Archive for the ‘Authority of Arbitrators’ Category

October 16 myLawCLE Webinar: Start in Arbitration, Finish in Court: The Sexual Harassment Plaintiff’s Election to Litigate

September 23rd, 2026 Application to Stay Litigation, Arbitrability, Arbitration Agreement Invalid, Arbitration Agreement Unenforceable, Arbitration Agreements, Arbitration as a Matter of Consent, Arbitration Law, Arbitration Practice and Procedure, Authority of Arbitrators, Challenging Arbitration Agreements, Charles Bennett, Claims Spot, Clear and Unmistakable Rule, Delegation Agreements, Delegation Provision, EFAA - FAA Chapter 4, Employment Arbitration, Enforcing Arbitration Agreements, FAA Chapter 4, FAA Section 2, Federal Arbitration Act Section 2, Forfeiture, Gateway Disputes, Gateway Questions, Philip J. Loree Jr., Predispute Arbitration Agreements, Richard D. Faulkner, Section 2, Separability, Severability, Sexual Harassment and Sexual Assault Disputes, United States Court of Appeals for the Ninth Circuit, United States Court of Appeals for the Second Circuit, United States Court of Appeals for the Sixth Circuit, Webinars No Comments »

Philip J. Loree Jr., Richard D. Faulkner, and Charles (“Chuck”) Bennett will Discuss the EFAA’s Application and Effect in an October 16, 2026, myLawCLE Webinar

What may result from the EFAA's application -- A Lawsuit, not an arbitration. . . . On October 16, 2026, I will be joining my good friends and colleagues Richard D. Faulkner of Faulkner ADR Law and Charles (“Chuck”) Bennett of Bennett Legal for a two-hour live myLawCLE webinar, which discusses the EFAA’s application and effect:  Start in Arbitration, Finish in Court: The Sexual Harassment Plaintiff’s Election to Litigate. The program begins at 2:30 p.m. Eastern and focuses on one of the most important practical consequences of the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (the “EFAA”): when, and how, a claimant who would otherwise be required to arbitrate may elect instead to litigate in court. That election to litigate may include not only sexual harassment and sexual assault disputes, but all otherwise arbitrable claims that are part of the same case.

The EFAA, codified as Chapter 4 of the Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 401-402, gives persons alleging covered sexual-harassment or sexual-assault disputes a post-dispute choice that did not exist under the ordinary FAA regime. But identifying that choice is only the beginning. The statute has generated substantial litigation over when a covered dispute arises or accrues, what qualifies as a covered dispute, who decides those questions, how broadly the election extends in a mixed-claim case, and what happens when arbitration has already begun.

We have previously discussed the EFAA’s structure in a practical Arbitration Law Forum overview and examined the Sixth Circuit’s entire-case ruling in Bruce v. Adams & Reese. The October 16 program builds on those discussions and approaches the subject from both claimant-side and employer-side perspectives.

Part I: When a Sexual Harassment Plaintiff Can Still Elect Court Over Arbitration

The first segment, When a Sexual Harassment Plaintiff Can Still Elect Court Over Arbitration, addresses the threshold coverage questions.

We will begin with the statute itself: what constitutes a “predispute arbitration agreement” or “predispute joint-action waiver”; what counts as a “sexual harassment dispute” or “sexual assault dispute”; and how Section 402(b) assigns questions about the EFAA’s  applicability to courts even when an arbitration agreement contains a delegation clause, and even if such an arbitral determination might be authorized by the doctrine of separability. We will also discuss the statute’s March 3, 2022 effective-date limitation and the developing case law concerning when a dispute “arises” or a claim “accrues.”

A central issue is the EFAA’s use of the word “case.” In Bruce v. Adams & Reese, LLP, 168 F.4th 367 (6th Cir. 2026), the Sixth Circuit held that a plausibly pleaded sexual-harassment dispute could render a predispute arbitration agreement unenforceable as to the entire case, including claims that otherwise would have been arbitrable. The Ninth Circuit subsequently reached the same basic conclusion in a different procedural context in Ding Ding v. Structure Therapeutics, Inc., No. 25-1532, slip op. (9th Cir. Aug. 19, 2026).

