Preview, Jules @ SCOTUS: Amicus Supports a Federal Arbitration Act ‘Jurisdictional Anchor’
By Sasha Hill
The U.S. Supreme Court’s second arbitration case of the 2025-2026 term is set to be argued at the end of this month.
CPR Speaks reported on the back story in Jules v. Andre Balazs Properties, No. 25-83 (Supreme Court docket page available at https://bit.ly/4qZsL0z), ahead of the Dec. 5 cert grant, at Sasha Hill, “SCOTUS Review: Can Federal Courts Exercise Jurisdiction on Arbitration Awards After Staying a Case?” CPR Speaks (Nov. 17) (available here) (See also Russ Bleemer, “SCOTUS Adds a Second Arbitration Case to the 2025-2026 Docket,” CPR Speaks (Dec. 5) (available here).)
Now, briefing is completed. The Jules oral arguments will be held at the nation’s top Court in Washington on Monday, March 30. This post discusses highlights from the parties' briefs, and the sole amicus curiae brief filed in the case.
Ahead of Jules, the Supreme Court will hear a case seeking to limit the Federal Arbitration Act Sec. 1 exemption in Flowers Foods Inc. v. Brock, 24-935, on March 25. See CPR Speaks previews at Sasha Hill, "Flowers Foods’ SCOTUS Return, Pt. 2: Support for 'Last-Mile Drivers' in FAA's Sec. 1 Arb. Exemption," CPR Speaks (March 5) (available here), and Sasha Hill, "Flowers Foods’ SCOTUS Return: Amicus Support for Limiting the FAA Sec. 1 Arbitration Exemption," CPR Speaks (Feb. 13) (available here).
* * *
The issue presented in Jules is whether a federal court that initially exercises jurisdiction and then stays a case pending arbitration maintains jurisdiction over a post-arbitration Federal Arbitration Act Section 9 or 10 application, where jurisdiction would otherwise be lacking.
In Jules, a court first exercised jurisdiction in an employment discrimination suit filed by Petitioner Jules, a former employee at Respondent Andre Balazs Properties’ hotel, Hollywood’s famous Chateau Marmont. That New York Southern U.S. District Court, fielding both California and New York claims, stayed litigation in the case pending arbitration under FAA Sec. 3.
Later, the same New York federal district court was asked to confirm or vacate an arbitration award in the case. It backed the award, and the Second U.S. Circuit Court of Appeals confirmed. Adrian Jules v. Andre Balazs Properties, et al., Nos. 23-1253(L), 23-1283 (consol.) (Apr. 25, 2025) (summary order) (available at https://bit.ly/4bIAF7R).
A brief examination of a couple of recent Supreme Court arbitration decisions dealing with FAA jurisdiction help illustrates the path to the present day. In Badgerow v. Walters, 596 U.S. 1 (2022) (available at https://bit.ly/4cKK1lt), the Court held that federal courts may exercise jurisdiction to confirm or vacate an arbitration award only if there exists a clear, independent jurisdictional basis on the face of the dispute—in other words, there must be diversity or federal question jurisdiction, and the confirmation and vacate laws, FAA Secs. 9-10, do not have independent jurisdiction.
Next, in Smith v. Spizzirri, 601 U.S. 472 (2024), the Court held that under FAA Sec. 3, a federal district court must stay a suit when a party requests it, and the dispute is arbitrable.
Petitioner Jules asserts that under Badgerow’s holding, the federal court lacks award-enforcement jurisdiction because the post-arbitration proceeding does not, on its own, establish an independent basis for federal jurisdiction, even though the Court stayed the suit to allow the parties to file for arbitration. The petitioner argues that the arbitration award’s enforceability is separate from the FAA Sec. 3 ruling to stay the case, and the court’s jurisdiction does not carry over from the previous ruling.
Along with rejecting the so-called jurisdictional anchor theory that would continue federal court jurisdiction from the FAA Sec. 3 stay to the FAA Sec. 9 request to confirm the award, Jules asks the Court to reject the so-called ancillary jurisdiction doctrine:
That doctrine recognizes that courts have inherent authority to exercise “jurisdiction over some matters (otherwise beyond their competence) that are incidental to other matters properly before them.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 378 (1994) [available at https://bit.ly/4siSh0M]. But as this Court recently observed in a case involving Section 3, “the inherent powers of the courts may be controlled or overridden by statute or rule.” Smith v. Spizzirri, 601 U.S. 472, 477 (2024) (citation omitted). Here, any interstitial doctrine of ancillary jurisdiction has been overridden by the FAA’s plain text, which does not authorize look-through jurisdiction under Sections 9 and 10 in any case.
