In Brown v. Brown-Thill, Nos. 13–1708, 13–1795, 13–1710, 13–1797 (8th Cir. Aug. 11, 2014) (click here for a copy of the decision), disputes arose between two co-trustees of a family trust, and the co-trustees had signed a broad arbitration agreement covering all disputes “which arise out of or relate to the administration and investment” of the trust and related partnerships. The Eighth Circuit’s decision focused on whether two arbitration awards should be vacated. One award directed a co-trustee, Brown, to execute certain documents to effectuate a distribution, and Brown raised several challenges to the award, such as manifest disregard, evident partiality, and procedural irregularities. However, the Eighth Circuit found no valid reason to vacate this particular award.
The second arbitration award removed Brown as a co-trustee. The Eighth Circuit found that this award was not based on a contractual removal provision, and instead, the arbitrator had relied on statutory grounds that are exclusively judicial. The Eighth Circuit noted that the removal dispute was arbitrable, and the arbitrator could make findings regarding this dispute, findings which the other co-trustee could present in a subsequent judicial proceeding. However, the Eighth Circuit found that the “arbitrator exceeded his powers by exercising the exclusively judicial function of removing Brown on statutory grounds.” (emphasis in original). Nevertheless, this improper exceeding of powers was in effect now moot because Brown had unconditionally resigned as a co-trustee.
I find this case interesting because 1) it involves a trust dispute, not a typical commercial dispute for which the FAA was designed; and 2) without much elaboration, the Eighth Circuit noted that certain functions can be exclusively judicial, such as the removal of a trustee. What other functions can be exclusively judicial? For example, in the context of class arbitration where the arbitration clause is silent regarding class mechanisms, could one argue that class certification and granting classwide relief are exclusively judicial functions?