That entire-case rule substantially raises the stakes of the threshold pleading fight. If the claimant adequately alleges a covered dispute, the forum for all properly joined claims may turn on that one issue. If the alleged covered dispute fails at the pleading stage, however, the remaining claims may still be subject to arbitration. We will examine what the cases say about that distinction and what it means in practice.

Part II: Executing the Arbitration Exit in a Sexual Harassment Case

The second segment, Executing the Arbitration Exit in a Sexual Harassment Case, moves from coverage to the EFAA’s application. Section 402(a) speaks in terms of an “election,” but it does not prescribe a form of notice, a special deadline, a required pleading mechanism, or a detailed process for leaving an arbitration that is already underway. Those omissions make execution of the EFAA’s election a practical lawyering problem.

For claimants, we will discuss how to make the election explicit; how to plead the covered dispute with the anticipated motion to compel in mind; how to establish the relationship between the covered dispute and the rest of the case; and how to document timing and knowledge when facts supporting an EFAA claim emerge only after arbitration has begun.

Ding Ding is particularly important on that last point. The Ninth Circuit held that a claimant who initially arbitrated claims that did not allege sexual harassment was not necessarily locked into arbitration after later discovering facts supporting a covered sex-based harassment claim within the EFAA’s ambit. But the court also recognized that ordinary waiver principles remain relevant. The practical question therefore becomes what the claimant knew, when the claimant knew it, and whether the claimant intentionally chose to arbitrate a known EFAA-covered dispute.

We will examine the same problems from the employer’s side. An employer confronting an EFAA election must decide quickly whether a dispute alleged to be within the EFAA’s coverage can be challenged at the pleading stage, whether a waiver argument is available, how to preserve arbitration rights while litigating the threshold issue of the EFAA’s applicability, and whether severance or relatedness arguments have any realistic force under the emerging entire-case rule.

The program will also use Puris v. TikTok as a vehicle for discussing harder boundary questions, including third-party harassment, employer responsibility, retaliation, and sex-based hostile-environment allegations that may not involve overtly sexual conduct. Puris is pending before the Second Circuit, and we’ve got our eyes open for a decision that might be handed down any day now.

Why the EFAA’s Provisions Are of Interest to both the Employment and Arbitration Bars

The EFAA’s provisions are short and few but its procedural consequences are significant. It can override otherwise enforceable predispute arbitration agreements, displace delegation provisions and the doctrine of separability and determine the forum for an entire employment case. Recent appellate decisions have moved the law forward quickly, but they also make clear that outcomes may depend on pleading, timing, waiver, motion sequencing, and the substantive harassment law incorporated into the EFAA’s definitions.

Our goal on October 16 is to provide a practical framework for analyzing those issues, which can be procedural traps for the unwary. We hope the program will be useful to arbitration practitioners, employment lawyers, in-house counsel, and others who may have to determine whether a dispute that appears headed for arbitration can – or must – finish in court.

The program is live on October 16, 2026, at 2:30 p.m. Eastern and offers two hours of CLE credit. Additional information and registration are available on the myLawCLE program page.

Chuck, Rick, and I would like to thank Mishelle Villatoro, myLawCLE’s CLE Program Development Specialist for organizing and coordinating the program, and John Holloway, the CEO of myLawCLE, for inviting the three of us to speak.

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.

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

September 14th, 2026 American Arbitration Association, Arbitrability, Arbitral Seat, Arbitration Agreements, Arbitration and Mediation FAQs, Arbitration Fees, Arbitration Law, Arbitration Practice and Procedure, Arbitration Provider Rules, Arbitration Providers, Arbitration Risks, Arbitration Situs, Arbitrator Selection and Qualification Provisions, Authority of Arbitrators, CPLR Article 75, Insurance Coverage, New York Arbitration Law (CPLR Article 75), Uncategorized No Comments »

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

AAA Commercial Arbitration Demand | First Steps After Receipt

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 Continue Reading »

