Introduction

The Fourth Circuit formally adopted a rule several circuits already apply: if an “independent” lawsuit is really an attempt to undo an arbitration outcome, it is an impermissible collateral attack on the award and will be dismissed. That decision reinforces the exclusivity and finality of the Federal Arbitration Act (“FAA”)’s confirmation, vacatur, and modification regime.

Separately, the Court made a practical point concerning Section 10(a)(3) prejudicial, procedural misconduct: an arbitrator does not commit “misconduct” by refusing to hear evidence when the arbitration agreement itself limits what is considered the evidentiary record and bars adversarial discovery. The same may be true when, as was the case before the Court, the arbitrator’s standard of review is deferential, and the proffered evidence is not material to the narrow question before the arbitrator.

The Fourth Circuit’s Adoption of the Impermissible Collateral Attack Rule: What Transpired?

The Center for Excellence in Higher Education (CEHE) ran schools accredited by the Accreditation Alliance of Career Schools and Colleges (the Alliance). After years of below-benchmark graduation and employment outcomes, CEHE’s system was placed on probation and repeatedly warned about losing accreditation. The Alliance withdrew accreditation.

CEHE appealed internally, then demanded binding arbitration as contemplated by the parties’ agreement. CEHE sought broad discovery and to introduce evidence outside of that deemed part of the internal appellate record, including information about how Alliance evaluated other schools for accreditation. The arbitration agreement limited arbitration to the record before the internal Appeals Panel and prohibited adversarial discovery. The arbitrator enforced those limits and made an award upholding the accreditation withdrawal.

The Alliance’s accreditation decisions were subject to deferential review only. That, in combination with the FAA, meant two tiers of deference were owed: The arbitrator had to review the Alliance’s decisions deferentially and, as is always the case under Section 10 of the FAA, a court reviewing the arbitrator’s award had to defer to the already deferential award.

CEHE filed in federal court: (i) a motion to vacate and, as part of the same filing, (ii) a complaint alleging due process violations and tortious interference. CEHE sought, in substance, to reverse the withdrawal of accreditation and recover damages flowing from it.

The district court denied vacatur and, as respects the complaint, granted judgment on the pleadings, treating the submission of those papers as an impermissible collateral attack on the award. The U.S. Court of Appeals for the Fourth Circuit affirmed in Center for Excellence in Higher Educ. v. Accreditation Alliance of Career Schs. & Colleges, __ F.4th ___, 25-1372 , slip op. at 2 (4th Cir. Feb 05, 2026)

Principal Issues Addressed

The Fourth Circuit’s decision focused on two issues. First, the scope of relief for arbitrator prejudicial procedural misconduct under Section 10(a)(3) in cases where the arbitration agreement limits what comprises the record, forecloses adversarial discovery, or the arbitrator’s standard of review is deferential. (Read more about Section 10(a)(3) here, here, and here.)

Second, when is a post-award lawsuit not a genuinely independent claim but an impermissible collateral attack on the award, that is, an end-run around FAA Sections 10–11?

Contractual Limits on Record Content, Evidence, and Discovery, or a Deferential Standard of Review Imposed on the Arbitrator, Can Foreclose FAA Section 10(a)(3) Prejudicial Procedural Misconduct Claims

CEHE’s motion to vacate asserted the arbitrator denied CEHE a fair opportunity to present “pertinent and material” evidence material evidence by refusing discovery and excluding comparative-accreditation evidence. Center for Excellence, slip op. at 9; 9 U.S.C. § 10(a)(3).

The Fourth Circuit rejected that argument for two reasons. First, the excluded “other schools” material was not “pertinent and material” to the arbitrator’s task. The arbitration was not a free-ranging arbitration featuring de novo review of the Alliance’s decision making. The arbitrator was tasked with determining whether the record adequately supported the Alliance’s accreditation decision, and in making that determination the arbitrator determined that Fourth Circuit precedent required the arbitrator to defer to the Alliance’s decision. Center for Excellence, slip op. at 12-15 (citation omitted). So even assuming evidence about other schools’ accreditation experiences might have rhetorical force or evidentiary value in the context of a different dispute resolution framework, the Court concluded that, considering the deferential standard of review, evidence about other Alliance accreditation decisions was irrelevant. Center for Excellence, slip op. at 10-11, 14-15.

