Petition for Writ of Certiorari — Spirit of the East, LLC, Petitioner v. Yale Products Inc., et al.

Supreme Court briefJun 8, 2023

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No. _________

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In The

Supreme Court of the United States

---------------------------------♦--------------------------------SPIRIT OF THE EAST, LLC,

a Delaware limited liability company,

Petitioner,

YALE PRODUCTS, INC., a Florida for-profit

corporation, and ALAN LEIGH, an individual,

Respondents.

---------------------------------♦--------------------------------On Petition For A Writ Of Certiorari

To The United States Court Of Appeals

For The Eleventh Circuit

---------------------------------♦--------------------------------PETITION FOR A WRIT OF CERTIORARI

---------------------------------♦--------------------------------BARTHOLOMEW L. MCLEAY

Counsel of Record

DWYER ARCE

KUTAK ROCK LLP

1650 Farnam Street

Omaha, Nebraska 68102

(402) 346-6000

bart.mcleay@kutakrock.com

dwyer.arce@kutakrock.com

Counsel for Petitioner

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COCKLE LEGAL BRIEFS (800) 225-6964

WWW.COCKLELEGALBRIEFS.COM

QUESTION PRESENTED

The Federal Arbitration Act, 9 U.S.C. §§ 1, et al.

(“FAA”), provides for judicial review of arbitration

awards. This includes grounds for vacating awards

where an arbitrator exceeds his or her power.

In Hall Street Assocs., L.L.C. v. Mattel, Inc., 552

U.S. 576 (2008), this Court held parties to a contract

could not supplement statutory grounds for vacating

an arbitration award under the FAA, but it did not address the long-standing power of a court to refuse to

enforce an award based on public policy.

The question presented is:

Whether a court is prohibited from even

considering public policy as a ground to vacate

an arbitration award under the FAA when the

award commands action in violation of criminal statutes.

PARTIES TO THE PROCEEDINGS BELOW

Petitioner Spirit of the East, LLC, is a Delaware

limited liability company.

Respondent Yale Products, Inc. is a Florida forprofit corporation and Respondent Alan Leigh is an individual.

RULE 29.6 STATEMENT

Pursuant to this Court’s Rule 29.6, Spirit of the

East, LLC states that it has no parent corporation and

that no publicly held company owns 10% or more of its

stock.

RELATED PROCEEDINGS

Spirit of the E., LLC v. Yale Prod., Inc., No. 22-60991CIV, 2022 WL 3371133 (S.D. Fla. Aug. 16, 2022);

Spirit of the E., LLC v. Yale Prod., Inc., No. 22-13122,

2023 WL 2890013 (11th Cir. Apr. 11, 2023).

iii

TABLE OF CONTENTS

Page

QUESTION PRESENTED...................................

PARTIES TO THE PROCEEDINGS BELOW ......

RULE 29.6 STATEMENT ......................................

RELATED PROCEEDINGS ..................................

TABLE OF CONTENTS ........................................

iii

TABLE OF AUTHORITIES ...................................

PETITION FOR A WRIT OF CERTIORARI .......

OPINIONS BELOW.............................................

JURISDICTION ...................................................

STATUTORY PROVISIONS INVOLVED ...........

INTRODUCTION ................................................

STATEMENT OF THE CASE..............................

Statutory Background ...............................

Statement of Facts and Underlying Dispute ............................................................

1. The Parties and the Transaction .........

2. Proceedings Below ...............................

3. Historical Background and Statutory

Context for Dispute ............................. 11

REASONS FOR GRANTING THE WRIT............ 13

There Is an Undeniable Circuit Split ........ 13

Lower Courts Have Not Uniformly Applied This Court’s Rules on Public Policy .... 19

TABLE OF CONTENTS—Continued

Page

The Eleventh Circuit Decision Is Wrong ..... 20

CONCLUSION..................................................... 27

APPENDIX

United States Court of Appeals for the Eleventh

Circuit, Opinion, April 11, 2023 ....................... App. 1

United States District Court for the Southern

District of Florida, Order, August 16, 2022 ... App. 17

American Arbitration Association, Final Award,

May 24, 2022 .................................................. App. 30

TABLE OF AUTHORITIES

Page

CASES

Acceleration Academies, LLC v. Charleston Acceleration Academy, Inc., 858 Fed. Appx. 606

(4th Cir. 2021)..........................................................18

Agostini v. Felton, 521 U.S. 203 (1997) .......................21

Air Line Pilots Ass’n v. Trans States Airlines,

LLC, 638 F.3d 572 (8th Cir. 2011) ..........................16

Bangor Gas Co., LLC v. HQ Energy Servs. (U.S.),

Inc., 695 F.3d 181 (1st Cir. 2012) ............................18

Bank of the United States v. Owens, 27 U.S. 527

(1829) ................................................................. 19, 20

Bayer CropScience Ag v. Dow Agrosciences LLC,

851 F.3d 1302 (Fed. Cir. 2017) ................................15

Caputo v. Wells Fargo Advisors, LLC, 2020 WL

2786934, cert. denied, 143 S. Ct. 375 ................ 13, 14

Caputo v. Wells Fargo Advisors, LLC, 2022 WL

1449176 (3d Cir. 2022) .......................... 14, 18, 24, 27

Cavalier Mfg., Inc. v. Gant, 143 So. 3d 762 (Ala.

2013) .................................................................. 16, 17

Citigroup Glob. Mkts., Inc. v. Bacon, 562 F.3d 349

(5th Cir. 2009)..........................................................27

Coppell v. Hall, 74 U.S. 542 (1868) .............................19

Dunham v. Lithia Motors Support Servs., Inc.,

No. S-15068, 2014 WL 1421780 (Alaska Apr. 9,

2014) ........................................................................15

DeMartini v. Johns, 693 Fed. Appx. 534 (9th Cir.

2017) ........................................................................15

TABLE OF AUTHORITIES—Continued

Page

Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213

(1985) .......................................................................25

Eastern Associated Coal Corp. v. United Mine

Workers of Am., Dist. 17, 531 U.S. 57 (2000) .... 19, 23

Frazier v. CitiFinancial Corp., LLC, 604 F.3d

1313 (11th Cir. 2010) ............................. 10, 13, 17, 20

Hall Street Assocs., L.L.C. v. Mattel, Inc., 552

U.S. 576 (2008) .......................... 4-6, 10, 13-20, 23, 24

Kaiser Steel Corp. v. Mullins, 455 U.S. 72 (1982).......21

Kelly v. K12 Inc., 854 Fed. Appx. 963 (10th Cir.

2021) ........................................................................15

Kennett v. Chambers, 55 U.S. 38 (1852) ................. 3, 19

Kilgore v. Mullenax, 520 S.W.3d 670 (Ark. 2017) ... 16, 17

Lesende v. State, 258 So. 3d 564 (Fla. Dist. Ct.

App. 2018) ................................................................12

License Tax Cases, 72 U.S. 462 (1866) ........................19

Martinique Properties, LLC v. Certain Underwriters at Lloyd’s of London, 60 F.4th 1206

(8th Cir. 2023)..........................................................16

McKool Smith, P.C. v. Curtis Int’l, Ltd., 650 Fed.