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

August 24th, 2026 Application to Confirm, Application to Stay Arbitration, Application to Stay Litigation, Application to Vacate, Arbitrability, Arbitrability - Equitable Estoppel, Arbitrability - Nonsignatories, Arbitrability | Existence of Arbitration Agreement, Arbitration Agreement Invalid, Arbitration Agreement Unenforceable, Arbitration Agreements, Arbitration and Mediation FAQs, Arbitration as a Matter of Consent, Arbitration Law, Arbitration Practice and Procedure, Arbitration Risks, Authority of Arbitrators, Awards, Challenging Arbitration Agreements, Challenging Arbitration Awards, Contract Formation, CPLR Article 75, Existence of Arbitration Agreement, Formation of Arbitration Agreement, New York Appellate Division, New York Arbitration Law (CPLR Article 75), New York Court of Appeals, New York State Courts, Practice and Procedure, Rights and Obligations of Nonsignatories, Small Business B-2-B Arbitration, Stay of Arbitration, Time Limit for Vacating, Modifying, or Correcting Award, Vacate Award | Arbitrability, Vacate Award | Existence of Arbitration Agreement, Vacatur No Comments »

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

Article 75 - New York state arbitration law

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 Continue Reading »

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

August 10th, 2026 Applicability of Federal Arbitration Act, Applicability of the FAA, Application to Confirm, Application to Vacate, Arbitrability, Arbitration Agreements, Arbitration Law, Arbitration Practice and Procedure, Arbitration Risks, Authority of Arbitrators, Awards, Challenging Arbitration Awards, Consent to Confirmation, Contract Formation, Convention on the Recognition and Enforcement of Foreign Arbitral Awards, Default Award, Existence of Arbitration Agreement, FAA Chapter 1, FAA Chapter 2, FAA Section 1, FAA Section 10, FAA Section 11, FAA Section 2, FAA Section 3, FAA Section 9, FAA Transportation Worker Exemption, Federal Arbitration Act Section 1, Federal Arbitration Act Section 10, Federal Arbitration Act Section 11, Federal Arbitration Act Section 12, Federal Arbitration Act Section 2, Federal Arbitration Act Section 9, First Principle - Consent not Coercion, Formation of Arbitration Agreement, Grounds for Modifying or Correcting Award, Grounds for Vacatur, Modify or Correct Award, Petition or Application to Confirm Award, Petition to Modify Award, Petition to Vacate Award, Post-Award Federal Arbitration Act Litigation, Practice and Procedure, Section 1, Section 10, Section 11, Section 12, Section 2, Section 9, Small and Medium-Sized Business Arbitration Risk, Small Business B-2-B Arbitration, Supreme Court, Time Limit for Vacating, Modifying, or Correcting Award, United States Supreme Court, Vacate, Vacate Award | Arbitrability, Vacate Award | Exceeding Powers, Vacate Award | Excess of Powers, Vacate Award | Existence of Arbitration Agreement, Vacatur No Comments »

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

no agreementWhat 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? Continue Reading »

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

July 29th, 2026 Appellate Practice, Application to Vacate, Arbitration as a Matter of Consent, Arbitration Law, Arbitration Practice and Procedure, Authority of Arbitrators, Award Fails to Draw Essence from the Agreement, Award Procured by Fraud and Corruption, Award Vacated, Awards, Businessperson's FAQ Guide to the Federal Arbitration Act, Challenging Arbitration Awards, Contract Interpretation, Corruption in the Arbitrators, Corruption or Undue Means, Disinterestedness, Evident Partiality, Exceeding Powers, FAA Chapter 1, FAA Section 10, FAA Section 11, Federal Arbitration Act Enforcement Litigation Procedure, Federal Arbitration Act Section 10, Federal Arbitration Act Section 11, Federal Subject Matter Jurisdiction, Fraud, Fraud or Undue Means, Grounds for Modifying or Correcting Award, Grounds for Vacatur, Imperfectly Executed Award or Powers, Manifest Disregard of the Agreement, Manifest Disregard of the Law, Modify or Correct Award, Personal Jurisdiction, Petition to Modify Award, Petition to Vacate Award, Post-Award Federal Arbitration Act Litigation, Practice and Procedure, Prejudice, Procedural Arbitrability, Procedural Misconduct, Section 10, Section 11, Small Business B-2-B Arbitration, State Arbitration Statutes, Subject Matter Jurisdiction, Supreme Court, United States Supreme Court, Vacate, Vacate Award | 10(a)(2), Vacate Award | 10(a)(4), Vacate Award | Arbitrability, Vacate Award | Attorney Fees, Vacate Award | Attorney's Fees, Vacate Award | Corruption, Vacate Award | Evident Partiality, Vacate Award | Exceeding Powers, Vacate Award | Excess of Powers, Vacate Award | Existence of Arbitration Agreement, Vacate Award | Fraud, Vacate Award | Manifest Disregard of the Law, Vacate Award | Public Policy, Vacatur No Comments »

