Don’t Cut Us Out of Arb Review, Says Ninth Circuit
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You can agree to disagree, but can you agree to preclude a court from reviewing an arbitration award? According to David McMahon of Barger & Wolen, the Ninth Circuit U.S. Court of Appeals recently gave a definitive “no” to the question.
The case was Burton v. Class Counsel, and the appeal arose from multidistrict litigation relating to wage-and-hour claims against Wal-Mart; the matter settled for $85 million, McMahon says, and the parties all agreed to have a master settle any fee disputes arising from the settlement.
And, of course, there was a dispute among counsel about fee allocations and an arbitrator made a ruling, redistributing the fees. The firm who found the new allocation favorable moved to have it confirmed in federal district court, but the other firm filed to have it overturned. The court confirmed the decision and, on appeal, it was argued the Ninth Circuit had no jurisdiction to hear the appeal because there was a provision in the arbitration agreement that didn’t allow appeals, McMahon explains. The appeal court upheld the decision.
The Ninth Circuit ruled that the Federal Arbitration Act “provides that federal district courts have the power to review arbitration awards,” and can reverse an award under specified circumstances. Additionally, it doesn’t “allow parties to waive the ground for vacating an arbitration award” and, therefore, cannot contract out of this right.
Read original articleTags: David McMahon, Ninth Circuit, Ninth Circuit U.S. Court of Appeals
