Today, the Court issued an order requesting supplemental briefing from the Hall Street Parties. The order is as follows:
ORDER IN PENDING CASE
06-989 HALL STREET ASSOC. V. MATTEL, INC.
The parties are directed to file supplemental briefs
addressing the following questions:
(1) Does authority exist outside the Federal Arbitration Act
(FAA) under which a party to litigation begun without reliance
on the FAA may enforce a provision for judicial review of an
(2) If such authority does exist, did the parties, in agreeing
to arbitrate, rely in whole or part on that authority?
(3) Has petitioner in the course of this litigation waived any
reliance on authority outside the FAA for enforcing the judicial
review provision of the parties’ arbitration agreement?
The briefs, not to exceed 6,000 words, are to be filed
simultaneously with the Clerk and served upon opposing counsel
on or before 2 p.m., Tuesday, November 27, 2007. Reply briefs,
not to exceed 3,000 words, may be filed with the Clerk and served
upon opposing counsel on or before 2 p.m., Monday, December 3,
It looks to me like the Court is wondering whether the FAA applies at all in this case (which was Roberts’ line of questioning). It may be that they are considering whether substantive judicial review provisions contained in an agreement among parties transforms what the parties think is arbitration into a procedure governed by common law (contract law) rather than the FAA. If that is the case, then the question becomes whether parties can ask courts to review their contracts on grounds that courts normally don’t use to review contracts. Then, the district court judge would have to look at whether he or she had authority to grant the parties’ request — in past cases, courts have used their inherent authority to grant or deny such non-traditional requests. But, because courts’ inherent authority is discretionary, courts might reject the parties’ requests. That level of uncertainty might doom these kinds of agreements.
From my perspective, I think the worst part of this may be that the Court is not going to answer the question whether parties may expand judicial review of arbitration awards (or, perhaps, their answer will be that when parties try to get more judicial review, they are not arbitrating).