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

Vacate, Modify or Correct an Arbitration AwardYour 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? Continue Reading »

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

April 1st, 2026 Appellate Jurisdiction, Appellate Practice, Applicability of Federal Arbitration Act, Applicability of the FAA, Application to Compel Arbitration, Application to Confirm, Application to Stay Litigation, Application to Vacate, Arbitrability, Arbitration Agreement Invalid, Arbitration Agreement Unenforceable, Arbitration Agreements, Arbitration Law, Arbitration Practice and Procedure, Authority of Arbitrators, Award Fails to Draw Essence from the Agreement, Award Irrational, Award Vacated, Awards, Confirmation of Awards, Conflict between Arbitration Clause and Another Clause, Contract Interpretation, CPR Alternatives, CPR Speaks Blog of the CPR Institute, CPR Video Interviews, Employment Arbitration, Enforcing Arbitration Agreements, Exceeding Powers, Exemption from FAA, FAA Chapter 1, FAA Chapter 4, FAA Section 10, FAA Section 401, FAA Section 402, FAA Section 9, FAA Transportation Worker Exemption, Federal Arbitration Act Enforcement Litigation Procedure, Federal Arbitration Act Section 1, Federal Arbitration Act Section 10, Federal Arbitration Act Section 3, Federal Arbitration Act Section 4, Federal Arbitration Act Section 9, Federal Policy in Favor of Arbitration, Federal Subject Matter Jurisdiction, Grounds for Vacatur, International Institute for Conflict Prevention and Resolution (CPR), Loree and Faulkner Interviews, Manifest Disregard of the Agreement, Nuts & Bolts: Arbitration, Petition to Vacate Award, Practice and Procedure, Pre-Award Federal Arbitration Act Litigation, Professor Angela Downes, Professor Downes, Questions of Arbitrability, Richard D. Faulkner, Section 3 Stay of Litigation, Section 6, Stay of Litigation Pending Arbitration, Subject Matter Jurisdiction, Substantive Arbitrability, United States Court of Appeals for the Second Circuit, United States Court of Appeals for the Seventh Circuit, United States Court of Appeals for the Sixth Circuit, United States Supreme Court, Vacate Award | 10(a)(4), Vacate Award | Exceeding Powers, Vacate Award | Excess of Powers Comments Off on CPR’s March 27 Appellate Arbitration Video Panel: Jules, Flowers Foods, Goff, and Bruce

arbitration video CPR

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.

 

New York’s Highest Court Rules that Arbitrator’s Statutory Treble Damages Award against Town Should have been Vacated

April 7th, 2025 Appellate Jurisdiction, Appellate Practice, Application to Confirm, Application to Vacate, Arbitrability, Arbitration Agreements, Arbitration Law, Arbitration Practice and Procedure, Authority of Arbitrators, Award Vacated, Challenging Arbitration Awards, CPLR Article 75, Enforcing Arbitration Agreements, New York Appellate Division, New York Court of Appeals, New York State Courts, Petition to Vacate Award, Policy, Public Policy, Punitive Damages, Questions of Arbitrability, Remedies, Sovereign Immunity, Substantive Arbitrability, Treble Damages, Uncategorized, Vacate, Vacate Award | Arbitrability, Vacate Award | Exceeding Powers, Vacate Award | Public Policy Comments Off on New York’s Highest Court Rules that Arbitrator’s Statutory Treble Damages Award against Town Should have been Vacated

Introduction

Treble Damages | Punitive Damages | Public Policy Under New York law, can an arbitrator lawfully award statutory treble damages against the State or its political subdivisions?

