliveira, 586 U.S. 105, 110-15 (2019) referred to as the FAA’s “sequencing[.]” 586 U.S. at 111. The nation’s highest court explained, “antecedent statutory provisions limit the scope of the court’s powers under §§ 3 and 4.” 586 U.S. at 110. “Section 2[.]” continued the Court, “provides that the Act applies only when the parties’ agreement to arbitrate is set forth as a ‘written provision in any maritime transaction or a contract evidencing a transaction involving commerce.’” 586 U.S. at 110 (quoting 9 U.S.C. § 2). Section 1, said the Court, “helps define § 2’s terms[,]” including by setting forth the FAA’s transportation workers’ exemption. 586 U.S. at 110. (See here for a discussion of Section 1’s transportation workers’ exemption.)

“Given the [FAA’s] terms and sequencing,” explained the Court, a “court should[,]” “before ordering arbitration[,]” “decide for itself whether” there is an agreement that falls within the scope of the FAA’s coverage. See 586 U.S. at 111. For “to invoke its statutory powers under §§ 3 and 4 to stay litigation and compel arbitration according to a contract’s terms, a court must first know whether the contract itself falls within or beyond the boundaries of §§ 1 and 2.” The same is true of FAA’s post-award provisions, Sections 9-12, which, like Sections 3 and 4, do not apply in the absence of an agreement falling within the scope of Sections 1 and 2.

MCI v. Exalon: The Leading No Agreement Section 12 Decision

The leading domestic FAA authority is the First Circuit’s decision in MCI Telecommunications Corp. v. Exalon Industries, Inc., 138 F.3d 426 (1st Cir. 1998). MCI demanded arbitration under provisions of a Federal Communications Commission (“FCC”) telecommunications tariff. The arbitration challenger did not participate. The arbitrator entered a default award. Exalon did not move to vacate, modify, or correct the award within the Section 12’s three-month deadline. When MCI later sought enforcement, Exalon defended on the ground that no written agreement bound it to arbitrate the dispute. Id. at 427-28.

The U.S. Court of Appeals for the First Circuit held that Section 12 did not bar the defense. It reasoned that the FAA’s enforcement provisions “do not come into play unless there is a written agreement to arbitrate.” Id. at 430. If no agreement exists, the alleged arbitrator’s acts have no force or effect as against the nonparty, and the nonparty’s failure to appear does not create an obligation to arbitrate that did not previously exist. Id.

Accordingly, a person contending that it is not bound may abstain and raise the absence of a written arbitration agreement as a defense to confirmation without being time-barred by Section 12. Id. at 430-31.

The Court analogized the situation to a default judgment entered without personal jurisdiction: a non-appearing person may later challenge the decisionmaker’s authority, but—if authority is established—may not use that collateral attack to reopen consideration of the merits. Id. at 430.

MCI also identified the decisive limitation. If the confirmation court later determines that an arbitration agreement existed and bound the non-appearing party, “the FAA would then fully come into operation, including the time limitations of section 12.” Id. That makes abstention a high-stakes strategy, not a safe harbor.

The First Circuit distinguished cases involving parties that participated in arbitration and later missed Section 12’s deadline. Participation in litigating the merits of the arbitration, the court explained, may at least bind the participant to the procedural requirements of the arbitral process. Id. at 430-31 (distinguishing Cullen v. Paine, Webber, Jackson & Curtis, Inc., 863 F.2d 851 (11th Cir. 1989), and Professional Administrators Ltd. v. Kopper-Glo Fuel, Inc., 819 F.2d 639 (6th Cir. 1987)). It also distinguished Comprehensive Accounting Corp. v. Rudell, 760 F.2d 138, 139-40 (7th Cir. 1985), because there the resisting parties had signed a contract containing an arbitration clause and conceded that the clause covered the dispute.

Other Federal Decisions Reinforce the No Agreement Principle

Although MCI is the clearest appellate decision on Section 12, other authorities reinforce its central distinction. In First Options, the Supreme Court held that courts ordinarily decide whether a person agreed to arbitrate arbitrability unless clear and unmistakable evidence shows otherwise. 514 U.S. at 943-46. The award challengers appeared before the arbitrators to contest jurisdiction, but their forceful objections did not demonstrate consent to let the arbitrators finally decide their own authority. Id. at 946-47. That decision does not interpret Section 12, but it confirms that an arbitrator’s assertion of jurisdiction, in the face of a party’s objection, cannot itself supply the missing agreement.

In China Minmetals Materials Import & Export Co. v. Chi Mei Corp., the Third Circuit held in a New York Convention case that a court asked to enforce an award must independently resolve a genuine contention that the underlying contracts—including the arbitration clauses—were forged. 334 F.3d 274, 288-90 (3d Cir. 2003). Chi Mei had participated only while repeatedly objecting to jurisdiction. The court held that its jurisdictional objection remained preserved absent a clear and unequivocal waiver. Id. at 289-90. The court added that, had the case arisen under the domestic FAA, First Options would have required the same threshold inquiry. Id. at 286.

More recently, in Spineway SA v. Strategos Group LLC, the Third Circuit held that a party did not waive its objection to an arbitrator’s authority by refusing to participate. No. 24-1584, slip op. at 3-4 (3d Cir. Mar. 18, 2025) (not precedential). The case (which is not precedential) arose under the New York Convention and concerned use of an arbitral institution different from the one the parties had selected, but the court expressly relied on MCI and explained that a party contending it is not bound may abstain and later object. Id. The court affirmed refusal to confirm because the tribunal was not constituted according to and in the manner required by the parties’ agreement. Id. at 4-6.

The overall picture is therefore strong but not perfectly uniform. MCI squarely supports the defense in the First Circuit. First Options, China Minmetals, and Spineway supply important formation, preservation, and enforcement principles. In the Second Circuit, Florasynth governs ordinary untimely vacatur defenses but, especially in light of New Prime, it is questionable whether Section 12 could govern an antecedent challenge to the existence of a Section 2-governed arbitration agreement. A business should expect the award proponent to argue that any objection is really an untimely Section 10(a)(4) excess-of-powers claim, not an antecedent Section 2 challenge.

Any counsel considering strategy in a no agreement case should carefully research applicable law to be sure there is not precedent, or even local, nonbinding district court cases, which might undermine or negate the position. If such cases are identified, counsel needs to thoroughly analyze them and devise and implement a strategy to address them.

Different Facts—Different Result

The Business Signed or Otherwise Became Bound

Lack of a signature does not necessarily mean no agreement exists. State contract law may bind a nonsignatory through assumption, agency, alter ego or veil-piercing principles, incorporation by reference, third-party-beneficiary status, waiver, or estoppel. Arthur Andersen, 556 U.S. at 631. Electronic assent, course-of-dealing evidence, or a subsequent agreement may also establish consent. If the court finds that the business was bound, MCI says the FAA—including Section 12—applies fully. 138 F.3d at 430.

The Objection Concerns Validity, Scope, or Outcome—not Existence of the Agreement

The no-agreement doctrine is not a way to repackage ordinary vacatur arguments. The award challenger’s contentions that the award was procured by fraud or undue means, or the arbitrator did not even arguably interpret the agreement or the law; exceeded a contractual limit; was guilty of corruption or evident partiality; awarded relief not even arguably authorized by the agreement; committed prejudicial, procedural misconduct; or otherwise denied the challenging party a fundamentally fair hearing, all generally presuppose the existence of an arbitration agreement. They therefore fall under Section 10, and are subject to Section 12’s three-month limitation period. That is also so for Section 11 grounds to modify or correct an award.

The Business Participated Without a Timely and Clear Objection

Participation can imply consent or waive an arbitrability objection. A party that, without clearly and timely objecting to arbitrability, selects the arbitrator, litigates the merits, seeks affirmative relief—or otherwise waits until an adverse award is made before denying the existence of an agreement—will likely be found to have consented to arbitration. See Opals on Ice Lingerie v. Bodylines Inc., 320 F.3d 362, 368-69 (2d Cir. 2003); Slaney v. International Amateur Athletic Federation, 244 F.3d 580, 591 (7th Cir. 2001). The later and less specific the objection, and the more inconsistent it is with the participation, the greater the risk of forfeiture, waiver, or estoppel becomes.

A Court Already Decided That the Business Must Arbitrate

If a court entered an order compelling the business to arbitrate after resolving formation or nonsignatory issues, the business generally cannot treat confirmation as a fresh opportunity to relitigate that ruling. Appellate deadlines, issue preclusion, law-of-the-case principles, and the particular procedural posture may control. A party that disagrees with a judicial arbitrability ruling must preserve and pursue the available judicial remedies at the appropriate time.

The Business Agreed to Delegate Arbitrability

Parties may clearly and unmistakably agree that an arbitrator will decide threshold arbitrability questions. Henry Schein, Inc. v. Archer & White Sales, Inc., 586 U.S. 63, 65, 69-71 (2019). But a delegation clause is itself an arbitration agreement. A court still must determine whether the resisting business formed or became bound by that delegation agreement. Coinbase, 602 U.S. at 149-51; New Prime, 586 U.S. at 112-15. A person cannot be bound to a delegation clause merely because the document someone else signed contains one.

What Happens If the Court Finds the Business Agreed to Arbitrate or Was Otherwise Bound?

This is the central risk. The business may believe, even reasonably, that it never agreed to arbitrate. But if the confirmation court finds signature, assent, agency, estoppel, assumption, or another basis for binding it, the business’s premise collapses. Under MCI, the FAA then applies in full, including Section 12’s deadline. 138 F.3d at 430. There may, of course, be an appeal, but that does not mean the business’s appeal will be successful.

The business may still litigate the threshold formation question and any factual disputes necessary to decide it. See 9 U.S.C. § 4; MCI, 138 F.3d at 429-31. But absent a timely motion to vacate, it ordinarily cannot pivot to Section 10 or 11 grounds and argue that the arbitrator committed fraud-related error, or was guilty of evident partiality, procedural misconduct, exceeding powers, manifest disregard of the law or the agreement, or some other Section 10 or 11 ground. Its authority challenge may fail while its vacatur, correction, or modification challenges are already time-barred.

That is why a business facing an adverse award should not rely casually on the no-agreement doctrine. Even when the threshold no-contract defense appears strong, counsel should determine the Section 12 deadline immediately. If there are possibly legitimate Section 10 or 11 grounds that might be preserved in the event the no-agreement challenge fails, then counsel should consider filing and serving within the three month time limit a claim for declaratory relief as to the non-existence of the arbitration agreement, and, in the alternative, and under an explicit reservation of rights, a motion to vacate, modify, or correct the award under Sections 10 and 11.

The ability to request this kind of alternative relief under a reservation of rights in a given set of circumstances may be jurisdiction specific. There may also be alternative ways of seeking this kind of relief. Counsel contemplating such a strategy should analyze and research it fully to, among other things, avoid or at least attempt to mitigate the risk of forfeiture or waiver.

But it may, subject to applicable law, turn out that moving under Section 10 or 11 in the alternative on a timely basis may be safer than betting everything on a favorable ruling on contract existence. For that ruling may or may not materialize, depending on the facts and applicable law.

Can the Business in a No Agreement Case Participate in the Arbitration Under a Strict Reservation of Rights?

Possibly—but this is the closer question the hypothetical deliberately avoids. First Options shows that appearing before arbitrators to contest their jurisdiction does not automatically establish consent. 514 U.S. at 946-47. China Minmetals likewise held that a party that repeatedly objected to jurisdiction, yet participated to demonstrate that the contracts were forged, preserved its objection absent a clear and unequivocal waiver. 334 F.3d at 289-90. And Opals on Ice recognizes that a party that clearly and explicitly reserves its arbitrability objection may participate without necessarily forfeiting later judicial review. 320 F.3d at 368-69.

But participation creates factual and legal risk that complete abstention does not. The award proponent may argue that the business impliedly agreed, waived its objection, submitted arbitrability to the arbitrator, or accepted the tribunal’s benefits while reserving only a post-loss escape route. The analysis may turn on what the business did, not merely what its reservation letter said.

Conclusion

On the strongest hypothetical—no assent, no state-law basis for binding the business, no participation, a prompt objection, and no prior judicial determination—the better reading of the FAA and the leading authorities is that the business may oppose confirmation on the threshold ground that no arbitration agreement authorized the award made against it. MCI provides the clearest Section 12 support; First Options, New Prime, Coinbase, China Minmetals, and Spineway reinforce the consent and sequencing principles.

