International Arbitration · New York Convention · Award Enforcement · Alter Ego · Foreign Sovereign Immunities Act

Introduction

An arbitration award is only worth the assets the prevailing party can reach. Two recurring scenarios arise in collecting on an award. First, the award debtor may be a shell with nothing in it, while the people who ran it weren’t named in the award. Second, the debtor may be an arm of a foreign state that argues it has sovereign immunity and shouldn’t have to answer in a U.S. court at all.

Within five weeks this past summer, the Ninth Circuit addressed both scenarios. On August 12, 2026, in Devas Multimedia Private Ltd. v. Antrix Corp. Ltd. (Devas), the court held that the arbitration exception in the Foreign Sovereign Immunities Act (FSIA) defeated a claim of sovereign immunity by a corporation wholly owned by India, so that a U.S. court could hear a petition to confirm a $562.5 million award against it, and that forum non conveniens wasn’t available to defeat a proceeding under the New York Convention. On September 17, 2026, in Government of Lao People’s Democratic Republic v. Baldwin (Lao), the court held that a federal district court had jurisdiction to enforce a foreign award against alleged alter egos who weren’t named as award debtors and didn’t take part in the arbitration, and that the court had to decide the alter-ego theory in that same proceeding.

Executive Summary

John Baldwin and Shawn Scott, two American entrepreneurs, set up a chain of companies to invest in casinos in Laos. Two of those companies, Sanum Investments Ltd. and Lao Holdings N.V., brought investment-treaty arbitrations in Singapore against the Government of the Lao People’s Democratic Republic (Lao PDR), and a third arbitration in which Lao PDR intervened. They lost all three. The tribunals dismissed the companies’ claims and ordered them to pay Lao PDR about $5 million in all, mostly for its fees, expenses and costs of the arbitrations. The Singapore courts refused to set the awards aside. In the Ninth Circuit’s words, “Despite repeated attempts, Lao PDR has been unable to collect on these awards.” Government of Lao People’s Democratic Republic v. Baldwin, 2026 WL 2752349, at *2.

Lao PDR then petitioned the U.S. District Court for the Northern Mariana Islands to enforce the awards under the New York Convention. It named the two award debtors and, by amendment, Baldwin, Scott and Bridge Capital, LLC, a Northern Mariana Islands company Baldwin and Scott own equally, as the debtors’ alter egos. The district court dismissed Baldwin and Bridge Capital for lack of subject-matter jurisdiction, reasoning that they weren’t parties to the arbitrations and that Lao PDR had to pursue its veil-piercing theory in a separate action. The Ninth Circuit reversed and remanded, holding that the liability of the alleged alter egos had to be decided in the same proceeding that enforced the awards.

Devas presents the sovereign immunity scenario. A three-member tribunal of the International Chamber of Commerce (ICC) found that Antrix, the commercial arm of India’s space agency, had wrongfully repudiated a satellite spectrum lease with Devas, an Indian company, and awarded Devas $562.5 million. A federal district court in Seattle confirmed the award. After a detour to the Supreme Court on personal jurisdiction, the Ninth Circuit affirmed on the three remaining threshold questions: that Antrix wasn’t immune from suit, because the FSIA’s arbitration exception applied; that exercising personal jurisdiction over Antrix was consistent with due process; and that forum non conveniens couldn’t be used to dismiss a Convention enforcement proceeding.

Factual Background and Procedural History

The Lao venture and the Singapore awards

Sanum Investments was incorporated in Macau in 2007 and partnered with a Laotian conglomerate, ST Group, to build casinos including the Savan Vegas Casino. Lao Holdings, an Aruba company, was later inserted into the ownership chain above it, and Bridge Capital provided financing. Government of Lao People’s Democratic Republic v. Baldwin, 2026 WL 2752349, at *2. By mid-2012, the companies were in disputes with ST Group over management of the casino, and Lao PDR became involved.

Sanum Investments and Lao Holdings then brought two arbitrations against Lao PDR, seated in Singapore, claiming breaches of treaty protections for foreign investors. Both tribunals dismissed the claims on August 6, 2019, and awarded Lao PDR its fees, expenses and costs of the arbitrations: about $1.95 million in the Lao Holdings proceeding and $1.78 million in the Sanum proceeding, or nearly $3.73 million together. A third arbitration, under the rules of the Singapore International Arbitration Centre, was brought by the companies against San Marco Capital Partners LLC, which Lao PDR had appointed to manage the casino and had indemnified. Lao PDR intervened. That tribunal also dismissed the companies’ claims, in an award dated August 11, 2021, which the Ninth Circuit described as an additional $1.3 million in Lao PDR’s favor. Each time, the companies’ set-aside actions failed in both the High Court of Singapore and the Singapore Court of Appeal, which assessed further costs against them. Government of Lao People’s Democratic Republic v. Baldwin, 2026 WL 2752349, at *2–3; Government of the Lao People’s Democratic Republic v. Baldwin, No. 1:22-cv-00011, ECF No. 111 (D. N. Mar. I. Apr. 3, 2025).

Lao PDR’s collection efforts included an unsuccessful suit in Thailand and a suit against Baldwin and Bridge Capital in the U.S. District Court for the District of Idaho, dismissed for lack of personal jurisdiction in 2022. Government of Lao People’s Democratic Republic v. Baldwin, 2026 WL 2752349, at *3. It then filed its petition in the U.S. District Court for the Northern Mariana Islands. In dismissing Baldwin and Bridge Capital, the district court read 9 U.S.C. §207 as confining a confirmation action to one brought “against any other party to the arbitration,” and, relying on the Second Circuit’s decision in Orion Shipping & Trading Co. v. Eastern States Petroleum Corp. of Panama, S.A., 312 F.2d 299, 301 (2d Cir. 1963), held that a confirmation proceeding wasn’t the place to pierce the corporate veil. Government of Lao People’s Democratic Republic v. Baldwin, 2026 WL 2752349, at *3. Scott’s own motion to dismiss was stayed pending the appeal.

Devas: from Seattle to the Supreme Court and back

Antrix and Devas signed their satellite spectrum lease in January 2005. Antrix was to build, launch and operate two satellites and lease Devas 70 MHz of India’s S-band spectrum, and Devas was to pay construction and leasing fees. Antrix terminated in February 2011, citing a Government of India policy decision not to provide the spectrum for commercial use. The ICC tribunal, seated in New Delhi, held in September 2015 that Antrix had wrongfully repudiated the agreement. Devas Multimedia Private Ltd. v. Antrix Corp. Ltd., 2026 WL 2330570, at *4 & n.3. Devas petitioned to confirm the award in the U.S. District Court for the Western District of Washington in 2018, and the district court confirmed it. A Ninth Circuit memorandum disposition reversed for lack of minimum contacts, but the Supreme Court held in CC/Devas (Mauritius) Ltd. v. Antrix Corp., 605 U.S. 223, 232 (2025), that the FSIA required no minimum contacts beyond those built into its exceptions to immunity, and remanded for the Ninth Circuit to address Antrix’s remaining arguments. Devas Multimedia Private Ltd. v. Antrix Corp. Ltd., 2026 WL 2330570, at *2, *5. Meanwhile, after the district court confirmed the award, the Indian courts set it aside. Id. at *4 n.4.

