The Supreme Court – March 31, 2022

Today, the Supreme Court of the United States issued one decision:

Badgerow v. Walters, No. 20-1143: This case concerns the scope of the federal courts’ jurisdiction to confirm or vacate arbitration awards under Sections 9 and 10 of the Federal Arbitration Act (“FAA”), 9 U.S.C. Section 1, et. seq.  Federal courts may or may not have jurisdiction to review petitions brought under the FAA because the FAA itself does not inherently create jurisdiction.  In an earlier decision, Vaden v. Discover Bank, 556 U.S. 49 (2009), the Supreme Court held that when federal courts considers requests to compel arbitration under Section 4 of the FAA, they may “look through” to the substance of the dispute and may exercise jurisdiction where the substantive dispute falls within the court’s jurisdiction.  The Vaden decision largely rested upon statutory language that granted jurisdiction to a federal court “which, save for [the arbitration] agreement, would have jurisdiction.” 9 U.S.C. § 4.  In a decision authored by Justice Kagan, the Supreme Court held that the language in Sections 9 and 10 of the FAA did not authorize federal courts to apply a “look-through” approach to jurisdiction because these sections do not include the express statutory language from Section 4 authorizing this approach.  Justice Breyer dissented, arguing that adopting a “look-through” approach to all of the FAA’s related provisions would provide a more harmonious and straightforward jurisdictional scheme.