The Supreme Court heard oral arguments in Hall Street Assoc. v. Mattel,Inc., the first part of this month, a case revolving around whether the Federal Arbitration Act precludes federal courts from reviewing arbitration awards for factual or legal error if parties have specified in an agreement more expansive judicial review than that provided for in the statutes. (Article)
According to the article, Mattel had leased property from Hall Street Associates in 1996, but after a well on the property tested with levels of thrichloroethylene higher than federal limits, sought to terminate that lease. Hall Street sued for indemnification of the clean-up costs.
The District Court of Oregon resolved part of dispute in May 2001, both parties presumably agreeing to arbitration on the balance of the issues. Hall Street, however, then sought a district court of review of the arbitrator’s finding that Mattel was protected by a contractual exception in the lease’s indemnity requirements. The District Court vacated the award to Mattel.
On appeal to the 9th. Circuit it was held that the FAA precluded the district courts from reviewing arbitration awards for legal error, which Hall Street has subsequently brought to this point.
During oral arguments Justice Breyer commented that it looked like there were a lot of open questions which made it a quite difficult case having to be argued on remand, which made it “the case of the century.”
Further on he clarified, saying he “was actually thinking the case of the century because it’s going to take a hundred years to finish…”
Hall Street’s merit brief
Mattel’s merit brief