Legal Analysis

1. The statutes common to both cases: 9 U.S.C. §§203 and 207

Both decisions turn on Chapter 2 of the Federal Arbitration Act, which implements the New York Convention. Section 202 defines which agreements and awards “fall[] under the Convention”: those “arising out of a legal relationship, whether contractual or not, which is considered as commercial,” other than relationships entirely between U.S. citizens with no reasonable relation to a foreign state. 9 U.S.C. §202. Sections 203 and 207 are key to the two Ninth Circuit decisions discussed here.

Section 203 is the jurisdictional grant. It provides:

“An action or proceeding falling under the Convention shall be deemed to arise under the laws and treaties of the United States. The district courts of the United States . . . shall have original jurisdiction over such an action or proceeding, regardless of the amount in controversy.” 9 U.S.C. §203.

Section 203 opens the federal courts to any proceeding that falls under the Convention, whatever the parties’ citizenship or the amount at stake (subject to §202’s exclusion of relationships entirely between U.S. citizens that have no reasonable relation to a foreign state). It also treats such a proceeding as arising under U.S. law, which, as Devas shows, matters when a foreign state argues that a purely foreign dispute isn’t something U.S. law treats as arbitrable.

Section 207 supplies the procedure and the standard for review and enforcement of an award, providing:

“Within three years after an arbitral award falling under the Convention is made, any party to the arbitration may apply to any court having jurisdiction under this chapter for an order confirming the award as against any other party to the arbitration. The court shall confirm the award unless it finds one of the grounds for refusal or deferral of recognition or enforcement of the award specified in the [New York] Convention.” 9 U.S.C. §207.

Section 207 sets a three-year deadline, identifies who may apply and against whom, and makes confirmation mandatory unless the opposing party proves one of the defenses in Article V of the Convention. Although §207 uses the word “confirm,” for a foreign award that term means the Convention’s single “recognition and enforcement” proceeding. Government of Lao People’s Democratic Republic v. Baldwin, 2026 WL 2752349, at *6 (citing CBF Indústria de Gusa S/A v. AMCI Holdings, Inc., 850 F.3d 58, 72 (2d Cir. 2017)).

Article V of the New York Convention provides a few, narrow bases for review: incapacity of a party or an invalid arbitration agreement; lack of proper notice or of an opportunity to present one’s case; an award beyond the scope of the submission; a tribunal or procedure not in accordance with the parties’ agreement or the law of the seat; or an award that isn’t yet binding or has been set aside or suspended at the seat. The court may also refuse enforcement on its own if the subject matter isn’t arbitrable under U.S. law or enforcement would violate U.S. public policy. Convention on the Recognition and Enforcement of Foreign Arbitral Awards art. V(1)–(2), June 10, 1958, 21 U.S.T. 2517, 330 U.N.T.S. 38. A U.S. court doesn’t revisit the tribunal’s findings or its application of the law. Government of Lao People’s Democratic Republic v. Baldwin, 2026 WL 2752349, at *5–6.

2. Lao PDR v. Baldwin

• Section 203 grants jurisdiction; §207 doesn’t take it away. The district court had dismissed Baldwin and Bridge Capital, who were not parties to the underlying arbitration proceedings, on the ground that §207 limited its jurisdiction, and on appeal they defended that ruling as the first of two independent reasons the dismissal was correct. They read the closing phrase of §207, “as against any other party to the arbitration,” as limiting the court’s jurisdiction to proceedings against named parties to the arbitration. The court held that the grant was in §203, and that “Section 207 does not define federal subject matter-jurisdiction over Convention proceedings.” Government of Lao People’s Democratic Republic v. Baldwin, 2026 WL 2752349, at *7. Instead, the court explained, §207 set conditions on when, by whom, for what and against whom a proceeding could be brought, and those conditions weren’t jurisdictional because they weren’t “located in a jurisdiction-granting provision.” Id. (quoting Al-Qarqani v. Chevron Corp., 8 F.4th 1018, 1024 (9th Cir. 2021)). A failure to meet a jurisdictional requirement ends the case at the threshold under §203, while a failure to meet a procedural condition is a defense on the merits under §207 and Article V.
• The alleged alter egos were within the Convention because the petition plausibly tied them to the awards. Holding that §203, not §207, was the jurisdictional grant left the question whether §203 reached Baldwin and Bridge Capital at all. They argued that they could not be held liable because they were neither parties to the arbitrations nor named as award debtors, and no court or tribunal had found them to be alter egos of Sanum Investments or Lao Holdings. Government of Lao People’s Democratic Republic v. Baldwin, 2026 WL 2752349, at *3. To decide whether a proceeding “falls under the Convention” and so comes within §203, the Ninth Circuit applied the test from Ministry of Defense of Islamic Republic of Iran v. Gould Inc., 887 F.2d 1357, 1362 (9th Cir. 1989), drawn from §202: the award must arise out of (1) a legal relationship, (2) that is commercial in nature, and (3) that isn’t entirely domestic in scope. Government of Lao People’s Democratic Republic v. Baldwin, 2026 WL 2752349, at *6. The court explained that a petitioner didn’t have to prove those elements to establish jurisdiction: as long as its claim that the award fell under the Convention wasn’t frivolous, or made solely to obtain jurisdiction, the court “must assume jurisdiction and hear the merits.” Id. at *7 (quoting Al-Qarqani v. Chevron Corp., 8 F.4th at 1025). Lao PDR never contracted with Baldwin, Scott or Bridge Capital, but its petition alleged that they dominated the two award debtors so completely that “the separate corporate personalities of each ceased to exist.” Id. Baldwin and Bridge Capital hadn’t argued that the allegations were frivolous, and the court said their merits “are not for us to evaluate.” Id. That was enough to satisfy the first element. The relationship was commercial because it involved disputes over managing the casino, and it wasn’t purely domestic because Lao PDR is a foreign nation. Id. at *8.
• Enforcement of a foreign award was one proceeding, so the alter-ego question had to be decided in it. Baldwin and Bridge Capital’s second argument was that, even with jurisdiction, the district court could not consider an alter-ego theory in a proceeding to confirm an award, as distinct from a later action to enforce it. That was the district court’s reasoning too: relying on Orion, it held that “[t]he proper mechanism” was for Lao PDR “to bring a separate action.” Id. at *3. Lao PDR argued that the district court had misapplied that Second Circuit precedent. Id. at *4. The Ninth Circuit agreed with Lao PDR. It explained that under the New York Convention, a court asked to enforce an award made abroad recognizes and enforces it in a single proceeding, and that Orion, decided before the United States joined the Convention, didn’t require the creditor to bring a separate veil-piercing action. Id. at *4–5, *8. Because the awards were made in Singapore, the district court “was required to consider the merits of Lao PDR’s petition, including its alter-ego theory, in a single action.” Id. at *8. The court attributed the district court’s error to §207’s use of the word “confirm” and said that “the district court’s confusion was understandable.” Id.
• The district court’s order dismissing Baldwin and Bridge Capital was appealable. As a threshold matter, Baldwin and Bridge Capital asked the Ninth Circuit to dismiss the appeal, arguing that it lacked appellate jurisdiction because a dismissal for lack of subject-matter jurisdiction wasn’t an appealable interlocutory order. The court held that, because the district court did have jurisdiction, its order dismissing them functioned as a denial of Lao PDR’s petition to enforce, which 9 U.S.C. §16(a)(1)(D), as incorporated by §208, made immediately appealable. The district court had “incorrectly attached a jurisdictional label to what should have been a decision on the merits.” Id. at *9 (quoting Al-Qarqani v. Chevron Corp., 8 F.4th at 1027).

