Badgerow v. Walters
596 U.S. 1
| SCOTUS | 2022Background
- Denise Badgerow, a financial advisor, alleged unlawful termination and pursued arbitration under a contract that required arbitration of employment claims (federal and state law).
- Arbitrators dismissed Badgerow’s claims; she then sued in Louisiana state court to vacate the arbitral award, alleging fraud in the arbitration.
- Respondents (Walters and colleagues) removed the action to federal district court and filed to confirm the award under FAA §9; Badgerow moved to remand and sought to vacate under FAA §10.
- The district court applied the Court’s Vaden look‑through approach (originally applied to §4 petitions) to §§9–10, found federal‑question jurisdiction in Badgerow’s underlying employment claims, and confirmed the award.
- The Fifth Circuit affirmed; the Supreme Court granted certiorari to decide whether Vaden’s look‑through rule applies to FAA §§9–10.
Issues
| Issue | Plaintiff's Argument (Badgerow) | Defendant's Argument (Walters) | Held |
|---|---|---|---|
| Whether Vaden’s look‑through rule for §4 petitions applies to FAA §§9–10 (confirm/vacate awards) | §§9–10 lack §4’s “save for” language; federal courts must find jurisdiction on the face of §9/§10 applications; remand required | Look‑through should apply to §§9–10 for uniformity; underlying federal claims supply jurisdiction | Look‑through does not apply to §§9–10; court must find independent jurisdiction from the application itself (reverse) |
| Whether Section 4 is merely a venue provision and Section 6 creates an FAA‑wide look‑through rule | Section 4’s text supports jurisdictional look‑through only for §4; §6 does not expand jurisdiction | Section 4 is a venue expansion; §6 (motions language) mandates treating all FAA applications like motions so look‑through applies broadly | Rejected: §4’s text addresses jurisdiction (not venue); §6 does not authorize a widespread look‑through jurisdictional rule |
| Whether policy considerations (administrative simplicity, uniformity, federal control of arbitration) justify applying look‑through beyond §4 | Statutory text controls; policy cannot override clear statutory omission | Uniform look‑through is simpler and avoids anomalous practical problems | Policy arguments insufficient to overcome clear statutory text; Congress chose a narrower rule (state courts play role) |
Key Cases Cited
- Vaden v. Discover Bank, 556 U.S. 49 (2009) (approved look‑through to underlying controversy for §4 petitions).
- Hall Street Associates, L.L.C. v. Mattel, Inc., 552 U.S. 576 (2008) (FAA’s procedural provisions do not themselves create federal jurisdiction).
- Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375 (1994) (federal courts are courts of limited jurisdiction and need an independent statutory basis).
- Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546 (2005) (district courts may not exercise jurisdiction absent statutory basis).
- Gunn v. Minton, 568 U.S. 251 (2013) (when a suit "arises under" federal law).
- Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (1983) (role of state courts in enforcing the FAA).
- Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213 (1985) (Congress’ policy favoring enforcement of arbitration agreements).
- Cortez Byrd Chips, Inc. v. Bill Harbert Constr. Co., 529 U.S. 193 (2000) (avoid interpretations of the FAA that create anomalous results).