Appx. 208 (5th Cir. 2016) .................................. 18, 27

Med. Shoppe Int’l, Inc. v. Turner Invs., Inc., 614

F.3d 485 (8th Cir. 2010) ...........................................16

Morelite Constr. Corp. v. N.Y.C. Dist. Council

Carpenters Benefit Funds, 748 F.2d 79 (2d Cir.

1984) ........................................................................26

vii

TABLE OF AUTHORITIES—Continued

Page

Morgan v. Sundance, Inc., 142 S. Ct. 1708 (2022) .... 4, 19

Muschany v. United States, 324 U.S. 49 (1945) .........21

Nat’l RR Passenger Corp. v. Fraternal Order of

Police, Lodge 189 Labor Comm., 855 F.3d 335

(D.C. Cir. 2017) ........................................................18

PolyOne Corp. v. Westlake Vinyls, Inc., 937 F.3d

692 (6th Cir. 2019) ...................................................15

Samaan v. General Dynamics Land Sys., Inc.,

835 F.3d 593 (6th Cir. 2016) ....................................15

Schwartz v. Merrill Lynch & Co. Inc., 665 F.3d

444 (2d Cir. 2011) ....................................................15

Seldin v. Est. of Silverman, 939 N.W.2d 768

(Neb. 2020), cert. denied, 141 S. Ct. 2622

(2021) ................................................................. 17, 24

Spirit of the East, LLC v. Yale Products, Inc., No.

22-60991-CIV-MORENO (S.D. Fla. Aug. 16,

2022) ........................................................................13

Spirit of the East, LLC v. Yale Products, Inc.,

2022 WL 3371133 (S.D. Fla. 2022) ...........................1

Spirit of the East, LLC v. Yale Products, Inc.,

2023 WL 2890013 (11th Cir. 2023) ........... 1, 6, 16, 20

Spirit of the East, LLC v. Yale Products, Inc., 520

S.W.3d 670 (11th Cir. Apr. 11, 2023) .......................17

Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559

U.S. 662 (2010) .................................................. 20, 21

T3 Enterprises v. Safeguard Bus. Sys., 435 P.3d

518 (Idaho 2019)......................................................13

viii

TABLE OF AUTHORITIES—Continued

Page

Titan Tire Corp. of Freeport, Inc. v. United Steel,

Paper & Forestry, Rubber, Mfg., Energy, Allied

Indus. & Serv. Workers Int’l Union, 734 F.3d

708 (7th Cir. 2013)................................... 6, 14, 22, 23

United Paperworkers Int’l Union, AFL-CIO v.

Misco, Inc., 484 U.S. 29 (1987) ..................................4

United States v. Klein, 80 U.S. 128 (1871)..................23

Visiting Nurse Ass’n of Fla., Inc. v. Jupiter Med.

Ctr., Inc., 154 So. 3d 1115 (Fla. 2014) ............... 16, 17

W.R. Grace & Co. v. Local Union 759, Int’l Union of the United Rubber, Cork, Linoleum,

and Plastic Workers of Am., 461 U.S. 757

(1983) ................................................... 3, 5, 14, 22, 23

Wachovia Sec., LLC v. Brand, 671 F.3d 472 (4th

Cir. 2012) .................................................................21

Wells Fargo Advisers, LLC v. Watts, 540 Fed.

Appx. 229 (4th Cir. 2013) ........................................15

STATUTES

9 U.S.C. §§ 1, et al. ................... 3-6, 14-16, 19, 20, 23-26

9 U.S.C. § 10 ............................................................ 1, 20

9 U.S.C. § 10(a)(4) ............................................. 5, 10, 18

28 U.S.C. § 1254(1) ........................................................1

Fla. Stat. § 328.04(1)(d) ................................................8

Fla. Stat. § 328.05(2).....................................................9

Fla. Stat. § 328.07 .........................................................8

TABLE OF AUTHORITIES—Continued

Page

Fla. Stat. § 328.07(3)(b) ..............................................12

Fla. Stat. § 328.07(5)...................................................12

Fla. Stat. § 328.07(6)...................................................12

Fla. Stat. § 328.21 .........................................................8

OTHER AUTHORITIES

Bartholomew L. McLeay, In Words of the Pandemic, Arbitration Jurisprudence Needs a Ventilator, 2022 J. Disp. Resol. 1 (2022) .......................14

Blog, An Emerging Threat: Vessel Identity Laundering, SanctionScanner, https://sanctionscanner.

com/blog/an-emerging-threat-vessel-identitylaundering-527 ........................................................12

Gary A. Watt, Josephine Petrick, & Imani Buckner, May Arbitration Awards Violate Public

Policy? Daily Journal, Jul. 29, 2021 (available

at https://rb.gy/httzi) ..................................... 5, 13, 26

John Basquill, Vessel identity laundering: an

emerging threat to maritime trade, Global

Trade Review (Oct. 9, 2021) ....................................11

Jonathon A. Marcantel, The Crumbled Difference Between Legal and Illegal Arbitration

Awards: Hall Street Associates and the Waning Public Policy Exception, 14 Fordham J.

Corp. & Fin. L. 597 (2009).......................................13

TABLE OF AUTHORITIES—Continued

Page

Matthew J. Brown, “Final” Awards Reconceptualized: A Proposal to Resolve the Hall Street

Circuit Split, 13 Pepp. Disp. Resol. L.J. 325

(2013) .......................................................................14

Richard C. Reuben, Personal Autonomy and Vacatur after Hall Street, 113 Penn. St. L. Rev.

1103 (Spring 2009) ..................................................22

Sean C. Wagner, Unchecked: How Frazier v.

CitiFinancial Eliminated Judicially Created

Grounds for Vacatur Under the Federal Arbitration Act, 64 Okla. L. Rev. 235 (Winter,

2012) ............................................................ 13, 24, 26

Stanley A. Leasure, Arbitration Law in Tension

After Hall Street: Accuracy or Finality?, 39

U. Ark. Little Rock L. Rev. 75 (2016) ................ 13, 24

Statista Research Department, Recreational vessels in the U.S. 1980-2021, Dec. 9, 2022 ............ 11, 12

PETITION FOR A WRIT OF CERTIORARI

Petitioner respectfully petitions this Court for a

writ of certiorari to review the judgment of the United

States Court of Appeals for the Eleventh Circuit in this

case.

---------------------------------♦---------------------------------

OPINIONS BELOW

The decision of the Eleventh Circuit is reported at

Spirit of the East, LLC v. Yale Products, Inc., 2023 WL

2890013 (11th Cir. 2023). App. 1. The district court decision confirming the arbitration award is reported at

Spirit of the East, LLC v. Yale Products, Inc., 2022 WL

3371133 (S.D. Fla. 2022). App. 17.

---------------------------------♦---------------------------------

JURISDICTION

On April 11, 2023, the Eleventh Circuit affirmed

the final judgment of the district court. App. 1. This

Court has jurisdiction under 28 U.S.C. § 1254(1).