* * *
On the other hand, Respondent Andre Balazs Properties, and related parties, contend that there is no circuit split on jurisdiction because only the Fourth Circuit sides with petitioner Jules, in SmartSky Networks LLC v. DAG Wireless Ltd., 93 F.4th 175 (4th Circuit 2024) (available here). SmartSky adopted the stance that Badgerow requires an independent jurisdictional basis for all Section 9 and 10 applications to confirm or vacate arbitration awards.
The respondents assert that federal judicial jurisdiction procedure law provides supplemental jurisdiction “to decide FAA post-arbitration motions: ‘in any civil action of which the district courts have original jurisdiction, the district courts shall have supplemental jurisdiction over all other claims that are so related * * * they form part of the same case or controversy.’ 28 U.S.C. 1367(a).”
It argues that Petitioner Jules' reliance on Badgerow is incorrect because that was a new case asking for award confirmation, and Jules is a previously filed federal case that invoked FAA Sec. 3.
The respondents’ petition notes,
The arbitration award is the contractual resolution of the parties’ claims, and the FAA post-arbitration motions enforce that settlement in the same pending case. The court here never relinquished jurisdiction, it stayed the case (which petitioner admits “preserves” jurisdiction), and it unremarkably retained power to decide a movant’s FAA rights in the original (and still pending) federal action.
* * *
On Feb. 24, the U.S. Chamber of Commerce filed an amicus brief in support of the respondents parties requesting the Court affirm the lower court’s decision that a federal court that previously stayed a case pending arbitration retains jurisdiction to confirm or vacate the resulting award. At this writing, it’s the only amicus brief filed in the case. Below is a summary of the Chamber’s arguments.
* * *
The U.S. Chamber of Commerce is the world’s largest business federation, representing more than 300,00 direct members and more than three million businesses across every industry sector. It asserts a strong interest in Jules, as its members want predictable jurisdictional rules governing the judicial forums in which arbitration clauses and their resulting awards can be reviewed—especially in relation to the enforceability of existing contractual agreements, which typically include arbitration clauses.
The counsel of record on the brief is former SCOTUS clerk Peter B. Rutledge, senior counsel in Atlanta’s Taft Stettinius & Hollister and former dean at the University of Georgia School of Law in Athens, Ga., who is a longtime presence in U.S. Supreme Court arbitration jurisprudence.
The brief adds five points supporting the respondents’ argument to enforce the arbitration award. It begins with arguing that Jules’ FAA reading ignores its statutory history of being modeled after New York’s 1920 arbitration law—a history that demonstrates New York courts understood their jurisdiction over the agreement-stage proceedings to cover the award-enforcement proceedings.
This logic aligns with the Andres Balasz Properties’ argument in Jules that the federal court should have jurisdiction over the enforcement of their arbitration award, after exercising its jurisdiction over the case before it was stayed. The brief goes on to assert that the FAA was created to overcome enduring judicial hostility to the enforcement of arbitration and their awards.
Not long after the enactment of New York’s arbitration law, Matter of Berkovitz v. Arbib & Houlberg, Inc., 130 N.E. 288 (N.Y. 1921) (available here), reinforced the rule that an arbitration award that is valid will be enforced; and “Marine Transit [Corp. v. Dreyfus, 284 U.S. 263, 275-276 (1932)] made clear that the FAA … expressly held that a federal court with jurisdiction to stay an action pending arbitration retains the power to confirm any ensuing arbitral award” within the context of an admiralty proceeding (available here).
The brief concluded on the history point:
Thus, the FAA’s “statutory history” supports the view that if a federal court concludes that an arbitration agreement “is valid” and “stay[s] its hand” until the conclusion of the arbitration, “its doors are open for whatever measure of relief the situation may exact,” including cross-applications to confirm and to vacate the award. Berkovitz, 130 N.E. at 291-92.
Next, the brief argues that the Petitioner’s reading of the FAA would upset expectations around international arbitrations that are not governed by the New York Convention or Panama Convention—the FAA’s Chapters 2 and 3. FAA Chapter 1, the brief argues, is expected to cover those international commercial arbitrations that fall outside of both international treaties—“importance beyond the domestic sphere.”