3. Devas v. Antrix

• Sovereign immunity: the FSIA’s arbitration exception had no U.S.-nexus requirement. On remand from the Supreme Court, the Ninth Circuit took up the alternative arguments Antrix had raised against confirmation, the first being that it was immune from suit. Because Antrix is wholly owned by India, it is treated as a foreign state under the FSIA and is immune from suit in U.S. courts unless an exception applies. The FSIA’s arbitration exception removes that immunity in an action “to confirm an award made pursuant to” an agreement to arbitrate with the foreign state, where the agreement concerns “a subject matter capable of settlement by arbitration under the laws of the United States” and the award “is or may be governed by a treaty . . . calling for the recognition and enforcement of arbitral awards,” such as the New York Convention. 28 U.S.C. §1605(a)(6); Devas Multimedia Private Ltd. v. Antrix Corp. Ltd., 2026 WL 2330570, at *3. The parties agreed that the action was brought to confirm an award governed by the New York Convention, so the dispute came down to the “subject matter” requirement. Antrix argued that its dispute with Devas, which concerned purely foreign commerce between two Indian companies, lacked any commercial nexus to the United States and so did not concern a subject matter capable of arbitration under U.S. law. The court rejected the argument on the text: the exception “contains no requirement that the underlying commerce that is the subject of the arbitration have a nexus with the United States,” while the FSIA’s commercial-activity exception does. Devas Multimedia Private Ltd. v. Antrix Corp. Ltd., 2026 WL 2330570, at *5. And because §203 deems a Convention proceeding to arise under U.S. law, the court reasoned, an award covered by the Convention concerned an arbitrable subject matter. Id. at *6.
• Personal jurisdiction was reasonable even assuming due process applied. The FSIA provides that personal jurisdiction over a foreign state exists whenever an exception to immunity applies and the state has been served, 28 U.S.C. §1330(b), and the Supreme Court had held that the statute required no separate minimum-contacts showing. Antrix argued that, even so, exercising personal jurisdiction over it would violate the Due Process Clause of the Fifth Amendment. Devas Multimedia Private Ltd. v. Antrix Corp. Ltd., 2026 WL 2330570, at *7. The Supreme Court’s decision in Fuld v. Palestine Liberation Organization, 606 U.S. 1, 16, 23–24 (2025), had declined to import the Fourteenth Amendment’s minimum-contacts test into the Fifth Amendment, without deciding whether the Fifth Amendment requires any reasonableness inquiry at all. Devas Multimedia Private Ltd. v. Antrix Corp. Ltd., 2026 WL 2330570, at *7. Assuming without deciding that Antrix was a “person” protected by the Fifth Amendment’s Due Process Clause, the court found jurisdiction reasonable under the three factors Fuld applied: the U.S. interest in honoring its treaty obligations, the modest burden on a sophisticated state-owned company, and Devas’s need for a forum that could reach U.S. assets. Id. at *7–8.
• Forum non conveniens had no place in a Convention proceeding. Antrix’s third argument was that the district court should have dismissed Devas’s petition under the doctrine of forum non conveniens, which lets a court decline a case that would more appropriately be heard elsewhere, in favor of litigation in India. Devas Multimedia Private Ltd. v. Antrix Corp. Ltd., 2026 WL 2330570, at *8. The district court had declined to dismiss on that ground. Id. at *4. Deciding a question of first impression in the circuit, the Ninth Circuit held that the doctrine “does not apply to an action to confirm a foreign arbitral award under the New York Convention.” Id. at *8. It reasoned first from the text: Article III requires each signatory to “recognize arbitral awards as binding and enforce them,” and Article V’s exclusive list of defenses doesn’t include an inconvenient forum. Id. The court added that, given the Convention’s purpose of unifying enforcement standards, “[a] discretionary, forum-by-forum defense to enforcement that would let each signatory state decline enforcement on convenience grounds is irreconcilable with the design of the Convention.” Id. The structure of an enforcement action led to the same place: forum non conveniens presupposes an adequate alternative forum, and only a U.S. court can reach a foreign state’s commercial property located here. Id. at *4, *9. Although Antrix was a state-owned company, the holding was stated without regard to who the respondent is, and the text-and-purpose reasoning applies equally to a private party; only the structural point was framed in terms of a foreign state’s U.S. assets. The court aligned itself with the D.C. Circuit’s decision in Tatneft v. Ukraine, 21 F.4th 829, 840 (D.C. Cir. 2021), and acknowledged that the Second Circuit reached a different result under the Panama Convention in Figueiredo Ferraz E Engenharia de Projeto Ltda. v. Republic of Peru, 665 F.3d 384, 391–92 (2d Cir. 2011), finding the dissent there “more persuasive.” Devas Multimedia Private Ltd. v. Antrix Corp. Ltd., 2026 WL 2330570, at *9 & n.8.

Holding

In Lao, the Ninth Circuit reversed the dismissal of Baldwin and Bridge Capital and remanded with instructions to consider the merits of Lao PDR’s petition to enforce, including its alter-ego theory as to Baldwin, Bridge Capital and Scott. It held that the district court had subject-matter jurisdiction under 9 U.S.C. §203, that §207’s “party to the arbitration” language wasn’t jurisdictional, and that the order was appealable under §16(a)(1)(D). Government of Lao People’s Democratic Republic v. Baldwin, 2026 WL 2752349, at *9. In Devas, the court affirmed as to subject-matter jurisdiction under the FSIA’s arbitration exception, 28 U.S.C. §1605(a)(6), personal jurisdiction, and forum non conveniens, which it held unavailable in an action to confirm a foreign award under the Convention. In a concurrently filed memorandum disposition, the court affirmed confirmation of the award and registration of the judgment as to Devas Multimedia America, Inc., reversed and vacated as to the Shareholder Intervenors’ standing to register the judgment, and remanded for the district court to address the effect of the Indian set-aside proceedings in the first instance. Devas Multimedia Private Ltd. v. Antrix Corp. Ltd., 2026 WL 2330570, at *10.

