Hall Street Associates, L. L. C. v. Mattel, Inc., 552 U.S. 576 (2008)

The underlying dispute in Hall Street Associates, L.L.C. v. Mattel, Inc. arose from a lease agreement between Hall Street Associates, the landlord, and Mattel, Inc., the tenant, concerning a property that had been used as a manufacturing site. The lease included an indemnification clause requiring Mattel to cover costs associated with any environmental law violations by itself or its predecessors. In 1998, tests revealed high levels of trichloroethylene (TCE) in the property’s well water, attributed to discharges from Mattel's predecessors. Following the discovery of additional pollutants by the Oregon Department of Environmental Quality (DEQ), Mattel ceased using the well and entered into a consent order with the DEQ for site cleanup. In 2001, Mattel notified Hall Street of its intent to terminate the lease, prompting Hall Street to file a lawsuit contesting this termination and seeking indemnification for cleanup costs. The procedural history of the case began with Hall Street's lawsuit in the United States District Court for the District of Oregon, where it contested Mattel's termination of the lease. After a bench trial, the court ruled in favor of Mattel regarding the termination issue. Following an unsuccessful mediation attempt for the indemnification claim, the parties agreed to submit the matter to arbitration, which the District Court approved. The arbitration agreement included a provision allowing the District Court to vacate or modify the arbitration award based on specific grounds, including legal errors. After the arbitrator ruled in favor of Mattel, Hall Street sought to vacate the award, arguing that the arbitrator had erred in interpreting the lease concerning applicable environmental laws. The case ultimately reached the Supreme Court on a writ of certiorari after the District Court vacated the arbitration award, citing the standard of review established in the arbitration agreement. The Supreme Court was tasked with determining whether the statutory grounds for vacating and modifying arbitration awards under the Federal Arbitration Act could be supplemented by contractual provisions agreed upon by the parties. The Court held that the statutory grounds were exclusive, thereby clarifying the limits of judicial review in arbitration cases.

Whether the statutory grounds for vacating and modifying arbitration awards under the Federal Arbitration Act can be supplemented by contractual provisions agreed upon by the parties.

The judgment is reversed.