New York prohibits punitive damage awards in suits against the State and its political subdivisions, including of course, towns. See Clark-Fitzpatrick, Inc. v Long Is. R.R. Co., 70 N.Y.2d 382, 386 (1987). Public funds are available only to compensate for damages suffered because the key “justifications for punitive damages—punishment and deterrence—are hardly advanced when applied to a governmental unit.” Sharapata v Town of Islip, 56 N.Y.2d 332, 338 (1982).

This prohibition on punitive damage awards is also based on the precept that the sovereign’s liability extends no farther than its waiver of immunity. As the New York Court of Appeals—New York’s highest Court—said in Sharapata, “we hold today that the waiver of sovereign immunity effected by section 8 of the Court of Claims Act does not permit punitive damages to be assessed against the State or its political subdivisions.” 56 N.Y.2d at 334.

But assuming treble damages are punitive in nature, can an arbitrator’s award imposing punitive damages be vacated because it violates New York public policy? Recently before the Court, in Matter of Rosbaugh v. Town of Lodi, 2025 NY Slip Op 01406 at *1 (N.Y. Mar. 13, 2025), was the question whether an arbitrator’s treble damages award against the Town of Lodi (the “Town”), made under New York Real Property Actions and Proceedings Law (“RPAPL”) § 861, was punitive in nature and thus contrary to New York public policy. The Court said the answer is yes and held the award must be vacated.

One might expect that Rosbaugh would have discussed briefly New York arbitration law authorizing vacatur of awards that violate public policy but it did not. The focus of the decision was instead on whether the Court could, without violating New York public policy, impose on and enforce against the Town any  judgment imposing an RPAPL 861 treble damage remedy, irrespective of whether the judgment resulted or would result from: (a) a plenary, judicial trial on the merits; or (b) a summary proceeding to enter judgment on an arbitration award imposing that remedy. Because the prohibition applies to any suit against the state or its subdivisions, whether on the merits or to confirm an arbitration award, it was arbitration neutral and it did not necessarily require a meaningful discussion of arbitration law to hold that the award had to be vacated.

But perhaps the Court downplayed the arbitration law aspects of the decision because it thought doing otherwise might inadvertently encourage more public-policy challenges to the confirmation of arbitration awards than the law warrants. The line between what may be an egregious mistake of law—which is ordinarily not subject to New York Civ. Prac. L. & R. (“CPLR”) Article 75 review—and a violation of an important New York public policy—which can be a basis for vacatur of an award, see Associated Teachers of Huntington, Inc. v. Bd. of Educ., 33 N.Y.2d 229, 235-36 (1973)— can sometimes be blurry. The Court may have wanted to downplay arbitration law to avoid encouraging award challengers from unnecessarily, and erroneously,  seeking vacatur of awards based on unreviewable legal errors which, while serious, do not amount to violations of “so strong a public policy as to require vacating an award. . . .” 33 N.Y.2d at 231-32.

Also left undiscussed was how New York arbitration law provided an independent, alternative ground on which the courts might have vacated the award. Under New York arbitration law—but not the Federal Arbitration Act—arbitrators to not have the power, and cannot be empowered by agreement, to award punitive damages. See Garrity v. Lyle Stuart, Inc., 40 N.Y.2d 354, 357, 359-60 (1976); see also Mastrobuono v. Shearson Lehman Hutton Inc., 514 U.S. 52, 62-64 (1995) (discussing difference between New York law and the FAA concerning arbitrability of punitive damages).

In Rosbaugh, the party who challenged the treble damage award was a municipality, which had a strong, sovereign-immunity-based public policy argument against the assessment of punitive damages.  But had the Town been a private person, then it would, it seems to the author, have had at least a  basis to argue that for the reasons explained by the Court in Rosbaugh, the treble-damage award had to be vacated under Garrity because of its punitive nature.

Background and Procedural History

Plaintiffs were landowners who owned land abutting one side of a dirt road in upstate New York. They had trees on their property, some of which apparently overhung the road, which was owned and maintained by the Town. The Town claimed that the trees were interfering with the right-of-way.

Presumably concluding that the trees were within the right-of-way, the Town proceeded to hire a tree service company to remove or trim them The company trimmed or cut down 55 trees that were on the plaintiff’s property.  Plaintiff sued the Town and the company seeking, among other remedies, treble damages under RPAPL 861(1).