What to Watch

• The alter-ego merits on remand, and how much the district court will review. Lao settles where the alter-ego question gets decided, not how. As to the awards themselves, the district court’s review is narrow: it must enforce them unless an Article V ground is proved, and it can’t revisit the tribunals’ decisions. Whether Baldwin, Scott and Bridge Capital are bound by the awards is a different question, one the tribunals never decided, and the Ninth Circuit directed the district court to evaluate it on the merits. The opinion doesn’t say what law governs veil-piercing for companies incorporated in Macau and Aruba, what standard of proof applies, or whether the court may take evidence. Scott’s stayed motion to dismiss is also back in play.
• Defenses beyond jurisdiction. Whether the alleged alter egos can invoke Article V defenses, or §207’s other conditions such as its three-year deadline, wasn’t before the court. Personal jurisdiction remains a separate hurdle, as the Idaho dismissal shows.
• Annulment at the seat. The Lao awards survived set-aside in Singapore. The Devas award didn’t survive in India, and the Ninth Circuit left the effect of that annulment to the district court. Devas Multimedia Private Ltd. v. Antrix Corp. Ltd., 2026 WL 2330570, at *4 n.4, *10. Article V(1)(e) permits, but doesn’t require, a court to refuse enforcement of an award set aside at the seat, so that remand will address what an annulment does to a U.S. judgment already confirming the award.
• Forum non conveniens across circuits. The Ninth and D.C. Circuits agree that forum non conveniens isn’t available in proceedings to confirm foreign awards. The Second Circuit’s contrary Figueiredo decision arose under the Panama Convention, so this isn’t a clean split, but respondents, sovereign or private, may continue to press the difference. The Devas court also reserved whether a transfer between U.S. districts under 28 U.S.C. §1404 could be appropriate. Devas Multimedia Private Ltd. v. Antrix Corp. Ltd., 2026 WL 2330570, at *9 n.9.
• Further review. Absent rehearing petitions, petitions for certiorari would be due 90 days after judgment, on or about November 10, 2026, in Devas and December 16, 2026, in Lao.

What This Means for Resolving International Arbitration Disputes

An award against a thinly capitalized company typically carries a discount, because the creditor’s realistic path runs through a second lawsuit, in a court with personal jurisdiction over the alter egos, on a veil-piercing theory decided from scratch. Lao doesn’t remove the veil-piercing question, but it requires the creditor to raise it in the enforcement proceeding itself, against the people and affiliates alleged to stand behind the debtor. Devas offers another path: no respondent, whether a state-owned company or a private one, can use forum non conveniens to send the creditor to another country’s courts when the assets at issue are here, and a U.S. court is the only one that can reach them.

Where the debtor is a shell, the negotiation shifts from whether the award will ever be collected to what the owners’ own exposure is worth. Where the debtor has assets in the United States, sovereign or private, it shifts away from the forum and toward the narrow Article V defenses and, as in Devas, the status of the award at the seat. Those questions have more definable ranges, which gives both sides a firmer basis for valuing the award. The open issues, especially the alter-ego merits and the effect of an annulment at the seat, will still separate the parties’ numbers.

John Libby is an arbitrator, mediator, and settlement counsel with LibbyADR LLC. This post contains his own summaries of the decisions discussed, prepared for general informational purposes only. The summaries are not intended to be a complete statement of any court’s reasoning, nor should they be taken to indicate how he would rule as an arbitrator in any particular case. In addition, the summaries are not legal advice, nor should they be construed as legal advice. Readers should not act on these posts, but should review the decisions themselves and consult with legal counsel.

Healthcare / Payor-Provider Disputes · No Surprises Act · Independent Dispute Resolution (IDR) · Vacatur

Introduction

Beginning in 2024, several large insurers sued providers and entities that assist in filing independent dispute resolution (IDR) cases on providers’ behalf under the federal No Surprises Act (NSA), alleging they flooded the process with ineligible disputes and collected awards to which they were never entitled. The insurers framed their cases in several ways: civil RICO, ERISA, state fraud and unfair-competition law, along with requested remedies to vacate the awards outright. Between April and July 2026, district courts in California, Florida, Texas and Georgia dismissed all four suits discussed here, and the insurers appealed to the Fifth, Ninth and Eleventh Circuits. The bottom line, explored in more detail below: the loser in an NSA case can’t sue to vacate the award except on the narrow grounds the NSA borrows from the Federal Arbitration Act (FAA).

Executive Summary

The NSA was intended to address the practice by out-of-network providers of balance billing their patients for the difference between their billed charges and amounts paid by the patient’s health insurer. The NSA established the IDR process, in which independent arbitrators resolve disputes between the provider and the health insurance payor, eliminating the provider’s right to balance bill the patient except for previously agreed co-pays and deductibles. The NSA requires the insurer to provide a “qualifying payment amount,” or QPA, which is essentially a median calculation of the insurer’s negotiated rates for the services at issue. After a period of negotiation, the provider and the insurer each make an offer (the insurer’s typically at or near the QPA, the provider’s typically some multiple of it), and the IDR arbitrator must choose, “baseball-style,” one of the two numbers to award.

In each of the three years for which the federal government has published full-year data, IDR entities have chosen the provider’s offer in most disputes: 81% of the time in 2023, 85% in 2024 and 85% to 88% in 2025, according to the Centers for Medicare & Medicaid Services (CMS). In light of these numbers, and other alleged practices by providers and the entities that represent them in IDR proceedings, several insurance companies have gone to court, challenging a system they argue is not working as Congress intended.

The defendants in three of the four cases addressed here are HaloMD, a Texas-based company that files IDR disputes on behalf of out-of-network providers, together with, in various combinations, its president Alla LaRoque, Scott LaRoque and his company MPOWERHealth, and physician groups that use HaloMD’s services. According to CMS, HaloMD, TeamHealth and SCP Health together accounted for about 44% of IDR disputes initiated in the first half of 2025. CMS, Supplemental Background on Federal Independent Dispute Resolution Public Use Files (January 1, 2025 – June 30, 2025). Anthem affiliates in California and Georgia and Blue Cross Blue Shield of Texas alleged that HaloMD and its clients filed disputes that were never eligible for IDR (hundreds in the California case, thousands in Georgia and more than 42,000 in Texas), covering claims already resolved, services the patient’s plan didn’t cover and similar defects, and attested to eligibility anyway. In the fourth case, Aetna alleged that Radiology Partners, a private-equity-backed aggregator of radiology practices, ran other Florida practices’ claims through the tax identification number of one acquired practice, Mori, Bean and Brooks. Aetna ended that practice’s network contract over the routing, and Radiology Partners kept it up afterward, filing tens of thousands of IDR disputes that misidentified who had performed the services.

Each district court dismissed the insurers’ claims. Across the four decisions, the courts barred the insurers’ claims on various bases, including: 1) the NSA bars judicial review of IDR determinations beyond the FAA’s vacatur grounds; 2) whether a dispute is eligible for IDR is for the IDR entity to decide; 3) fraud an insurer knew about, or had the chance to raise, during the IDR process cannot support vacatur afterward; and 4) RICO, ERISA, state-law and declaratory-judgment claims seeking the same relief are attempts to get around those limits. Not every court reached every point. The vacatur claims (in California, Florida and Georgia) failed on the merits; the other claims failed for lack of jurisdiction or, in Florida, on preemption. Three of the four dismissals were with prejudice; in the California case, the court dismissed the federal claims without leave to amend and declined to exercise supplemental jurisdiction over the state-law claims, dismissing them without prejudice. All four insurers have appealed to their respective circuits. None of the appeals has yet been argued.