In Cortez Byrd Chips, Inc. v. Bill Harbert Constr. Co., 529 U.S. 193 (2000) (available here), the Court found that FAA Chapter 1’s venue provision was permissive based on the consequences for international cases falling outside the New York and Panama Conventions. If the venue provisions had been found to be mandatory, however, there would have been a “venue gap” for the enforcement of international arbitration awards, making it substantially more difficult to confirm international awards in a federal forum under FAA Chapter 1.
Therefore, the Chamber of Commerce argues that the Jules’ FAA interpretation would jeopardize the enforceability of international commercial arbitration awards.
The brief’s third argument is that Jules’ FAA reading ignores an entry-of-judgment clause contained in the parties’ agreement. The clause grants a federal court the power to enforce an arbitration decision as a judgment if the parties’ arbitration agreement says the court may do so.
The FAA grants the courts power to enforce arbitration agreements by the terms set within them—including any institutional rules explicitly used in the arbitration bilateral agreements. In the Jules case, the parties used JAMS’ rules to govern their arbitration—and JAMS Rule 25 explicitly deems both parties to have consented to the enforcement of an arbitration award in any court having jurisdiction over the case:
[W]hen the District Court stayed litigation pending arbitration (Pet. 8, 12a), it was not simply requiring the parties to arbitrate but it also was requiring the parties to observe their bilateral agreement to an entry of judgment pursuant to Rule 25. Thus, when Respondents, as the award creditors, returned to court following the successful arbitration, the District Court naturally retained jurisdiction to confirm the award as part of its previous decision to hold the parties to all aspects of their arbitral commitment, including the bilateral consent to entry of judgment.
The brief further contends that federal jurisdiction over the Jules’ award enforcement effectuates one of the FAA’s main objectives: to counteract state hostility to arbitration. To find otherwise would substantially impede this goal.
Denying federal courts the authority to enforce awards in cases where they already have properly exercised jurisdiction would frustrate commercial parties’ ability to rely on federal-court protection when structuring contractual agreements. It will also expose them to the risk of anti-arbitration sentiment in state court and invite gratuitous and wasteful litigation by which parties file extraneous actions and motions to destroy federal-court jurisdiction. The added costs, complexities, and risks of denying a federal forum for the enforcement of arbitral awards when a federal court already has properly exercised jurisdiction would undermine the FAA’s benefits and harm the commercial interests it was designed to advance.
In its fifth and final argument point, the Chamber's brief contends that the petitioner’s claim that the jurisdictional-anchor theory would trigger a race to the courthouse, as parties forum-shop for their cases’ most favorable predicted outcome, is flawed for several reasons.
First, it notes that the petitioner does not provide empirical evidence for this claim, despite the fact that the jurisdictional-anchor theory has been applied for years in both pre- and post-Badgerow; if this claim is true, as the Jules asserts, there would be more evidence available to support it, the brief argues.
Second, the brief notes that the petitioner’s argument relies on former Justice Stephen G. Breyer’s dissent in Badgerow that the jurisdictional-anchor theory would create needless litigation, while ignoring the significant distinction between the cases it cites: “Badgerow involved an independent proceeding, whereas SmartSky incorrectly extended Badgerow to an embedded proceeding.” [For this point, the brief cited Philip J. Loree Jr., The Fourth Circuit Weighs the Post-Badgerow Jurisdictional Anchor—and Finds It Won’t Set, 142 Alternatives 73, 75 (May 2024) (available on Westlaw), which is published by CPR Speaks’ publisher, the CPR Institute.]
The brief continues:
If anything, Petitioner’s proposed approach offers a recipe for wasting resources. Rather than harnessing the investment of time by a federal court that has already scrutinized the case when deciding to issue a Section 3 stay, Petitioner’s approach squanders that investment by forcing both parties to start anew in a different court when filing cross-applications to vacate or to confirm the award.
Thus, the Chamber of Commerce requests that the Court affirms the lower court’s judgment and embraces the jurisdictional-anchor theory to allow a federal court “to confirm or vacate an arbitral award under Sections 9 and 10 in embedded proceedings.”
* * *
The author is the CPR Institute’s 2025-2026 academic year intern from the Howard University School of Law ADR Program, where she is a second-year student in Washington, D.C. Alternatives to the High Cost of Litigation Editor Russ Bleemer contributed to research.
[END]