The National Arbitration Forum Blog

Following oral arguments in the case, the Court requested supplemental briefing on three questions relating to whether the parties’ arbitration agreement and its provision for heightened judicial review are based on some legal authority other than the Federal Arbitration Act (FAA).

In its supplemental brief, Hall Street Associates makes the curious argument that the parties’ use of the term “contract arbitration” indicates that the parties contemplated some form of ADR separate from “statutory arbitration” under the FAA. This argument is curious because the FAA applies only to contractual arbitration (i.e., arbitration required by contract rather than statute). See 9 U.S.C.A. § 2.

In its supplemental brief, Mattel makes a compelling argument that Hall Street waived any argument that there is authority outside the FAA for enforcing the heightened review provision. As Mattel points out, Hall Street’s petition for cert was premised on the applicability of the FAA and the circuit split on whether the FAA allows parties to contract for heightened review.

As an alternative to waiver, the Court could apply the doctrine of judicial estoppel to prevent Hall Street from abandoning its previous position that the FAA applied to the parties’ arbitration agreement. As the Court has explained, judicial estoppel “generally prevents a party from prevailing in one phase of a case on an argument and then relying on a contradictory argument to prevail in another phase.” New Hampshire v. Maine, 532 U.S. 742, 749 (2001).

The doctrine should be applied in this case because Hall Street first prevailed in obtaining cert by highlighting the Court’s FAA jurisprudence and the circuit split on the permissibility of heightened review under FAA, but now seeks to prevail on the permissibility of heightened review by arguing that the FAA does not apply. The Court should apply the doctrine of judicial estoppel to prevent this lawyerly form of bait-and-switch.

Otherwise, as Ross Runkel noted in his insightful blog entry on the issue, the Court’s decision may not resolve the basic question of whether heightened review is available under an FAA-governed agreement. In that scenario, the circuit split – the apparent basis for granting cert – would go unresolved.