Background

Providers Prevail in the Majority of IDR Proceedings

The outcomes of the IDR process have run heavily one way. In the second half of 2025, providers, facilities and air ambulance providers were the prevailing party in about 85% of payment determinations, down from 88% in the first half of the year, and the prevailing offer exceeded the QPA in about 87% of determinations. CMS, Supplemental Background on Federal Independent Dispute Resolution Public Use Files (July 1, 2025 – December 31, 2025). Researchers at Georgetown University’s Center on Health Insurance Reforms, analyzing CMS data, put the provider share at 81% in 2023 and 85% in 2024. Jack Hoadley, Kennah Watts, Katie Keith & Ellie DeGarmo, The No Surprises Act IDR Process: An Early Look at 2025 Data, Health Affairs Forefront (Mar. 2026). A “win” means the IDR entity chose the provider’s offer, not that the provider received any particular amount, and a small number of high-volume filers account for much of the volume. That record is the backdrop for the suits discussed here. The insurers read it as evidence that the process is being gamed; providers read it as evidence that plans’ QPAs are routinely understated.

Why providers prevail so often is itself disputed. Researchers at the Brookings Institution offered several possible explanations: providers may take their strongest claims to IDR and settle the rest; IDR entities may give weight to the higher out-of-network amounts plans paid before the NSA, which the median awards resembled more closely than in-network rates; plans’ QPAs may understate actual in-network rates; and after courts set aside the agencies’ rules directing IDR entities to give the QPA special weight, IDR entities had little substantive guidance. Matthew Fiedler & Loren Adler, A First Look at Outcomes Under the No Surprises Act Arbitration Process, Brookings Institution (Mar. 27, 2024). Others look at the IDR entities themselves. Researchers at Georgetown University’s Center on Health Insurance Reforms found that provider win rates ranged from 19% to 99% depending on the IDR entity, and raised concerns about fee incentives and the absence of written reasons. Kennah Watts & Jack Hoadley, No Surprises Act Arbitrators Vary Significantly In Their Decision Making Patterns, Health Affairs Forefront (June 24, 2025). Paragon Health Institute, a market-oriented health policy group, reported that IDR entities handling more disputes tend to favor providers more often, and noted that “[a]rbitrators are not paid until they award disputes.” Jackson Hammond & Katherine Hall, Fixing the No Surprises Act: Scaling Back and Reforming the Federal Arbitration System, Paragon Health Institute (Sept. 14, 2026). Provider groups read the record differently. In an analysis sent to Congress, the American College of Emergency Physicians, the American College of Radiology and the American Society of Anesthesiologists said that insurers lost about a quarter of 2025 line items by default and offered $1 or less on 8.2%, and argued that “the QPA is unreliable, fundamentally flawed, and used by insurers to game the system.” Insurers Are Undermining the No Surprises Act, Then Claiming IDR Process Is Broken, New Analysis Sent to Congress Explains, ACEP Now (Oct. 1, 2026).

The NSA Provides Limited Review for the Results of the IDR Process

The NSA makes an IDR entity’s payment determination “binding upon the parties involved, in the absence of a fraudulent claim or evidence of misrepresentation of facts presented to the IDR entity involved regarding such claim,” and provides that it “shall not be subject to judicial review, except in a case described in any of paragraphs (1) through (4) of section 10(a) of title 9.” 42 U.S.C. § 300gg-111(c)(5)(E)(i); 29 U.S.C. § 1185e(c)(5)(E)(i). Those are the FAA’s grounds for vacating an arbitration award: corruption, fraud or undue means; evident partiality or corruption in the arbitrator; specified misconduct; and an arbitrator exceeding its powers. 9 U.S.C. § 10(a)(1)–(4).

The Eleventh Circuit has held that this cross-reference imports the FAA’s existing case law. REACH Air Medical Services LLC v. Kaiser Foundation Health Plan Inc., 160 F.4th 1110, 2025 WL 3222820, at *4 (11th Cir. Nov. 19, 2025). Under that FAA case law, a party seeking to vacate an award for fraud must prove it by clear and convincing evidence, show that it couldn’t have been discovered with due diligence before or during the arbitration, and show that it related materially to an issue in the arbitration. Id. at *6. REACH came from the provider side: an air-ambulance company challenged an award Kaiser won, alleging Kaiser had given the IDR entity a lower QPA than it had given the provider, and the Eleventh Circuit affirmed dismissal. The Florida court applied REACH directly, and the California court applied the same test from Ninth Circuit precedent.

Contested Eligibility Decisions

Not every out-of-network claim qualifies for IDR. Before an IDR entity picks between the parties’ offers, federal regulations require it to determine that the dispute is eligible. 45 C.F.R. § 149.510(c)(1)(v). The insurers’ core theory is that this screening has failed at scale and that high-volume filers have taken advantage of it. In the Texas case, the defendants answered with the government’s own figures: in 2024, non-initiating parties objected to eligibility in 44% of disputes, but only 19% were found ineligible. Blue Cross Blue Shield of Texas, slip op. at 5. The providers’ answer on the law, which the courts have so far accepted, is that the eligibility decision is part of the IDR entity’s determination, and therefore inside the NSA’s limit on judicial review. As the California court put it, “An IDRE’s payment determination necessarily includes a determination of eligibility.” Anthem, 2026 WL 982629, at *9.

Providers’ Avenues for Review Are Also Limited

Two circuits have addressed the reverse posture: a provider holding an unpaid award. East Coast Advanced Plastic Surgery, LLC v. Cigna Health & Life Insurance Co., No. 25-2204, ___ F.4th ___ (2d Cir. Sept. 17, 2026) (ECAPS); Guardian Flight, L.L.C. v. Health Care Service Corp., 140 F.4th 271 (5th Cir. 2025), cert. denied, No. 25-441 (U.S. Jan. 12, 2026). Both courts held that the NSA creates no private right of action to enforce an award, and that enforcement is left to the Department of Labor, the Department of the Treasury, the Department of Health and Human Services and state insurance regulators. The Fifth Circuit went further and held that the NSA’s limit on judicial review bars suits to confirm IDR awards; the Second Circuit left that question open. The Supreme Court denied review in Guardian Flight in January 2026. We discussed ECAPS in an earlier Case Spotlight.