Ultimately the parties agreed to submit their dispute to arbitration.  The arbitrator found for the plaintiffs, awarding three-times the “‘stumpage value’ of the damaged or destroyed trees.” 2025 NY Slip Op 01406 at *1 (quotations in original). The trial court upheld the award and a divided panel of the Appellate Division, Fourth Department, affirmed.

New York’s highest court said “[t]he sole issue on appeal is whether treble damages under RPAPL 861 are punitive in nature , making them unavailable in a suit against a municipality.” 2025 NY Slip Op 01406 at *1. It concluded that they were punitive and that the award had to be vacated. See 2025 NY Slip Op 01406 at *3.

Whether Statutory Treble Damages are Punitive Depends on the Intent of the Legislature

As a general rule, treble damages are considered to be punitive but the Continue Reading »

Some Things to Consider Seriously Before You Agree to Arbitrate: An Arbitration Award may Direct You to Pay Your Adversary’s Attorney’s Fees

March 7th, 2025 Arbitration Agreements, Arbitration as a Matter of Consent, Arbitration Fees, Arbitration Law, Arbitration Practice and Procedure, Arbitration Provider Rules, Arbitration Providers, Arbitration Risks, Attorney Fee Shifting, Attorney Fees and Sanctions, Authority of Arbitrators, Awards, Bad Faith, Charles Bennett, Drafting Arbitration Agreements, Judicial Review of Arbitration Awards, Outcome Risk, Practice and Procedure, Richard D. Faulkner, Small and Medium-Sized Business Arbitration Risk, Small Business B-2-B Arbitration, Uncategorized Comments Off on Some Things to Consider Seriously Before You Agree to Arbitrate: An Arbitration Award may Direct You to Pay Your Adversary’s Attorney’s Fees

Attorney's Fees in ArbitrationThose who agree to arbitration expose themselves to potential awards of attorney’s fees in cases where courts would likely not award fees.

If you’re a small business or an individual there’s a good chance you’re not fully familiar with certain of the risks associated with arbitration. Clients frequently consult with me when they find themselves saddled with unfavorable awards, and some of these persons are ones who, through no fault of their own, did not appreciate the risks involved and might  consequently have missed opportunities to better manage them. In many instances these persons were represented by attorneys who understood that subject matter of the arbitrated disputes, and who were skilled courtroom litigators, but who were not necessarily as well-versed in arbitration-law as are arbitration and arbitration-law practitioners.

This is more than simply an anecdotal observation. My good friends, colleagues, and sometimes co-counsel, Richard D. Faulkner and Charles (“Chuck”) Bennett, who also practice in this field, tell me they share this view and that their experiences are aligned with my own. (Here is a post concerning a Federalist-Society-sponsored webinar Rick, Chuck, and I participated in last year.) Other arbitration attorneys with whom I have spoken also agree.

Readers armed with some practical knowledge may be better able to avoid, mitigate or otherwise manage arbitration risks. It is in that spirit that we discuss a risk that tends to be more severe in arbitration than it is in court litigation:  your exposure to an award of attorney’s fees. As always, nothing we say here is or should be construed as legal advice. If you require legal advice you should engage and consult with an attorney.

Exposure to Liability for Your Adversary’s Legal Fees

A commonly overlooked risk associated with agreeing to arbitrate is that, if you lose, you might be on the wrong end of an award that requires you to reimburse your adversary for some or all of the fees it incurred in the arbitration. To be sure, there is a risk that in court litigation, the court may assess attorney’s fees against a losing party, but as we’ll see, the risk is generally higher in arbitration than it is in court litigation. Worse yet, in arbitration the ability to challenge meaningfully  such an award (or any other award) in court is extremely circumscribed under the Federal Arbitration Act (“FAA”). The same is generally so where state arbitration law applies.