---------------------------------♦---------------------------------

STATUTORY PROVISIONS INVOLVED

The relevant statutory provisions are those found

at 9 U.S.C. § 10, providing:

(a) In any of the following cases the

United States court in and for the district

wherein the award was made may make an

order vacating the award upon the application

of any party to the arbitration—

(1) where the award was procured by corruption, fraud, or undue

means;

(2) where there was evident

partiality or corruption in the arbitrators, or either of them;

(3) where the arbitrators were

guilty of misconduct in refusing to

postpone the hearing, upon sufficient

cause shown, or in refusing to hear

evidence pertinent and material to

the controversy; or of any other misbehavior by which the rights of any

party have been prejudiced; or

(4) where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual,

final, and definite award upon the

subject matter submitted was not

made.

(b) If an award is vacated and the time

within which the agreement required the

award to be made has not expired, the court

may, in its discretion, direct a rehearing by the

arbitrators.

the district wherein an award was made that

was issued pursuant to section 580 of title 5

may make an order vacating the award upon

the application of a person, other than a party

to the arbitration, who is adversely affected or

aggrieved by the award, if the use of arbitration or the award is clearly inconsistent with

the factors set forth in section 572 of title 5.

---------------------------------♦---------------------------------

INTRODUCTION

Arbitration is widely used today as a dispute resolution method. But deficiencies in arbitration enforcement have the prospect of undermining its long-term

acceptance and effectiveness. This petition presents a

stark illustration of one such deficiency.

This case involves a deep and enduring conflict in

the lower courts over whether a court may even consider vacating an arbitration award under the Federal

Arbitration Act, 9 U.S.C. §§ 1, et al. (“FAA”), based on

violation of public policy. The specific violation in the

case below arose by virtue of an arbitration award that

ordered completion of a transaction in violation of

state criminal statutes.

This Court recognized judicial authority authorizing a court to refuse enforcement of a contract based

on violation of public policy more than 150 years ago.

Kennett v. Chambers, 55 U.S. 38 (1852). Such authority

extends to “any contract.” W.R. Grace & Co. v. Local Union 759, Int’l Union of the United Rubber Cork, Linoleum and Plastic Workers of Am., 461 U.S. 757, 766 (1983).

The doctrine derives from the basic notion that “no

court will lend its aid to one who founds a cause of

action upon an . . . illegal act.” United Paperworkers

Int’l Union, AFL-CIO v. Misco, Inc., 484 U.S. 29, 42

(1987).

This Court more recently has explained an arbitration agreement is to be considered on equal footing

with other contracts and that a court should “not devise novel rules to favor arbitration” since the “federal

policy is about treating arbitration contracts like all

others.” Morgan v. Sundance, Inc., 142 S. Ct. 1708,

1709, 1713 (2022).

This Court’s unbroken views on these subjects

render it surprising there could be any disagreement

on the authority of a court to review an arbitration

award made or applied in violation of public policy. But

this Court’s decision in Hall Street Assocs., L.L.C. v.

Mattel, Inc., 552 U.S. 576 (2008), has re-invigorated an

earlier divide and widespread confusion over whether

a court may use a non-statutory ground, namely, manifest disregard of the law, to vacate an arbitration

award governed by the FAA. Id.

In the case below, the Eleventh Circuit concluded

Hall Street in effect authorizes special treatment for

arbitration contracts by foreclosing any consideration

of public policy or other non-statutory ground to enforcement of arbitration awards under the FAA. This

view admittedly also is held by several other courts,

including, lamentably, multiple state supreme courts

which believe Hall Street mandates they yield their

sovereign authority over major public policy of their

states to the FAA. Fortunately, there is an even greater

number of courts advancing the opposite view.

At last count, there is an 8-6 split among federal

and state courts, with the Eleventh Circuit joining a

minority of courts which have rejected a public-policy

exception to vacation of an arbitration award under

the FAA. Neither the Eleventh Circuit nor any court

on its side of the split has adequately explained how

its determination can be squared with this Court’s directive in W.R. Grace and other decisional law, which

have communicated the opposite message.1

This Court should grant the petition and resolve

the question of whether a public policy exception survives Hall Street as a ground for vacating an arbitration award under the FAA.

---------------------------------♦---------------------------------

STATEMENT OF THE CASE

A. Statutory Background

The FAA provides for judicial review of arbitration

awards. 9 U.S.C. §§ 1, et al. It also provides grounds for

a court to vacate an arbitration award where an arbitrator exceeds his or her power. 9 U.S.C. § 10(a)(4).

See Gary A. Watt, Josephine Petrick, & Imani Buckner,

May Arbitration Awards Violate Public Policy? Daily Journal, Jul.

29, 2021 (available at https://rb.gy/httzi) (“W.R. Grace test should

survive Hall Street until such time as the Supreme Court explicitly overturns (or otherwise holds inapplicable to the FAA) its

public-policy precedents.”)

In Hall Street Assocs., L.L.C. v. Mattel, Inc., 552

U.S. 576, (2008), this Court held parties to a contract

could not supplement statutory grounds for vacating

an arbitration award under the FAA to include “manifest disregard of the law.” Id. at 585. This Court found

the FAA listed grounds are “exclusive” to contract parties requesting relief. Id. at 586.

There are at least six courts, including the Eleventh Circuit below, which find the “sole question” for a

court to consider in reviewing an arbitration award is

“whether the arbitrator (even arguably) interpreted

the parties’ contract.”2 The Eleventh Circuit and other

courts sharing its view have concluded any prior “judicially-created bases for vacatur,” including “public policy,” are “no longer valid in light of Hall Street.” Id. On

the other side of the chasm is an even greater number

of courts, including seven federal courts of appeals and

one state supreme court, which hold the long-recognized power of a court to vacate an arbitration award

based on public policy remains viable after Hall Street

as a ground for vacating an arbitration award.3

See Spirit of the East, LLC v. Yale Products, Inc., No. 2213122, 2023 WL 2890013, at *4 (11th Cir. Apr. 11, 2023).

See, e.g., Titan Tire Corp. of Freeport, Inc. v. United Steel,

Paper & Forestry, Rubber, Mfg., Energy, Allied Indus. & Serv.

Workers Int’l Union, 734 F.3d 708, 716-17 & n.8 (7th Cir. 2013).

B. Statement of Facts and Underlying Dispute

1. The Parties and the Transaction

This case arises out of a marine transaction involving a purported sale of a vessel (“Vessel”) by Respondent, Yale Products, Inc. (“Yale”), to Petitioner,

Spirit of the East, LLC (“Spirit”), under a written

agreement dated April 17, 2021 (“Agreement”). App. 2.

The Vessel is approximately 87’ and was built in Turkey by Aegean Yachts in 2006. App. 2. Yale claimed to

have purchased the Vessel in a court-ordered sale in

which a Maltese mortgage holder held an interest.

App. 31. The closing for the transaction between Yale

and Spirit was scheduled to be “on board” the Vessel on

May 6, 2021. App. 31. Since January 2017, Yale docked

the Vessel at 738 NE 20th Avenue, Fort Lauderdale,

Florida 33304. (ECF No. 1 at 4).