The District Court Decisions

• Anthem Blue Cross Life & Health Insurance Co. v. HaloMD LLC, 2026 WL 982629 (C.D. Cal. Apr. 9, 2026). Anthem asserted RICO, a claim to vacate under the NSA, an ERISA claim under 29 U.S.C. § 1132(a)(3), declaratory relief and California law. The district court dismissed the vacatur claim because Anthem knew of the alleged false eligibility attestations and objected to them during the IDR process, so the fraud was not undiscoverable; adopting one group of defendants’ phrase, the court said that “Anthem has pleaded itself out of court.” Id. at *8. The court also held that the fee structure Congress built into the IDR process is not “undue means,” and that because IDR entities are authorized to decide eligibility, the claim that they exceeded their powers collapsed into the fraud claim. Id. It dismissed the RICO, ERISA and declaratory claims for lack of subject-matter jurisdiction: “These theories are all end runs around the NSA’s limits on judicial review.” Id. at *10. It declined supplemental jurisdiction over the state-law claims, dismissing them without prejudice, and denied leave to amend. Id. at *10–11.
• Aetna Health Inc. v. Radiology Partners, Inc. (M.D. Fla. Apr. 16, 2026). Aetna sought to vacate the awards and recover arbitration fees and overpayments. In one example the court described, an IDR entity awarded $752.00 on a claim whose in-network rate was $78.89. Id., slip op. at 7. The district court found that Aetna had pleaded fraud with the particularity Rule 9(b) requires. But applying REACH, it held that the fraud was discoverable with due diligence before the IDR proceedings, because Aetna had terminated the practice’s network contract over the same conduct. The court called it “a close call,” but held that Aetna’s admission that it ended the contract over that conduct was “fatal to Aetna’s position,” and that neither the volume of claims nor the defendants’ efforts to conceal the scheme could “excuse Aetna’s failure to raise the issue in the IDR disputes.” Id. at 8–9. It also declined to screen disputes that hadn’t yet been filed, noting that Aetna can challenge them before the IDR entity. It treated the remaining claims as an attempt to “end-around the NSA and FAA strictures,” held them preempted, and dismissed with prejudice. Id. at 9–10.
• Blue Cross Blue Shield of Texas v. HaloMD, LLC (E.D. Tex. May 22, 2026). Blue Cross Blue Shield of Texas alleged that HaloMD, Alla LaRoque and Scott LaRoque used more than 42,000 ineligible IDR disputes, under both the federal process and Texas’s own arbitration process, to obtain tens of millions of dollars in awards. The district court held that the NSA’s bar on review of payment determinations extends to eligibility decisions and that the suit was an impermissible collateral attack on the awards, observing that the plaintiff “is attempting to relitigate issues previously decided by the IDR entities.” Id., slip op. at 11. It reached the same result for the disputes under Texas’s own arbitration statute, and dismissed every claim with prejudice for lack of subject-matter jurisdiction. Id. at 14–18.
• Blue Cross Blue Shield Healthcare Plan of Georgia, Inc. v. HaloMD, Inc. (N.D. Ga. July 10, 2026). The Georgia plan alleged that HaloMD and two Georgia physician groups that are HaloMD clients submitted thousands of ineligible disputes, and asserted RICO, ERISA and Georgia-law claims along with a claim to vacate the awards. The district court held that it lacked jurisdiction over every claim except vacatur, because each would require it to re-examine eligibility and payment decisions the IDR entities had already made. It dismissed the vacatur claim on the merits: the fraud allegations didn’t meet Rule 9(b), in part because the plan had the opportunity to object before the IDR entities; nothing alleged rose to “undue means”; and IDR entities that decide eligibility don’t exceed their powers. It also found no personal jurisdiction over HaloMD. Responding to the plan’s point that providers prevail in 85% of payment determinations, the court wrote that it was “highly improbable” to infer a conspiracy of providers and IDR entities from those numbers, and “highly plausible to infer that the Plaintiff engages in a consistent practice of submitting lowball offers to out-of-network providers in an effort to maximize its profits.” Id., slip op. at 62. It dismissed the case with prejudice.

Legal Analysis

• Eligibility belongs to the IDR entity. The California, Georgia and Texas courts each treated the eligibility decision as part of the IDR determination rather than a separate question a court can revisit. (The Florida court didn’t need to reach it.) That reading matters because nearly every insurer theory, whatever its label, depends on showing that particular disputes should never have reached IDR. The California court noted the consequence of the contrary view: “nearly every eligibility determination disputed by an IDR participant would be subject to review.” Anthem, 2026 WL 982629, at *8.
• Fraud known during the IDR process cannot support vacatur afterward. The FAA’s fraud ground requires fraud that could not have been discovered through due diligence. In the California, Florida and Georgia cases, the insurers’ own allegations showed that they knew of the conduct before or during the IDR proceedings. In California, they objected to it, and in Georgia they had the chance to. The Florida court’s message was that an insurer with evidence of ineligibility or misrepresentation must raise it in the IDR dispute, not hold it for later litigation.
• Relabeling the claim does not change the analysis. RICO, ERISA, declaratory-judgment and state-law claims all sought to recover or nullify IDR awards. The courts treated them as attempts to obtain the judicial review the NSA does not allow. California, Georgia and Texas framed the result as a lack of jurisdiction, with Georgia and Texas calling the claims collateral attacks on the awards; Florida framed it as preemption of claims resting on the same facts. California didn’t reach the state-law claims, dismissing them without prejudice.
• The insurers’ position on appeal. The insurers argue that the courts have read the judicial-review limit to cover conduct outside the arbitration itself, leaving no forum for what they describe as systematic abuse of the process. Elevance said after the Georgia ruling that the decision “misinterprets the No Surprises Act and improperly limits judicial review.” Health plan and employer groups — America’s Health Insurance Plans; the American Benefits Council, the ERISA Industry Committee and the Business Group on Health; and the California Association of Health Plans and the Association of California Life & Health Insurance Companies — have filed amicus briefs supporting Anthem in the Ninth Circuit. The providers respond that Congress chose a closed, arbitration-based process with limited review, and that the FAA’s vacatur grounds and agency oversight are the remedies it provided.

What to Watch

• The Eleventh Circuit, twice. Aetna v. Radiology Partners, No. 26-11607, will be fully briefed when Aetna files its reply, due October 14, 2026, and Blue Cross Blue Shield of Georgia v. HaloMD, No. 26-12777, is at an earlier stage: the Georgia plan’s opening brief is due October 15, 2026. Both will be decided against the court’s own REACH decision, which supplied the vacatur standard the Florida court applied.
• The Ninth Circuit, without an NSA precedent. Anthem v. HaloMD, No. 26-2355, comes to a court that hasn’t yet ruled on IDR review, with health plan and employer amici already filed, although the district court found the vacatur claim controlled by the Ninth Circuit’s existing FAA case law. Anthem filed its opening brief on August 5, 2026, the defendants filed their answering briefs on October 5, and Anthem’s optional reply is due November 27, 2026. It is the most likely source of a different answer.
• The Fifth Circuit, against Guardian Flight. Blue Cross Blue Shield of Texas v. HaloMD, No. 26-40316, will be decided by the court that held the NSA’s limit on judicial review bars suits to confirm IDR awards. How that court applies the same limit to an insurer seeking to undo awards will be worth watching.
• Timing. No argument dates have been set in any of the four appeals. Decisions before spring 2027 would be unusual. A circuit split on insurer challenges would raise a question about the IDR process that the Supreme Court has so far declined to take up from the provider side.

What This Means for Resolving Payor-Provider Disputes

If the circuits affirm, the IDR award becomes close to final in both directions: hard for the losing insurer to undo and, after ECAPS and Guardian Flight, hard for the winning provider to collect through a lawsuit. The courts’ emphasis on raising eligibility and misrepresentation objections inside the IDR proceeding also moves the real contest earlier, into the dispute itself, where each side’s record is made.

