The Lawletter Vol. 51 No. 3
ALTERNATIVE DISPUTE RESOLUTION: It’s Hard to Attack an Arbitration Award
Paul Ferrer—Senior Attorney
Attacking an arbitration award is never an easy task. The Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1-16, which serves as a model for many similar state arbitration statutes, provides very limited grounds for vacating an arbitrator’s award. See 9 U.S.C. § 10(a) (grounds for vacation include that the award was procured by “corruption, fraud, or undue means,” or that the arbitrators were partial, exceeded their powers, or committed certain kinds of misconduct, including refusing to hear pertinent evidence). Other than those grounds, judicial review of an arbitration award is “severely circumscribed”: “A court sits to determine only whether the arbitrator did his job, not whether he did it well, correctly, or reasonably, but simply whether he did it.” Ctr. for Excellence in Higher Educ., Inc. v. Accreditation All. of Career Schs., 166 F.4th 452, 457 (4th Cir. 2026) (quotations omitted). A person aggrieved by an arbitrator’s award on one of the stated grounds may seek relief from the federal district court for the district where the award was made. See 9 U.S.C. § 10(b). In the cited case, the United States Court of Appeals for the Fourth Circuit joined the Fifth, Sixth, and Tenth Circuits in holding that a person may not, however, launch a collateral attack on the arbitrator’s award.
In that case, the plaintiff operated several schools that had been accredited by the defendant, an accrediting agency, as required to receive federal funding. The defendant decided to withdraw the plaintiff’s accreditation. That decision was affirmed in binding arbitration. The plaintiff then filed suit in federal district court asserting claims for violation of due process and tortious interference with contract and prospective business or economic advantage. The district court did not even reach the merits of those claims in dismissing the complaint as an impermissible collateral attack on the arbitration award.
The Fourth Circuit affirmed. The court noted that its sister circuits had already “rejected complaints that purport to bring independent claims but that instead merely attempt to vacate an arbitration award.” 166 F.4th at 460 (collecting cases). The court reasoned that such an “impermissible-collateral-attack rule” is necessary to fully effectuate the exclusive remedies granted to litigants wishing to vacate an award for the grounds stated in Section 10 of the FAA (or to modify an award for the similarly limited grounds stated in Section 11). Id. at 461.
So, how does a court know the difference between an “impermissible collateral attack” on an arbitration award and a “truly independent cause of action”? Id. The court “should look to the relationship between the alleged wrongdoing, purported harm, and arbitration award. Signs of an impermissible collateral attack include [1] alleging wrongdoing that would justify vacatur, [2] a purported harm that is the kind of harm appropriately remedied through Section 10 of the [FAA], and [3] requested relief that is in essence the relief sought in arbitration.” Id. (cleaned up).
In that case, the court easily concluded that the plaintiff’s complaint was an impermissible collateral attack on the arbitration award. First, the wrongdoing alleged by the plaintiff was that the arbitrator refused to consider pertinent evidence, which is one of the grounds for vacating an arbitration award explicitly stated in Section 10(a)(3) of the FAA. Id. Second, the purported harms the plaintiff suffered, including damages, loss of students, and loss of reputation and goodwill, all flowed from its loss of accreditation, which was the precise issue decided by the arbitrator. Id. And third, the core of the plaintiff’s requested relief was an injunction to reverse the decision to withdraw the plaintiff’s accreditation, which was “intimately connected with the kind of relief one would seek in a Section 10 motion to vacate” an arbitration award. Id. at 462.
Because the plaintiff’s complaint was so clearly nothing more than a collateral attack on the arbitration, it had to be “dismissed in toto,” without even proceeding to the merits of the due-process and other claim, which was the approach correctly taken by the district court. Id. at 462. In short, there can be no end run around the exclusive, and very limited, remedies for seeking relief from an arbitrator’s award explicitly provided in the FAA.
