Nafta Traders, Inc. v. Quinn

84 TRADERS, INC., Petitioner,

NAFTA

v. QUINN,

Margaret Respondent. A.

No. 08-0613.

Supreme Court Texas. 8,Oct.

Argued 13, May

Decided 05-068-CV, 2167164, (Tex. 13-99-797-CV, 35729667, WL 2006 at *6 No. 2000 WL at *2 3, 2006, denied); App.-Fort Aug. pet. 30, Worth (Tex.App.-Corpus Christi-Edinburg Nov. Colvin, No.13-03-00034-CV, v. Colvin 2006 2000, 402, pet.); no In re 25 S.W.3d 1431218, (Tex.App.-Corpus WL at *5 Christi- 2000, (Tex.App.-Fort pet.); 405-06 Worth no 25, 2006, denied); Edinburg May pet. Gaxiola Snell, 11-98-00126-CV, Snell v. No. 1999 WL Garcia, 426, (Tex.App.-El v. 169 S.W.3d 432 33747973, 4, (Tex.App.-Eastland at *2 Nov. 2005, A.J.J., pet.); Paso no In re No. 2-04- 1999, DuBois, pet.); no DuBois v. 956 S.W.2d 265-CV, 914493, (Tex.App. WL 2005 at *3 607, 1997, (Tex.App.-Tyler pet.); 610 no Woo April pet.); Fort Worth no In re Woodall, 856, (Tex. dall v. 837 S.W.2d 858 J.C.S., 06-04-00085-CV, No. 2005 WL 1992, writ); App.-Houston [14th Dist.] no 927173, 18, (Tex.App.-Texarkana April at *5 Burden, 499, Casterline v. 560 S.W.2d 501 2005, E.A.S., 565, pet.); no re In 123 S.W.3d 1977, writ); (Tex.Civ.App.-Dallas no Anderson 2003, denied); (Tex.App.-El pet. Paso Anderson, (Tex.Civ. v. 503 S.W.2d Z.B.P., (Tex.App.-Fort re 109 S.W.3d writ); App.-Corpus Christi no McSween Wahid, pet.); Worth no Zorilla v. McSween, (Tex.Civ. v. 472 S.W.2d (Tex.App.-Corpus S.W.3d Christi- 1971, writ). App.-San Antonio no Galarza, Edinburg pet.); no Galarza

86 Busch,

Alan L. Myers, Busch and L.L.P., Ruotolo, Robert Busch Ruotolo & L.L.P., Simpson, Jeffrey Rasansky, H. Ra- sansky Firm, Albert, Law Christopher M. L.L.P., Simpson, Dallas, Busch Ruotolo & Traders, for Nafta Inc. Johnson,

Janette Janette Johnson & As- sociates, Neill, Dallas, Christine for Mar- garet Quinn. A. Townsend,

Roger Alexander Dubose & LLP, Houston, Townsend for Amicus Cu- Associates, riae City Energy Denver L.P. opinion consequently judgment HECHT delivered reverse the Justice Court, in which Chief Justice court of appeals5 and remand the case to WAINWRIGHT, JEFFERSON, Justice proceedings. court for further MEDINA, GREEN, Justice Justice JOHNSON, WILLETT, Justice