For parties with disputes running in both directions — unpaid awards on one side, claimed overpayments and ineligible filings on the other — litigation offers neither side a clean path. That tends to push the numbers toward negotiation, often across a portfolio of claims rather than one dispute at a time. The awards themselves still matter there: each one is a neutral’s answer to what a set of services was worth, and a large body of them gives both sides a shared reference point for resolving the rest.

John Libby is an arbitrator, mediator, and settlement counsel with LibbyADR LLC. This post contains his own summaries of the decisions discussed, prepared for general informational purposes only. The summaries are not intended to be a complete statement of any court’s reasoning, nor should they be taken to indicate how he would rule as an arbitrator in any particular case. In addition, the summaries are not legal advice, nor should they be construed as legal advice. Readers should not act on these posts, but should review the decisions themselves and consult with legal counsel.

Healthcare / Payor-Provider Disputes · No Surprises Act · Independent Dispute Resolution (IDR)

Updated October 18, 2026, to reflect post-decision filings. See the dated update under What to Watch.

Introduction

The No Surprises Act (NSA) was designed to replace balance billing of patients and payment fights between payors and out-of-network providers with a streamlined arbitration process. When a provider and a health plan can’t agree on what an out-of-network service is worth, each submits an offer, and a certified independent dispute resolution (IDR) entity picks one of the numbers — it’s “baseball” arbitration. The statute provides that the result is “binding” and must be paid within 30 days, but does not say what happens when the plan doesn’t pay. Providers holding unpaid awards have argued that a binding award must be enforceable in court; health plans have argued that Congress left enforcement to regulators. District courts are divided, including within the Second Circuit, and in 2025 the Fifth Circuit adopted the plans’ reading in Guardian Flight, L.L.C. v. Health Care Service Corp., 140 F.4th 271 (5th Cir. 2025). On September 17, 2026, the Second Circuit agreed. In East Coast Advanced Plastic Surgery, LLC v. Cigna Health & Life Insurance Co., the court held that the NSA does not create an implied private right of action to enforce IDR awards, and that the Declaratory Judgment Act cannot supply one. It expressly left open another question the Fifth Circuit had answered: whether the NSA’s limit on judicial review bars suits to confirm IDR awards altogether.

Executive Summary

East Coast Advanced Plastic Surgery (ECAPS) performs breast reconstruction surgery for patients who have undergone mastectomies. It has no network contract with Cigna, but it does have a contract with MultiPlan, which sells network access to plan administrators including Cigna, under which Cigna was to pay a “Contract Rate” of 85% of ECAPS’s billed charges. According to the complaint, Cigna paid far less in the “overwhelming majority” of cases. ECAPS took the claims through the NSA’s IDR process and won awards exceeding $3 million. Cigna paid none of them. Cigna, for its part, alleges that ECAPS billed fraudulently and that Cigna overpaid it by $8.5 million, and it sued ECAPS under ERISA, the Declaratory Judgment Act and Connecticut law. ECAPS then sued Cigna, seeking a declaration that Cigna violated the NSA by failing to pay the award amounts.

The district court dismissed ECAPS’s complaint, holding that the NSA contains no express or implied private right of action to enforce IDR awards and that the Declaratory Judgment Act is not an independent source of one. The Second Circuit affirmed.

Background

The IDR process

Under the NSA, an out-of-network provider bills the patient’s plan rather than the patient, and the plan must make an initial payment or send a notice of denial within 30 days. A provider that disagrees can open negotiations and, if those fail, initiate the IDR process. Each side submits an offer, and the certified IDR entity selects one of them. The determination “shall be binding upon the parties involved” and “shall not be subject to judicial review, except in a case described in any of paragraphs (1) through (4) of section 10(a) of title 9” — the Federal Arbitration Act’s grounds for vacating an arbitration award. 29 U.S.C. § 1185e(c)(5)(E)(i)(I)–(II). Payment is due within 30 days of the determination. Id. § 1185e(c)(6).

Three codifications, three agencies

Congress conferred jurisdiction over the NSA on three different federal agencies: the Department of Labor (DOL), as the administrator of ERISA § 716, 29 U.S.C. § 1185e; the Department of the Treasury (Treasury), through the Internal Revenue Service (IRS), as the administrator of I.R.C. § 9816; and the Centers for Medicare & Medicaid Services (CMS) of the Department of Health and Human Services (HHS), which administers Public Health Service Act § 2799A-1, 42 U.S.C. § 300gg-111. Each codification reads the same, and the agencies execute them concurrently, including joint issuance of the IDR regulations and sharing responsibility for certifying IDR entities and setting the methodology for awards. CMS runs the federal IDR portal on behalf of all three agencies.

The NSA defines the jurisdiction of each agency by the type of coverage involved, so that each agency reaches a different set of plans and parties:

• Private employer-sponsored group health plans, whether self-funded or insured, are covered by both the ERISA and Internal Revenue Code versions. DOL and Treasury share enforcement over them.
• Church plans, which fall outside ERISA, answer only to the Code, and so to Treasury.
• Non-federal governmental plans, such as those sponsored by state and local governments, fall under the Public Health Service Act and HHS.
• Health insurance issuers are also governed by the Public Health Service Act, whether they sell group or individual coverage. Here the states are the primary enforcers, and CMS steps in only where a state lacks the authority or doesn’t substantially enforce.
• Providers, facilities and air ambulance providers have their balance-billing obligations under the Public Health Service Act alone, enforced by the states and CMS.

The categories overlap in predictable ways. When an employer buys insurance, the insurer answers to the state or CMS, and the employer’s plan answers to DOL and Treasury.

This overlapping structure became the center of the ECAPS case. Each of the three statutes Congress amended comes with its own enforcement machinery. ERISA authorizes DOL to sue. The Code imposes an excise tax on the plan sponsor. The Public Health Service Act lets HHS impose civil money penalties and leaves the states to police insurers. The question was whether Congress, having spread enforcement across all of those mechanisms, also meant to let a provider holding an unpaid award go to court on its own.

The divided lower courts

Before ECAPS, district courts had gone both ways, including two in the District of Connecticut. Compare Guardian Flight LLC v. Aetna Life Ins. Co., 789 F. Supp. 3d 214, 229 (D. Conn. 2025) (finding an implied right of action), with Axis Neuromonitoring, LLC v. Aetna Inc., 824 F. Supp. 3d 217, 224 (D. Conn. 2026) (finding none, “as have most courts to consider the issue”).

