U.S. Supreme Court Rejects Contractual Expansion of Judicial Review of Arbitration Awards

Hall Street Assocs., L.L.C. v. Mattel, Inc., No. 06-989 (U.S., March 25, 2008) See Hall Street Decision

In a landmark decision, the United States Supreme Court held that the increasingly popular practice of contracting for expanded judicial review of arbitration awards is not permissible under the Federal Arbitration Act (the "FAA").  This practice was seen as a way to obtain the benefits of arbitration while eliminating one of its drawbacks: limited judicial review.  The Hall Street decision may have the unintended consequence of driving parties away from arbitration.  Since expanded judicial review is now much less available, more parties may opt for traditional litigation with its right to appeal a bad result.

For a fuller discussion of this decision, see Client Alert, published by Thompson & Knight Appellate Practice Specialty Group.