"Non-appealable" arbitration award is appealable

Cannot contract away FAA Section 10 appeal provisions. After a settlement of $85 million in the Wal-Mart wage and hour multidistrict litigation, the district court awarded $28 million in attorney fees. Plaintiffs' counsel disagreed among themselves as to splitting up this award, so they agreed to "binding, non-appealable arbitration."

After the arbitrator issued an award dividing up the attorney fees, one of the attorneys moved to confirm the award, and another attorney moved to vacate the award. The district court confirmed the award, finding no basis for vacating it.

Of course, the loser appealed the non-appealable award to the 9th Circuit.

The 9th Circuit decided that the award was indeed appealable. Burton v. Class Counsel and Party to Arbitration (9th Cir 12/17/2013).

The reasoning:

  1. "Non-appealable" is ambiguous because courts have read that language two ways:
    1. It precludes only federal court review of the merits of the arbitrator’s decision, and does not eliminate the parties’ right to appeal from the arbitrator’s decision under § 10 of the Federal Arbitration Act (FAA).
    2. It divests both the district court and the 9th Circuit of jurisdiction to review the arbitration award on any ground.
  2. Hall Street Associates v. Mattel, 552 US 576 ( US Supreme Court 2008) held that parties could not contract for judicial review that was greater than that provided by the FAA, so it follows that parties cannot contract for any less review than the FAA provides. So, Section 10 review is still available in the courts.

I think that's an argument only a lawyer could follow.