If the court finds that the business did agree or is otherwise bound, however, the ordinary FAA rules apply with full force—including Section 12’s deadline. That possibility makes early, careful, and alternative planning, research, and analysis essential.

This article is for general informational purposes and, like all other Arbitration Law Forum articles, is not legal advice. It also does not purport to be an exhaustive recitation of all applicable law that may bear on the issues discussed in any particular jurisdiction. In any event, the applicable law and deadlines, and their interpretation and scope, depend on the agreement, award, forum, and the facts, and are subject to judicial interpretation.

Some Additional Related Arbitration Law Forum Resources:

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Unfavorable Arbitration Award? A Businessperson’s Guide to Vacating, Modifying or Correcting FAA-Governed Awards

Philip J. Loree Jr. — Wed, 29 Jul 2026 15:19:12 +0000

Introduction: Can I Vacate, Modify or Correct this Award?

Your business has just received an unfavorable arbitration award. The amount is substantial. The award seems legally wrong, factually indefensible, or procedurally unfair. Questions arise: Will a court vacate, modify or correct it? What would a court review? Where must or may the challenge be brought? How much time is available? And what information will arbitration-law counsel need?

The first point is the most important: a motion to vacate, modify or correct an arbitration award is not an appeal. A court ordinarily will not rehear the dispute, reweigh the evidence, correct ordinary legal or factual errors, or substitute its judgment for the arbitrator’s. Federal Arbitration Act (FAA) Sections 10 and 11 provide a narrow safety net, not broad appellate review. See 9 U.S.C. §§ 10-11; Hall Street Associates, L.L.C. v. Mattel, Inc., 552 U.S. 576, 584 (2008). In essence, Section 10 addresses only egregious violations of an arbitration agreement and then only those contemplated by the statute.

That does not mean every attempt to vacate, modify or correct an award will fail. Certain awards present genuine, cognizable grounds for a challenge. But those grounds must be identified quickly, supported by the arbitration record, and presented under demanding legal standards. This article is an issue-spotting guide for businesspersons considering a challenge to a domestic award falling under FAA Chapter 1. International awards falling under FAA Chapters 2 or 3, and other awards not governed by FAA Chapter 1, may require a different analysis.

What Does it Mean to Vacate, Modify or Correct an Award?

Vacatur nullifies all or part of an award. It usually does not produce a judgment on the merits for the award challenger. The dispute may have to be arbitrated anew, perhaps before the same arbitrator or panel or perhaps before a new one, depending on the governing law, agreement, provider rules, and court order.

Modification or correction is narrower. It generally repairs an evident calculation or description error, deletes reference to an unsubmitted matter, or corrects a defect of form without changing the merits. It is not a vehicle for rewriting the award simply because the arbitrator reached the wrong result.

Proceedings to vacate, modify or correct an award are usually decided on motion papers under motion practice rules. Even narrow, supervised discovery or evidentiary hearings are the exception, not the rule. A strong application therefore must tell a compelling story through evidence, already in hand, and admissible for motion practice purposes. Such evidence may include the arbitration agreement, pleadings, orders, exhibits, transcript, briefs, objections, arbitrator disclosures, correspondence, and the award itself, properly authenticated and presented by affidavit, declaration, affirmation, or the equivalent.

Potential Vacatur Candidates under FAA Section 10

Section 10(a) identifies four statutory categories: (1) procuring an award by corruption, fraud, or undue means; (2) evident partiality or corruption in an arbitrator; (3) specified procedural misconduct or other prejudicial misbehavior; and (4) exceeding powers or imperfectly executing them by failing to make a mutual, final, and definite award. 9 U.S.C. § 10(a).

The examples below are illustrations only and are designed to identify fact patterns that might provide a solid basis for a successful challenge. The same fact pattern may succeed in one jurisdiction and fail in another. Waiver, forfeiture, lack of prejudice, an inadequate record, or a different governing standard can defeat an otherwise plausible challenge.

The Award Was Procured by Fraud, Corruption, or Undue Means

A potentially strong case may exist when clear and convincing evidence shows that the prevailing party obtained the award by fraud, corruption, or undue means that materially affected the arbitration, and could not, with reasonable diligence, have been discovered and addressed earlier. “Undue means” usually connotes something akin to fraud.

Examples include:

The prevailing party submitted fabricated invoices, altered emails, or false financial records that materially influenced liability or damages.
A key witness gave materially false testimony on a material issue, later disproved by newly discovered and reliable evidence, and the false testimony had at least a meaningful connection to the result.
A party bribed an arbitrator or used another corrupt method to influence the decision.

Fraud vacatur is not a device for relitigating credibility. Courts ordinarily demand clear and convincing proof, materiality, and diligence. Arbitration-law counsel will ask when the misconduct was discovered, why it could not have been uncovered during the arbitration, what objections were made, and how the misconduct affected the award.

Evident Partiality or Corruption in an Arbitrator

While standards may vary from jurisdiction to jurisdiction, an evident-partiality challenge may be viable when an arbitrator failed to disclose a significant relationship, financial interest, or other conflict, and a reasonable person would have to conclude that an arbitrator laboring under that conflict was partial to a party in an arbitration.

Examples include:

The arbitrator had an undisclosed material financial interest in one party or in the outcome.
The arbitrator or the arbitrator’s firm had a substantial, undisclosed business relationship with a party, counsel, important witness, or affiliated entity.
The arbitrator was an officer, director, employee, or significant adviser of a party and did not disclose the relationship.

Nondisclosure alone does not automatically require vacatur. Courts disagree about how serious or direct a relationship must be. Timing is also relevant. A party that knew, or should have known, of a conflict but proceeded without a prompt objection may, depending on the facts and applicable law, be deemed to waive the challenge. Preserve the original disclosures, supplemental disclosures, provider correspondence, arbitrator and provider invoices, conflict checks, objections, and recusal requests.

Consult and comply with applicable provider rules (if any) concerning objections and requests for recusal. Where the rules do not prohibit it, make objections both on the record and in correspondence with the arbitration provider (if any), the arbitrator, and counsel for the parties.

Procedural Misconduct that Caused Prejudice

Section 10(a)(3) addresses misconduct in refusing a postponement despite sufficient cause, refusing to hear pertinent and material evidence, or engaging in other prejudicial misbehavior. Arbitrators have broad discretion to manage hearings, exclude cumulative evidence, enforce deadlines, and prevent delay. Generally, the question is not whether the ruling was debatable, but whether it clearly denied a fundamentally fair opportunity to present the case and caused prejudice.

Possible examples include:

The arbitrator refused a reasonable continuance after a material witness was suddenly hospitalized, even though the requesting party acted diligently and showed that the witness could testify within a defined period.
The arbitrator excluded noncumulative evidence central to a dispositive issue, despite a clear offer of proof explaining what the evidence would establish.
After scheduling discovery and a merits hearing, the arbitrator unexpectedly entered a final award without notice or an opportunity for one party to present its case.

These claims often rise or fall on preservation of the record. Arbitration-law counsel will look for the written request, the stated grounds, the opponent’s response, the ruling, the challenger’s objections, a proffer of the excluded evidence, a transcript or other reliable record documenting the proffer and objections, and evidence that the arbitrator’s ruling prejudiced the challenger.

A business that chose not to order a transcript will likely face a serious proof problem. To underscore a point we’ve made before, saving a few hundred dollars in transcription costs is a poor tradeoff if it means losing an otherwise promising procedural misconduct claim.

The Arbitrator Exceeded the Powers Granted by the Parties

Section 10(a)(4) focuses on authority, not ordinary error. The court asks whether the arbitrator acted within the powers granted by the arbitration agreement, the issues submitted, and the governing arbitral rules. If the arbitrator was even arguably interpreting the contract, the award must stand. See Oxford Health Plans LLC v. Sutter, 569 U.S. 564, 569 (2013).

Potential examples include:

The arbitrator decided a claim or defense that the parties clearly did not agree to submit—or in fact submit—to arbitration.
The arbitrator imposed obligations on a nonparty that never agreed to arbitrate, did not participate in the arbitration, and was not otherwise bound under applicable state law.
The agreement expressly and clearly prohibited punitive damages, but the arbitrator awarded them without any even barely colorable contractual basis for doing so.
The award did not resolve a claim or issue submitted for decision and therefore was not mutual, final, and definite.
The award abandoned the agreement rested solely on the arbitrator’s personal view of commercial justice, and the arbitrator did not even arguably interpret the contract.
The award clearly contravened the express terms of parties’ contract, and was not even arguably based on an interpretation of that contract or the law.

A serious legal or factual mistake is ordinarily not enough. Counsel must tie the challenge to a concrete limit on arbitral authority, show that the arbitrator crossed that limit, and in reaching that conclusion did not even arguably interpret the parties’ agreement.

Manifest Disregard and Public Policy

Some federal courts continue to discuss “manifest disregard of the law” as a vacatur ground, sometimes as a ground authorized by Section 10(a)(4) or as a judicial gloss on the Section 10 grounds generally. Others reject it as an independent ground in light of Hall Street. Where recognized, it generally requires far more than legal error: the controlling rule must have been clear, specifically presented, outcome-determinative, and consciously ignored, with no even barely colorable basis supporting the result.

Public-policy challenges are also exceptionally narrow and jurisdiction-dependent. An award ordinarily must require conduct that directly conflicts with a well-defined and dominant public policy established by law. One possible example is an award that clearly directs one or both of the parties to violate the terms of a statute that was enacted for the benefit of a class of persons other than simply the parties to the arbitration agreement.

Neither manifest disregard of the law nor violation of public policy doctrine is a license to vacate an award viewed as unfair, unwise, or contrary to sound business policy.

What Usually Is Not Enough to Vacate an Award?

Several recurring complaints may justify disappointment but, standing alone, usually do not justify vacatur:

The arbitrator misunderstood a witness, credited the other side’s version of events, or gave little weight to documents and other evidence your business considered decisive.
The arbitrator made a legal error, misread a statute, or provided sparse, inconsistent, or unpersuasive reasoning.
The damages appear excessive, but the relief was arguably within the submission and there is at least a barely colorable contractual or legal basis for the calculation, even it is not one that a court would likely ever accept were it deciding the merits.
The arbitrator enforced a procedural deadline, limited discovery, or excluded cumulative evidence in a way the losing party considers harsh or unfair.
The award is unexplained. Unless the agreement or governing rules clearly required a reasoned award—and unless the arbitrator does not even arguably interpret the agreement or rules as authorizing unreasoned awards—then unreasoned awards are perfectly acceptable.

A challenge on the ground the award is bereft of persuasive reasoning might garner some emotional support from some persons but not likely from judges well-versed in the FAA. Courts evaluate whether a statutory ground exists, not whether the award might persuade another decisionmaker. A useful arbitration-law counsel consultation separates three things that clients understandably tend to conflate: an incorrect result, a process that seems unfair, and a legally cognizable defect within the meaning of the FAA. Only the third supports judicial relief; the second is relevant only when it amounts to a prejudicial denial of a fundamentally fair hearing falling within Section 10(a)(3).

To Modify or Correct an Award Under FAA Section 11

Section 11 authorizes a court to modify or correct an award in three limited circumstances. 9 U.S.C. § 11.

Evident Material Miscalculation or Description Error

Suppose the award lists $1 million in general damages and $1.25 million in consequential damages, but mistakenly states the total as $22.5 million even though the award and record unmistakably show an intended total of $2.25 million. That is a classic correction candidate.

The same may be true when the award unmistakably misdescribes a person, property, account, date, or item. For example, it directs the filing of a lien on “249 Green Street,” but the submitted documents and the award’s reasoning unmistakably identify the intended property to be 250 Greene Street.

The error generally must be evident from the face of the award, or the face of the award and the undisputed arbitration record. Section 11 does not authorize a court to redo disputed calculations or choose among competing damages theories.

Relief on a Matter Not Submitted

A court may modify an award that grants relief on a matter not submitted when the additional ruling affects the merits of the matters that were submitted. For example, the parties asked only whether an agreement terminated on January 1, but the arbitrator also found a later breach and awarded damages no party requested.

