33 F.4th 1038
8th Cir.2022Background:
- Lunda Construction (general contractor) contracted with Industrial Steel Construction (ISC) to fabricate steel for an IADOT bridge project.
- ISC sued Lunda; the district court compelled arbitration under the parties’ contract, which incorporated the AAA Construction Industry Rules for procedural matters.
- The arbitrator found for Lunda, awarding $84,977.19 for repair costs, attorneys’ fees, expert costs, and Lunda’s share of arbitration costs; ISC lost on its claims.
- ISC moved in district court to vacate or modify the award as to attorneys’ fees and expert costs, arguing the contract did not authorize Lunda to recover fees (Lunda’s fee clause had been struck, while ISC’s fee provision remained).
- The district court vacated the fees and expert-costs portion but confirmed the remainder; Lunda appealed to the Eighth Circuit.
Issues:
| Issue | ISC's Argument | Lunda's Argument | Held |
|---|---|---|---|
| Whether the arbitrator exceeded authority by awarding Lunda attorneys’ fees and expert costs | Contract expressly allowed ISC to recover fees but struck Lunda’s fee clause; arbitrator lacked authority to award Lunda fees | Contract incorporated AAA Construction Industry Rules for procedural gaps; arbitrator could apply those rules to award fees | The arbitrator at least arguably construed the contract and permissibly applied the AAA rules; vacatur was improper — award must be confirmed |
| Whether application of AAA Rule 48 to award fees was permissible | Rule 48 permits fees only if all parties requested or the agreement authorizes them; requirements not met here | Rule 48 governs procedural matters the contract left unspecified and may be applied as a gap-filler | Court accepted that the arbitrator could apply Rule 48 as a procedural rule incorporated by the contract |
| Whether an alleged legal error by the arbitrator can be treated as exceeding powers under FAA §10(a)(4) | A serious legal error here should justify vacatur | FAA deference requires courts to uphold an arbitrator’s interpretation if it is at least arguable | Court applied the heavy deference standard (Oxford Health): an arguable construction of the contract by the arbitrator must stand |
| Whether the arbitrator’s supposed failure to issue specific findings on fees meant he exceeded authority | Contract required findings of fact and law; lack of specific findings on fees shows failure to construe contract | Parties cannot expand judicial review beyond FAA; arbitrator provided sufficient reasoning | Court held the arbitrator’s award contained an interpretive route from contract to conclusion; contractual findings requirement cannot enlarge vacatur grounds |
Key Cases Cited
- Epic Sys. Corp. v. Lewis, 138 S. Ct. 1612 (reinforces federal policy favoring arbitration)
- Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (arbitration agreements enforced like other contracts)
- Hall Street Assocs., L.L.C. v. Mattel, Inc., 552 U.S. 576 (parties may not expand statutory vacatur grounds)
- Oxford Health Plans LLC v. Sutter, 569 U.S. 564 (courts must uphold an arbitral interpretation if it is at least arguable)
- United Steelworkers v. Enter. Wheel & Car Corp., 363 U.S. 593 (ambiguity does not justify refusing enforcement of an award)
- CenterPoint Energy Res. Corp. v. Gas Workers Union, 920 F.3d 1163 (Eighth Circuit reiteration of limited judicial review of awards)
- Beumer Corp. v. ProEnergy Servs., LLC, 899 F.3d 564 (arbitrator’s legal error does not alone show excess of authority)