In light of the Vessel’s global span and intriguing

history, Spirit unsurprisingly required Yale under the

Agreement to promise to convey “good and marketable” title to the Vessel and also to “deliver . . . all documents necessary to transfer title to the Vessel . . . to

enable” Spirit to “document or register the Vessel.”

App. 2. Yale’s attorney served as a “fiduciary-agent”

broker (“Selling Broker” or “Escrow Agent”) for the

transaction. App. 3. The Agreement provides the “Sale

shall be deemed closed” when: (a) Spirit “paid the full

purchase price . . . to the Selling Broker’s escrow account . . . and the Selling Broker is in a position to deliver the purchase price” to Yale; and (b) Spirit or the

Selling Broker “received the title documents” from Yale

“properly executed for transfer and delivery” to Spirit.

App. 2 (emphasis added). The Agreement includes an

arbitration clause mandating arbitration as the sole

and exclusive forum for resolving any dispute. App. 23.

Spirit was to “take delivery” of the Vessel “at closing.” App. 15. Spirit refused to accept transfer of the

Vessel and complete the transaction because it determined the Vessel had a “fraudulent hull identification

number of a sunken vessel,” which would render any

such transfer in violation of Florida criminal statutes.

(ECF No. 17 at 18).4 Spirit concluded the Selling Broker could not have “received the Title Documents”

and/or “Title Documents had not been delivered to

Spirit,” again in violation of Florida criminal statutes.

Id.

Spirit initiated arbitration to obtain return of the

purchase price, damages, attorney fees and costs of the

arbitration. App. 30. The arbitration was held over two

days on January 19-20, 2022. App. 30. The arbitrator

issued a final award on March 1, 2002. App. 30-35. The

arbitrator ruled that a closing of the “sale”—as defined

in the Agreement—occurred on May 6, 2021, and “closing documents were executed.” App. 32. The arbitrator

Fla. Stat. § 328.07 provides “[t]he hull identification number must be . . . permanently affixed . . . such . . . that alteration

. . . would be obvious and evident.” Fla. Stat. § 328.04(1)(d) further provides the “certificate of title . . . must contain . . . [a] hull

identification number.” See Fla. Stat. § 328.21 (“ ‘A person who . . .

sell[s] or transfer[s]’ ” a vessel without the requisite “certificate of

title . . . ‘is guilty of a misdemeanor of the second degree.’ ”).

qualified his finding, however, by adding “the vessel

was not documented or registered.” (ECF No. 1 at 74).

The arbitrator further made a finding there was an “erroneous HIN on the bill of sale,” but concluded it did

“not prevent a sale because the vessel is identified by

name and manufacturer’s official number.” App. 34.5

Finally, the arbitrator made a finding about “transfer”

of the Vessel (as opposed to “sale”), stating “[e]ven if it

is a misdemeanor under Florida law to ‘transfer’ a vessel that was not registered or documented, it would not

prevent that transfer by sale from occurring [and,]

[w]ithout such a transfer[,] there could be no misdemeanor.” App. 34. The arbitrator then entered a final

award in favor of Yale, including an award of attorney

fees and costs, and ordered the following relief: “The

Escrow Agent . . . is hereby ordered[ ] to release the

$220,000 purchase price that he is holding and to pay

that sum to . . . Yale Products, Inc.” App. 34-35.

2. Proceedings Below

On August 16, 2022, the district court entered an

order confirming the award and denying Spirit’s motion to vacate. App. 17. The district court recounted the

illegality argument advanced by Spirit to the arbitrator as follows: “ ‘In other words, the transfer of the Vessel is unlawful, but the arbitrator ordered the release

of the escrow funds to Yale for the Vessel, thereby

Sale of a vessel with an “erroneous HIN” invokes yet another Florida criminal statute. Fla. Stat. § 328.05(2) (A person

“found to ‘sell . . . [or] supply a . . . fictitious . . . bill of sale . . . of a

vessel’ . . . is guilty of a felony of the third degree.”).

effectuating the unlawful transfer.’ ” App. 22. The

district court concluded Spirit’s illegality argument

was controlled by the Eleventh Circuit in Frazier v.

CitiFinancial Corp., LLC, 604 F.3d 1313 (11th Cir.

2010), which interpreted this Court’s decision in Hall

Street. App. 20-21. The district court in its order

acknowledged the general principle that a court cannot

enforce a contract requiring performance of an illegal

action, but it determined application of that principle

was foreclosed by the Eleventh Circuit’s decision in

Frazier based on Hall Street. App. 24-25. The district

court further found Spirit’s public-policy argument—

namely, the final award is void for illegality—does not

support the conclusion that the arbitrator exceeded his

powers under 9 U.S.C. § 10(a)(4). App. 25. Despite Yale

not requesting any affirmative relief, the district court

confirmed the final award, including the arbitrator’s

command to the Escrow Agent “to pay” Yale the full

amount of the transaction held in escrow. App. 29.

On appeal, the Eleventh Circuit affirmed. App. 1.

The Eleventh Circuit held this case is controlled by its

prior precedent in Frazier, which it reaffirmed. App.

11-14. The Eleventh Circuit held: “Spirit’s arguments

largely rest on public policy grounds” and thus “fall

squarely within the ‘judicially-created bases for vacatur’ that were repudiated” in Frazier. App. 11. The

Eleventh Circuit further rejected Spirit’s closely related statutory argument, also bearing on public policy,

that the arbitrator exceeded his powers under 9 U.S.C.

§ 10(a)(4). App. 11-12.

3. Historical Background and Statutory Context for Dispute

To place this transaction and dispute in context,

certain background information about the growing

criminality associated with “vessel identity laundering”6 and “HIN cloning” should be addressed. “Vessel

identity laundering” has been described as a practice

of manipulating vessel registration, ownership, and related documentation to create a false identity for a

ship, while “HIN cloning” is a specific form of such

practice in which a vessel’s HIN is modified to make it

appear to be a different vessel.7

In 2021, there were about 12 million vessels registered for recreational purposes in the United States,

an increase from 11.84 million from the prior year;

Florida registered 987,769 of those vessels.8 In Florida,

based on review of insurance records, nearly 5,000

boats are estimated to be reported stolen annually,

some of which are stripped and destroyed and others

shipped to foreign countries or resold to other areas or

John Basquill, Vessel identity laundering: an emerging

threat to maritime trade, Global Trade Review (Oct. 9, 2021) (“The

practice, referred to as identity laundering, means blacklisted

ships appear legitimate in the eyes of trading companies, financial institutions and authorities.”); Statista Research Department, Recreational vessels in the U.S. 1980-2021, Dec. 9, 2022

(“There is growing fraud in transactions involving boats, including HIN cloning. . . . [T]he number of small boats that are stolen

each year has been steadily increasing for several decades. . . .”)

(hereinafter, “Statista”).

See id.