Depending on the circumstances, the same defect may also support partial vacatur under Section 10(a)(4). Counsel must determine which remedy best fits the defect and the controlling law, and should generally assert both in support of the application.

Imperfection in Form Not Affecting the Merits

Section 11(c) permits correction of a defect in form that does not change the merits. It might apply where the award’s operative language contains an obvious omission or inconsistency that prevents implementation of the award even though the intended merits determination is unmistakable.

Suppose, for example, the award unambiguously orders payment of a specified sum “no later than 30 days of the date of this Award,” but mistakenly omits the date of the award. Assuming the arbitration record unmistakably establishes the intended date, then that award may be correctable under Section 11(c), provided the correction only enables implementation of the relief specified in the award.

Finally, if there might be a ground to modify or correct the award under any of Section 11’s three grounds, be sure to check the arbitration agreement and provider rules immediately. They may authorize the arbitrator to correct computational, clerical, typographical, or similar errors within a very short period. A provider request is not an opportunity for merits reconsideration, and it should never be assumed to extend or toll a judicial deadline.

What to Do in the First 24 to 48 Hours

Do not place the award in a drawer, hoping it will go away—it won’t. Take these steps immediately:

Save the award in its original form, together with the email, transmittal letter, envelope, electronic notice, and other evidence showing when and how it was delivered.
Calendar the most conservative deadline (i.e., the earliest interpretation of the deadline) but have arbitration-law counsel calculate the controlling deadline as soon as possible.
Preserve the complete arbitration file: agreement, amendments, provider rules, pleadings, hearing orders, disclosures, correspondence (including about the selection and appointment of arbitrators), exhibits, briefs, fee rulings, orders, all hearing and meeting transcripts or recordings, and post-hearing submissions.
Identify every objection, continuance request, evidentiary proffer, recusal request, and ruling potentially relevant to a challenge.
Have counsel issue an appropriate litigation hold (or an update to an existing hold). Do not delete emails, texts, accounting records, or electronic files connected with the arbitration or the suspected ground for challenge.
Avoid direct or ex parte communications with the arbitrator. Any permissible request for correction or clarification, and all other communications, should be made in compliance with applicable arbitration rules.
Determine whether the prevailing party has threatened or attempted to initiate any confirmation, collection, account restraint, or other enforcement activity (including the filing of any liens).

The Record Must Prove the Grounds to Vacate, Modify or Correct

A strong theory without record support is rarely enough to vacate, modify or correct an award. For a procedural challenge, the court may need the transcript, the written motion for adjournment, the arbitrator’s ruling, and the excluded exhibit or witness proffer. For an excess-of-powers challenge, arbitration-law counsel may need every version of the arbitration clause; the demand, answer and counterclaims; the submission agreement and correspondence concerning the submission of issues to the arbitrator; the applicable provider rules, and any stipulations or agreements narrowing or expanding the issues to be determined. For evident partiality, the critical evidence may include disclosure forms, engagement letters, provider correspondence, public records, and proof of the relationship and when and how it was discovered.

The business should also identify who can authenticate key documents and explain the chronology in a declaration. Counsel may need affidavits from company personnel, prior arbitration counsel, witnesses, or investigators. Because post-award discovery is not routinely available, the application ordinarily must be built from materials the business can lawfully obtain and present at the outset.

What Arbitration-Law Counsel Must Analyze

A useful first consultation should address more than whether the award “looks wrong.” Arbitration-law counsel should analyze:

The precise statutory or recognized ground for relief and the evidence supporting each required element.
Preservation, waiver, diligence, prejudice, and whether the record is adequate.
Whether to seek vacatur, partial vacatur, modification, correction, remand, or some combination.
Whether the arbitrator or provider can correct an evident error, and whether doing so affects court strategy.
The governing arbitration law, including any state-law provisions that may supplement or alter the analysis.
The proper court, venue, filing method, service method, and deadline.
Whether a pending lawsuit stayed under FAA Section 3 remains available for post-award motions.
Whether federal subject-matter jurisdiction exists. The FAA does not itself create federal jurisdiction. A freestanding Section 9, 10, or 11 application generally needs an independent jurisdictional basis on its face; a court may not simply look through to the underlying dispute. Badgerow v. Walters, 596 U.S. 1, 4-5 (2022). But a federal court that previously stayed pending claims under Section 3 retains jurisdiction to decide later confirmation or vacatur motions concerning the resulting award. Jules v. Andre Balazs Properties, 146 S. Ct. 1209, 1214-15 (2026).
Whether filing in state court creates removal risk, or filing in federal court may lead to a jurisdictional fight that may consumes precious time and resources.
What to expect later on in terms of enforcement activity in the event the trial court confirms the award, and what, if anything, can be done to stay such enforcement, including the posting of a bond pending appeal. This discussion should include whether it may be necessary to obtain in the future the assistance of an attorney who represents judgment debtors in debt collection and judgment enforcement matters.
The likely cost, business benefit, settlement value, collectability consequences, and what happens if the award is vacated and must be re-arbitrated.

The Deadline to Vacate, Modify or Correct Is Shorter Than It Looks

FAA Section 12 states that notice of a motion to vacate, modify, or correct must be served within three months after the award is “filed or delivered.” 9 U.S.C. § 12. Three months is not always the same as 90 days, and the trigger is not necessarily the date printed on the award.

Court rules govern filing mechanics, and FAA service requirements can be technical, especially when the opposing party is outside the district. For example, following FAA Section 12 strictly to the letter, some courts require that service by U.S. Marshall be utilized when the opposing party is outside the district. That takes additional time to arrange, effectively reducing further the amount of time the challenger has to prepare papers.

Depending on the forum, governing law, and procedural posture, state law may impose a shorter period or additional requirements. A provider request for correction, settlement discussion, or promise by the opponent not to enforce should not be assumed to stop the clock. The safe practice is to determine the deadline immediately and plan to file and complete required service well before it expires.

A supported challenge also takes time. Arbitration-law counsel must master the agreement and record, research the controlling jurisdiction’s standards, prepare affidavits or declarations, assemble exhibits to be authenticated by affidavit or declaration, address jurisdiction and venue, and arrange proper service. An unsupported placeholder filing will likely not preserve a ground that was omitted or inadequately presented.

Making the Business Decision To Apply to Vacate, Modify or Correct an Award

Even a good-faith challenge may have modest odds because judicial review is deliberately narrow. The decision should therefore account for more than legal merit. Consider the amount and collectability of the award, the cost of motion and appellate practice, the cost and risk of a new arbitration, the possibility of returning to the same arbitrator, insurance and indemnity issues, business disruption, settlement opportunities, and the need for a stay.

The right question is not merely, “Was the arbitrator wrong?” It is: “Can we prove, from a properly preserved record and under the governing law, a recognized ground for vacating, modifying, or correcting this award—and does pursuing that remedy make business sense?”

Vacating, Modifying or Correcting Awards: Conclusion

An unfavorable award is not necessarily the end of the road, but the road is fraught with traps for the unwary. Preserve the record, calculate the deadline, identify the strongest potential ground, and engage experienced arbitration-law counsel promptly. Speed matters, but disciplined issue selection and evidentiary support matter just as much.

This article is for general informational purposes and, like all other Arbitration Law Forum articles, is not legal advice. The applicable law and deadlines, and their interpretation and scope, depend on the agreement, award, forum, and the facts, and are subject to judicial interpretation.

Some Additional Related Arbitration Law Forum Resources:

Contacting the Author

If you have any questions about this article, arbitration, arbitration law, or arbitration-related litigation, then please contact Philip J. Loree Jr. at (516) 941-6094 or PJL1@LoreeLawFirm.com.

ATTORNEY ADVERTISING NOTICE: Prior results do not guarantee a similar outcome.

Photo Acknowledgment

The image featured in this post was generated by ChatGPT on July 27, 2026.

The post Unfavorable Arbitration Award? A Businessperson’s Guide to Vacating, Modifying or Correcting FAA-Governed Awards appeared first on The Arbitration Law Forum.

Latest FAA Section 1 Transportation Worker Exemption Development: SCOTUS Says “No” to Employer’s Bright-Line Rule Conditioning FAA Exemption Eligibility on Requiring Employee to Cross Border to be “Engaged in Commerce”

Philip J. Loree Jr. — Mon, 15 Jun 2026 14:27:28 +0000

SCOTUS’S Most Recent FAA Section 1 Transportation Worker Exemption Case: Introduction

May was a big month for arbitration in the U.S. Supreme Court. The Court decided the two Federal Arbitration Act (“FAA”) cases on its 2025 Term docket, one on subject matter jurisdiction, the other on the scope of the FAA Section 1 transportation workers exemption.

On May 14, 2026, the Court decided Jules v. Andre Balazs Properties, No. 25-83, slip op. (U.S. May 14, 2026). Jules held that “a federal court with pre-existing jurisdiction over claims that it stayed pending arbitration under §3 can adjudicate a §9 or §10 motion even if that motion does not present, on its face, an independent basis for federal jurisdiction.” Jules, slip op. at 7. Associate Justice Sonia Sotomayor wrote the Court’s well-reasoned, 9-0 opinion in Jules. Professor Angela Downes, Professor Richard D. Faulkner, and the author discussed the then-pending Jules case in a March 27, 2026 YouTube video hosted by the International Institute for Conflict Prevention and Resolution (“CPR”)’s Russ Bleemer and entitled Hot Topics: The Supreme Court’s March on Arbitration. The Arbitration Law Forum will be reporting more about Jules in the not-too-distant future.

But the focus of this post is the second of the two arbitration-law cases decided in May of this 2025 Term, Flowers Foods, Inc. v. Brock, No. 24-935, 608 U.S. ___, slip op. (May 28, 2026), which concerned the scope of the FAA Section 1 transportation workers’ exemption. In Brock the Court unanimously held that a worker who transports goods only within one State may still belong to a class of workers “engaged in . . . interstate commerce” if the transportation work they perform intrastate is part of the route the goods travel interstate. Brock, slip op. at 3. If so, then that worker’s arbitration agreement may under FAA Section 1 be exempt from FAA enforcement. Id.; 9 U.S.C. § 1.

Simple, right? Perhaps, but it underscores an important doctrinal point. Section 1 does not inquire whether a transportation worker actually crosses a state line. It does not ask whether the worker personally crosses a state line. And it does not ask whether the worker physically touched, loaded, unloaded, or otherwise interacted with a vehicle that crossed a state line. As interpreted by Brock, what Section 1 asks—though not in these precise words—is whether whether the transportation worker plays a “direct, active, and necessary” role in the interstate movement of goods, irrespective of where in the goods’ path of travel the worker played that role. Slip op. at 8. As Associate Justice Neil M. Gorsuch—who authored the opinion for a unanimous Court— aptly explained, applicability of the FAA does not turn on “a game of tag with vehicles” that cross state lines. Slip op. at 3.

Brock: Background and the QP

Flowers Foods produces packaged baked goods, including Wonder Bread and other products. It operates bakeries in 19 States, using franchisees for distribution in various geographic territories. Brock was a Flowers Foods franchise, who, without leaving Colorado, collected Flowers goods from a Colorado warehouse, and delivered them to local stores in Colorado. Slip op. at 1-2.

Brock commenced in 2022 against Flowers an action in Colorado federal district court, alleging that Flowers violated state and federal law by not paying him, and other distributors, the wages to which he and they were allegedly entitled under applicable law. Flowers moved under the FAA to compel arbitration, relying on Brock’s distribution agreement, which required arbitration of disputes between Brock and Flowers. The district court denied the motion and the Tenth Circuit affirmed. The Tenth concluded that Brock was part of a class of workers engaged in interstate commerce and accordingly FAA Section 1’s exemption applied, depriving the Court of its authority under the FAA to stay litigation and compel arbitration. Slip op. at 2; see 9 U.S.C. §§ 1, 3, & 4

Flowers sought certiorari on a deliberately narrow question: can a worker qualify as “engaged in . . . interstate commerce” under Section 1 if he never crosses state lines and never interacts with vehicles that do? (Slip op. at 3.) The question allowed Flowers to avoid what might otherwise have been some difficult factual questions, all in favor of inviting the Court to adopt a clear, bright-line, easily administrable rule. The Court responded to the invitation with equal clarity: it said there is no such rule.