Justice I GUZMAN, and Justice Justice Petitioner, Traders, Inc., Nafta an inter- joined. LEHRMANN national apparel re-distributor athletic questions regard- “The answer most footwear, employment terminated its ing inexorably arbitration ‘flow from the respondent, Margaret Quinn, A. its Vice simply fact that arbitration is a matter of ”1 President Operations, citing as the basis parties.’ contract between the Never- for its decision a reduction in force due to theless, States United worsening Quinn business conditions. Associates, in Hall has held Street L.L.C. sued Nafta for sex discrimination in viola- Mattel, Inc., grounds v. that the for vacat- tion of the Texas Commission on Human modifying or an award un- ing Rights employee Act.6 Nafta’s handbook (FAA)2 der the Federal Arbitration Act “Arbitration”, included a section captioned “supple- “are cannot be exclusive” and which called for “a dispute arising out of by principal ques- mented contract”.3 The employment ... relationship [the] or its in tions this case are whether the Texas termination” to (TAA)4 be submitted to binding General Arbitration Act likewise arbitration. The arbitration section did precludes an for not indicate whether state or federal for law of an arbitration award reversible er- ror, not, apply, providing only would preempts pro- and if whether the FAA “[a]ll agreement. ceedings City enforcement of such an We shall be conducted in the Dallas, questions negative answer both in the State of Texas.”7 Nafta moved to Cull, claim, Perry litigable v. regardless Homes 258 S.W.3d would involve a (Tex.2008) Chi., (quoting Options type dispute (excluding First Inc. the kind or insured 938, 943, Kaplan, compensation 514 U.S. 115 S.Ct. workers’ claims than [other (1995)). claims], wrongful discharge 131 L.Ed.2d 985 claims for unem- insurance, ployment administrative claims be- Board, fore the National Labor Relations §§ 2. 9 All U.S.C. 1-16. references to the FAA Equal Employment Opportunity Commission provisions. are to these any parallel agency), state or local parties agree dispute to submit such to bind- 3. 552 U.S. ing pursuing arbitration in lieu of a trial in a L.Ed.2d 254 court of law. by "The arbitration will be conducted §§ 4. Tex. Civ. Prac. & Rem.Code 171.001-.098. American Arbitration Association or other provi- All references to the TAAare to these mutually agreeable arbitration service. The sions. by agree- arbitrator will be selected mutual five, through ment from a list of alternative 2008). (Tex.App.-Dallas 5. 257 S.W.3d 795 strikes from a second list of five. In all other respects, process the arbitration will be con- §§ 6. Tex. Lab.Code 21.001-.556. ducted in accordance with the American Arbi- Employment tration Association Arbitration 7. The in section full read as follows: party’s expenses rules with each therefrom to dispute arising by "In the party event there is a out of be borne deter- unless otherwise your employment relationship with the Com- mined The arbitrator. arbitrator shall pany required opinion or its termination which the be to state in a written through upon unable resolve direct discussion or facts and conclusions of law relied Complaint support Resolution Procedure that the decision rendered. The arbitra- FAA, compel Regarding damages, arbitration under the which discrimination. Naf- applies evidencing a trans- attorney “contract[s] ta asserted that fee award involving Quinn action commerce”8 did was that the improper, “special damages” object, signed and the district court an really recovery award was a double of lost agreed order. wages, and that the sup- evidence did not port anguish an award of mental damages. then selected an AAA arbi- Quinn responded that grounds none of the trator, who heard evidence and awarded recognized by asserted Nafta is $30,000 $30,000 Quinn pay, in back in men- TAA or the FAA as a for vacating basis an $29,031 anguish damages, “special tal in award, and that neither $104,828 fees, damages”,9 attorney TAA the FAA permits grounds nor A costs. verbatim record was made of the vacating arbitration award to be en- proceedings. Quinn moved the court to larged by agreement. Even if such an confirm the award under the TAA. Nafta agreement were permissible, Quinn ar- FAA, moved for vacatur under gued, the statement the handbook was TAA, law, provision the common and a vague too and one-sided to be enforced. the arbitration section of the employee contended, finally, And she even if the handbook that stated: “The arbitrator grounds by asserted Nafta could be con- (i) authority does not have to render a sidered, rejected should all be decision which contains a reversible error meritless. (ii) law, apply state or federal or to a remedy cause of action or expressly not The district court issued a brief order provided for existing under state or feder- simply confirming the arbitrator’s award argued part al law.” Nafta in that giving any without indication whether it agreeing to these limits on the arbitrator’s had considered the substance of Nafta’s authority agreed had effect complaints rejected and them or instead expand scope judicial the narrow had that concluded the TAA or FAA did provided by review otherwise the TAA and permit not grounds consideration of such the FAA. for vacatur. Nafta appealed.10 After oral award, argument in the court of grounds vacating appeals As for Naf- but be- issued, opinion fore an had ta asserted that the arbitrator the United applied had Quinn’s States Supreme federal law to sex Court decided Hall discrimination Street Associates, Mattel, Inc., claim even though alleged only she had a holding L.L.C. law, violation of grounds Texas and that the evi- that the FAA’s for vacatur and support dence did not a finding of modification sex “are exclusive” and cannot be Quinn (i) $6,000 tor does not have unemployed, to render a 9. While used decision which $5,000 contains a reversible error of personal savings, took out a loan on law, (ii) state or federal or a cause of $15,000 policy, her life insurance withdrew remedy expressly action provided not $1,572 401(k) plan, incurring pen- from her existing pro- under state or federal law. All $1,459 alty, paid expenses COBRA ceedings City shall be conducted in the maintain her health insurance. These Dallas, duty State of Texas. The to arbitrate comprised “special damages”. amounts described above shall survive the termination employee’s employment of the with the Com- Quinn appealed also from the district pany. provisions Employee The of the Hand- attorney court’s denial of her claim for fees knowing voluntary book constitute a proceeding. incurred in the confirmation parties’ rights jury waiver of the to a trial." Quinn affirmed, appeals The court of has 8.9 petitioned U.S.C. 2. for review. remedy Although contrary contract”.11 action to law.16 The “supplemented the TAA in appeals applied appeals rejected the court court of argu- Nafta’s FAA, that noting than the because, this case rather explained, ment while an arbi- Quinn disputed Nafta nor had on neither power by deciding trator exceeds his their arbi- governed that the TAA appeal issue the did not to submit tration,12 be- it concluded similarities him, he does not exceed power by his heavily in weighed tween the two statutes Moreover, deciding incorrectly.17 matters construing the TAA as Hall Street favor said, the court Nafta could not use section Accordingly, construed the FAA.13 had 171.088(a)(3)(A) accomplish indirectly “to judi- “parties seeking the court held that what we have already concluded it cannot an arbitration award covered cial review of is, directly, contractually expand do contractually agree under the TAA cannot judicial review of the arbitration deci- expand scope of that review and are sion.” Having decided that none of instead limited to review based on complaints Nafta’s fell within statutory grounds enumerated vacatur, statutory grounds for the court statute.”14 affirmed the district judgment.19 court’s statutory ground One such section granted petition We Nafta’s for review.20 171.088(a)(3)(A),that an arbitrator ex- has power,15 argued ceeded his and Nafta II power by had exceeded his arbitrator TAA, which is based on the issuing an erroneous award when the arbi- Act,21 Uniform Arbitration specific tration denied him the authori- lists ty grounds vacating,22 modifying, to commit reversible error or an for or cor- Texas) (including adopted 128 11. 552 U.S. S.Ct. 170 "most states have Act”). L.Ed.2d 254 the Uniform Arbitration (Tex.App.-Dallas 797 12. 257 S.W.3d 171.088(a) § 22. Tex. Civ. Prac. & Rem.Code 2008). ("On application party, of a the court shall (1) vacate an award if: the award was ob- acknowledged 13. Id. at 798. The at fraud, by corruption, tained or other undue argument oral in this Court that means; (2) rights party preju- the of a were concerning positions taken different the both (A) by: partiality by diced evident an arbitra- during applicability of the FAA and TAA this arbitrator; (B) appointed tor as a neutral proceeding. arbitrator; (C) corruption in an or miscon- arbitrator; duct or wilful misbehavior of an 14. Id. at 799. (3) (A) powers; the arbitrators: exceeded their (B) postpone hearing refused to after a & 15. Tex. Civ, Prac. Rem.Code showing postpone- of sufficient cause for the 171.088(a)(3)(A). § ment; (C) refused to hear evidence material (D) controversy; to the or conducted the 257 at 799. S.W.3d 171.043, contrary hearing, to Section 171.044, 171.045, 171.046, 171.047, in or a 17. Id. substantially prejudiced manner (4) agree- rights party; there no of a or was 18. Id. arbitrate, adversely ment to the issue was not Subchap- proceeding in a under determined 19. Id. at 799-800. B, party participate in ter and the did not hearing raising objec- without (Mar. 2009). arbitration Tex.Sup.Ct.J. tion.”); 23(a), § Unif. Arbitration Act cf. LLC, (2000) ("Upon Exploration, [motion] U.L.A. 77-78 21. See In re Gulf (Tex.2009) (noting by party proceeding, court a to an arbitration S.W.3d an recting23 pro- enforcing arbitration award and Whether an to ar- offered, grounds vides that unless such construing bitrate or an arbitration court, application party, “the on of a shall clause, give courts and arbitrators must ground confirm the award.”24 One such rights effect to the contractual and ex- vacating for an arbitration award pectations of the In en- parties. this pow- “the arbitrators ... exceeded their deavor, contract, as with other by agree- ers”.25 arbitration conducted parties’ intentions control. This is be- parties, ment of the the rule well estab- an cause arbitrator derives his or her lished that arbitrator derives his “[a]n powers parties’ agreement from the power parties’ agreement from the to sub- forgo legal process and submit their mit to arbitration”.26 theAs United States disputes to private dispute resolution.27 has stated: days the court shall vacate an award tion] made made within 90 after the [movant] (1) proceeding pursuant if: award was receives notice of the award to Sec- fraud, procured by corruption, days or other un- tion 19 or within 90 after the [movant] means; (2) (A) partial- due there was: evident receives notice of a modified or corrected ity by appointed an arbitrator as a neutral ar- pursuant award to Section the court shall bitrator; (B) arbitrator; corruption an (1) or modify or correct the award if: there was (C) prejudicing misconduct an arbitrator an evident mathematical miscalculation or an rights party pro- of a to the arbitration description person, evident mistake in the aof (3) ceeding; postpone award; arbitrator refused to thing, property referred to in the hearing upon showing of sufficient cause (2) the arbitrator has made an award on a postponement, refused to consider evi- claim not submitted to the arbitrator and the controversy, dence material to the or other- affecting award be corrected without hearing contrary wise conducted the to Sec- upon merits of decision the claims submit- prejudice substantially so as to ted; (3) imperfect the award is in a matter rights party proceeding; of a to the arbitration affecting of form not the merits of the deci- (4) an arbitrator exceeded the arbitrator's submitted.”). sion on the claims (5) powers; there was no to arbi- trate, person participated unless the in the 171.087; Tex. Civ. Prac. & Rem.Code cf. proceeding raising without the ob- 7 U.L.A. 76 Unif. Arbitration Act jection 15(c) under Section not later than the ("After party proceeding to an arbitration (6) beginning hearing; of the arbitration or award, may receives notice party of the proper the arbitration was conducted without make a [motion] court for an order notice of the initiation of an arbitration as confirming the award at which time the court required prejudice in Section 9 so as to sub- confirming shall issue a order unless the stantially rights party the of a to the arbitra- pursuant award is modified or corrected to proceeding.”). pursuant Section 20 or 24 or is vacated to 23.”). Section 171.091(a) § 23. Tex. Civ. Prac. & Rem.Code ("On application, modify the court shall or 25. Tex Civ. Prac. & Rem.Code (1) correct an award if: the award contains: 171.088(a)(3)(A). § (A) numbers; an evident miscalculation of or (B) an description evident mistake in the of a Smith, City Pasadena v. 292 S.W.3d person, thing, property or referred to in the of (Tex.2009) (citing Corp. Guidry, award; Oil (2) the arbitrators have made an Gulf (1959) 160 Tex. 327 S.W.2d respect award with to a matter not submitted ("the authority of arbitrators is derived from may to them and the award be corrected agreement”)). the arbitration affecting without the merits of the decision respect made with submitted; to the issues that were (3) or the form of the award Stolt-Nielsen S.A. v. AnimalFeeds Int’l - -, imperfect affecting Corp., in a manner not the U.S. merits S.Ct. 1773- (2010) controversy.”); (citations of the 176 L.Ed.2d 605 cf. Unif. Arbitration Act 24(a), (2000) omitted). § ("Upon quotation U.L.A. 87-88 internal [mo- marks Quinn agreed that an arbitrator held in Hall Nafta and Street. Sections 10 and 11 of between disputes to resolve appointed FAA specify grounds the for vacating,28 (i) authority them “does not have to render modifying, or correcting29 an arbitration a er- a decision which contains reversible TAA’s, award that are similar to the (ii) law, ror of state or federal or a TAA, like the section 9 of the FAA man- remedy not expressly cause of action or dates confirmation grounds.30 absent such existing state or feder- provided for under Street, In Hall the had part tried al law.” Unless there is some reason to dispute of their to the federal district court general exclude such limitations from the then agreed to submit part another parties’ agreement rule that the deter- arbitration.31 They agreed that the court authority, mines arbitral Nafta’s conten- could “enter judgment upon any award” tion that the arbitrator au- exceeded his unless “the findings arbitrator’s of facts thority a ground raises vacate supported by evidence, are not substantial award, appeals and the court of erred in or ... the arbitrator’s conclusions of law contrary. holding to the are erroneous.”32 The Supreme Court Quinn argues agreement that her to lim- held that this agreement impermissibly en- it the arbitrator’s is in effect an larged grounds for vacating modify- or broader review of ing an arbitration award under the FAA.33 permitted by the arbitration award than must, course, We of follow Hall Street in the TAA for the same reasons it is not FAA,' applying the permitted construing under similar of the but provisions FAA, TAA, as the obliged United States we are to examine Hall 10(a) ("In them, following any 28. 9 U.S.C. matter not submitted to unless it is a affecting cases the United States court in and for the matter not the merits of the decision submitted, may (c) district wherein award was made upon the matter Where the vacating upon make an order the award imperfect award is in matter of form not application any party to the arbitration— affecting controversy. merits (1) procured by corrup- where the award was award, modify order and correct the so tion, fraud, means; (2) or undue where there promote as to effect the intent thereof and partiality corruption was evident or justice parties.”). between the arbitrators, them; (3) either or where the guilty arbitrators were of misconduct in refus- ("If Id. in their ing postpone hearing, upon sufficient agreed judgment that a of the court shall shown, refusing cause or in to hear evidence upon pursuant be entered the award made pertinent controversy; and material to the arbitration, court, specify and shall any rights other which misbehavior year then at time within one after the any party prejudiced; have been any party award is made to the arbitration where the powers, arbitrators exceeded their may apply specified court so for imperfectly or so executed them that a mutu- award, confirming thereupon order the and al, final, upon subject and definite award the grant the court must such an order unless the made.”). matter submitted was not vacated, modified, award is or corrected as prescribed in sections 10 and 11 of this ti- ("In following 29. either of the Id. cases tle.”). the United States court in and for the district wherein the award was made make an Assocs., Mattel, Inc., 31. Hall St. L.L.C. v. modifying correcting upon order or the award U.S. 128 S.Ct. 170 L.Ed.2d application any party the of the arbitra- (a) Where there anwas evident material tion— figures an evident materi- miscalculation or Id. description al person, mistake in the award, thing, property in referred to the (b) upon Where the arbitrators have awarded Id. at 128 S.Ct. 1396. reasoning judg- theory grief post-arbitration Street’s and reach our own tration in process.37 Supreme ment. The based its deci- Court FAA sion on the framework of the and on Quinn with that while the We It found that “textual policy. features” Supreme parties Court and the in Hall 9, 10, and 11 were “at with sections odds “expandable Street framed issue as a enforcing expand judicial contract to re- judicial authority”,38 flip-side review following view the arbitration.”34 Because decision-making authority, limited arbitral 11 all grounds Quinn listed sections 10 and the aim of agreement. Nafta’s egregious Though parties in Hall departures “address from Street did couch their in terms of limiting agreed-upon arbitration” and “ex- parties’ authority the arbitrator’s to issue a deci- conduct”, not, treme arbitral the FAA did unsupported by sion the law and the evi- reasoned, contracting the Court “authorize dence, certainly practical that was ef- parties supplement specific review for fect what they expressly agreed to— outrageous instances conduct with re- judgment” court could not “enter Further, just any view legal for error.”35 on such a decision. The in Hall observed, the Court section 9 “carries no attempted accomplish indirectly Street flexibility”; “unequivocally hint of tells Quinn the same sought end and Nafta grant cases, courts to confirmation all directly limit on arbitrator’s author- —a except ‘prescribed’ one of the excep- when ity. applies”, merely tions and does not “tell a Court, Supreme Yet the in holding that just court what to do in case the parties grounds under the FAA the vacating, for construction, say nothing else.”36 This modifying, correcting an arbitration added, was consistent with policy award cannot be expanded beyond those favoring judicial limited review: listed sections 10 and did not discuss text, fighting Instead of it makes 10(a)(4), section which like section provisions, more sense to see the three 171.088(a)(3)(A) TAA, provides 9-11, §§ substantiating a national vacatur “where the arbitrators exceeded policy favoring just arbitration with their powers”.39 appears The omission limited review needed to maintain arbi- us to undercut the Court’s textu- tration’s essential virtue of resolving dis- analysis. al agreed When putes straightaway. Any reading other that an arbitrator should not have authori- opens legal door to the full-bore ty to reach a decision based on reversible evidentiary appeals that can in- render words, error —in other that an arbitrator merely formal arbitration prelude to a should have power judge— no more than a more cumbersome and time-consuming a motion to vacate for such error as ex- process, bring ceeding arbi- firmly arbitrator’s 10(a)(4). 34. Id. at only 39.9 U.S.C. mention of 10(a)(4) section in Hall Street is the observa- 35. Id. thought[ tion that "some courts have 'mani- ] disregard' may fest have been shorthand for 36. Id. at 128 S.Ct. 1396. 10(a)(3) 10(a)(4), § paragraphs the au- St., 37. Hall 552 U.S. at 128 S.Ct. 1396 thorizing vacatur when the arbitrators were (citations, marks, quotation internal and ‘guilty pow- of misconduct' or 'exceeded their ” omitted). brackets St., ers.’ Hall 552 U.S. at 128 S.Ct. 1396. 38. Id. at 128 S.Ct. 1396. regarded section 10. The forceable”.42 The in the text of Court this