Second, the agreement itself foreclosed the arbitrator from considering the evidence the school argued the arbitrator had to hear or from permitting the adversarial discovery the school argued was required. Center for Excellence, slip op. at 11.  This is a key doctrinal point practitioners should note: Evidence cannot be “pertinent and material to the controversy” under Section 10(a)(3) if the arbitration agreement itself prohibits the arbitrator from considering that evidence. While the Court did not address this point, if the school wanted to challenge those limitations it should have attempted an FAA Section 2 pre-arbitration unconscionability challenge prior to the commencement of the arbitration. See 9 U.S.C. § 2; Doctor’s Assocs., Inc. v. Casarotto, 517 U.S. 681, 687 (1996) (under FAA Section 2, a party may challenge arbitration agreement on unconscionability grounds applicable to contracts generally). The author expresses no view on whether such a challenge might have succeeded.

The arbitration agreement expressly stated that the arbitrator could not consider evidence not in the Appeals Panel record and prohibited adversarial discovery. An arbitrator who enforces those terms is not “refusing to hear” evidence in the procedural misconduct sense; he or she is doing what the parties contracted for. That’s the arbitrator’s job.

This is a recurring theme in FAA jurisprudence: the FAA regulates egregious process breakdowns, but—apart from leaving the door open to a party seeking judicial reformation of an arbitration agreement under Section 2 in an appropriate case—it does not authorize a court to rewrite the parties’ arbitration agreement simply because one side is, after the fact, unhappy with the bargain it struck. See Aviall, Inc. v. Ryder System, Inc., 110 F.3d 892, 895-97 (2d Cir. 1997).

The Big Development: the Fourth Circuit Adopts the “Impermissible Collateral Attack” Rule

The more consequential arbitration-law holding was the Fourth Circuit’s adoption of the impermissible collateral attack rule.

The Premise: FAA §§ 10–11 Provide the Exclusive Route to Overturn or Undo an Award

The court treated it as common ground that a litigant seeking to vacate or modify an award must proceed under the FAA’s narrow vacatur/modification framework—principally §§ 10 and 11. FAA exclusivity and finality has a practical purpose: binding arbitration is designed to resolve the parties’ dispute expeditiously and conclusively.

The Court found adoption of the “impermissible collateral attack rule” necessary to preserve that presumed exclusivity and finality. Allowing disappointed parties to repackage vacatur theories as “independent” tort or constitutional claims would destroy finality, which could make arbitration a less attractive and more expensive alternative to court litigation.

How to Spot a Collateral Attack: Look at Wrongdoing, Harm, and Requested Relief

The Fourth Circuit adopted a functional test used by other circuits, focusing on:

• The Alleged Wrongdoing. Is it the type of defect that would support vacatur under Section 10 (or modification under Section 11)?
• The Harm. Does it flow from the award’s effect?
• The Requested Relief. Is it, in essence, the relief vacatur would provide?

Applied to CEHE, each of the three supported application of the “impermissible collateral attack” rule:

• The alleged wrongdoing was essentially “the decisionmaker refused to consider evidence”—classic § 10(a)(3) territory.
• The harms (lost students, reputational damage, financial losses) flowed from the accreditation loss the arbitrator upheld and CEHE sought to overturn.
• The requested relief—especially injunctive relief reversing the withdrawal—tracked what vacatur would accomplish.

The court also emphasized that a party cannot sanitize an impermissible collateral attack by tweaking remedies. A damages label does not save a claim when the theory of injury is an allegedly  defective arbitration process.

The Punchline: If it’s a Collateral Attack, the Whole Complaint is Tossed

Because the complaint was treated as a collateral attack, it was dismissed in toto, including tortious interference claims that at a cursory glance might appear “independent.”

The breadth of that remedy is significant. It signals that courts will not allow plaintiffs to proceed count-by-count where the thrust of the lawsuit is to overturn the arbitration outcome.

Doctrinal Implications of the Fourth Circuit’s Adoption of the Impermissible Collateral Attack Rule

Center for Excellence does more than announce a new label for a familiar concept. By adopting an “impermissible collateral attack” rule, the Fourth Circuit has supplied a doctrinal framework for defining when post-award litigation concerning claims allegedly independent from a Section 10 or 11 challenge is, in practical effect, an attempt to unwind the award that has already been or would be barred by Sections 9-11 of the FAA.  The decision’s implications extend beyond accreditation disputes and are likely to influence how parties plead, defend, and adjudicate post-award claims in the Fourth Circuit and perhaps elsewhere.

FAA Exclusivity, Finality, and the “Functional” Inquiry

The Court’s central move is to treat FAA Sections 10–11 as the exclusive doctrinal avenue for judicial relief that would set aside, modify, or otherwise negate an arbitral award. That premise is hardly novel, but Center for Excellence gives it operational content by insisting on substance over form. Courts are instructed to look past pleading labels and ask whether the alleged wrong, the asserted injury, and the requested relief are, in substance, a bid to obtain what vacatur or modification would provide (or would have provided had vacatur or modification been granted).