The Court’s Reasoning

The opinion began with SCOTUS’s three, relatively recently decided, Section 1 cases. New Prime Inc. v. Oliveira, 586 U.S. 105 (2019), said Section 1’s “contracts of employment” extended to independent contractor relationships. 586 U.S. at 116. (See Arbitration Law Forum Posts here and here.) Southwest Airlines Co. v. Saxon, 596 U.S. 450 (2022), held an airline worker that loaded and unloaded cargo could fall within the Section 1 exemption even though that person did not fly across state lines or pilot planes. 596 U.S. at 459, 461. (See Arbitration Law Forum Post here.) Bissonnette v. LePage Bakeries Park St., LLC, 601 U.S. 246, 249 (2024), held there was no requirement that exemption be invoked by a transportation industry worker, provided the work “‘play[s] a direct and necessary role in the free flow of goods across borders.’” Slip op. at 3 (quoting Bissonnette, 601 U.S. at 256). (See Arbitration Law Forum post here.)

The Court explained that in each of these three cases the Court had rejected a proposed limitation on Section 1 that would limit the exemption’s scope by creating a category of exempt cases rather than limiting it based on Section 1’s text. “Make this case the fourth[,]” said the Court. slip op. at 3.

A textual analysis demonstrated that the individual transportation worker was not required to cross any borders to qualify for the exemption. Nor does Section 1 require the worker to interact with a vehicle that has crossed or is intending to cross the border. Slip op. at 6-7.

Section 1, explained the Court, exempts from the FAA “workers engaged in . . . interstate commerce.” Slip op. at 7 (quoting 9 U.S.C. § 1). At the time the FAA was in enacted in 1925, to “engage,” meant to “take part in” something, or to be “employ[ed]” or “involve[d]” in it. Slip op. at 7 (quotations and citations omitted). “Interstate commerce” was traffic, intercourse, or “the transportation of persons or property between or among the several states” or from points in one State to points in another. Slip op. at 7 (citations and quotations omitted).

Interstate transportation, observed the Court, frequently includes intrastate segments. Slip op. at 7. It consists not only of “crossing state lines but intrastate activity too.” Slip op. at 7. “[A] continuous carriage[,]” explained the Court, “can begin in one State and end in another even though much of the journey occurs within a single State.” Slip op. at 7.

The Butterscotch Krimpets’ Excellent (but Hypothetical) Adventure

Simple hypotheticals can illustrate with great clarity complex principals or rules. Justice Gorsuch masterfully used this technique in the Opinion. The Court posited a company in State B that contracts to deliver a truckload of Butterscotch Krimpets to a customer in State A. One driver carries them across the state line, and the Court noted that all would agree that the driver was engaged in interstate commerce. Changing the hypothetical slightly, the Court supposed that three drivers divvied up the work as follows: Driver 1 would take the goods from the bakery to the border of State B, where Driver 2 collects them and drives them 10 feet across the border. Driver 3 collects them in State A and delivers them to the customer in State A. Slip op. at 4-5.

The Court observed that under Flowers’s proposed, bright-line rule, only Driver 2 was engaged in interstate commerce. “[T]hat cannot be right,” the Court said, for each driver “played a direct, active, and necessary part” in moving the goods from State B to State A. Slip op. at 8.

That hypothetical illustrates why Flower’s rule would make Section 1 turn on how the transportation was choreographed, so to speak, rather than on how the transportation scheme functioned to transport the goods from starting to end point. The statutory inquiry is aligned not with which driver crossed the border but with whether the worker’s class participates in interstate transportation as part of a continuous, coordinated movement of goods from starting to end point.

The Court Grounds FAA Section 1 Hypothetical in Historical Practice

Pointing to certain cases illustrating how engaging in commerce was generally understood at or about late nineteenth and early twentieth centuries—that is, a period roughly contemporaneous with the FAA’s 1925 enactment—the Court demonstrated how general commonsense aligns with historical practice. Discussing The Daniel Ball, 10 Wall. 557, 565 (1871), the Court explained how a steamship operated entirely within Michigan waterways nevertheless was “engaged in commerce between the States” because it transported goods destined for other States, or goods that had come from outside Michigan and were destined for points within Michigan. Slip op. at 8 (quotation and citation omitted) The rule The Daniel Ball applied was functional, not mechanical or technical: “that several different and independent agencies are employed in transporting the commodity, some acting entirely in one State, and some acting through two or more States, does in no respect affect the character of the transaction.” Slip op. at 8 (citation and quotation omitted). The steamship was “engaged in interstate commerce even though it stayed in Michigan,
and even though it did not come into direct contact with a vessel that had crossed state lines.” Slip op. at 8-9.

The Court also cited Rearick v. Pennsylvania, 203 U.S. 507, 510-13 (1906); Rhodes v. Iowa, 170 U.S. 412, 413-414, 426 (1898); and Norfolk & Western R. Co. v. Pennsylvania, 136 U.S. 114, 119-120 (1890), for like propositions. The Court carefully explained that it does “not mean to suggest that the scope of §1 is coterminous with the scope of the Commerce Clause as it was interpreted at the time of the FAA’s adoption in 1925.” Slip op. at 9, see slip op. at 9-10; U.S. CONST. art. I, § 8, cl. 3. The point was textual: contemporaneous cases using language like “engaged in commerce between the States” are “probative evidence of what an ordinary person at the time of the FAA’s enactment would have understood its terms to mean.” Slip op. at 10.

FAA Section 1: What the Court Reaffirmed, and What It Did Not Decide

The Court did not hold that every local, intrastate delivery worker falls under FAA Section 1. There must be, the Court explained, a “direct,” “necessary,” and “activ[e]” role in moving goods across borders. Slip op. at 10, quoting Saxon, 596 U.S. at 458.) Workers’ whose nexus to interstate commerce is too remove, too general, or merely incidental would not qualify. See slip op. at 10.

The Court understandably declined to decide a number of important FAA Section 1 issues. Flowers noted that it contracted with an independently operated company owned by Brock but not with Brock in his individual or personal capacity. Slip op. at 10. Certain lower courts have considered business-entity contracting as relevant to whether there exists a “contract of employment” for purposes of FAA Section 1. While the Court noted the contrast between Fli-Lo Falcon, LLC v. Amazon.com, Inc., 97 F. 4th 1190, 1197-1198 (9th Cir. 2024), and Silva v. Schmidt Baking Distribution, LLC, 162 F. 4th 354, 356-357 (2d Cir. 2025), on that issue, it did not have occasion to resolve it and declined to do so. Slip op. at 10-11.

Flowers also argued that Brock ordered, purchased, and took title to the products before selling them locally. Some lower courts have treated such facts as relevant, especially when asking whether goods have reached their intended destination or whether the worker is simply engaged in a new local sale. Slip op. at 10-11. The Court acknowledged the issue by citing Rittmann v. Amazon.com, Inc., 971 F.3d 904, 916 (9th Cir. 2020); Immediato v. Postmates, Inc., 54 F. 4th 67, 72, 78 (1st Cir. 2022), and the Court below, but left the question open. Slip op. at 10-11.

The Court did so because Flowers did not ask the Court to decide those questions. It “venture[d] all upon one cast” by seeking a bright-line rule that a worker does not qualify for a Section 1 exemption unless he or she crosses state lines or interacts with vehicles that do. Slip op. at 11. The Court rejected that rule and stopped there. Brock thus expands the field of workers who may qualify for an FAA Section 1 exemption, but, not surprisingly, it does not purport to eliminate Section 1’s textual boundaries, even though their scope continues to be the subject of ongoing judicial debate.

Doctrinal Implications

First, Brock confirms that Section 1 doctrine is work-centered. The Court continues to eschew decision-making based on industry, employment, and now border-crossing categorizations. What the workers actually do as respects the interstate movement of goods is what matters.

Second, what constitutes being “engaged in interstate commerce” remains important but it is defined more broadly than perhaps some may want it to be. Yes, a purely local delivery is not automatically interstate commerce. But an intrastate leg of a continuous interstate journey can be enough. That means courts will focus on the path of the goods, their destination, and the structure of the distribution arrangement, and the worker’s role in enabling the interstate goods movement.

Third, Section 1 continues to be an important limit on FAA arbitration agreement enforcement. If anything it is more robust than perhaps some thought or preferred. If the exemption applies, a court cannot use the FAA to compel arbitration. That does not necessarily invalidate the arbitration agreement. It means the party seeking arbitration must identify an alternative, possible source under which to seek enforcement, such as state law, and to deal with whatever limits that alternative enforcement source may present.

Fourth, while drafting is and always has been extremely important in arbitration law and practice, the parties cannot rewrite FAA Section 1 any more than they can rewrite any other provision of the FAA. Businesses using arbitration agreements with drivers, distributors, couriers, franchisees, and owner-operators should continue to consider the FAA’s savings clause (9 U.S.C. § 2); choice of law and forum provisions; and class, collective-action, and mass arbitration strategy. But after Brock, no drafter should assume that a local route is outside Section 1 simply because it never crosses a state line.

Fifth, while Brock may make evidence of border-crossing nonessential in many cases, its application nevertheless requires a well-developed documentary record. Parties litigating Section 1 issues should develop the facts concerning, among others, where the goods were manufactured, where they originated and are intended to go, whether the worker’s route was assigned as part of the interstate movement of the goods, and whether, and if so, to what extent, title, purchase, resale, or warehousing has changed the character of the movement.

Conclusion

Flowers Foods’ messages is straightforward: Section 1 concerns participation in interstate transportation, not physical border crossing. A worker who participates in the intrastate leg of an interstate trip may fall within the transportation worker exemption, provided the work performed is directly related to, and required for, the shipment of goods across borders.

For employees and independent contractors, Brock gives Section 1 real significance in disputes arising in distribution systems that use local franchisees, owner-operators, and last-mile contractors. For employers and their counsel, the message is that interpretations that dictate outcomes for particular categories of conduct are not likely to succeed. For transportation workers who do not wish to arbitrate disputes, the message is perhaps more promising.

Contacting the Author

If you have any questions about this article, arbitration, arbitration law, or arbitration-related litigation, then please contact Philip J. Loree Jr. at (516) 941-6094 or PJL1@LoreeLawFirm.com.

ATTORNEY ADVERTISING NOTICE: Prior results do not guarantee a similar outcome.

Photo Acknowledgment

The photo featured in this post was licensed from Yay Images and is subject to copyright protection under applicable law.

The post Latest FAA Section 1 Transportation Worker Exemption Development: SCOTUS Says “No” to Employer’s Bright-Line Rule Conditioning FAA Exemption Eligibility on Requiring Employee to Cross Border to be “Engaged in Commerce” appeared first on The Arbitration Law Forum.

Significant Developments in U.S. State Arbitration Law: the Virginia Arbitration Fairness Act

Philip J. Loree Jr. — Fri, 08 May 2026 17:10:09 +0000

Virginia Arbitration Fairness Act: Part I of a Two-Part Post

Virginia has enacted a targeted arbitration statute that is likely to generate FAA preemption litigation. Chapter 490, Senate Bill 227 (“SB 227”), signed into law on April 8, 2026, amends Virginia’s arbitration statute and adds a new Article 3 to Chapter 21 of Title 8.01, titled the “Arbitration Fairness Act.” 2026 Va. Acts ch. 490; Va. Code §§ 8.01-581.017-.021 (effective July 1, 2026). The Act “shall apply to all arbitration agreements entered into on or after July 1, 2026.” 2026 Va. Acts ch. 490, § 2.

The Act does not purport to prohibit consumer or employment arbitration. Nor does it seek to invalidate categorically pre-dispute arbitration agreements. It instead regulates “high-volume arbitration service providers,” prescribes arbitrator-selection procedures, imposes detailed disclosure obligations, restricts certain provider relationships, regulates invoices and fee payment, creates tolling rules, and authorizes civil remedies and State Corporation Commission penalties. It also adds a new state-law vacatur ground for an award “rendered by an arbitrator selected in violation of” the Act. Va. Code §§ 8.01-581.010(6), 8.01-581.017-.021. That last provision, combined with the disclosure requirements, is a significant consideration in, among other things, evident partiality disputes, and exceeding-powers challenges based on violation of the Act’s provisions concerning arbitrator selection.