grounded reasoning that an arbi- Court’s Supreme general policy “beg[ging] question as the not merely legal errors are the trator’s ... whether the FAA has textual features the “egregious departures from kind enforcing at odds with a contract to ex- section parties’ agreed-upon arbitration” pand judicial review following the arbitra- errors loses force when such addresses tion”,43but one such “textual is feature[ ]” parties’ express directly contradict the 10(a)(4), section which requires vacatur deprive and them of the benefit when arbitrators exceed authority. their expectations. of their reasonable Whether that feature is at with odds ex- panded judicial depends on whether to limit parties agreed When judge, right a the power an arbitrator’s that of contract to circumscribe arbi- appeal, decisions are renewable on whose limiting tral includes the authori- complaint is that the arbitrator’s ty to err in decision-making. statutory a powers, decision exceeds his Supreme analysis, textual Court’s vacatur, only way to main ground for when taking complete account of the statu- for limited argument tain a textual text, tory question circles back to the an agreement review is to hold that such whether can to limit an arbi- statutory provi encompassed not not, trator’s to err. If power then section words, sion and unenforceable. other 10(a)(4) is consistent with the Court’s anal- argument entails that arbitra the textual so, ysis, analysis but if appear would never, by committing, reversible tors can error, statutory be flawed. It is the text that powers” “exceed their within the 10(a)(4), meaning regardless of section of begs policy question, policy agreement. But the FAA it parties’ begs statutory construction issue. imposes parties’ self no such limitation on The Supreme Court stated that contrary, right of contract.40 On as ... “makes sense” for there to be “a na- noted, Supreme “the FAA lets Court policy favoring just tional arbitration with some, many tailor even features of the limited review needed to maintain arbi- contract, including way resolving tration’s essential virtue of dis- chosen, what their qualifi arbitrators difficulty putes straightaway.”44 One with be, cations which issues are arbitra- should policy this statement of national is that the ble, along procedure with and choice of previously had identified the en- Furthermore, Court law.”41 substantive private agreements forcement of recognized “general policy treating agreements “overriding goal”, writing: as en- FAA’s - -, Corp., 130 S.Ct. 40.The Court has never addressed Feeds Int’l U.S. 10(a)(4), (2010) (citations except say, section since Hall 176 L.Ed.2d 605 Street, omitted). only quotation when arbitrator and internal marks Stolt- "[i]t [an] agree- strays interpretation application Nielsen did not involve an arbitration from expanded judicial effectively ment for review. dispense[s] his justice own brand of industrial that his deci- unenforceable”, St., may 41. at sion be and that Hall 552 U.S. 1396. ”[i]n situation, an arbitration decision be 10(a)(4) Id. vacated under of the FAA on the ground that the arbitrator 'exceeded [his] powers,’ Id. for the task of an arbitrator is to contract, interpret and enforce a not to make public policy.” Stolt-Nielsen S.A. v. Animal- Id. at 128 S.Ct. 1396. legislative history policy guide interpreta- of the es- should its textual [FAA] tablishes that the behind its purpose tion.48 Parties to arbitration for passage was to ensure enforce- cost, speed other than such reasons and privately agreements ment of made instances, flexibility, privacy, and in some reject sug- arbitrate. therefore the We least, cases, expertise.49 In some at overriding of gestion goal the the delay whether arbitration reduces cost and promote Arbitration Act was to the ex- event, fiercely at all is debated. Act, peditious resolution of claims. The hardly would make sense to force more all, after does not mandate the arbitra- expedition on than want. If claims, merely tion of all but the en- identify we were to an essential virtue of motion of of upon the one forcement — arbitration, it would be that it a creature privately negotiated ar- —of agreement. of agreements.45 bitration assuming But that the goal ultimate of Hall Street dismissed these words as taken haste, abiding difficulty arbitration is context, explaining out of that all policy against expanded judicial with a re- Court had said was that arbitration should view, correspondingly, and limited arbitral expedited, be with the par- accordance authority, is that the could not itself agreement, pending ties’ despite litigation, say policy whether the a good was one: proceeding even if in different forums is say parties Hall Street and its amici will resolving not the most course for efficient flee if expanded from arbitration disputes.46 But the Court has since open is not to them. One of Mattel’s ‘principal purpose’ reaffirmed “[t]he flight amici foresees from the courts if private the FAA is to ‘ensur[e] arbi- who, anyone, it is. We do not know if agreements tration according enforced right, say and so cannot whether terms’”,47 to their so Hall Street cannot exclusivity reading of the statute is more fairly be read to replace “princi- FAA’s pal purpose” popularity of a threat of arbitra- enforcing agreements tors to that of with arbitration’s “essential courts. But whatever expedition virtue” of in determining consequences holding, what of our Scis., Reynolds, Byrd, (quoting 45. Dean Witter Inc. v. Volt Inc. Bd. Trs. Info. 213, 219, 1238, Univ., 468, U.S. 105 S.Ct. 84 L.Ed.2d 158 Leland Junior 489 U.S. Stanford (1985). (1989), S.Ct. 103 L.Ed.2d 488 citing and Stolt-Nielsen S.A. v. AnimalFeeds - -, Corp., Int'l U.S. 130 S.Ct. ("Despite 46. 552 at U.S. 128 S.Ct. 1396 (2010)). 176 L.Ed.2d 605 opinion's language the [Dean Witter] 're- jecting] suggestion overriding that the goal (" promote expedi- was to persuaded [FAA] Id. at 1749 ‘We ... are not claims,’ holding argument tious resolution of man- that the conflict between two goals dated immediate enforcement of an arbitra- of the Arbitration Act—enforcement of agreement; merely trying private agreements encouragement Court was of ef- explain inefficiency difficulty speedy that the dispute ficient and resolution —must conducting simultaneous arbitration and be resolved favor of the latter in order to ” litigation good enough federal-court (quoting was not a realize the intent of the drafters.’ (citations Witter, reason to defer the arbitration." Dean 470 U.S. at 105 S.Ct. omitted)). 1238)). quotation internal marks See, Gazda, Comment, Mobility Concepcion, e.g., AT&T LLC v. Peter F. Arbi- U.S. -, Making 179 L.Ed.2d tration: Court-AnnexedArbitration an (available Texas, http;//www. at Attractive Alternative in 16 St. Mary’s supremecourt.gov/opinions/10pdfy09-893.pdf) L.J.