This substance over form approach is significant because it diminishes the viability of a common post-award strategy: coupling a narrow FAA vacatur motion with broader common-law or constitutional claims that seek to re-create, in a new procedural posture, the merits contest that the arbitration ended. Under Center for Excellence, it will be harder to argue that merely changing the cause of action (for example, to tortious interference or due process theories) changes the essential character of the relief sought where the litigation’s gravitational center remains the arbitral outcome.

Collateral Attack Doctrine as Distinct from Claim and Issue Preclusion

The impermissible collateral attack rule overlaps conceptually with res judicata and collateral estoppel, but it is not simply a repackaging of those doctrines. Preclusion asks whether a claim could have been or an issue was litigated and resolved in a prior adjudication. The impermissible collateral attack rule asks a different question: whether the new lawsuit is an improper vehicle for challenging the arbitral award at all, given the FAA’s exclusive remedial structure.

That distinction has practical doctrinal consequences. Preclusion analysis can be fact-intensive (identity of parties, privity, finality, opportunity to litigate, and so forth), and it sometimes requires careful attention to what the arbitral tribunal actually decided. The collateral attack rule can, in appropriate cases, be applied earlier, more categorically, and perhaps with greater ease, because it turns on the nature of the alleged wrong and the relief sought. Center for Excellence therefore provides defendants with an additional—and sometimes simpler—path to dismissal independent of conventional preclusion defenses.

Pleading-Stage Tool that Reinforces the FAA’s Narrow Review

The Fourth Circuit’s approach also matters procedurally: it confirms that a court may identify an impermissible collateral attack at the pleadings stage, without permitting the case to proceed into discovery and merits motion practice. That is consistent with the FAA, which favors speed and finality in award enforcement and sharply limits post-award judicial review. See 9 U.S.C. §§ 6, 9-11.

In that respect, the decision is likely to influence motion practice. Where a complaint is tethered to the award—because the harm is framed as the consequences of the award’s effects and the relief is framed to reverse, enjoin, or effectively nullify those effects—courts have a doctrinal basis to terminate the litigation quickly and early. Conversely, plaintiffs seeking to survive dismissal will need to plead with care, demonstrating that the asserted injury and requested remedy do not depend on re-litigating the arbitral dispute or undercutting the award’s finality.

The Substance of the Remedy Sought Will Often Be Decisive

Center for Excellence highlights that focusing on substance and practicality can drive effective arbitration-law (and other legal) doctrine. Injunctive or declaratory relief that would “reverse” the practical effects of an award is, predictably, the easiest target for a collateral attack defense. But the Court made clear that damages claims are not immune from scrutiny. Where the damages theory is that the arbitration process was defective and the plaintiff’s economic losses flow from the award’s operation, a damages label will not transform the lawsuit into an independent claim.

That focus on the practical effects of the remedies sought will likely shape how plaintiffs draft complaints and how defendants frame dismissal motions. If the requested relief would require the court to adjudicate—directly or indirectly—the propriety of the arbitral process or the correctness of the arbitral outcome, the collateral attack doctrine supplies a doctrinal basis for dismissal even where traditional preclusion doctrines might require more granular analysis.

Interaction with FAA Section 10(a)(3) and Contractually “Closed” Records

Finally, the decision’s Section 10(a)(3) discussion complements the collateral attack holding. The Court treated the arbitration agreement’s limits on discovery and the evidentiary record as materially shaping what can qualify as “pertinent and material evidence” for procedural misconduct purposes. Where parties contract for a closed record (or for review limited to an internal administrative record), an arbitrator’s enforcement of those limits will generally not supply a Section 10(a)(3) hook for vacatur. The same is true when the standard of review governing the arbitrator’s decision making is deferential, as it was here.

Taken together, these strands of the opinion underscore a consistent doctrinal theme: parties who bargain for procedural limits on arbitration—or arguably for deferential review by the arbitrator—should expect courts to enforce the bargain, both by (i) declining to expand Section 10(a)(3) into a vehicle for reengineering the agreed process and (ii) rejecting attempts to achieve the same end through post-award litigation framed as something other than an FAA vacatur or modification proceeding.

Conclusion

Center for Excellence is a clean Fourth Circuit adoption of a rule that arbitration practitioners often assume exists everywhere—but which has not been formally embraced by all other circuits. The rule strengthens award finality by closing a common loophole: a collateral attack on an award that is disguised as something else.

Contacting the Author

If you have any questions about this article, arbitration, arbitration-law, or arbitration-related litigation, then please contact Philip J. Loree Jr., at (516) 941-6094. 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 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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