The U.S. Court of Appeals for the Second Circuit provided further clarity on the federal courts' role in reviewing agreements under the Federal Arbitration Act, finding subject-matter jurisdiction can exist over motions to confirm arbitrations under §9 of the act following the court's previously established “look-through” test.

The suit itself resulted from a singular rejection of a rabbinical tribunal's decision providing the rights of one Hasidic Orthodox Jewish group to call itself the “Bobov” community, which included selling goods using the moniker.

The petitioners, having secured the desired outcome from arbitration before the tribunal, sought confirmation from the U.S. District Court for the Eastern District of New York. One respondent out of the 613 served filed an opposition, challenging the district court's subject-matter jurisdiction, among other arguments.

In September 2017, U.S. District Judge Carol Bagley Amon found the district court did have subject-matter jurisdiction and confirmed the award. The sole opponent of the award, Baruch Einstein, appealed.

The panel of Chief Judge Robert Katzmann and Circuit Judges Christopher Droney and Richard Sullivan noted that it had yet to expound on the ability for federal courts to have subject-matter jurisdiction in such an instance. The issue, the panel stated, was that “subject matter jurisdiction does not exist simply because a party wishes to confirm an award” under §9 of the FAA.

The panel relied on two decisions—one from the U.S. Supreme Court and the other out of the circuit itself—to settle the issue. The Supreme Court's 2009 decision in Vaden v. Discover Bank provided no enlargement of jurisdictional powers under the FAA while instructing courts to “look through” to the underlying controversy to see what, if any, federal claims arose.

Applying Vaden, the circuit later established in 2016's Doscher v. Sea Port Group Securities that the look-through approach should apply to §10 of the act. Finding that the two sections have largely identical language, the panel said the justifications it found in Doscher “apply with equal force” to §9.

“We see no reason to employ a different approach for §9 than §10, and so hold that a district court should employ the 'look through' approach described in Doscher when determining subject matter jurisdiction over petitions to confirm arbitration awards under §9,” the panel wrote in its decision.

Turning to the case at hand, the panel found the district court properly asserted subject-matter jurisdiction, as the underlying issue dealt with federal trademark law, “over which district courts unquestionably possess subject matter jurisdiction.” The panel affirmed the award confirmation.

Reached by phone, Einstein, who proceeded pro se on appeal, expressed his disappointment at the decision.

“Justice was not served. Fraud prevailed,” he said.

The Bobov party was represented on appeal by Covington & Burling partners Alan Vinegrad and David Pinsky. The attorneys declined to comment.

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