From a structural perspective, the Act is framed as a fairness measure directed principally at arbitration providers and arbitration procedure. But several provisions do more than regulate provider conduct. They alter the enforceability consequences of arbitration agreements; impose strict disclosure requirements on arbitrators, insert statutory terms into covered agreements, authorize withdrawal from arbitration in certain circumstances, mandate sanctions, and require vacatur of awards in cases where the Act has been violated. Those provisions will almost certainly invite arguments that the Act discriminates against arbitration or imposes arbitration-specific obstacles inconsistent with the purposes and objectives of the Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1-16.

What the Virginia Arbitration Fairness Act Governs

The coverage scope of the Virginia Arbitration Fairness Act turns on several defined terms. An “arbitration service provider” is “any person or entity that administers, facilitates, or provides arbitration services in the Commonwealth.” Va. Code § 8.01-581.017. A “high-volume arbitration service provider” is “any arbitration service provider that conducts more than 100 arbitrations per calendar year” that “arise from a pre-dispute arbitration agreement involving a Virginia-connected transaction.” Id. The threshold is not 100 arbitrations of any kind. It is 100 covered arbitrations tied to Virginia-connected transactions.

The Act reaches pre-dispute arbitration agreements in two settings. A covered “pre-dispute arbitration agreement” is an agreement to arbitrate a dispute “between a consumer and a business” or “between an individual employed in the Commonwealth and that individual’s employer” if the dispute “had not yet arisen at the time of making such agreement.” Id. A “consumer” is an individual who “seeks, uses, or acquires, by purchase or lease,” goods or services “for personal, family, or household purposes.” Id. A “drafting party” is “the company or business that included a pre-dispute arbitration provision in a contract with a consumer or employee,” and the definition includes “any third party relying upon or otherwise subject to the arbitration provision other than the employee or consumer.” Id.

“Virginia-connected transaction” is broadly defined. It means “any transaction, agreement, or dispute” that “arises out of, relates to, or is otherwise connected with activities, relationships, or events occurring within the Commonwealth,” including “any arbitration ordered by a state or federal court located in the Commonwealth.” Id. As a threshold matter, a court deciding whether the Act applies will have to determine whether the relevant contract, employment relationship, consumer transaction, arbitral forum, or judicial order is sufficiently connected with Virginia. Given the breadth of the Act’s scope language, the answer will likely be yes in many cases arising in Virginia state or federal courts, or even in cases pending outside the state that have meaningful contacts with the Commonwealth. Conflict-of-law disputes may also arise where the facts and applicable choice-of-law rules suggest that another state’s law might govern issues addressed by the Act.

Arbitrator Selection and Disclosure

Section 8.01-581.018 contains the Virginia Arbitration Fairness Act’s core arbitrator-selection provisions. In a covered arbitration with a high-volume provider, the provider “shall not require any party to accept or use any particular arbitrator” in an arbitration involving a Virginia-connected transaction. Va. Code § 8.01-581.018(A). The provider must “establish and maintain procedures” that give the parties a “meaningful opportunity to agree upon an arbitrator.” Va. Code § 8.01-581.018(B). If the parties cannot agree, the provider must use an “impartial system for arbitrator selection” ensuring that “each party has an equal voice,” “neither party may unilaterally impose an arbitrator upon the other party,” and “the selection process is transparent and fair to all parties.” Id.

The Act identifies four acceptable selection systems. They include a “striking method” under which the parties “alternatively eliminate arbitrators from a list until one remains”; a “ranking method” under “which the parties rank arbitrators and the highest mutually ranked arbitrator is selected”; and a “random selection method” from a pool “previously approved by both parties.” Va. Code § 8.01-581.018(C)(1)-(3). The fourth category is “any other method” ensuring that “neither party can compel the other to accept an arbitrator without meaningful input.” Va. Code § 8.01-581.018(C)(4). That residual category appears to give arbitration providers some leeway to design compliant procedures. But “meaningful input” is an open-ended term that appears to be susceptible to differing, reasonable interpretations. It will thus likely become a litigation point when provider rules already contain appointment procedures, especially default appointment rules that apply when the parties cannot agree.

The Act also requires proposed neutral arbitrators to disclose “all matters” that may cause a person “aware of the facts” to have “reasonable uncertainty” about whether the proposed neutral “would be able to be impartial.” Va. Code § 8.01-581.018(D). Required disclosures include “any ground for disqualification of a judge for a violation of the Canons of Judicial Conduct”; whether the proposed neutral has, or recently discussed, a “current arrangement concerning prospective employment or other compensated service as a dispute resolution neutral” with a party; and the names of the parties to “all prior or pending arbitrations during the preceding five years” in which the proposed neutral served or is serving as a party arbitrator for a party or for a party’s lawyer. Va. Code § 8.01-581.018(D)(1)-(3).

While we’ll discuss in greater detail the potentially profound implications of the disclosure provisions, an initial observation is that they are unusually detailed. For covered prior or pending matters, the proposed neutral must disclose “the results of each case arbitrated to conclusion,” including “the date of the arbitration award,” “the identification of the prevailing party,” “the names of the parties’ attorneys,” “the text of any written award,” and “the amount of monetary damages awarded, if any.” Va. Code § 8.01-581.018(D)(3). For individual nonparties, confidentiality may be preserved by identifying the person as “claimant” or “respondent.” Id.

Section 8.01-581.018(E) adds a further restriction. A high-volume provider may not administer a covered arbitration if “any party or law firm representing a party has, or within the preceding five years has had, any type of financial interest in the private arbitration company,” including “ownership, employment, or appointment and payment as an arbitrator or other neutral.” Va. Code § 8.01-581.018(E). This is one of the Act’s most consequential provisions. It appears, for example, to disqualify a provider where members or employees of the party’s law firm have acted as paid neutrals for the provider within five years.

As we’ll discuss further in Part II, because violation of the Act’s provisions is a ground for vacating an award, the Act effectively may be construed to impose less demanding evident partiality standard on challenging parties than the FAA imposes. For example, failure to disclose circumstances that would indicate a violation of judicial impartiality standards would appear to authorize vacatur. That would effectively force neutral arbitrators to comply with impartiality standards that apply to Virginia’s judges, something that would contradict a large body of law construing the FAA. (See, e.g., here. here, and here.)

Fee Payment, Tolling, High-Volume-Arbitration-Provider Reporting, and Remedies

Section 8.01-581.020 addresses fee payment and delay. If a covered arbitration requires, “either expressly or through application of state or federal law or the rules of the arbitration provider, that the drafting party pay certain fees and costs before the arbitration can proceed,” then failure to pay “within 30 days after the due date” has three statutory consequences. Va. Code § 8.01-581.020(A): “The drafting party shall be in . . . material breach of the arbitration agreement, . . . in default of the arbitration,” and “deemed to have waived the right to compel such arbitration. . . . ” Id.

The Act also regulates provider invoicing. After a consumer meets the filing requirements necessary to initiate an arbitration with a high-volume provider, the provider must “immediately provide an invoice” to all parties for “any fees and costs required before the arbitration can proceed. . . .” Va. Code § 8.01-581.020(B). The invoice must “be provided in its entirety,” “state the full amount owed and the date that payment is due,” “include estimated future charges through the completion of the arbitration[,] and be sent to all parties by the same method of delivery on the same day.” Id. If the agreement does not expressly state the number of days for payment, the provider must “issue all invoices to the parties as due upon receipt.” Id.

The Act says that “[i]f the drafting party materially breaches and is in default under subsection A, the employee or consumer may. . . either[:]

1. Withdraw the claim from arbitration and proceed in a court of appropriate jurisdiction; or

2. Compel arbitration in which the drafting party shall pay reasonable attorney fees and costs related to the arbitration.”

Va. Code § 8.01-581.020(C)(1)-(2).

The Court is instructed to “impose sanctions on the drafting party[]” if the consumer “proceeds in court.” Va. Code § 8.01-581.020(C). The sanctions provision refers to the “consumer,” rather than to the “employee or consumer,” thereby raising a potential interpretive question for a future employment action. See id.

The invoicing provisions appear designed to force the drafting party to proceed promptly to arbitration by paying required fees or face statutory waiver, court access, attorneys’ fees, and, at least in consumer actions, sanctions.

The Virginia Arbitration Fairness Act also imposes annual reporting requirements on “high-volume arbitration service providers. . . .” Required annual reports to the Virginia State Corporation Commission must include the “following information:”

The total number of arbitrations involving Virginia-connected transactions conducted in the preceding calendar year;

A description of the arbitrator selection procedures utilized; and

If collected, statistical data regarding arbitrator selection outcomes and the satisfaction rates of the parties involved.

Va. Code § 8.01-581.019.

The Act’s tolling provisions are also significant. They provide that “[a]ny statute of limitations as to a claim regarding or relating to a Virginia-connected transaction” is tolled when a party sends an arbitration service provider a “written demand to arbitrate,” and remains tolled until “90 days after the termination or completion of the arbitration.” Va. Code § 8.01-581.020(D).

Additional tolling rules protect claims when the non-drafting party withdraws from arbitration after default and when a party first commences a civil action but is later required to arbitrate. Id. Those provisions appear designed to prevent limitations problems created by procedural detours between court and arbitration. See id.

Finally, Section 8.01-581.021 authorizes injunctive relief and civil remedies. A party subjected to a noncompliant arbitrator-selection procedure “may seek injunctive relief or other appropriate civil remedy in the circuit court of the city or county in which the arbitration shall be held or in the circuit court for the City of Richmond[, Virginia].” If, after a hearing an award is made, “a party alleging that such award was determined by an arbitrator selected in violation of the provisions of this article may make an application with the court to vacate the award, and the court shall proceed in accordance with § 8.01-581.010.” Va. Code § 8.01-581.021(A).

If the State Corporation Commission determines that “a high-volume arbitration service provider” has violated the Act, it may impose a civil penalty not exceeding $10,000 per violation. Va. Code § 8.01-581.021(B)

The Act provides in § 8.01-581.021(C) that its requirements “shall be incorporated as material terms of any pre-dispute arbitration agreement transacted pursuant to Virginia contract law.” Va. Code § 8.01-581.021(C).

A § 8.01-581.021(D) savings and severability clause provides that nothing in the Act “shall be construed to preempt federal law governing arbitration[;]” the Act “shall be construed to be consistent with such law to the maximum extent permitted[;]” and “[i]f any provision of this section is held invalid or unenforceable, the remaining provisions shall remain in full force and effect.” Va. Code § 8.01-581.021(D).

The Basic FAA Preemption Framework

The FAA’s central command is Section 2, which makes written arbitration agreements in contracts involving commerce “valid, irrevocable, and enforceable” except on grounds that exist “at law or in equity for the revocation of any contract. . . . ” 9 U.S.C. § 2. U.S. Supreme Court equal-treatment cases say that states may apply generally applicable contract defenses, but may not impose rules that apply only to arbitration or that derive their meaning from an arbitration agreement being in issue. See, e.g., AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339-44 (2011); Doctor’s Assocs., Inc. v. Casarotto, 517 U.S. 681, 687 (1996); Kindred Nursing Ctrs. Ltd. P’ship v. Clark, 581 U.S. 246, 251-52 (2017); Viking River Cruises, Inc. v. Moriana, 596 U.S. 639, 650-51 (2022).

That does not mean every state arbitration procedure is preempted. The FAA does not federalize all aspects of arbitration law. State contract law, state procedural law, and provider rules may not be preempted, and parties may choose state arbitration procedures in appropriate circumstances. See Volt Info. Sciences, Inc. v. Board. of Trs. of Leland Stanford Junior Univ., 489 U.S. 468, 476-79 (1989). But the label “procedure” is not dispositive. A state rule may be preempted if it conditions enforcement of an arbitration agreement on arbitration-specific requirements, interferes with the parties’ chosen arbitral forum or process, or makes arbitration slower, more costly, or less available in a way that conflicts with the FAA’s purposes and objectives. See Preston v. Ferrer, 552 U.S. 346, 356-59 (2008); AT&T Mobility, 563 U.S. at 343-44, 346-52; Kindred Nursing Ctrs., 581 U.S. at 251-52.

That is why the Virginia Act will likely be tested provision by provision and as applied. Certain provisions appear to resemble neutral regulation of providers, while others might directly alter contractual enforcement, waiver, forum availability, impartiality standards, arbitrator selection, or the rules and standards concerning award confirmation and vacatur. The Act’s savings clause may help courts avoid unnecessary conflict, but it cannot preserve a provision that conflicts with the text of the FAA or its purposes and objectives.