Id.

states.9 In order to avoid becoming a potential victim,

boat purchasers are instructed to thoroughly verify

vessel registration and ownership details and to conduct rigorous due diligence of the marine transaction.10

The Florida Legislature has attempted to address

misuse and misappropriation of vessel identification

through various statutory enactments which serve the

additional purpose of curtailing trafficking of drugs

and other contraband.11

Florida courts have imposed criminal punishment

for violations associated with missing or altered HINs

of a vessel. See Lesende v. State, 258 So. 3d 564 (Fla.

Dist. Ct. App. 2018) (“[Defendant] challenges his convictions and sentences [among other things] for . . .

possession of a vessel with a missing or altered hull

identification number. . . . We affirm [Defendant]’s convictions and sentences. . . .”).

---------------------------------♦---------------------------------

Statista (“T]he new owner has to forfeit the boat . . . [and

possibly] fend off criminal charges”).

See Blog, An Emerging Threat: Vessel Identity Laundering, SanctionScanner, https://sanctionscanner.com/blog/an-emergingthreat-vessel-identity-laundering-527.

See Fla. Stat. § 328.07(6) (“[N]o person . . . shall assign the

same hull identification number to more than one vessel”); Fla.

Stat. § 328.07(5) (“The failure to have [HIN] clearly displayed . . .

shall be probable cause for an . . . authorized law enforcement

officer to make further inspection of the vessel”); Fla. Stat.

§ 328.07(3)(b) (mere possession of vessel with “altered” HIN number allows for vessel to “be seized as contraband property by a law

enforcement agency . . . and subject to forfeiture. . . .”).

REASONS FOR GRANTING THE WRIT

This petition presents a single question both confounding and increasingly exasperating for more than

a dozen lower federal courts of appeals and state supreme courts on whether the public-policy exception to

the enforceability of arbitration awards was abrogated

by this Court in Hall Street.

A. There Is an Undeniable Circuit Split

There is a profound and incisive circuit split, recognized for years by multiple federal and state courts12

and commentators,13 over whether a court may vacate

Frazier v. CitiFinancial Corp., LLC, 604 F.3d 1313, 1324

(11th Cir. 2010) (noting “different approach” of circuit courts);

Spirit of the East, LLC v. Yale Products, Inc., No. 22-60991-CIVMORENO (S.D. Fla. Aug. 16, 2022) (“circuit split”); Caputo v.

Wells Fargo Advisors, LLC, 2020 WL 2786934, at *3 (D.N.J. May

29, 2020) (“Circuit Courts of Appeals have . . . disagreed on . . .

public policy exception”); T3 Enterprises v. Safeguard Bus. Sys.,

435 P.3d 518, 533 (Idaho 2019) (“circuit split” following Hall

Street).

Gary A. Watt, Josephine Petrick, & Imani Buckner, May

Arbitration Awards Violate Public Policy? Daily Journal (Jul. 29,

2021) (available at https://rb.gy/httzi) (“[T]he circuits have split

on the post-Hall Street public-policy issue”); Jonathon A. Marcantel, The Crumbled Difference Between Legal and Illegal Arbitration Awards: Hall Street Associates and the Waning Public

Policy Exception, 14 Fordham J. Corp. & Fin. L. 597, 599 (2009)

(“[Hall Street raises] questions [about] continued existence” of

public policy exception); Sean C. Wagner, Unchecked: How Frazier v. CitiFinancial Eliminated Judicially Created Grounds for

Vacatur Under the Federal Arbitration Act, 64 Okla. L. Rev. 235,

236 (Winter 2012) (“[After] Hall Street, . . . circuit courts are

split as to . . . non-statutory grounds for vacatur”); Stanley A.

Leasure, Arbitration Law in Tension After Hall Street: Accuracy

an arbitration award under the FAA based on public

policy after Hall Street. At present, there is an 8-6 split,

with federal courts of appeals and state supreme

courts on both sides of the divide. Equally concerning

is that most of the remaining five federal courts of appeals have squarely faced, but deliberately sidestepped, this post-Hall Street question—some on

multiple occasions—while restively awaiting this

Court’s resolution.14

The Second, Fourth, Sixth, Seventh, Ninth, Tenth

and Federal Circuits as well as the Alaska Supreme

Court have continued to apply a public-policy exception for vacating an arbitration award governed by the

FAA in post-Hall Street decisions. See Titan Tire Corp.

of Freeport, Inc. v. United Steel, Paper & Forestry, Rubber, Mfg., Energy, Allied Indus. & Serv. Workers Int’l

Union, 734 F.3d 708, 716-17 & n.8 (7th Cir. 2013)15;

or Finality?, 39 U. Ark. Little Rock L. Rev. 75, 84 (2016) (“[Hall

Street] resolve[s] one circuit split and . . . created another one”);

Matthew J. Brown, “Final” Awards Reconceptualized: A Proposal

to Resolve the Hall Street Circuit Split, 13 Pepp. Disp. Resol. L.J.

325, 340 (2013) (“[I]n resolving [an earlier] split, . . . Hall Street

. . . ha[s] led to a new circuit split. . . .”); Bartholomew L. McLeay,

In Words of the Pandemic, Arbitration Jurisprudence Needs a Ventilator, 2022 J. Disp. Resol. 1, 13 (2022) (“split . . . on public policy

grounds following . . . Hall Street”).

See, e.g., Caputo v. Wells Fargo Advisors, LLC, 2022 WL

1449176, *2 n.11 (3d Cir. 2022) (“not yet weighed in”).

Titan Tire Corp. of Freeport, Inc. v. United Steel, Paper &

Forestry, Rubber, Mfg., Energy, Allied Indus. & Serv. Workers

Int’l Union, 734 F.3d 708, 712 (7th Cir. 2013) (distinguishing Hall

Street, holding “arbitrator’s decision violates explicit public policy

and thus ‘we are obliged to refrain from enforcing it’ ” (citing W.R.

Grace)).

Schwartz v. Merrill Lynch & Co., Inc., 665 F.3d 444,

451-42 (2d Cir. 2011)16; DeMartini v. Johns, 693 Fed.

Appx. 534, 537 (9th Cir. 2017)17; Wells Fargo Advisers,

LLC v. Watts, 540 Fed. Appx. 229, 231 (4th Cir. 2013);

PolyOne Corp. v. Westlake Vinyls, Inc., 937 F.3d 692 (6th

Cir. 2019)18; Kelly v. K12 Inc., 854 Fed. Appx. 963 (10th

Cir. 2021)19; Bayer CropScience Ag v. Dow Agrosciences

LLC, 851 F.3d 1302 (Fed. Cir. 2017)20; Dunham v. Lithia

Motors Support Servs., Inc., No. S-15068, 2014 WL

1421780, at *6 (Alaska Apr. 9, 2014).21

Schwartz v. Merrill Lynch & Co., Inc., 665 F.3d 444, 45142 (2d Cir. 2011) (noting “manifest disregard doctrine” was cast

“into some doubt” by Hall Street, but recognizing a court can

“refuse enforcement of an arbitrator’s award on public policy

grounds”).

DeMartini v. Johns, 693 Fed. Appx. 534, 537, 539 (9th Cir.