95 gives Supreme text us no business to The statutory expressed Court concern that “a more cumbersome and statutory grounds.50 time-con- expand suming judicial process review [would] judicial policy favoring A national limited bring theory grief arbitration in post- that turns out to be review inimical process”,52 arbitration and we that hardly comfortably arbitration could reside delay and resulting expense are concerns ar- alongside policy favoring the “national intended, least, that arbitration is at that has bitration” alleviate.53 But equally grievous is a post- in the FAA.51 Congress held declared But process that refuses to correct denying possibility, without that the Court intended, errors as the parties and of statutory concluded that the text no leaves equal justice concern is a civil system that alternative. allows an litigation alternative to only they if are willing to risk an unreview- Thus, the search for a policy justify able decision. The California Supreme judicial limited review winds back around Court, declining to follow Hall Street in text, which, statutory we have statute, construing its own state’s offered seen, already is what commissioned this assessment: expedition place. problem in the first The judicial system reaps little benefit (and comes down to this. Under the TAA forcing parties from to choose between FAA), an arbitration award must be the risk of an erroneous arbitration pow- vacated if the arbitrator exceeds his award and the burden of litigating their Generally, powers ers. are arbitrator’s dispute entirely in court.... There are by agreement parties. determined of the significant also benefits to the develop- parties agree Can the that an arbitrator ment of the common law when arbitra- power judge, has no more than a so that subject tion awards are made to merits review, subject his decision is the same parties’ review agreement.... judicial as a decision? Hall Street answers These advantages, obtained with the no, analysis on an based FAA’s text consent of the are parties, substantial.54 ignores provision that raises the matter, As a fundamental problem, policy and a be at Texas odds recognizes protects law with a broad free policy favoring the national arbitra- of contract. repeatedly dom We have said tion. great respect, With we are unable to conclude that analysis Hall Street’s

