Federal Court Jurisdiction Over Arbitration Awards: At U.S. Supreme Court (Jules v. Andre Balazs)

“Look through” jurisdiction? (Photo by Marilyn Swanson)

Hypothetical:

Plaintiff sues Defendant in Federal District Court on a federal question claim;
the Court grants Defendant’s motion to refer the case to arbitration and to stay the court case until arbitration concludes;
the arbitrators rule for Defendant and award nothing ($0.00) to Plaintiff;
Defendant asks the Federal District Court in the stayed case to confirm the arbitration result; and
Plaintiff moves to dismiss the confirmation request for lack of jurisdiction.

Question:

Does the Federal District Court have jurisdiction to confirm the arbitration result?

This question would seem to have a simple answer: “Yes, jurisdiction does exist” [at least, that’s the way it seemed to me before reading further].

But it’s not so simple, because that very question is now before the U.S. Supreme Court on a circuit split in Jules v. Andre Balazs Properties, Case No. 25-83 (cert. granted December 5, 2025, oral arguments occurred on March 30, 2026).

Starting Point—Badgerow

The starting point for answering the Question is a prior ruling by the U.S. Supreme Court in Badgerow v. Walters, 596 U.S. 1 (2022), in which the facts are similar to the hypothetical above, except that the case began with an arbitration filing, instead of with a federal court lawsuit.

In Badgerow, the Supreme Court ruled that the federal district court did not have jurisdiction to confirm the arbitration award, because the issue before the court was one of contract (i.e., whether the arbitration result should be confirmed or vacated)—not the original federal question between the parties.

–Federal Arbitration Act

Badgerow cites and applies the Federal Arbitration Act (“FAA”; 9 U. S. C. §1 et seq.), which authorizes a party to an arbitration agreement to seek various forms of assistance from a federal court, including:

under § 4—asking the court to compel an arbitration proceeding as contracted between the parties; and
under §§ 9 & 10—asking the court to confirm or vacate an arbitration award.

The FAA does not itself create jurisdiction—the federal court must have an independent jurisdictional basis to resolve the matter. On this point, there is a major difference between requests under § 4 and under §§ 9 & 10 of the FAA:

on a motion to compel arbitration, § 4 instructs a federal court to “look through” the petition to the “underlying substantive controversy” to determine, for example, whether a federal question is presented; but
on a motion to confirm or vacate an arbitration award under §§ 9 & 10, the same “look through” approach does not apply—those two sections lack Section 4’s distinctive language directing a look-through.

–Facts

The Badgerow case grows out of an arbitration of an employment dispute that includes federal question claims. The arbitrators dismiss Badgerow’s claims. So, Badgerow sues Employer in state court to vacate the arbitration result, and Employer removes the case to Federal District Court with a request to confirm the arbitration award.

In response, Badgerow moves in Federal Court to remand the case to state court, arguing that the Federal Court lacked jurisdiction under §§ 9 & 10 to vacate or confirm the award. The District Court denies the motion and confirms the arbitration result, and the Fifth Circuit affirms.

–State Court Role

Congress has granted Federal District Courts jurisdiction over (i) diversity cases—suits between citizens of different States with a value over $75,000, and (ii) federal question cases—suits “arising under” federal law.

But §§ 4, 9 & 10 of the FAA do not themselves support federal jurisdiction—were it otherwise, every arbitration in the country, however distant from federal concerns, could wind up in a federal district court. And if federal court jurisdiction does not exist, FAA actions belong in state courts, which are also required by the FAA to honor arbitration agreements and have a “prominent role” in doing so.

–The Issue

The Badgerow issue is about where a federal court should look to determine whether an action brought under §§ 9 or 10 has an independent jurisdictional basis. A starting place is the application itself:

if it shows that the contending parties are citizens of different States (with over $75,000 in dispute), then §1332(a) gives the court diversity jurisdiction for the FAA action; or
if it alleges that federal law (beyond §§ 9 or 10 itself) entitles the applicant to relief, then §1331 gives the court federal-question jurisdiction.

–The Answer

Those jurisdiction possibilities do Employer no good. Employer and Badgerow are from the same state. And their applications under §§ 9 & 10 raise no federal issue—because the two parties are now contesting, not the legality of Badgerow’s firing, but the enforceability of an arbitral award.

The arbitral award is no more than a contractual resolution of the parties’ dispute—a way of settling legal claims. And quarrels about legal settlements—even settlements of federal claims—typically involve only state law, like disagreements about other contracts.

Here’s a significant difference between applications under § 4 of the FAA and §§ 9 & 10:

under § 4, a Federal District Court has jurisdiction over an application to compel arbitration when that court “would have jurisdiction” over “the controversy between the parties” without the arbitration agreement; but
under §§ 9 & 10, there is no corresponding language, so that an application to confirm or vacate an arbitral award raises only a state law question—indeed, §§ 9 & 10 do not even mention subject-matter jurisdiction.

Such difference, created by Congress, governs. That’s because a Federal District Court may not exercise jurisdiction absent a statutory basis, and the jurisdiction Congress confers may not be expanded by judicial decree.

Circuit Split

The U.S. Supreme Court granted certiorari in Jules v. Andre Balaza Properties, on December 5, 2025, to resolve a new circuit split on the jurisdiction question previously addressed by the Supreme Court in Badgerow.

What follows is a summary of that circuit split.

–Jurisdiction does Exist

Badgerow involved an action under §§ 9 & 10 of the FAA commenced in state court and then removed to federal court for the sole purpose of vacating an arbitral award. The present action is different because it started as a federal question suit in Federal District Court before being stayed under § 4 of the FAA pending arbitration, then returned to the same Court under §§ 9 & 10 of the FAA for confirmation of the arbitration result.

The Supreme Court has held that a “court with the power to stay the action under § 3 [of the FAA] has the further power to confirm any ensuing arbitration award.” Cortez Byrd Chips, Inc. v. Bill Harbert Constr. Co., 529 U.S. 193, 202 (2000); see also Marine Transit Corp. v. Dreyfus, 284 U.S. 263, 275–76 (1932).

This Court has held the same and will continue to do so.[F. 1]

–Jurisdiction Does Not Exist

At the time the parties filed their respective §§ 9 & 10 applications, they were no longer litigating over federal questions from their fraught business relationship — those issues and claims had been resolved by arbitration. Instead, the parties’ dispute focused on the enforceability of the arbitration result.

To find it had jurisdiction over what was in essence a contract dispute among the parties, the district court had to “look through” to the civil lawsuit and determine that a federal question claim existed.

The same issue was before the Supreme Court in Badgerow, where the Court answered: “no,” the district court could not “look through” to the civil lawsuit for federal question jurisdiction.

As to the argument that Badgerow did not “undo the near century of well-established federal precedent” that a court that stays an action pending arbitration retains jurisdiction to enforce the award. The two cases cited for support (Cortez and Marine Transit) do not apply: (i) Cortez addresses a venue issue, not jurisdiction, and (ii) Marine Transit applies a different section of the FAA (§ 8) that governs admiralty cases—and § 8 has subject matter jurisdiction language similar to § 4 of the FAA.

Conclusion

It will be interesting to see what the U.S. Supreme Court does with this case.

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Footnote 1. This opinion is the one upon which certiorari was granted: Jules v. Andre Balazs Properties, Case Nos. 23-1253(L) & 23-1283(Con) (2nd Cir., decided April 25, 2025) .

Footnote 2. This opinion is Smartsky Networks, LLC v. DAG Wireless, Ltd., 93 F.4d 175 (4th Cir. 2024).

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