2017) (observing “FAA provide[s] the ‘exclusive grounds’ for vacating or modifying” an award under Hall Street, but also “a court

may vacate an arbitration award contrary to public policy”).

PolyOne Corp. v. Westlake Vinyls, Inc., 937 F.3d 692, 701

(6th Cir. 2019) (recognizing limitations in Hall Street, but noting

“a court simply cannot ignore the illegality of a contract”); compare Samaan v. General Dynamics Land Sys., Inc., 835 F.3d 593,

600 (6th Cir. 2016) (stating whether “ ‘manifest disregard of the

law’ may still [a]pply . . . after Hall Street is an open question”).

Kelly v. K12 Inc., 854 Fed. Appx. 963 (10th Cir. 2021) (“A

court may grant a motion to vacate an arbitration award [for] . . .

violation of public policy . . . [under the] . . . FAA. . . .”).

Bayer CropScience Ag v. Dow Agrosciences LLC, 851 F.3d

1302, 992-93 (Fed. Cir. 2017) (citing [Hall Street], stating the

“[FAA] . . . strictly limits the grounds for disturbing an arbitral

award, but . . . [a] challenger [can] meet . . . high . . . standards to

support a refusal to confirm an award as contrary to public policy”).

Dunham v. Lithia Motors Support Servs., Inc., No. S-15068,

2014 WL 1421780, at *3, 6 (Alaska Apr. 9, 2014) (“[T]his Court

The Eighth Circuit22 and Eleventh Circuit23 and

the highest courts of Alabama,24 Arkansas,25 Florida26

applies the FAA standard for vacating an arbitrator’s award. . . .

[I]f the award violates public policy, then the court cannot enforce

it”).

Martinique Properties, LLC v. Certain Underwriters at

Lloyd’s of London, 60 F.4th 1206, 1208 (8th Cir. 2023) (reaffirming/clarifying “in the absence of one of the[ ] [four] grounds, the

award must be confirmed” (emphasis added)) (citing Med. Shoppe

Int’l, Inc. v. Turner Invs., Inc., 614 F.3d 485, 488 (8th Cir. 2010)

(“We . . . hold . . . an arbitral award may be vacated only for the

reasons enumerated in the FAA”); Air Line Pilots Ass’n v. Trans

States Airlines, LLC, 638 F.3d 572, 578-79 (8th Cir. 2011) (recognizing public policy exception under the Railway Labor Act, but

rejecting that same applies to “defunct vacatur standard under

the FAA,” concluding “Hall Street . . . eliminated judicially created vacatur standards under the FAA, including manifest disregard for the law”) (emphasis added).

Spirit of the East, LLC v. Yale Products, Inc., No. 22-13122,

2023 WL 2890013 (11th Cir. Apr. 11, 2023) (“Spirit’s arguments

that we should vacate the arbitrator’s award based on . . . public

policy . . . fail because they are not based on a statutory ground

for vacatur under . . . the FAA. See also [Hall St.]”).

Cavalier Mfg., Inc. v. Gant, 143 So. 3d 762, 769 n.5 (Ala.

2013) (“Cavalier argues, [sic] the award is . . . contrary to public

policy. . . . Th[is] argument[ ] clearly ha[s] no relation to § 10, and

we accordingly grant [it] no consideration”).

Kilgore v. Mullenax, 520 S.W.3d 670, 675 (Ark. 2017) (“Kilgore . . . contends the court . . . should vacate the arbitration

award because it violates an Arkansas public-policy . . . Kilgore

ignores that the FAA provides . . . four ‘exclusive grounds’ for vacatur. The circuit court did not err in refusing to read into the

FAA an additional ground that is not there. . . .”).

Visiting Nurse Ass’n of Fla., Inc. v. Jupiter Med. Ctr., Inc.,

154 So. 3d 1115, 1128, 1132 (Fla. 2014) (“JMC argues that a court

cannot enforce an arbitration panel’s interpretation of a contract

if it results in the violation of . . . public policy. . . . [But] courts

and Nebraska27 have held Hall Street forecloses a public-policy challenge, finding “the judicially created

grounds for vacatur . . . are no longer valid.” Frazier

v. CitiFinancial Corp., LLC, 604 F.3d 1313, 1314, 132324 (11th Cir. 2010); see also Spirit of the East, LLC v.

Yale Products, Inc., 520 S.W.3d 670, 675 (11th Cir. Apr.

11, 2023); Cavalier Mfg., Inc. v. Gant, 143 So. 3d 762,

768-69 & n.5 (Ala. 2013); Kilgore v. Mullenax, 520

S.W.3d 670 (Ark. 2017); Visiting Nurse Ass’n of Fla.,

Inc. v. Jupiter Med. Ctr., Inc., 154 So. 3d 1115, 1128,

1132 (Fla. 2014); Seldin v. Est. of Silverman, 939

N.W.2d 768, 787 (Neb. 2020), cert. denied, 141 S. Ct.

2622 (2021).

cannot review the claim that an arbitrator’s construction of a contract renders it illegal[.]”).

Seldin v. Est. of Silverman, 939 N.W.2d 768, 787 (Neb.

2020), cert. denied, 141 S. Ct. 2622 (2021) (“Because . . . [Hall

Street] abrogated public policy as grounds . . . , we . . . hold . . . a

court is not authorized to vacate an arbitration award based on

public policy grounds. . . .”).

The remaining federal courts of appeals, First,28

Third,29 Fourth,30 Fifth,31 and D.C. Circuits32 have remained on the sidelines awaiting a definitive ruling by

this Court. With exception of the Fifth Circuit,33 these

lower federal courts of appeals appear poised to accept

a rule recognizing a public policy exception to vacatur

after Hall Street.

Bangor Gas Co., LLC v. HQ Energy Servs. (U.S.), Inc., 695

F.3d 181, 188 (1st Cir. 2012) (“manifest-disregard . . . thrown into

doubt by [Hall Street] [but] assume (arguendo but with some confidence) that an arbitration award would be vulnerable to the extent that it directed . . . violat[ion] [of FERC] mandate”).

Caputo v. Wells Fargo Advisors, LLC, 2022 WL 1449176,

*3 n.11 (3d Cir. 2022) (“[A]rbitration award may be vacated when

. . . it violates . . . public policy . . . That said, we have not yet

weighed in on whether th[is] . . . survive[s] . . . [Hall Street]”).

Acceleration Academies, LLC v. Charleston Acceleration

Academy, Inc., 858 Fed. Appx. 606, 607 n.* (4th Cir. 2021) (“[O]ur

power to vacate . . . may be an open question after [Hall Street]”).

McKool Smith, P.C. v. Curtis Int’l, Ltd., 650 Fed. Appx.

208, 212 (5th Cir. 2016) (“[We] [a]ssum[e]—without deciding—

. . . a violation of a state’s public policy fall[s] within 9 U.S.C.

§ 10(a)(4) . . . Curtis argues . . . public policy as . . . within . . . 9

U.S.C. § 10(a)(4). . . . [W]e need not decide this issue today”).

