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St. Mary's Law Journal

Abstract

In the wake of a defeat in arbitration, trial lawyers seek appellate counsel looking for some method to escape the arbitrator’s decision. Most leave such offices disappointed after having been informed arbitration awards will be set aside by the courts “only in very unusual circumstances.” The Federal Arbitration Act (FAA) fully endorses arbitration and liberally encourages its use as an alternative to traditional litigation. Consistent with Congress’ focus on speed, efficiency, and cost reduction, a critical goal of arbitration is to establish “finality” at the earliest possible point. Unfortunately, early finality is antithetical to robust appellate proceedings. Yet, the FAA does provide an “extraordinarily narrow” path for challenging the results of an arbitration proceeding. An arbitration award issued under the FAA does not take on the force of law until it has been “confirmed” by a court. Confirmation transforms the arbitration award into a judgment of the court, binding and enforceable in the same manner as any other judgment issued by the court. The challenge to an arbitration award is made by opposing the motion to confirm and filing a motion to vacate. The court conducts an exceedingly deferential review if there is any legal basis for vacating the award. The district court has statutory authority under the FAA to vacate an arbitration award in only four situations. Each of those grounds for vacatur deals with the integrity and propriety of the arbitration process itself and not with the legal or factual accuracy of the arbitrator’s award. Meaning, none of the four FAA statutory grounds is designed to correct a good-faith error of fact or law by the arbitrator, no matter how egregious. The Texas Supreme Court confirmed that so long as arbitrators are acting within the scope of their authority, making serious errors does not suffice to overturn decisions.

Publisher

St. Mary's University School of Law

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