No one likes paying attorney fees but they are a necessary incident of dispute resolution, especially resolution of high-dollar disputes. But imagine not only having to pay your own attorney’s fees, but also those of your adversary, an adversary who, in effect, is reimbursed for the fees it incurred in making your life miserable. Continue Reading »

Modern Perfection, LLC v. Bank of America: Fourth Circuit Says Arbitrator gets to Decide which of Two Contracts’ Conflicting Dispute Resolution Provisions Applies

January 27th, 2025 Application to Stay Litigation, Arbitrability, Arbitrability | Clear and Unmistakable Rule, Arbitrability | Existence of Arbitration Agreement, Arbitration Agreement Invalid, Arbitration Agreements, Arbitration Law, Arbitration Practice and Procedure, Authority of Arbitrators, Challenging Arbitration Agreements, Clear and Unmistakable Rule, Delegation Provision, Existence of Arbitration Agreement, FAA Chapter 1, FAA Section 2, Federal Arbitration Act Enforcement Litigation Procedure, Federal Arbitration Act Section 3, Federal Arbitration Act Section 4, Federal Subject Matter Jurisdiction, Motion to Compel Arbitration, Practice and Procedure, Richard D. Faulkner, Section 2, Section 3 Stay of Litigation, Section 4, Stay of Litigation, Stay of Litigation Pending Arbitration, United States Court of Appeals for the Fourth Circuit, United States Supreme Court Comments Off on Modern Perfection, LLC v. Bank of America: Fourth Circuit Says Arbitrator gets to Decide which of Two Contracts’ Conflicting Dispute Resolution Provisions Applies

Introduction: Delegation Provisions and Modern Perfection

Delegation Provisions | Arbitrability ChallengeDelegation provisions clearly and unmistakably assign arbitrability determinations to arbitrators, which means they provide for arbitrators to decide arbitrability-related disputes.

Coinbase v. Suski, 602 U.S. 143 (2024) set forth the allocation of power between courts and arbitrators for four “orders” of arbitrability-related disputes:

  1. A “first order” dispute is “[a] contest over the merits of the dispute[,]” the determination of which “depends on the applicable law and relevant facts.” 602 U.S. at 148 (quotation omitted).
  2. A “second order dispute” concerns “whether [the parties] agreed to arbitrate the merits” of the first order dispute. 602 U.S. at 148 (quotation omitted).
  3. A “third order dispute” concerns “who should have the primary power to decide” a second order dispute.” 602 U.S. at 149.
  4. A “fourth order” dispute is one where there are “multiple agreements that conflict as to the third-order question of who decides arbitrability.” 602 U.S. at 149.

Coinbase held that fourth-order disputes are for the courts, which are to decide them based on “traditional contract principles.” 602 U.S. at 149.

In a recent U.S. Court of Appeals for the Fourth Circuit decision, Modern Perfection, LLC v. Bank of America, No. 23-1965, slip op. (4th Cir. Jan. 13, 2025), the Court was faced with what appeared to be a “fourth-order” dispute as defined by Suski. The question was who gets to decide arbitrability questions when one contract contained a broad arbitration agreement and a delegation provision and the other a clause that expressly contemplated judicial resolution of disputes.

The problem was that Suski was not decided until briefing in both the district court and the Fourth Circuit was complete, and the arbitration challengers’ argument centered on the scope of the delegation provisions, not on whether the contracts contemplating judicial resolution of disputes superseded the delegation provisions.

The Suski fourth-order dispute issue was first raised in a Fed. R. App. P. 28(j) letter the challenger submitted once Suski was decided.  Because the argument had not been raised in the parties’ appellate briefs, the Court would not hear it, and ruled that, under the terms of the delegation provisions, the arbitrator gets to decide whether the dispute was arbitrable.

Background

Over a five-year period a bank issued to each of six plaintiffs two Continue Reading »

Overturning Arbitration Awards based on Clear Mistakes of Historical Fact or Conceded Nonfacts: Some Further Thoughts (Part IV): Will the Seventh Circuit Reverse the UpHealth District Court?

November 14th, 2024 Appellate Practice, Application to Vacate, Arbitration Agreements, Authority of Arbitrators, Award Fails to Draw Essence from the Agreement, Award Vacated, Awards, Challenging Arbitration Awards, Exceeding Powers, FAA Section 10, Federal Arbitration Act Enforcement Litigation Procedure, Federal Arbitration Act Section 10, Judicial Review of Arbitration Awards, Manifest Disregard of the Agreement, Manifest Disregard of the Law, Outcome Review, Petition to Vacate Award, Post-Award Federal Arbitration Act Litigation, Practice and Procedure, Standard of Review, United States Court of Appeals for the Seventh Circuit, United States District Court for the Northern District of Illinois, United States Supreme Court, Vacate, Vacate Award | 10(a)(4), Vacate Award | Manifest Disregard of the Law, Vacatur for Conceded Nonfact or Clear Mistake of Historical Fact Comments Off on Overturning Arbitration Awards based on Clear Mistakes of Historical Fact or Conceded Nonfacts: Some Further Thoughts (Part IV): Will the Seventh Circuit Reverse the UpHealth District Court?