The D.C. Circuit, with Justice Kavanaugh in the majority,

recognized a public policy exception to enforcement of an arbitration award under general authority. Nat’l RR Passenger Corp. v.

Fraternal Order of Police, Lodge 189 Labor Comm., 855 F.3d 335,

340 (D.C. Cir. 2017) (“A federal court, reviewing an arbitration

award, ‘may refuse to enforce contracts that violate law or public

policy[.]’ ”).

See id. at n.39 (citing McKool Smith).

B. Lower Courts Have Not Uniformly Applied

This Court’s Rules on Public Policy

An arbitration award has been found to be indistinguishable from the arbitration agreement itself.

Eastern Associated Coal Corp. v. United Mine Workers

of Am., Dist. 17, 531 U.S. 57, 62 (2000). And the “FAA’s

‘policy favoring arbitration’ does not authorize federal

courts to invent special, arbitration-preferring procedural rules.” Morgan v. Sundance, Inc., 142 S. Ct. 1708,

1713 (2022).

This Court determined nearly two centuries ago

that the judiciary is authorized under “general principles” to refuse to enforce contracts made or applied in

violation of public policy. See Bank of the United States

v. Owens, 27 U.S. 527, 538-39 (1829). It is not relevant

why, how or because of whom the agreement is rendered unlawful. Coppell v. Hall, 74 U.S. 542, 559 (1868)

(“Whenever the illegality appears, whether the evidence comes from one side or the other, the disclosure

is fatal to the case. . . . Wherever the contamination

reaches, it destroys. . . . [T]he law will not lend its support to a claim founded upon its violation”); Kennett v.

Chambers, 55 U.S. 38 (1852). Statutes enacted by the

legislature “express the public policy in regard to the

subjects of them.” License Tax Cases, 72 U.S. 462, 469

(1866).

Hall Street did not change this Court’s long line of

judicial authority authorizing a court to refuse enforcement of contracts based on public policy grounds. In

Hall Street, the parties executed an agreement to

arbitrate in which they agreed the district court could

vacate any award if the arbitrator’s factual findings

lacked evidentiary support or if the arbitrator’s legal

conclusions were erroneous. See 552 U.S. at 579. This

Court addressed application of “manifest disregard of

the law” (not public policy), stating the precise issue

before the Court was “whether statutory grounds for

prompt vacatur and modification may be supplemented by contract.” Id. at 578 (emphasis added). This

Court answered the question in the negative. Id.

C. The Eleventh Circuit Decision Is Wrong

The Eleventh Circuit has advanced a view, respectfully, that is antagonistic to almost 200 years of

this Court’s precedents. Bank of the United States v.

Owens, 27 U.S. 527, 538-39 (1829). Moreover, despite

this Court announcing in Stolt-Nielsen it was reserving a question arising from Hall Street,34 the Eleventh

Circuit has forged ahead to decide it under its own

precedent, declaring all “judicially-created bases for

vacatur are no longer valid in light of Hall Street.” See

Spirit of the East, LLC v. Yale Products, Inc., No. 2213122, 2023 WL 2890013, at *4 (11th Cir. Apr. 11, 2023)

(“Spirit’s arguments . . . fly in the face of Frazier and

fail because they are not based on a statutory ground

for vacatur under § 10 of the FAA”). The Eleventh Circuit in the case below, and in Frazier, and those courts

Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662,

672 n.3 (2010) (“We do not decide whether ‘manifest disregard’

survives . . . [Hall Street] . . . as a judicial gloss on . . . 9 U.S.C.

§ 10[.]”).

adopting this view are incomprehensibly claiming a

right to overrule this Court’s precedent.35 Those courts

on the other side of the split, and even the Fifth Circuit, which is aligned with the Eleventh Circuit in

theory, have recognized they do not have the right to

ignore or avoid this Court’s precedent.36

Contrary to the Eleventh Circuit’s implied suggestion, a court’s refusal to enforce an illegal promise

based on public policy does not create an “additional

remedy” extending beyond the dictates of Congress.

See Kaiser Steel Corp. v. Mullins, 455 U.S. 72, 81 n.7

(1982) (“Refusing to enforce a promise that is illegal

. . . is not providing an additional remedy contrary to

the will of Congress[.]”).

This Court has made plain for three-quarters of a

century that any public policy under consideration

must be a “dominant public policy.” Muschany v.

United States, 324 U.S. 49, 66 (1945). This Court has

since added such public policy also must be “well defined” and ascertainable “by reference to the laws and

legal precedents and not from general considerations

See Agostini v. Felton, 521 U.S. 203, 237 (1997) (“We do not

acknowledge, and we do not hold, that other courts should conclude our more recent cases have, by implication, overruled an

earlier precedent. . . . [T]he Court of Appeals should follow the

case which directly controls, leaving to this Court the prerogative

of overruling its own decisions[.]”) (citation omitted).

See Wachovia Sec., LLC v. Brand, 671 F.3d 472, 481 n.7

and 483 (4th Cir. 2012) (“We read [Stolt-Nielson] to mean that

manifest disregard continues to exist . . . [and] we decline to adopt

the position of the Fifth and Eleventh Circuits. . . .”). The Fifth

Circuit arguably later altered its view. See id. at note 39.

of supposed public interests.” W.R. Grace & Co. v. Local

Union 759, Int’l Union of the United Rubber, Cork, Linoleum, and Plastic Workers of Am., 461 U.S. 757, 766

(1983) (citation omitted). Through force of its own ruling, this Court can be confident any decision here will

not open the floodgates for a whole new slate of arbitration challenges. See Richard C. Reuben, Personal

Autonomy and Vacatur after Hall Street, 113 Penn. St.

L. Rev. 1103, 1114 (Spring 2009) (“[C]laims that an arbitral award violates public policy are overwhelmingly

rejected[.]”).

The antithesis of the reasoning of the Eleventh

Circuit in the case below is demonstrated by the Seventh Circuit in Titan Tire, which, by contrast, shows

meticulous deference to this Court’s precedent. In Titan Tire, an employer of a tire manufacturing facility

(Titan) discontinued making certain work payments to

union officials after concluding they were not legal under applicable law. 734 F.3d at 710. An arbitrator found

the Titan “payments were lawful” and ordered Titan to

“resume paying.” Id. at 711. Titan sought to vacate

the arbitrator’s award and the union responded by

seeking to enforce the award, which the district court

confirmed. Id. On appeal, the Seventh Circuit first observed a distinction between “manifest disregard of the

law,” which it noted “does not provide a basis to overturn an arbitrator’s decision,” and an arbitrator’s directive to “the parties to violate the law,” which it found

“must be overturned by a court of law.” Id. at 716-17.

The Seventh Circuit explained a “violation of a

statute . . . is the clearest example of a violation of

public policy and ‘no arbitrator is entitled to direct a

violation of positive law.’ ” Id. The Seventh Circuit also

found Hall Street “did not overrule Eastern Associated

Coal or W.R. Grace, both of which it found recognized

a public policy exception to the general prohibition on

overturning arbitrator awards.” Id. at 717 n.8. Quoting

this Court in W.R. Grace, the Seventh Circuit reversed

the district court holding: “Because such payments are

illegal, the arbitrator’s decision violates explicit public

policy and thus ‘we are obliged to refrain from enforcing it.’ ” Id. at 712.