FAA provides persuasive basis for con- thing if there is one which more than struing way. the TAA the same public policy requires another it is that St., 588-589, efficient, 50. Hall 552 at system U.S. 128 S.Ct. bitration as an economical (citations omitted). 1396 resolving disputes. Accordingly, we have long upon held that ‘an award of arbitrators Corp. given matters them Keating, 51. Southland submitted to the same U.S. 852, (1984). judgment 79 L.Ed.2d 1 effect as the of a court of last resort. presumptions indulged All reasonable " award, St., against favor of the and none it.’ 52. Hall 552 U.S. at 128 S.Ct. 1396 (citations (quoting City quotation San Antonio v. and internal marks omit- McKenzie Co., ted). Constr. 136 Tex. 150 S.W.2d (1941))). Group, Delgado, 53. CVN Inc. v. 95 S.W.3d (Tex.2002) Connection, DIRECTV, Inc., ("Subjecting 54.Cable Inc. v. expense Cal.Rptr.3d awards to adds Cal.4th 190 P.3d delay, thereby diminishing the benefits of ar- 96 competent gone award age

men of full and under- see how. Had liberty standing against against shall have the utmost of her and the law and evi- contracting, dence, and that their contracts agreement would have been to freely voluntarily when entered into her benefit. We have said that an arbitra- en- shall be held sacred and shall be agreement may be so one-sided as to by justice.55 forced of unconscionable,59 Courts be but the benefits or judicial burdens of review for reversible nothing find in the TAA at odds We with error fall to each side alike. contrary, this On the policy.56 purpose of the TAA is to facilitate arbitration The Court in Hall Street agreements, which have been enforceable squarely rejected argument that an by in Texas or statute since at Constitution statutory expand least 1845.57 the TAA con- Specifically, grounds review of an arbitra policy against parties’ agreeing tains no tion award is an invalid attempt to confer limit of arbitrator to that jurisdiction by on a court contract: rather, judge, of a an express provision but requiring vacatur when “arbitrators [have] jurisdictional, Because the FAA is not powers”.58 their exceeded argument there is no merit in the Quinn argues that an like enforcing agreement’s ju- the arbitration one-sided, one in this case is but we fail to dicial review provision would create fed- Co., 109, Stephens Ins. Co. v. Martin Pav In re AIU Ins. 148 S.W.3d 122 Fairfield. LP, 653, (Tex.2008) (con C.J., (Tex.2004) ("The ing, (Phillips, dissenting) 246 S.W.3d 664 struing policy coverage punitive right guaranteed insurance of to arbitration has been Nebel, damages) (quoting every Wood Motor Co. v. (citing Texas constitution." Tex. Const. 86, 181, (1951) XVI, 1969); § Tex. (repealed 150 238 S.W.2d 185 art. 13 of Const, Tex. 11; clause) 1869, XII, 1866, (construing § contract termination art. of art. Const, Tex. 15; VII, 1861, VII, 15; (quoting Printing Registering § & § Numerical Co. of art. Const, Tex. 1845, VII, 15)); Sampson, Eq. § v. 19 L.R. 1874 WL of art. id. at 122 Const, Tex. (1875))); ("Each Gym-N-I Play provided 16322 see also n. 1 constitution that it is Snider, 905, grounds, v. duty Legislature pass Inc. 220 S.W.3d 912 ‘the such laws (Tex.2007) (construing necessary proper commercial ex lease as be to decide warranties) Wood); arbitration, pressly waiving (quoting differences when the Peake, Mktg., BMG Direct Inc. v. 178 S.W.3d shall elect that method of trial.’ Tex. Const. 763, (Tex.2005) 1876, XVI, 1969). (construing liquidated (repealed 767 art. 13 This clause) damages (quoting Samp repealed by Wood and section was the voters in 1969 ); Am., ‘obsolete, son In re Prudential Ins. superfluous Co. 148 one of the and unneces (Tex.2004) (construing sary S.W.3d 129 n. 11 sections of the Constitution.’ HJ.R. Tex. waiver) No.3, R.S., jury (quoting Leg., contractual Wood and 61st 1969 Tex. Gen. Laws Mo., Sampson); Ry. Kan. &Tex. Co. Tex.v. 3230. The House Joint Resolution stated that Carter, repealer 95 Tex. 68 S.W. 164 was intended to ‘make (construing waiving responsibility changes contract present substantive in our constitu Id.”). engines) (quoting for fires caused railroad tion.’ Sampson). 58. Tex. & Rem.Code Civ. Prac. 655; Fairfield, 171.088(a)(3)(A). 56. See 246 S.W.3d at Town P'ship, Flower Mound v. Estates Ltd. Stafford (Tex.2004) L.P., ("Generally, Poly-America, 135 S.W.3d In re 262 S.W.3d (Tex.2008) public policy ("Unconscionability the State's reflected its is to be " Bank, factors, (quoting light variety statutes.’ Tex.Commerce N.A. determined in of a Grizzle, (Tex.2002))); prevent oppression 96 S.W.3d which aim to and unfair Austin, Props. Operating City surprise; general, FM Co. v. a contract will be found (Tex.2000). one-sided.”). grossly S.W.3d if it unconscionable TAA, by private construing obliged contract.60 we are to be jurisdiction eral faithful to its text. TAA, also, jurisdictional, is not has no more merit with re- argument Accordingly, we hold pres- that the TAA jurisdiction. Noth- to Texas courts’ spect ents no impediment agreement an ing subject. more need be said on the limits the of an arbitrator deciding judi- matter and thus allows for of the TAA’s mandate We are mindful cial review of an arbitration award for ... that it “be construed to make uniform reversible error. appli- the construction of other states’ law cable to an arbitration.”61 But the states Ill already divided over whether their When, case, permit agreements