Seventh CircuitWill the Seventh Circuit reverse the judgment in the UpHealth case?

In our October 7, 2024, post, “Can a Court under Section 10(a)(4) Overturn an Award Because it was Based on a Clear Mistake of Historical Fact or a Conceded Nonfact?”, we discudssed UpHealth Holdings, Inc. v. Glocal Healthcare Sys. PVT, No. 24-cv-3778, slip op. (N.D. Ill. Sept. 24, 2024), which granted partial vacatur of an arbitration award because it was, said the Court, based on a “nonfact.” Our October 18, 2024 post, Overturning Arbitration Awards based on Clear Mistakes of Historical Fact or Conceded Nonfacts: Some Further Thoughts (Part I), identified five questions relating to UpHealth designed to shed further light on the case and the arbitration award vacatur standard on which the Court relied.

The first four of those questions were answered in our October 18, October 21, and November 12, 2024, posts. This November 14, 2024, post answers the fifth question: “If there is a [United States Court of Appeals for the] Seventh Circuit appeal of the UpHealth decision, is it likely the decision will be overturned on appeal, and if so, on what grounds?”

We explained in our November 12, 2024, post that UpHealth has appealed the district court decision to the Seventh Circuit. And if you’ve been reading our prior UpHealth posts, then you’ve probably already guessed that the answer is “yes,” it seems likely the Seventh Circuit will reverse the UpHealth decision.

In terms of the grounds, for such a reversal, we think the Seventh Circuit will probably conclude that the only forms of outcome review the Seventh Circuit recognizes is manifest disregard of the contract and violation of public policy, and that UpHealth involves neither of those grounds. That is all the more so where, as here, there is no agreement or concession concerning the allegedly mistaken fact. (See November 12, 2024, post.)

We think the Seventh Circuit may also conclude that recognizing vacatur based on a clear mistake of historical fact or a conceded nonfact would embroil courts in review of the arbitrator’s fact findings, including the sufficiency of evidence. Under Seventh Circuit and U.S. Supreme Court authority, the FAA does not authorize such review.  Oxford Health Plans LLC v. Sutter, 569 U.S. 564, 566-70 (2013); Stolt-Nielsen, S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662, 671-72, 676-77 (2010). Major League Baseball Players Assoc. v. Garvey, 532 U.S. 504, 509-10, 511 (2001); Hill v. Norfolk & Western Ry., 814 F.2d 1192, 1194-95 (7th Cir. 1987) (citations omitted) (Posner, J.); American Zurich Ins. Co. v. Sun Holdings, Inc., 103 F.4th 475, 477-78 (7th Cir. 2024) (Easterbrook, J.); Affymax, Inc. v. Ortho-McNeil-Janssen Pharms., Inc., 660 F.3d 281, 284 (7th Cir. 2011) (citing George Watts & Son, Inc. v. Tiffany & Co., 248 F.3d 577 (7th Cir.2001); Eljer Mfg., Inc. v. Kowin Development Corp., 14 F.3d 1250, 1254, 1256 (7th Cir. 1994).

We discussed all of these shortcomings in the UpHealth Court’s analysis in our October 7, 18, 21, and November 12, 2024, posts. We believe that the Seventh Circuit will probably also conclude that the UpHealth court erred by vacating the award in part, particularly since the Seventh Circuit recognizes outcome review in extremely narrow circumstances only and none of those circumstances are present here—where the district court has, for intents and purposes, second-guessed the arbitrator’s fact finding.

It will be interesting to see how the appellee (Damodaran) attempts to square the district court’s decision with Seventh Circuit and Supreme Court authority. We will continue to watch the appeal and report on significant developments.

Contacting the Author

If you have any questions about this article, arbitration, arbitration-law, 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 nearly 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, matters.

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