A future post will address in more detail the Act’s likely FAA preemption pressure points and other implications. The provisions that are most controversial, and thus most likely to generate litigation, include the disclosure provisions, the rule that violations of the Act may result in award vacatur, the mandatory fee-default waiver, the sanctions remedy, the incorporation of the Act as “material terms” of covered agreements, and any application of the arbitrator-selection rules that prevents use of the arbitral forum or procedures chosen by the parties. That is a substantial portion of the Act, which is why Part II will focus on whether those provisions can be applied consistently with the FAA.

Contacting the Author

If you have any questions about this article, arbitration, arbitration law, or arbitration-related litigation, then please contact Philip J. Loree Jr. at (516) 941-6094 or PJL1@LoreeLawFirm.com.

ATTORNEY ADVERTISING NOTICE: Prior results do not guarantee a similar outcome.

Photo Acknowledgment

The photo featured in this post was licensed from Yay Images and is subject to copyright protection under applicable law.

The post Significant Developments in U.S. State Arbitration Law: the Virginia Arbitration Fairness Act appeared first on The Arbitration Law Forum.

Carter v. SP Plus Corp. and the Federal Policy in Favor of Arbitration: Seventh Circuit Rejects Arbitration Exceptionalism in an FAA Section 16 Ruling Finding no Appellate Jurisdiction

Philip J. Loree Jr. — Tue, 21 Apr 2026 22:12:03 +0000

Introduction: Carter and the Federal Policy in Favor of Arbitration

United States Circuit Judge Judge Frank H. Easterbrook’s opinion in Carter v. SP Plus Corp., No. 25-2127, slip op. at 1-5 (7th Cir. Apr. 15, 2026), is important for two related reasons. First, it carefully distinguishes an immediately appealable denial of a motion to compel arbitration from a non-appealable order refusing to lift a Section 3 stay of litigation pending the district court’s decision on whether an arbitration agreement was formed. Second, and more significantly, it rejects an employer’s attempt to invoke the federal policy favoring arbitration as a reason to relax ordinary procedural and evidentiary rules and resolve doubts in favor of arbitration. The opinion instead applies Morgan v. Sundance, Inc., 596 U.S. 411, 418 (2022), according to its terms: arbitration agreements are to be enforced like other contracts, not a favored class of “super contracts” entitled to special treatment. (For a discussion of Morgan, see here.)

We have discussed how, even before Morgan, courts have recognized that the federal policy in favor of arbitration is of limited scope. (See here.) Essentially, the principle that doubts should be resolved in favor of arbitration is not at all a generally applicable rule of decision in arbitration law but rather allows, in a limited context, a pro-arbitration resolution of ambiguities concerning the scope of the arbitration agreement itself. See Granite Rock Co. v. Int’l Bhd. of Teamsters, 561 U.S. 287, 301-303 (2010); Lamps Plus v. Varela, 139 S. Ct. 1407, 1418-19 (2019).

Nevertheless, arbitration proponents sometimes still contend that the the federal policy in favor of arbitration requires courts to select a pro-arbitration outcome whenever some doubt exists about an arbitration-law-related question.

Carter reminds us that is not so. The Federal Arbitration Act (the “FAA”) does not authorize arbitration-agreement exceptionalism. If ordinary litigation principles cut against agreement enforcement, then the result should be the same as obtains in any other ordinary contract action. See Carter, slip op. at 4-5; Morgan, 596 U.S. at 418. Outside of its limited role in requiring the summary resolution of contract ambiguities in the scope of the arbitration agreement itself—something that spares arbitration-law litigants (and courts) from having to conduct lengthy trials to resolve contract ambiguities about scope—the federal policy in favor of arbitration plays no meaningful role, apart from ensuring that arbitration agreements are on an equal footing with other contracts.

Carter is of interest because it concerns FAA Section 16 interlocutory appeals, FAA Section 4 formation disputes, and Morgan‘s continuing role in curbing overbroad invocations of pro-arbitration policy.

Background

Carter, an employee, sued SP Plus Corporation, the employer, under state and federal minimum-wage statutes. Shortly thereafter, the district judge stayed the litigation in favor of arbitration based on a checked box in Carter’s electronic “‘onboarding materials’” that allegedly reflected assent to a “Mutual Agreement to Arbitrate All Claims.” Carter, slip op. at 1.

But an FAA Section 3 stay was entered too quickly and without notice to Carter. After this initial ruling, Carter filed an affidavit describing a very different onboarding process from the one SP Plus had presented. According to Carter, a human-resources employee, Brenjy Etienne, filled out and signed most of the forms on Carter’s behalf, did not explain what they were, did not offer Carter the option to decline arbitration, and did not allow him to see the computer screen on which the choices were being made. If Carter’s account was true, then he had not consented to arbitration. Id. at 2.

On reconsideration, the district court lifted the Section 3 stay and denied SP Plus’s motion to stay pending arbitration, concluding that on the record the court could not determine that a valid arbitration agreement had been formed. Id. at 2. SP Plus appealed instead of submitting responsive evidence or asking the district court to conduct an evidentiary hearing.

The Section 16 Question

The first issue on appeal was appellate jurisdiction under FAA Section 16. SP Plus argued that the district court had entered an appealable order under 9 U.S.C. Section 16(a)(1), either by refusing a stay of litigation under Section 3 or by denying a Section 4 petition to order arbitration to proceed. See 9 U.S.C. § 16(a)(1)(A) & (B). The Seventh Circuit acknowledged that the district court did not expressly state whether the district court was denying the request for arbitration. Id. at 2-3.

As the Court explained, there were two different possibilities. If the district court’s next step was merits litigation, then the order effectively denied arbitration and could be appealed. But if the next step was merely an evidentiary hearing, or a trial under Section 4, to determine whether Carter himself checked the box and agreed to arbitrate, then the district court had not denied arbitration. It had only postponed decision while evaluating disputed evidence. A delay of that kind is different from an appealable denial, said the Court. Id. at 3.

The Court quoted Section 4, and the procedures Section 4 maps out for resolving disputes about whether arbitration should be compelled, including notice to parties resisting arbitration. The Court observed that the district court had acknowledged it made its original order without notice and without granting a trial, which is required when the making of the arbitration agreement is in issue. “This implies],]” said the Court, “that the order [on reconsideration] rescinding the premature directive to arbitrate is not final and that the appeal must be dismissed.” Id. at 3.

The Court’s Jurisdiction Analysis and Conclusion

But that was not the end of it. The Seventh Circuit ultimately concluded that in the circumstances, this particular order was appealable. That was so not because the district court had clearly denied arbitration in the first instance (it did not), but because SP Plus had forfeited any entitlement to the Section 4 hearing or trial that might otherwise have occurred as a result of the order. Absent such forfeiture, the order would have been non-appealable because it would not have denied the request for arbitration or otherwise constituted a final decision with respect to arbitration. See id. at 3-4; 9 U.S.C. §§ (a)(1)(A) & (B), (a)(3). But the forfeiture eliminated the necessity for a trial on the making of the agreement, and the order was thus appealable as a denial of a request for arbitration. See id. at 3-4.

The Court explained that a party entitled to a hearing or trial under Section 4 may “relinquish” that right. Id. at 3. SP Plus wanted the court of appeals to direct the district court to hold a hearing, yet it had never asked the district judge to grant one. Nor had SP Plus submitted any evidence responding to Carter’s affidavit. In the district court, SP Plus did not signal a desire to present testimony from Etienne or anyone else. It simply noticed an appeal. Id. at 4. “A party can’t keep the district court in the dark about the existence of an evidentiary dispute and then ask for relief on appeal[,]” the Court explained.

If SP Plus wanted a hearing, it had to request one and support the request with evidence. It did neither, and the Seventh Circuit held that SP Plus had accordingly forfeited any right to a hearing, which in turn meant that the district court’s order had become a conclusive—and thus appealable—denial of a motion to compel arbitration. Id. at 4.

The Court shows us it is telling to consider SP Plus’s litigation strategy in light of what might have transpired had it proactively asserted its rights. SP Plus could have easily filed an affidavit from Etienne attesting to Carter’s consent to arbitration, if he had consented and she had knowledge of facts showing that consent. Id. at 4. That might have led to an evidentiary hearing concerning the making of the agreement, see 9 U.S.C. § 4, or depending on what the two affidavits showed, perhaps a ruling on the merits on the consent question. If the result was an evidentiary hearing, or a grant of the request for arbitration, then there would be no appealable order yet.

Alternatively, had Etienne remembered things the way Carter did, and submitted an affidavit to that effect, then—assuming the electronic evidence was inconclusive––SP Plus’s request for arbitration would have “lack[ed] essential evidence.” Id. at 4. That would have resulted in an order denying the request for arbitration, which would have been appealable immediately.

Carter shows how a case that initially appears non-appealable can become appealable because the party seeking arbitration forfeits procedural rights that otherwise would have kept the matter in an interlocutory posture.

The Merits: Formation, Section 4, and Forfeiture

Once the Seventh Circuit determined that appellate jurisdiction existed, the merits were straightforward. Carter had submitted sworn testimony that he never assented to arbitration. Absent a fully formed and enforceable delegation agreement, whether a party agreed to arbitrate is ordinarily a question for the court, not the arbitrator. See, e.g., AT&T Technologies, Inc. v. Communications Workers, 475 U.S. 643, 649, 651 (1986); Granite Rock, 561 U.S. at 299-300, 301-03; Carter, slip op. at 4. On the record that SP Plus chose to make, the district court’s conclusion that no valid agreement had been shown was not clearly erroneous. Carter, slip op. at 4.

The opinion is especially instructive in what it says about Section 4 procedure. Section 4 does not automatically hand the proponent of arbitration an evidentiary do-over. It gives a right to a hearing or trial when formation is in issue, but like many procedural rights that right can be waived or forfeited. Carter therefore ties together contract formation, Section 4 procedure, and ordinary preservation principles.

There’s a lesson here. Counsel who seek arbitration sometimes assume that once the opponent submits an affidavit disputing assent, the district court must on its own set a hearing and continue protecting the arbitration request from adverse consequences. Carter exposes that assumption as unfounded. The burden remains on the party seeking arbitration to request the hearing, preserve the record, and adduce evidence on the existence of an arbitration agreement. If it does not, the district court is entitled to treat the record as closed and decide the issue against the party bearing the burden of proving an agreement.

The Federal Policy in Favor of Arbitration Cannot Save the Day

The opinion’s most significant contribution comes in its final section. SP Plus argued that the Seventh Circuit should effectively “place a thumb on the scale in favor of” a pro-arbitration outcome because of the federal policy in favor of arbitration. Id. at 4. The Court—quite correctly, the author thinks—emphatically rejected that proposition, relying on Morgan, where the Supreme Court made clear that the federal policy in favor of arbitration is to make arbitration agreements “as enforceable as other contracts, but not more so.” Morgan, 596 U.S. at 418 (citation and quotation omitted); Carter, slip op. at 4-5; Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 404 n.12 (1967).

Carter applies Morgan in an important context. Morgan is, not surprisingly, often cited in waiver cases, because Morgan itself rejected arbitration-specific waiver rules. But as Morgan’s text strongly suggests, and Carter confirms, Morgan’s discussion of the federal policy in favor of arbitration has implications outside of the waiver context. Morgan rejects arbitration exceptionalism generally; Carter demonstrates that the point extends beyond waiver to formation disputes, evidentiary burdens, forfeiture of procedural rights, and appellate arguments under Section 16. If ordinary rules would counsel against enforcement of an ordinary contract, they also counsel against enforcement of an arbitration contract. Carter, slip op. at 5.

The import of Carter on the Morgan issue is that the federal policy in favor of arbitration does not extend past the narrow purpose for which it was judicially designed: to resolve in favor of arbitration ambiguities in the scope of an arbitration agreement itself. See, e.g., Granite Rock, 561 U.S. at 301-303.