own statutes for ex- as in this an arbi panded agreement by review of arbitration tration is covered both state law,64 say yes,62 say awards: three five no.63 and federal state preempted law is 2, 1396, 576, nations, eign any Territory 60. 552 582 n. 170 U.S. or of the United (2008). Columbia, L.Ed.2d 254 States or in the District of or be- another, any Territory tween such or § Tex. Civ. Prac. & Rem.Code 171.003. any Territory between any such State or nation, foreign or between the District of Co- Servs., Raymond 62. See James Fin. Inc. v. any Territory foreign lumbia and State or or Honea, 1161, (Ala.2010); 55 So.3d 1170 Cable nation, nothing but herein contained shall Connection, DIRECTV,Inc., Inc. v. 44 Cal.4th seamen, apply employment to contracts of 1334, 229, 586, Cal.Rptr.3d 82 190 P.3d 606 employees, any railroad other class of (2008); Printing, Fitzpatrick Tretina Inc. v. & engaged foreign workers or interstate com- Assocs., Inc., 349, 788, 135 N.J. 640 A.2d 793 § 9 merce.” U.S.C. 1. (1994); Parcel, see also HR East LLC v. Harman, Inc., 189, Handy & 287 Conn. 947 Quinn argued appeals in the court of 916, A.2d 926 n. 16 agreement her with Nafta did not involve commerce, interstate but she has abandoned Club, Country 63. See Inc. v. St. Brookfield Court, event, argument any in this and in LLC, 408, James-Brookfield, 287 Ga. 696 argument agree- there is no serious that her 663, 1, (2010); S.E.2d 667 HL LLC v. River Operations ment as Vice President of of a walk, LLC, 725, (Me.2011); 15 A.3d 736 John with business national and international sales Forks, City T. Jones Constr. Co. v. Grand did not involve interstate commerce. 698, (N.D.2003); Pugh’s N.W.2d 665 704 applies The TAA to written arbitration Landscape Jaycon Corp., Lawn Co. v. Dev. 320 agreements, Tex. Civ. Prac. & Rem.Code 252, (Tenn.2010); S.W.3d 261 Barnett v. 171.001, except as follows: Hicks, 119 Wash.2d 829 P.2d "(a) chapter This not does to: Dick, (1992); Mich.App. see also Dick v. (1) bargaining agreement a collective be- (1995); 534 N.W.2d 190-191 Trom union; employer tween an and a labor Servs., Inc., Raymond betta v. James Fin. (2) agreement by acquisition an for the (Pa.Super.Ct.2006). A.2d property, one or more individuals of ser- vices, money, or credit in which the total applies FAA to maritime transactions by indi- commerce, consideration to be furnished involving and transactions " $50,000, except vidual is not more than as U.S.C. defined as follows: ‘Maritime (b); provided by transactions’, defined, Subsection as herein means char- (3) carriers, personal injuiy, except a claim for parties, lading ter bills of of water (c); provided Subsection agreements relating wharfage, supplies fur- (4) vessels, collisions, compensation a claim for workers’ repairs nished vessels or benefits; or foreign other matters in commerce which, January made before subject controversy, if the would be admiralty jurisdiction; embraced within ‘commerce’, defined, "(b) An described Subsection as herein means com- (a)(2) among subject chapter merce the several States or with for- to this if: so, “to the extent actually that it conflicts with agreed to do nor does is, federal law—that to the extent that it prevent parties agree who do to arbi- accomplish- ‘stands as an obstacle to the excluding trate from certain claims from ment and execution of the full purposes the scope agreement. of their arbitration ”65 objectives Congress.’ Having simply requires It pri- courts to enforce permits concluded that the TAA parties to vately negotiated agreements to arbi- expanded judicial review of arbi- trate, contracts, like other in accordance awards, tration we must determine wheth- with their terms.66 FAA, er the which under Hall pre- Street FAA-preemption is thus at state-law aimed agreements, cludes such preempts Texas hindrances to enforcement of arbitration is, agreements law. That do such thwart agreements applicable not to contracts Congress’s purposes objectives and in the generally. explained way: We have it this FAA? (1) only preempts FAA the TAA if: Sciences, In Volt Inc. Information (2) agreement the is in writing, it in- v. Board Trustees Leland of Stanford (3) commerce, volves interstate it can University, Supreme Junior the ex Court scrutiny withstand under traditional con- plained the preemptive FAA’s effect as (4) tract law, defenses under state and follows: state law enforceability affects the of the designed The FAA was to overrule agreement.... The mere fact that a judiciary’s the long-standing refusal to commerce, contract affects interstate agreements enforce to arbitrate and to FAA, thus triggering pre- the does not place such agreements upon the same clude enforcement under the TAA as footing as other contracts. While Con- well. For the FAA to preempt the gress was no doubt aware that the Act TAA, state law must refuse to enforce encourage would expeditious the resolu- agreement an arbitration that the FAA tion of disputes, passage its was motivat- would, enforce, (1) ed, either foremost, because the by first and a congression- al TAA expressly exempted desire to has agreements agree- enforce into (2) parties which ment from Accordingly, coverage, had entered. the TAA has we recognized imposed enforceability the FAA does requirement require not parties to arbitrate when found the FAA.67 (1) Assocs., parties L.P., agreement agree Kempwood to the 9 S.W.3d 127- arbitrate; writing to (Tex.1999) and curiam). (per (2) agreement signed by party is each party’s attorney. Scis., and each 65. Volt Inc. v. Bd. Trs. Leland Info. "(c) (a)(3) by A claim described Subsection Univ., 468, 477, Junior 489 U.S. Stanford subject chapter is to this if: (1989) (quoting S.Ct 103 L.Ed.2d 488 (1) claim, party each to the on the advice Davidowitz, Hines v. 312 U.S. counsel, arbitrate; agrees writing (1941)). 85 L.Ed. 581 agreement signed by party each (citations, Id. punc- at S.Ct. party’s attorney.” each tuation, quotation and internal marks omit- §Id. 171.002. ted). noted, appeals parties As the court of disputed applicability have not of the TAA Co., 67. In re D. Wilson Constr. 196 S.W.3d agreement. to their (Tex.2006) (citations, brackets, em- may The TAAand the applica- FAA both be phasis, quotation and internal marks omit- agreement, ble to an parties’ absent ted). choice of one or the other. In re L & L Volt, parties agreements chose California law as fit. see Just as agreement.68 their arbitration govern they may by limit contract the issues them, one dispute arose between When arbitrate, they will which so too the other demanded arbitration while filed they specify by contract the rules under suit, strangers agree- two to the joining which that arbitration will be conducted. The state trial court ment as defendants. Where, here, have agreed stayed pursuant provi- the arbitration to a arbitration, to abide state rules of of the Arbitration Act that sion California enforcing those rules according to the stay a court “to authorized terms fully consis- of. pending litigation resolution of related be- FAA, tent goals with the even if party tween a the result is that stayed arbitration is it, and third not bound where where the Act would otherwise permit it possibility conflicting rulings ‘there is a go By forward. permitting the courts ”69 on a common issue of law or fact.’ “rigorously enforce” agreements such provi- FAA Though the contains no similar terms, according to their give we effect sion, held that rights contractual expecta- preempt FAA did not state law: - parties, tions of the doing without vio- recognition Congress’ principal In of lence to policies by behind purpose ensuring private of that arbitra- FAA.70 according are enforced agreements terms, to their we have held that State preempted, law was not pre-empts require FAA state laws which even though operated stay it to judicial forum for the resolution of gone that would have forward under feder contracting parties claims which the al law. The parties’ agreement was en agreed to resolve arbitration. But it forced, thwarted, by application not of the prevents does not that the FAA follow they law California had chosen. The Su agreements enforcement of to arbi- preme Court concluded that the FAA’s trate different rules than under those purposes objectives are not defeated Indeed, in set forth the Act itself. such by conducting arbitration under state-law quite a result would be inimical to the procedures provided different from those primary purpose ensuring FAA’s of Indeed, by the federal statute. as Volt