As the Seventh Circuit decision in Titan Tire reveals and, respectfully, the Eleventh Circuit overlooks,

any rule that creates a paradigm in which an arbitrator, via the award confirmation process, is empowered

to overrule judicial authority is unsustainable. A court

should not be required to enforce an action it has determined violates state or federal criminal laws. This

Court has never suggested an arbitrator holds such

sweeping power over a judge and the FAA does not

cede such authority.

Nor has this Court assumed judicial authority

granted by the U.S. Constitution can be restrained by

Congress in such a manner.37 To be fair, there also is no

United States v. Klein, 80 U.S. 128, 147 (1871) (“[T]he court

is forbidden to give the effect to evidence which, in its own judgment, . . . is . . . precisely contrary . . . Congress has inadvertently

passed the limit which separates the legislative from the judicial

power. It is of vital importance that these powers be kept distinct.”).

suggestion Congress meant by the FAA to divest this

Court of such judicial authority.38

Hall Street may have intended to resolve a question vexing arbitration jurisprudence, but it has left

profound uncertainty in its wake. As one commentator

has noted: “[Hall Street] resolve[s] one circuit split and,

at the same time, created another one with the potential for even more disruption to the law of arbitration

than already existed.”39 This Court already has passed

on an opportunity to resolve this irksome question and

hopefully it will be able to avoid missing the chance

again.40

This case presents a significant opportunity to recognize and promote federalism. It is, respectfully, awkward and discomfiting for the highest courts in states

across the country to be forced to reject vital public policies of their own states in order to shrink in tribute to

a federal statute this Court repeatedly has declared

Sean C. Wagner, Unchecked: How Frazier v. CitiFinancial

Eliminated Judicially Created Grounds for Vacatur Under the

Federal Arbitration Act, 64 Okla. L. Rev. 235, 259 (Winter 2012)

(“[T]here have been no attempts by Congress to . . . declare the

statutory grounds listed as the exclusive grounds for vacatur. In

fact, Congress has amended the FAA five times since enacting the

FAA. . . .”).

Stanley A. Leasure, Arbitration Law in Tension After Hall

Street: Accuracy or Finality?, 39 U. Ark. Little Rock L. Rev. 75, 5

(2016).

See, e.g., Caputo v. Wells Fargo Advisors, LLC, 2022 WL

1449176, *3 n.11 (3d Cir. 2022), cert. denied, 143 S. Ct. 375;

Seldin v. Est. of Silverman, 939 N.W.2d 768, 787 (Neb. 2020), cert.

denied, 141 S. Ct. 2622 (2021).

was enacted only to support judicial enforcement of

private arbitration agreements.41 While important, the

FAA should not be used as a statutory device to create

or foster national norms or subjugate the sovereignty

of independent states without a clear preemptive right

from Congress.

This case provides an ideal vehicle for this Court

to reach the important question presented. From a factual standpoint, this case is a microcosm of an alarming and growing number of illegal transactions in the

marine industry. From a legal standpoint, the question

to be addressed involves a highly divisive and weighty

issue, which has flummoxed lower courts and strikes

at the heart of fundamental judicial authority to address public policy issues. This matter also is cast in a

setting of arbitration, which has become the most prevalent dispute resolution method of civil law.

Fortunately, despite the significance of the factual

and legal issues to be evaluated and decided, this is a

manageable and “clean” case for this Court to review.

This matter involves only a single transaction, the dispute of which was heard in a two-day arbitration and

the subject of a wieldy three-page arbitration award.

The dockets in both the district court and court of appeals are threadlike by comparison to most cases before this Court and there is not even an open question

on public policy since this case involves state statutory

Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 219 (1985)

(“The legislative history of the Act establishes that the purpose

behind its passage was to ensure judicial enforcement of privately

made agreements to arbitrate[.]”).

crimes the arbitrator himself identified and even assumed were committed (“Even if it is a misdemeanor

under Florida law. . . .”). App. 24 (emphasis added).

There also is virtually no possibility a ruling in

this case will unleash a torrent of new challenges to

arbitration awards. Even in jurisdictions where courts

can consider public policy as a ground for vacating an

arbitration award, they are almost never successful.42

But a ruling by this Court will potentially ensure arbitration remains legitimate as a dispute resolution

method into the future and not suffer what otherwise

could be a slow, ignominious decline due to a perceived

lack of legitimacy. Even worse, the judicial system will

suffer by courts’ mistakenly placing their respected imprimatur on arbitration awards the public knows were

rendered in obvious violation of state or federal statutes.43

Finally, there is no need for this case to percolate

any longer. There are multiple federal courts of appeals

See Gary A. Watt, Josephine Petrick, & Imani Buckner,

May Arbitration Awards Violate Public Policy? Daily Journal Jul.

29, 2021 (available at https://rb.gy/httzi) (“FAA public-policy challenges appear to be few, and are rarely successful[.]”).

See Morelite Constr. Corp. v. N.Y.C. Dist. Council Carpenters Benefit Funds, 748 F.2d 79, 84 (2d Cir. 1984) (“Were we to

[improperly] lend our imprimatur to an award . . . [the] judiciary

would be sadly diminished”); Sean C. Wagner, Unchecked: How

Frazier v. CitiFinancial Eliminated Judicially Created Grounds

For Vacatur Under The Federal Arbitration Act, 64 Okla. L. Rev.

235, 258 (Winter 2012) (“If arbitration awards contrary to public

policy are confirmed, the court’s role in promoting good public policy will be subverted[.]”).

parked restlessly in an appellate harbor awaiting a

two-horn blast signal from this Court, that announces,

at long last, they are able to come ashore and permanently moor on a familiar judicial pier, which, for the

past 200 years, has directed them to protect the dominant public policies of the people they serve.44 Spirit

hopes this Court concludes it is now time to hoist the

flag on this important question.

---------------------------------♦---------------------------------

CONCLUSION

The petition for a writ of certiorari should be

granted.

Respectfully submitted,

BARTHOLOMEW L. MCLEAY

Counsel of Record

DWYER ARCE

KUTAK ROCK LLP

1650 Farnam Street

Omaha, Nebraska 68102

(402) 346-6000

bart.mcleay@kutakrock.com

dwyer.arce@kutakrock.com

Counsel for Petitioner

The Third Circuit, while inclined to recognize a public policy exception, has multiple times delayed ruling on the question.

See Caputo v. Wells Fargo Advisors, LLC, No. 20-3059, 2022 WL

1449176, *2, n.11 (3d Cir. May 9, 2022) (“not yet weighed in”). The

same is true of the Fifth Circuit, but from an opposing predisposition. See McKool Smith, P.C. v. Curtis Int’l, Ltd., 650 Fed. Appx.

208 (5th Cir. 2016); Citigroup Glob. Mkts., Inc. v. Bacon, 562 F.3d

349, 355 (5th Cir. 2009).

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.