Earlier today, the Court issued its decision in Jules v. Andres Balazs Properties, No. 25-83 (May 14, 2026) (click here for a copy of the decision). In a nutshell, the Court held that federal courts staying cases under section 3 of the FAA retain subject matter jurisdiction to confirm or vacate arbitral awards.
Suppose a worker, like Jules in this case, files a federal civil rights claim in federal court, and the court orders a stay under section 3 (stays are mandatory under section 3 according to the earlier Spizzirri case.) Suppose an arbitrator eventually issues a $10,000 award in favor of the worker. The court, having stayed the case, has jurisdiction to consider a petition to vacate or confirm this award.
Contrast the above example with this following: suppose there is no preexisting case filed in a court, and the worker arbitrates this same matter and receives a $10,000 arbitral award. Today’s Jules decision does not control because there is no prior court matter that has been stayed. Instead, under the earlier Badgerow case, a federal court would have no power to confirm or vacate this award (even though it is identical to the award in the prior example) because the $10,000 award would probably not satisfy the jurisdictional requirements under 28 USC 1332. Badgerow does not authorize a “look through” approach whereby jurisdiction can be based on the underlying merits dispute that was arbitrated.
The two above hypotheticals are analyzed differently, even though the awards are identical in both situations. I am not a fan of the Badgerow decision and believe it is wrongly decided.
One more observation: the Jules Court reaffirmed the federal judiciary’s “supervisory role” with respect to arbitration under the FAA, which the Court previously recognized in the Spizzirri decision. The Jules Court recognizes that a federal court having stayed a case under section 3 can “superintend” an arbitration matter through its completion. I suppose state courts, which are not governed by section 3 of the FAA, do not have a similar supervisory role under the FAA, although state courts are obligated under the Southland decision to honor arbitration agreements under section 2 of the FAA.