private agreements to arbitrate are en- acknowledged, it is not clear to what ex forced according to their terms. Arbi- procedures, prescribed tent the FAA’s ex tration under the a matter Act is of courts, coercion, for consent, pressly apply federal ever in not generally FAA, free to their structure arbitra- state courts.71 Section 10 of the Volt, 470, 4, appear §§ 68. 489 U.S. at 109 S.Ct. 1248. 3 and which their terms to court, apply only proceedings to in federal see (quoting Id. at 109 S.Ct. 1248 Cal.Civ. (referring proceedings 9 U.S.C. to 1281.2(c)(3) (West 1982)). Proc.Code ‘brought in of courts of the United States’); (referring 'any § 4 to United States 478-479, (citations Id. at 109 S.Ct. 1248 court’), applicable district are nonetheless omitted). quotation and internal marks Corp. Keating, state See court. Southland v. (“While supra, (expressly at n. 104 S.Ct. 852 Id. 'at 477 n. 109 S.Ct. 1248 we reserving question '§§ whether 3 and 4 provi- have held that FAA's 'substantive' applicable proceedings §§ the Arbitration Act 1 and 2—are in state as to sions— court, courts’); id., Corp. well as state see also at 104 S.Ct. federal see Southland J., (§§ Keating, dissenting) 465 U.S. 3 and 4 of (O'Connor, (1984), court).”); apply only L.Ed.2d 1 we have never held that the FAA in federal see Street, preempt agree-

basis of the decision Hall is itself state law that allows only addressed to “the States court United enlarge judicial ments to review of arbitra- in and for the district wherein the award tion awards: was made”.72 The lesson of Volt is that holding §§ 10 and 11 [FAA] preempt the FAA does not all state-law provide exclusive regimes for the review arbitration; impediments preempts to statute, provided by pur- we do not impediments state-law port say they exclude more agreements. searching on based out- Street, opinion in Hall as we side statute as well. The FAA is not discussed, point pro seems at one only way into court for want- expedition primary goal mote as the of the ing review of arbitration awards: expedition FAA. But if is the touchstone may contemplate enforcement under FAA-preemption, for then was incor Volt law, statutory state or common for ex- decided, rectly upheld since it the use of ample, judicial where review different delay law Though state arbitration. scope arguable. speak But here we Volt, majority Hall Street’s did not cite only scope expeditious judi- Court has since on it.73 relied With Volt 9,10, §§ cial review under decid- intact, we cannot read Hall discus Street’s ing nothing possible about other avenues importance sion of the expedition enforcement of arbitration displace principal as the preemp basis for awards.75 protection parties’ agreem tion the importantly, Dissenting ents.74 More Hall from the Street Court’s construction FAA, expressly contemplates that the FAA will Breyer emphasized Justice - Bank, , also Vaden private agreements v. Discover U.S the FAAis to ensure that . — 1262, 20, 129 S.Ct. 1279 n. according 173 L.Ed.2d 206 to arbitrate are enforced to their (2009) (stating that enforcing agreement Court has not de "[t]his terms.... Whether §§ apply proceed cided whether 3 and 4 construing arbitrate an arbitration courts,” Volt); clause, ings citing in state give Cable Con courts and arbitrators must effect nection, DIRECTV, Inc., rights Inc. v. 44 Cal.4th expectations to the contractual Cal.Rptr.3d parties.... 82 190 P.3d parties 597 have held that [W]e (2008) (stating n. 12 procedur generally that the FAA's free to structure their arbitra- provisions pro agreements al do not they state court see fit ... and ceedings). agree We need not resolve the issue on rules under which arbitration Volt, proceed.” (citing here. will 489 U.S. at 1248) (citations 109 quota- S.Ct. and internal omitted)). tion marks 72. 9 U.S.C. 10. 74. A law state that both denies enforcement Mobility Concepcion, 73. AT&T LLC v. U.S. -, parties' agreement 1740, 1748, of the and defeats arbitra- 131 S.Ct. 179 L.Ed.2d is, goal expedition (2011) (available surprisingly, tion’s not http://www. at preempted. Concepcion, 131 S.Ct. 1740 supremecourt.gov/opinions/10pdf/09-893.pdf) rule, Volt); (holding regarding that the California (quoting Stolt-Nielsen S.A. v. Animal - unconscionability -, of class arbitration Corp., Feeds Int’l U.S. 130 S.Ct. contracts, 1758, 1773-1774, waivers in consumer from Discover 176 L.Ed.2d 605 Court, ("While Superior Bank 36 Cal.4th interpretation of an arbitration (2005), Cal.Rptr.3d law, 113 P.3d 1100 agreement is generally is a matter of state FAA). preempted by the imposes the FAA certain rules of fundamental importance, including precept the basic that consent, Assocs., Mattel, Inc., a matter not coer 75. Hall St. L.L.C. v. .... cion have said on [W]e numerous occa U.S. 170 L.Ed.2d primary purpose sions that the central or agreement agreement. necessary that its Nor was it for was effect. preclusive not have Quinn would and Nafta to not gov- decision choose to be passage opinion of the Court’s Citing the FAA, erned since even if it applies, part and a of Justice just quoted, we have case, as it does in this not preempt does he stressed: dissenting opinion, Stevens’ parties’ agreement for expanded judi- in this case is question presented cial review. The matter is left Arbitration Act whether “the Federal agreement parties. of the But absent court from en- precludes ... a federal agreement, clear the default under forcing” an arbitration TAA, only permitted by and the course power the court the to set aside an gives FAA, judicial is restricted review.78 an arbi- arbitration award embodies reasons, For these we hold that mistake about the law. Like the trator’s preempt FAA does not enforcement of an majority pri- and Justice Stevens, expanded judicial for review of forth, I marily for the reasons set an arbitration award enforceable under the not preclude believe that the Act does TAA. agreement.76 of such an enforcement think, any argu- passages, These we refute IV only to reasoning applies ment that Volt’s An arbitration award procedure by which arbitration is con- ducted, procedure by susceptible merely not the which awards to full only are reviewed. The reasonable read- because the A agreed. Street, ing opinions in Hall in our court79 must have a sufficient record of view, the FAA not preempt is that does proceedings, complaints the arbitral to a state law that allows preserved, must have been all as if the greater review of arbitration awards.77 judgment app award were a court on sake, efficiency’s For Quinn necessary