The Court also rejected SP Plus’s effort to denigrate Carter’s affidavit as merely “self-serving.” Citing Hill v. Tangherlini, 724 F.3d 965 (7th Cir. 2013), the Court explained that affidavits made on personal knowledge are not to be discounted simply because they are favorable to the affiant. Carter, slip op. at 5. The Seventh Circuit tersely concluded by remarking that “[a] brief that repeats canards expressly rejected by decisions such as Morgan and Hill is hard to take seriously.” Id. at 5.

Conclusion: The Employer wins on Appellate Jurisdiction, Loses on the Merits, and Receives no Help from the Federal Policy in Favor of Arbitration

Carter deserves close attention. It is a compact but important Seventh Circuit opinion that clarifies how FAA Section 16 operates when a district court reconsiders a premature stay in favor of arbitration, how Section 4 hearing rights can be forfeited, and why Morgan v. Sundance is significant well beyond waiver doctrine.

Most importantly, Judge Easterbrook’s well-reasoned opinion rejects the notion that courts should “place a thumb on the scale in favor of arbitration” when ordinary evidentiary and procedural rules point the other way. Id. at 4. The FAA requires equal treatment for arbitration contracts, not favored treatment. Id. at 4-5. Carter states that proposition clearly and applies it rigorously.

Contacting the Author

If you have any questions about this article, arbitration, arbitration-law, or arbitration-related litigation, then please contact Philip J. Loree Jr., at (516) 941-6094 or PJL1@LoreeLawFirm.com.

Philip J. Loree Jr. is principal of the Loree Law Firm, a New York attorney who focuses his practice on arbitration and associated litigation. A former BigLaw partner, he has 35 years of experience representing a wide variety of corporate, other entity, and individual clients in matters arising under the Federal Arbitration Act, as well as in insurance- or reinsurance-related, and other disputes.

ATTORNEY ADVERTISING NOTICE: Prior results do not guarantee a similar outcome.

Photo Acknowledgment

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The post Carter v. SP Plus Corp. and the Federal Policy in Favor of Arbitration: Seventh Circuit Rejects Arbitration Exceptionalism in an FAA Section 16 Ruling Finding no Appellate Jurisdiction appeared first on The Arbitration Law Forum.

O’Dell v. Aya Healthcare Services: The Ninth Rejects Non-Mutual Offensive Collateral Estoppel as a Basis for Invalidating Arbitration Agreements

Philip J. Loree Jr. — Wed, 15 Apr 2026 17:30:54 +0000

Introduction

In O’Dell v. Aya Healthcare Services, Inc., No. 25-1528, slip op. at 2-3 (9th Cir. Apr. 1, 2026), the Ninth Circuit overturned a district court ruling that invoked non-mutual, offensive collateral estoppel to deem unconscionable hundreds of separate, bilateral arbitration agreements agreements between a corporate health care provider and its individual, nurse employees. O’Dell, a 3-0 opinion, is of interest to entity and individual parties litigating gateway arbitrability disputes arising out of mass, class, or collective proceedings.

Background

The case concerned wage-related claims asserted by travel-nurse employees against a healthcare provider, Aya Healthcare Services, Inc. (“Aya”). As a condition of employment, Aya required its employees to sign arbitration agreements containing similar terms. The agreements also contained delegation provisions that required an arbitrator, rather than a court, to decide arbitration-agreement validity disputes. Id. at 4-6. (You can read about delegation provisions here and here.)

The district court initially sent four named plaintiffs’ disputes to four separate arbitrations each to be decided by a different, individual arbitrator. The results were evenly split: Two arbitrators held the agreements unconscionable based on their fee allocation and venue provisions; the other two ruled that the agreements were enforceable, determining that a savings clause (presumably providing for severability) cured any unconscionability problem. Id. at 6. The district court confirmed three of the four awards, refusing to confirm one of the awards because of Aya’s alleged failure to pay the arbitration fee. Id.

After 255 additional plaintiffs opted into a Fair Labor Standards Act (“FSLA”) collective action, the district court declined to send their disputes to arbitration. Instead, invoking non-mutual, offensive collateral estoppel, the district court gave preclusive effect to the two arbitral rulings invalidating the agreements, refused to give the same effect to the two rulings upholding the agreements, and held that Aya was barred by collateral estoppel from enforcing the remaining agreements. Id. at 6-7.

The Court did not accord preclusive effect to the two awards that upheld the agreement to arbitrate, dismissing them as not “reasoned” or “thorough.” Id. at 7.

The Court of Appeals for the Ninth Circuit reversed and remanded.

Offensive, Non-Mutual Collateral Estoppel: The Question Presented

The Ninth Circuit considered whether “application of non-mutual offensive collateral estoppel to preclude the enforcement of arbitration agreements is compatible with the Federal Arbitration Act [(the “FAA”)].” Id. at 4. The Court said the answer was no. Id. at 4-5, 12-13.

The Ninth Circuit’s Analysis: Non-Mutual, Offensive Collateral Estoppl is Incompatible with the FAA

The court’s reasoning was straightforward, but its implications are significant. It began with the FAA’s text.

FAA Section 2 provides, in pertinent part, that arbitration agreements “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract. . . . 9 U.S.C. § 2. Under Section 2, “generally applicable contract defenses such as fraud, duress, or unconscionability” are “grounds for revocation.” Slip op. at 8 (quotations and citations omitted) But there were no such grounds here.

The Ninth Circuit explained that non-mutual offensive issue preclusion is not a “generally applicable contract defense” of the kind contemplated by Section 2’s savings clause. O’Dell, slip op. at 8-9 (quotations and citation omitted). For irrespective of whether a case concerns contract enforceability, this preclusion doctrine may, to avoid relitigation, accord certain judgments preclusive effect. “In other words,” said the Court, “the doctrine is not about contracts or contract defenses.” It is a judge-made preclusion doctrine which—if used as it was here—would indirectly but effectively invalidate arbitration agreements that the FAA says should be enforced. Id. at 8-10.

It is not a ground for “revocation”—which is “‘[t]he recall of some power, authority, or thing granted, or a destroying or making void of some deed that had existence until the act of revocation made it void.’” Id. at 9 (quotations and citations omitted). “Revocation” under Section 2 “includes fraud, duress, and unconscionability[,]” but “does not pertain to a deficiency with respect to the formation of contracts. . . that might result in “revocation.” Slip op. at 9 (quotations and citations omitted).

Even assuming “revocation broadly encompasses the indirect but effective invalidation of the agreement through preclusion, And to the extent that “revocation broadly encompasses the indirect but effective invalidation of agreements through preclusion,” the doctrine would “contravene critical features of the FAA.” Slip op. at 9 (quotations and citations omitted).

The Court also considered context, considering Sections 3, 4, 10, and 13 of the FAA. Sections 3 and 4 require courts to stay litigation and compel arbitration in accordance with the parties’ agreement once the making of the agreement is not in issue. 9 U.S.C. §§ 3-4. Section 10 provides limited grounds for vacatur focused on defects in the arbitral process, such as corruption, fraud, or evident partiality. Id. § 10. In the Ninth Circuit’s view, nothing in that statutory scheme suggests that Congress contemplated a non-mutual preclusion doctrine that would frustrate arbitrations the parties had separately agreed to undertake. O’Dell, slip op. at 9-10. The court specifically rejected the employees’ reliance on Section 13, reasoning that Section 13 makes confirmed awards enforceable as judgments, but does not authorize using one confirmed award to abrogate distinct arbitration agreements involving other parties. Id. at 12-13.

Application of Offensive, Nonmutual Collateral Estoppel Violates Arbitration’s First Principle

The FAA’s first principle—consent, not coercion—provided the Court with a second— and perhaps in some ways, more important—rationale. (For a discussion of arbitration’s “first principle,” see here.) The FAA, the panel explained, presupposes that arbitration is a matter of consent, not coercion. Id. at 10-11 (citing Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662, 681 (2010); Lamps Plus, Inc. v. Varela, 587 U.S. 176, 184 (2019)). The employees’ preclusion theory disregarded this first principle. See slip op. at 10-11. As the Court explained, “[p]recluding an arbitration” to which “the parties agreed. . .— because a different arbitrator in a different proceeding had concluded that an agreement between different parties was unconscionable—would render the parties’ consent meaningless.” Slip op. at 11.

Using Offensive, Non-Mutual Collateral Estoppel to Impose a Bellwether Scheme without Party Consent

The court’s third rationale will likely attract the most attention. The district court’s ruling, the panel said, effectively transformed individualized arbitrations into a binding “bellwether” or class-like device without the parties’ consent. Id. at 5, 11-12. That is significant because Supreme Court precedent has repeatedly held that the FAA does not permit courts or arbitrators to impose class procedures that alter the “fundamental attributes” of arbitration unless there is a contractual basis to do so. See Epic Sys. Corp. v. Lewis, 584 U.S. 497, 507-09 (2018) (quotation and citations omitted); AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 344 (2011); Stolt-Nielsen, 559 U.S. at 684-87. O’Dell extends that line of authority in an important way. It treats offensive non-mutual preclusion, when used to wipe out separate bilateral arbitrations, as another unauthorized claim aggregation scheme that is inconsistent with the FAA’s consent-based, bilateral structure. See O’Dell, slip op. at 11-13.

The Court said “the imposition here [of an aggregation mechanism] is more concerning than in” prior cases. See slip op. at 11. Because in ordinary class proceedings named representative plaintiffs must “adequately represent” class members. Slip op. at 11. Not so here. “Indeed,” said the Court, under the district court’s logic, just one arbitration proceeding would be enough to preclude hundreds (or thousands) of other arbitration proceedings.” Slip op. at 12. “That,” remarked the Court, “is a class action stripped of all its important protective features.” Slip op. at 12. Permitting offensive collateral estoppel to preclude agreed individual arbitrations from taking place “would supplant arbitrations with binding bellwether class actions lacking the procedural safeguards of ordinary class actions.” Slip op. at 12. That would violate the FAA. See Slip op. at 12.

The Court accordingly rejected “this new application of preclusion doctrine as it would be “fundamentally at war with the FAA and undermine Congress’s efforts to protect arbitration from judicial opposition.” Slip op. at 12 (citation omitted).

Implications of the Decision

O’Dell is important for at least three reasons. First, it clarifies that FAA Section 2’s saving clause authorizes only generally applicable contract defenses, not equitable doctrines which apply to litigation generally, as opposed to contract actions specifically. That is especially so, where, as here, the doctrine may, as applied, interfere with arbitration’s key attributes or is otherwise incompatible with arbitration.

Second, O’Dell reminds us that, pursuant to delegation agreements, and in the absence of contractual consent to the contrary, gateway arbitrability disputes are disputes between the parties to the particular individual arbitration agreement at issue. They are, in the absence of an agreement to the contrary, to be decided in an arbitration between those parties, not by proxy using a bellwether aggregation device.

Here, the district court had already enforced the delegation clauses as written by sending the first four validity disputes to arbitration. Id. at 5-6. Once those arbitrations produced mixed results, the district court used the two invalidity awards as a shortcut to avoid further arbitrations. The Ninth Circuit rejected that move. In practical terms, where the parties have agreed to arbitrate gateway validity questions one by one, courts may not convert a few early rulings into a substitute for resolving each of the remaining individual arbitrations. See slip op. at 10-12.

Third, O’Dell has implications for collective, coordinated, and mass arbitration litigation. Plaintiffs’ counsel will often look for ways to convert favorable early rulings into leverage across a broader claimant pool. Defendants, too, sometimes seek global effect from threshold rulings. O’Dell does not foreclose contractual bellwether arrangements or other consensual aggregation mechanisms. But it does show that courts may not impose them through non-mutual offensive issue preclusion when the parties agreed to bilateral arbitration. Id. at 11-13.

Conclusion

O’Dell should be read as an important Ninth Circuit reaffirmation of three connected FAA principles: arbitration agreements must be enforced according to their terms; not all defenses are generally applicable contract defenses, and arbitration remains a matter of consent, not coercion. Where parties agreed to bilateral arbitration, courts may not use non-mutual offensive collateral estoppel to create a de facto class, bellwether, or other aggregation mechanism to which the parties never agreed.

Contacting the Author

If you have any questions about this article, arbitration, arbitration-law, or arbitration-related litigation, then please contact Philip J. Loree Jr., at (516) 941-6094 or PJL1@LoreeLawFirm.com.

ATTORNEY ADVERTISING NOTICE: Prior results do not guarantee a similar outcome.

