As Dramatist John Heywood first memorialized in his 1546 work, you cannot have your cake and eat it too.1 Whether this proverb is relevant to an arbitration clause providing for expanded review is an issue of sharp contention among the federal circuits. Expanded judicial review is applied to arbitration agreements in the context of the Federal Arbitration Act (FAA), under which parties to an arbitration agreement can choose to rely on a federal district court to review an arbitrator's decision and either confirm or vacate the arbitral award. Within this framework, at issue is whether parties to an arbitration agreement can contract for expanded judicial review of their arbitration decision, rather than have the court apply only the statutorily and judicially created standards.
In Schoch v. InfoUSA, the Eighth Circuit Court of Appeals, without expressly deciding the issue, strongly suggested that it would not allow expanded review of arbitrators' decisions. Nevertheless, Schoch represents the Eight Circuit's position at the center of a circuit divide. On one side, courts allow expanded review of arbitration decisions, stressing the contractual nature of arbitration and the FAA policy favoring the freedom of parties to structure their agreements as they see fit. On the other side, courts disallow expanded review because allowing it would endanger the independence and efficiency of the arbitration process and, more fundamentally, because the FAA provides the exclusive grounds for review of arbitration awards, thus precluding any expanded review.
Joshua K. Norton,
Having Your Cake and Eating It Too? Contractually Expanding Judicial Review of Arbitration Decisions. Schoch v. InfoUSA, Inc., 341 F.3d 785 (8th Cir. 2003),
86 Neb. L. Rev.
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