It was not eal.80 informal; are often proceedings proce govern and Nafta to choose the TAA to relaxed, dural rules are rules of evidence agreement, their nor would that choice followed, are not and no record is made. provided expanded judi alone have them arbitration, aspects These of which are cial review of an arbitration award. The key reducing delay to costs and in re TAA, it, permits as we have construed solving disputes, casualty must fall review, parties agree expanded or to full requirements judicial for review. a limit on the arbitrator’s corresponding case, authority, parties not The can decide for themselves this but does impose every such review on arbitration the benefits are worth the addi- whether confirm, alter, J., (Breyer, ruling Id. at 128 S.Ct. 1396 dis- 79. In on motions to or omitted). added) (citation award, senting) (emphasis vacate an arbitration a trial court re- viewing the award for reversible error serves Connection, DIRECTV, 77. See Cable Inc. v. appellate function. Inc., Cal.Rptr.3d Cal.4th P.3d 595-599 appeals judicial proceedings, the from preserving complaints requirements for and Hut- See Mastrobuono Shearson Lehman out, respectively, ton, Inc., for the record are set 514 U.S. Appel- 34 of the Texas Rules of Rules (holding L.Ed.2d 76 that an Although these rules are not unambiguously scope late Procedure. that did not limit the awards, appeals from arbitration by choosing written for arbitration a state-law rule did FAA). govern appeals. effectively principles their should such not do so under the them, delay, only peals,

tional cost and but the court did not reach but meritorious, they agree concluding to which is the if can kind of instead that even If grounds review courts conduct. error cannot were not for vacatur. Be- demonstrated, pre- disagree, judgment be an award must be cause we appeals sumed correct.81 court of must be reversed and the case to that court for consider- remanded token, By the same challenges ation of the of Nafta’s merits cannot to a different stan the arbitration award. dard of review than the court It is so ordered. in employ judicial proceeding would a volving subject same matter. “[A]n Chief Justice JEFFERSON filed a agreement providing that a concurring opinion, in which Justice ‘judge would review the award flipping WAINWRIGHT and Justice studying a coin or the entrails of a dead joined. LEHRMANN fowl’would be unenforceable.”82 JEFFERSON, Here, joined by Justice Chief have submitted a rec- Justice and Justice WAINWRIGHT proceeding, including ord of the arbitration LEHRMANN, concurring. a transcript of the evidence offered. Nafta legal has attacked the award on several Increasingly, disputes our civil are sub- grounds and challenged sufficiency of private mitted to the sector rather than a remand, the evidence. On the court must judge jury. The trend is neither intrin- determine whether the record is sufficient bad, sically good nor but there are conse- to review complaints. Nafta’s quences. open When a case is tried in court, rules evidence inherited from V Britain and modified American courts court, In the trial Nafta jury may properly invoked the dictate what facts a provision Quinn recorded, its with lim- consider. The proceeding is iting the dispositive arbitrator’s “to a rulings subject principles render decision which contains a preservation. reversible error of error the facts are When law, ... state or federal applied, established and the law the State remedy expressly cause action or of Texas enforces the trial judg- court’s provided existing facts, for under state or report feder- ment. Journalists editori- law”, arguments al and raised its under al critique judgment, writers citizens laws, this provision vacating the award. reflect on legisla- the state of our the trial confirming Since court’s order tors file bills to alter future outcomes. decision, gives award no basis for its we When the parties appeal, resulting the presume rejected must that the court precedent gives predictability Naf- to the activi- arguments in ta’s substance. Nafta people raised ties and transactions which arguments the same in the court ap- corporations engage. Connection, Cal.Rptr.3d ready

81. See also Cable 82 solution in the familiar rule that the ("Some 190 P.3d at 605 courts have presumed decision under review is correct on expressed concern that arbitration is so differ- silent.”). matters where the record is judicial proceedings ent from that courts adequately would be unable to review the (citations omitted) (quoting Id. LaPine decisions_ substance of arbitrators' Prob- Kyocera Corp. Corp., Tech. 130 F.3d lems with the cases, are record not reflected in the (9th Cir.1997) (Kozinski, J., concurring)). arise, they but in the event there is a It An arbitration is different.1 is said to embrace modern case-management prac- costly, tices, and overseen speedier, be often less Legislature should ensure that by experts subject in the relevant matter. justice system has resources to im- private.2 But it is conducted rules prove technology qualified and to hire per- apply. may evidence do not There be ways sonnel—two sure to improve efficien- transcript proceedings. no official cy. final, usually

The award is even when an choice, unlikely, given And it is a judgment appealed identical state parties choose, to an arbitration would procedural court would be reversed on arbitrator, their a person only whose quali- grounds. generally substantive Courts are fication possession license, is the of a law confirm required to an arbitral award be- and who need significant not have experi- trial have little judges power cause to re- ence as an advocate or as a judge.4 They or, insufficiency verse it for factual with pool seek instead a qualified profession- exceptions, prevent certain a miscar- als rather than individuals who are swept riage justice.3 in and out of office based not on consider- This case asks whether can merit, ations of vagaries but on the “try” a agree privately, case but then Const, partisan election. See Tex. art. V enlist state courts to review the decision (outlining requirements for reversible errors of state or federal election). The solution quandary to that is law. I with the beyond case, scope of this but TAA, is enforceable under parties’ contractual for review- notwithstanding. Hall Street 339 S.W.3d ing the arbitrator’s decision demonstrates only at 101. I write to observe that our that people per- know how to avoid this system failing parties compelled if are deficiency. will, ceived They increasingly, arbitrate because believe our courts select théir own specialized tribunal and do not their If adequately serve needs. right seek to retain a contractual litigation leaving because lawsuits are to mean- ingful expensive, appellate too the bench and the bar must review in our state courts. does, crippling oppressive rethink the burdens As the Court I would affirm that Nevertheless, must, discovery imposes. yet right. If courts have we in the fu- Grp., Stifel, grant 1. See Bowles Fin. Inc. v. Nicolaus the court must such an order unless the Co., Inc., (10th & vacated, modified, F.3d Cir. award is or corrected as 1994) ("Arbitration provides pro neither the prescribed in sections 10 and 11 of [the protections cedural nor the assurance of the FAA]."); Tex. Civ. Prac. & Rem.Code 171.087 proper application of substantive law offered ("Unless grounds vacating, are offered for judicial system.”). modifying, correcting under award Sec- TAA], tion 171.088 or 171.091 [of Weixia, Comment, 2. See Gu Note & Confiden- court, application party, on of a shall confirm tiality Blessing Revisited: or Curse in Interna- award.”). Arbitration?, tional 15 Am. Rev. Int’l Arb. 607, ("How disputes actually decid- only ed concerns not to the arbi- V, ("Each 4.See art. district Const, Tex. tration, but also have substantial effects judge qualified shall be elected voters shareholders, large, including on the world at at a General a citizen Election shall be consumers, regulators, administrative and the State, the United States and of this who is affecting like. Decisions them should be sub- practice law in licensed to this State and has (footnote omitted)). ject public scrutiny.” lawyer Judge practicing been a or a of a State, combined, Court in this or both for four ("[A]nyparty 3. See U.S.C. 9 to the arbitra- election...."). specified years preceding to the court so for an next his award, confirming thereupon order ture, aspects justice address those of our

system that compel litigants to circumvent opt private adjudication.

the courts and SERVICES, TAX LOAN

GENESIS

INC., Frossard, and M. Suzanne

Trustee, Petitioners,

Kody Kody and Janet KOTHMANN and

Kothmann, Trustee, Respondents.

No. 09-0828. of Texas.

Argued Nov. May

Decided

Case Details

Case Name: Nafta Traders, Inc. v. Quinn

Court Name: Texas Supreme Court

Date Published: May 13, 2011

Citation: 339 S.W.3d 84

Docket Number: 08-0613

Court Abbreviation: Tex.