Photo Acknowledgment

The photo featured in this post was licensed from Yay Images and is subject to copyright protection under applicable law.

The post O’Dell v. Aya Healthcare Services: The Ninth Rejects Non-Mutual Offensive Collateral Estoppel as a Basis for Invalidating Arbitration Agreements appeared first on The Arbitration Law Forum.

CPR’s March 27 Appellate Arbitration Video Panel: Jules, Flowers Foods, Goff, and Bruce

Philip J. Loree Jr. — Wed, 01 Apr 2026 17:29:08 +0000

The International Institute for Conflict Prevention & Resolution (“CPR”) presented on March 27, 2026, the latest instalment of its long-running hot-topics in arbitration video series: “Hot Topics: The Supreme Court’s March on Arbitration.” Our good friend and colleague Russ Bleemer, editor of Alternatives to the High Cost of Litigation, moderated the presentation. The panelists were our other good friends and colleagues Professor Angela Downes and Richard D. Faulkner— plus the author, Philip J. Loree Jr.

This developments in arbitration video looked backward to the March 25, 2026, Supreme Court argument in Flowers Foods, Inc. v. Brock, No. 24-935 (U.S. argued Mar. 25, 2026), forward to the March 30 argument in Jules v. Andre Balazs Properties, No. 25-83 (U.S. argued Mar. 30, 2026), and sideways to certain consequential circuit decisions, including USAA Savings Bank v. Goff, No. 25-1730, slip op. (7th Cir. Mar. 19, 2026), and Bruce v. Adams & Reese, LLP, No. 25-5210, slip op. (6th Cir. Feb. 25, 2026). This was the eighteenth CPR arbitration video presentation this panel (or most of it), has given during the past four or five years.

The March 27, 2026, Video

The March 27 program is best understood not as a one-off webinar, but as the newest installment in a continuing conversation about where appellate arbitration law is heading. CPR’s December 2025 year-end program had already previewed Jules and Flowers Foods, the two U.S. Supreme Court arbitration-law cases the Court has thus far accepted this 2025 Term for review.

What the March 27, 2026, Video Shows About the Current State of Arbitration Law

This latest arbitration video shows that the four featured matters are different on their facts but closely related in what they reveal about the present state of arbitration law. None is a frontal assault on arbitration. Each instead concerns a doctrinal pressure point: where post-award litigation belongs, who falls within the FAA’s Section 1 transportation-worker exemption, when courts will conclude that arbitrators exceeded the bounds of the contract by not interpreting it, and how far Congress’s Ending Forced Arbitration Act (“EFAA”) carve-out extends once sexual-harassment or sexual-assault claims are pleaded together with other claims not covered by the EFAA.

In that respect, Jules remained the centerpiece. Jules asks whether a federal court that properly exercised federal question jurisdiction over an action, and then stayed that action pending arbitration under FAA Section 3, may later adjudicate post-award FAA motions without having a new and independent basis for subject-matter jurisdiction. The question is narrow only on the surface. In practical terms, it concerns whether a federal court that has federal question jurisdiction over the merits dispute, and pursuant to FAA Section 3 stays the litigation pending arbitration of the merits dispute, may, at the request of one of the parties, and without having a new and independent basis for subject matter jurisdiction (such as diversity), complete the job after the award returns, or whether the parties must instead start over in state court. The CPR panel’s discussion came only days before the March 30 argument, which made the presentation a timely and useful preview of one of the Court’s most important FAA jurisdiction-related cases since Badgerow v. Walters, 596 U.S. 1 (2022), and Smith v. Spizzirri, 601 U.S. 472 (2024).

Readers who view the March 27, 2026 presentation and the subsequent March 30, 2026 oral argument can see that the panelists’ comments were largely or entirely on the mark. CPR Speaks followed the argument with a very thoughtful same-day report, Supreme Court Hears Case on Federal Courts’ Powers to Confirm Arbitration Awards. A decision likely will issue before the close of the October 2025 Term in late June.

Flowers Foods concerns the scope of FAA Section 1’s transportation-worker exemption. But both Jules and Flowers Foods share an important feature: both concern where the FAA stops, and both therefore affect whether arbitration disputes will be resolved in court, in arbitration, or in some jurisdictional or procedural limbo between the two. The March 27 program accordingly framed Flowers not as an isolated exemption dispute, but as part of the Court’s broader and continuing effort to define the FAA’s boundaries with greater textual precision.

The panel also highlighted two significant circuit courts of appeals decisions that underscore how much important arbitration doctrine is shaped outside the U.S. Supreme Court. In Goff, the Seventh Circuit addressed a rare circumstance in which a court vacated an award on the ground that the arbitrator had, disregarded the parties’ contract and thus did not even arguably interpret it. That issue is significant not because courts often vacate awards on that basis, but because they rarely do. Oxford Health Plans LLC v. Sutter, 569 U.S. 564, 569, 572-73 (2013), made clear how narrow the path is for setting aside an award under FAA Section 10(a)(4) when the arbitrator is at least arguably construing the agreement. A decision like Goff therefore commands attention because it tests the line between genuine contract interpretation and an arbitrator’s substitution of her own notions of “[economic] justice” or “sound policy.” See id. at 569; Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662, 672, 675 (2010).

Bruce, in turn, is one of the most important circuit-court decisions construing the EFAA. The Sixth Circuit adopted what is sometimes called the entire-case rule: when a case includes an EFAA-covered sexual-harassment dispute, the statute renders the arbitration agreement unenforceable as to the whole case, not merely as to the EFAA-covered claims. See Bruce, slip op. at 17-19. Whether one agrees or disagrees with that reading, the decision is consequential because it gives the statute a broader practical effect than a claim-by-claim approach would have done. The March 27 CPR program usefully placed Bruce in the same conversation as Jules, Flowers Foods, and Goff because all four cases illuminate a common theme: appellate courts are increasingly defining arbitration law through technical yet consequential disputes over scope, forum, remedy, and statutory carve-outs, rather than through generalized debates about whether the federal policy in favor of arbitration should in a given case drive an arbitration-friendly outcome.

The presentation also illustrated the value of continuity among panelists. Professor Downes, Rick Faulkner, Russ Bleemer, and the author bring different vantage points to the discussion: academic, arbitral, appellate- and district-court practitioner, and editorial. Because the same group has returned repeatedly over several years, the programs have developed into something more useful than mere episodic commentary.

For readers of The Arbitration Law Forum, the key takeaway is straightforward. The March 27 program is worth watching not only for its discussion of the four featured cases, but also for the broader picture it paints. The doctrinal stakes of the Supreme Court’s arbitration docket are larger than they first appear. Lower federal courts continue to generate important arbitration law at a brisk pace. And many of the most consequential disputes now concern not whether arbitration will or should be enforced in the abstract, but how courts define the boundaries of arbitral power, arbitral forum, and arbitral exception. This eighteenth CPR presentation captures, in one discussion, several of the issues likely to shape arbitration-law practice in the months and years ahead.

Contacting the Author

If you have any questions about this article, arbitration, arbitration law, or arbitration-related litigation, then you may contact the author at pjl1@loreelawirm.com or +1 (516) 941-6094.

Philip J. Loree Jr. is principal of The Loree Law Firm, a New York attorney who focuses his practice on arbitration and arbitration-law matters. The Loree Law Firm’s website is https://loreelawfirm.com/.

ATTORNEY ADVERTISING NOTICE: Prior results do not guarantee a similar outcome.

Photo Acknowledgment

The photo featured in this post was licensed from Yay Images and is subject to copyright protection under applicable law.

The post CPR’s March 27 Appellate Arbitration Video Panel: Jules, Flowers Foods, Goff, and Bruce appeared first on The Arbitration Law Forum.

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The AAA Sent Me a List of Arbitrators. How Should My Business Choose One?

Arbitrator Selection—Understand the Rule R-13 Process and the Deadline

Start With the Dispute, Not the Resumes

Other Qualifications That May be Material to Arbitrator Selection

Past Experience With a Candidate Can Be Invaluable in Arbitrator Selection

Research the Candidates – But Use Judgment

Read the Disclosures Carefully

Do Not Communicate Improperly With a Candidate

Arbitrator Selection—Use Strikes and Rankings Thoughtfully and Deliberately

Before You Return the AAA List: A Practical Checklist

Conclusion

Contacting the Author

Photo Acknowledgment

I Just Received an Arbitration Demand Under the AAA Commercial Rules. What Should I Do First?

Introduction: Treat the AAA Demand as a Legal Proceeding, Not Routine Business Mail

Why it is Important to Get Counsel Involved Immediately when You Are Served with an AAA Arbitration Demand

Start With the Contract – Not Just the Demand

Preserve Evidence Now

Calendar the Other Early AAA Deadlines

Think About Counterclaims, Insurance, and Emergency Issues

Begin Thinking About the Arbitrator and the Economics of the AAA Case

Do Not Ignore Mediation or the Preliminary Hearing

The First 48 Hours: A Checklist

Contacting the Author

Photo Acknowledgment

No Agreement to Arbitrate in a Case Governed by New York CPLR Article 75?

Introduction: Same Hypothetical but New York Article 75 Changes the Timing Analysis

The Article 75 Hypothetical

New York Article 75: Two Different Timing Rules

Article 75 20-Day Rule: CPLR 7503(c)

The 90-Day Rule: CPLR 7511(a)

Matarasso: Under CPLR Article 75 an Arbitration Notice Cannot Create an Arbitration Agreement That Never Existed

Why the Matarasso Defense Should Carry Through to Confirmation

The Matarasso rationale is not about forgiving a late filing

Article 75 makes a written arbitration agreement a sine qua non for confirmation

CPLR 7511(b)(2) and Case Law Suggests the No Agreement Principle Should Apply Post Award Even if the Challenger is Served with a Notice of Intent to Arbitrate and does not Move for a Stay

The Most Important Qualification: “I Did Not Sign” Does Not Necessarily Mean “No Agreement” under Article 75

What Is Not a True Matarasso No Agreement Defense?

An existing contract allegedly expired or ceased to be enforceable

A contractual coverage or condition-precedent dispute

A scope objection

Does a Written Pre-Arbitration Objection Preserve the Defense under Article 75?

Participation Creates a Separate and Potentially Serious Article 75 Risk

What Happens If the Confirmation Court Finds That the Business Was Bound to Arbitrate?

Conclusion

Contacting the Author

Photo Acknowledgment

No Agreement to Arbitrate? Defending Against an Award Without a Timely FAA Motion to Vacate

No Agreement: A Businessperson’s Guide to a Narrow but Important Defense to Award Confirmation

The No Agreement Hypothetical That Presents the Strongest Defense

The Ordinary FAA Rule: Section 12 Is Strict

Why a True No-Agreement Defense Is Different

MCI v. Exalon: The Leading No Agreement Section 12 Decision

Other Federal Decisions Reinforce the No Agreement Principle

Different Facts—Different Result

The Business Signed or Otherwise Became Bound

The Objection Concerns Validity, Scope, or Outcome—not Existence of the Agreement

The Business Participated Without a Timely and Clear Objection

A Court Already Decided That the Business Must Arbitrate

The Business Agreed to Delegate Arbitrability

What Happens If the Court Finds the Business Agreed to Arbitrate or Was Otherwise Bound?

Can the Business in a No Agreement Case Participate in the Arbitration Under a Strict Reservation of Rights?

Conclusion

Arbitration Law FAQs: Confirming Arbitration Awards under the Federal Arbitration Act

Contacting the Author

Photo Acknowledgment

Unfavorable Arbitration Award? A Businessperson’s Guide to Vacating, Modifying or Correcting FAA-Governed Awards

Introduction: Can I Vacate, Modify or Correct this Award?

What Does it Mean to Vacate, Modify or Correct an Award?

Potential Vacatur Candidates under FAA Section 10

What Usually Is Not Enough to Vacate an Award?

To Modify or Correct an Award Under FAA Section 11

What to Do in the First 24 to 48 Hours

The Record Must Prove the Grounds to Vacate, Modify or Correct

What Arbitration-Law Counsel Must Analyze

The Deadline to Vacate, Modify or Correct Is Shorter Than It Looks

Making the Business Decision To Apply to Vacate, Modify or Correct an Award

Vacating, Modifying or Correcting Awards: Conclusion

Contacting the Author