U.S. Supreme Court Review; Fall Term Cert Possibilities

In Spring 2026, the U.S. Supreme Court issued two unanimous arbitration decisions addressing different parts of the Federal Arbitration Act. There’s another under consideration for the term that begins in October, and more making their way up the appellate ladder that could soon be the subjects of certiorari petitions. 

In Jules v. Andre Balazs Properties, 146 S. Ct. 1209 (2026) (also available at https://bit.ly/4eku71s), the Court addressed whether federal courts retain jurisdiction to confirm or vacate arbitral awards after staying an underlying case for arbitration under FAA Sec. 3. In Flowers Foods, Inc. v. Brock, 146 S. Ct. 1358 (2026) (also available at https://bit.ly/4xFsPVC), the Court clarified whether last-mile delivery drivers who transport goods locally after those goods have moved in interstate commerce can fall within FAA Sec. 1’s transportation-worker exemption.

The decisions addressed different corners of the FAA, and both are already shaping how lower courts approach arbitration disputes.

Jules on Jurisdiction

The Jules opinion settled one jurisdiction question, but may have left open the application of its rule to other FAA sections not at issue in the case..

In Jules, decided May 14, the Supreme Court considered whether a federal court that stays an action for arbitration under FAA Sec. 3 retains jurisdiction when the parties return after arbitration to confirm or vacate the award under FAA Sections 9 and 10.

Adrian Jules filed suit against his former employer in federal court on federal and state discrimination claims, and the case was stayed for arbitration. After the arbitrator ruled against him, the respondents moved to confirm the award and Jules cross-moved to vacate it. Jules argued that, under Badgerow v. Walters, 596 U. S. 1 (2022) (available at https://bit.ly/4fkxzKx), those motions required an independent basis for federal jurisdiction.

The Supreme Court unanimously disagreed. Writing for the Court, Justice Sonia Sotomayor explained that Badgerow involved a different posture, which was a freestanding federal action filed only after arbitration had ended. In Jules, by contrast, the federal claims that originally established jurisdiction remained pending during the FAA Sec. 3 stay, so the district court retained that jurisdiction when the parties returned to confirm or vacate the award.

CPR Speaks previously covered Jules in detail when the decision was released, available here.

The first appellate application of Jules came just eight days later, when the Seventh U.S. Circuit Court of Appeals applied the decision in Hinkes v. Sunera Technologies Inc., No. 25-1268 (May 22). Hinkes brought federal employment-discrimination claims, and the district court stayed the case for arbitration. After the arbitrator ruled for the employer, the district court confirmed the award. On appeal, the Seventh Circuit confronted the same jurisdictional question presented in Jules and deferred its decision while the Supreme Court considered the case.

After the opinion was released, Circuit Judge Frank Easterbrook noted that Jules confirmed the Seventh Circuit’s approach and held that because Hinkes’s original suit arose under federal law, the district court retained subject-matter jurisdiction to confirm or set aside the award.

While Hinkes shows a fairly straightforward application of Jules on the back end of arbitration, a petition for certiorari currently pending before the Supreme Court asks whether Jules’s preexisting-jurisdiction reasoning extends to the front end.

In Burford German Funding LLC v. financialright claims GmbH, No. 25-1269, financialright, which is a German debt collector that helps manage mass claims, filed a discovery application under 28 U.S.C. Section 1782 in federal court, which allows a federal court to order discovery for an overseas matter. Relying on an arbitration clause, Burford, a third-party litigation funder, then moved within that proceeding to stay the case under FAA Sec. 3 and compel arbitration under FAA Sec. 4.

The federal district court held that it lacked jurisdiction over the arbitration motion, and a divided Third Circuit affirmed, concluding that a Section 1782 proceeding is not a “civil action” for purposes of FAA Sec. 4.

Burford filed a petition for a writ of certiorari on May 4, before Jules was decided. After Jules, however, the petitioners returned with a supplemental brief arguing that the decision confirmed the Third Circuit had misread Badgerow. Burford asked the Court to grant, vacate, and remand for reconsideration in light of Jules.

Although financialright initially waived a response, the Supreme Court requested one on July 15, and the response deadline has been extended to Sept. 14. The case is scheduled for consideration by the Court at its Sept. 28 conference, before the Court’s new term begins a week later, on Oct. 5. 

For a deeper look at the Court’s jurisdictional analysis in Jules, see Philip J. Loree Jr., “‘Look At,’ Not ‘Look Through’: SCOTUS Settles, for Now, Federal Arbitration Act Jurisdiction Where Cases Are Stayed,” 44 Alternatives 136 (July/August 2026) (available on Westlaw and by email request to Alternatives@cpradr.org).

Flowers Foods on

FAA Section 1

In Flowers Foods, decided May 28, the Supreme Court rejected a simple geographic rule for FAA Sec. 1. Thomasville, Ga.-based baking company and distributor Flowers Foods had argued that a transportation worker could qualify for the exemption only by crossing state lines or interacting with a vehicle that does. 

The Supreme Court unanimously rejected that approach. Writing for the Court, Justice Neil Gorsuch held that a worker who transports goods on an intrastate leg of an interstate journey can still fall within FAA Sec. 1.

The ruling eliminated a geographic bright line, but left FAA Sec. 1’s outer boundaries for lower courts to work out. The Supreme Court reaffirmed that a worker must play a “direct,” “necessary,” and “active” role in interstate transportation, while declining to resolve other potential limits on the exemption.

For a fuller discussion of Flowers Foods and the questions it left open, see CPR Speaks’ coverage of the decision, available here.

Since Flowers Foods, in In re Justin Smith, No. 14-25-00916-CV (July 28), a Texas state appellate court considered a mandamus challenge to an order compelling a Sysco delivery driver to arbitration. Sysco had argued that Plaintiff Smith fell outside FAA Sec. 1 because he never made deliveries across state lines—the same argument the Supreme Court rejected in Flowers Foods while Smith’s petition was pending. Because Smith delivered products originating outside Texas, the court held that he qualified for the exemption and directed the trial court to vacate its arbitration order in light of Flowers Foods.

But Miller v. Weiser Security Services, Inc., No. 1D2025-3181 (July 8), shows that removing the geographic requirement does not eliminate FAA Sec. 1’s other limits. Plaintiff Phillip Miller worked as a security officer at a port, but a Florida appellate court held that proximity to interstate commerce was not enough. His evidence did not show the “direct,” “necessary,” and “active” role in moving goods that the exemption requires, so the court affirmed the order compelling arbitration.

What to Watch

Both of the Supreme Court’s Spring 2026 FAA decisions answered relatively narrow questions, but their practical reach is still coming into focus. The most immediate development is Burford. With financialright’s response due mid-September, the Supreme Court will soon have another opportunity to consider the reach of Jules’s jurisdictional reasoning.

On the Section 1 side, lower courts will continue to work out what Flowers Foods means in practice, with the focus shifting from whether workers cross state lines to the role their actual duties play in the interstate movement of goods.

For more analysis on both these cases, see the forthcoming September and the October issues of Alternatives to the High Cost of Litigation.

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The author, a second-year student at the Northeastern University School of Law in Boston, was a 2026 CPR Summer Intern.

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