Legal Analysis

• The starting presumption runs against the provider. The court framed the question of a private right of action through Alexander v. Sandoval, 532 U.S. 275, 286–87 (2001), and two 2026 Supreme Court decisions applying the same approach, FS Credit Opportunities Corp. v. Saba Capital Master Fund, Ltd., 608 U.S. 608, 613 (2026), and Cisco Systems, Inc. v. Doe I, 146 S. Ct. 1882, 1890 (2026). Where a statute has no express private right of action, courts begin with the presumption that Congress did not intend one, and the text and structure must show “a clear manifestation” of intent to create both a private right and a private remedy. Lopez v. Jet Blue Airways, 662 F.3d 593, 596 (2d Cir. 2011).
• “Shall pay” is rights-creating language, but it isn’t enough. The court accepted that the NSA’s payment provisions are the kind of rights-creating language that can imply a cause of action, citing its own decision in Murphy Medical Associates, LLC v. Yale University, 120 F.4th 1107, 1112 (2d Cir. 2024). But under Gonzaga University v. Doe, 536 U.S. 273, 284 (2002), a plaintiff must also show an intent to create a private remedy, and that is where ECAPS’s argument failed.
• Congress imported the FAA’s vacatur provision, not its confirmation provision. The NSA incorporates FAA § 10, which lets a court vacate an award, but not FAA § 9, which lets a party confirm one. Congress has incorporated § 9 elsewhere — the Administrative Dispute Resolution Act makes awards enforceable “pursuant to sections 9 through 13 of title 9,” 5 U.S.C. § 580(c) — and the court read the omission here as deliberate, as the Fifth Circuit had. See Guardian Flight, 140 F.4th at 276–77. ECAPS argued that Congress didn’t need § 9 because it applies to arbitration under an agreement rather than a statute. The court pointed out that § 10 applies to agreement-based arbitration too, and Congress incorporated it anyway.
• The enforcement scheme is administrative, and it interlocks. This is where the overlapping administrative structure set up by Congress becomes key. DOL can sue to enjoin violations by private employer-sponsored plans, 29 U.S.C. § 1132(a)(5). Treasury can impose an excise tax on a non-governmental plan that fails to meet the requirements, which include timely payment of IDR awards. I.R.C. § 4980D(a). HHS can impose civil money penalties on state and local governmental plans, 42 U.S.C. § 300gg-22(b)(2)(A). And states can enforce the requirements against health insurance issuers, id. § 300gg-22(a)(1). Under Sandoval, 532 U.S. at 290, the express provision of one method of enforcement suggests Congress meant to preclude others.
• How vigorously the agencies enforce is beside the point. ECAPS made four related arguments, and the court rejected each.
  • No enforcement power in the NSA. ECAPS argued that the NSA itself confers no enforcement power on DOL or Treasury. The court answered that Congress didn’t need to grant any. The NSA was written into ERISA and the Internal Revenue Code, and both already authorize agency enforcement: DOL’s power to sue dates to ERISA’s enactment in 1974, and Treasury’s excise tax was added to the Code in 1996. Once the NSA’s requirements became part of those statutes, the existing enforcement tools applied to them.
  • Minimal enforcement by DOL. ECAPS argued that DOL’s enforcement of IDR awards has been minimal. The court held that the relevant question is whether Congress authorized agency enforcement, not how actively the agency uses it.
  • Treasury can waive the tax. ECAPS pointed out that Treasury may waive the tax when a late payment isn’t due to willful neglect. The court said that an agency’s discretion to waive enforcement is no evidence that Congress intended a private right of action.
  • The tax falls on the employer. For most plans, the tax falls on the employer rather than on the plan that failed to pay. The court noted that ECAPS cited no authority requiring enforcement power to run against the noncomplying entity itself.
• “Binding” does not say who enforces. The court held that ECAPS’s reliance on the provision making the IDR entity’s choice between the two offers “binding upon the parties involved,” 29 U.S.C. § 1185e(c)(5)(E)(i)(I), begged the question, because the provision says nothing about who may enforce the determination. Cases enforcing “binding” awards under arbitration agreements did not address a statutory process subject to administrative enforcement.
• Vacatur still has work to do without private enforcement. ECAPS argued that incorporating the grounds for vacatur under FAA § 10 would be pointless if no one could be compelled to pay. The court disagreed: a plan facing an unfavorable award may prefer to seek vacatur rather than ignore the award and risk administrative action, and a provider that believes the process was tainted and produced too low an award can seek vacatur as well. Quoting Guardian Flight, the court observed that Congress “may have judged it better to have an administrative enforcement mechanism handle most award disputes instead of throwing open the floodgates of litigation.” 140 F.4th at 277.
• The Tucker Act and § 1983 analogies did not carry over. ECAPS relied on Maine Community Health Options v. United States, 590 U.S. 296 (2020), where the Supreme Court held that the Affordable Care Act’s command that the HHS Secretary “shall pay” insurers under the risk-corridors program let those insurers sue the government for the payments Congress later declined to fund. The Court observed there that “shall pay” language “often reflects congressional intent to create both a right and a remedy under the Tucker Act.” Id. at 324. But that holding arose under the Tucker Act, which waives the federal government’s sovereign immunity for money claims but requires a plaintiff to identify a separate statute that “can fairly be interpreted as mandating compensation by the Federal Government.” Id. at 322–23. Maine Community answered that money-mandating question. ECAPS presented a different one: whether Congress implied a private right of action against a private health plan, with no sovereign immunity and no Tucker Act claim involved. The court also rejected ECAPS’s reliance on 42 U.S.C. § 1983. In § 1983 cases, the statute itself supplies the remedy, so a plaintiff needn’t show that Congress intended one, but ECAPS’s claim rested on an implied right of action, where the plaintiff carries that burden.
• No end-run through the Declaratory Judgment Act. Because the Declaratory Judgment Act does not create an independent cause of action, and ECAPS had no substantive claim of right under the NSA, its declaratory claim fell with its implied-right claim.

Holding

Affirmed. The NSA does not create an implied private right of action for a provider to enforce payment awards obtained through the IDR process, and the Declaratory Judgment Act does not supply an independent cause of action. The court assumed, without deciding, that the NSA’s judicial-review provision, 29 U.S.C. § 1185e(c)(5)(E)(i)(II), does not itself bar ECAPS’s suit.

What to Watch

• The question the court reserved. Cigna argued that the NSA’s limit on “judicial review” bars any suit to confirm or enforce an IDR award, and the Fifth Circuit adopted that reading in Guardian Flight. The Second Circuit did not decide it. The difference matters only at the margins today, since neither circuit allows a private enforcement suit, but it would matter if a provider framed a claim some other way.
• Further review. Two circuits now agree, and the court cited no circuit decision going the other way, which makes this an unlikely candidate for Supreme Court review unless a split develops. Absent a rehearing petition, a petition for certiorari would be due 90 days after judgment, on or about December 16, 2026.
• Update (October 18, 2026). ECAPS petitioned for panel rehearing and rehearing en banc on October 1, 2026, and the petition is pending. Pet. for Reh’g, East Coast Advanced Plastic Surgery, No. 25-2204 (2d Cir. Oct. 1, 2026), Dkt. No. 82. The Emergency Department Practice Management Association and EMS Alliance filed an amicus brief supporting rehearing on October 13, 2026. If the court denies the petition, a petition for certiorari would be due 90 days after the denial. See Sup. Ct. R. 13.3.
• Agency enforcement. With private suits foreclosed in two circuits, whether an unpaid IDR award gets paid now depends on DOL, Treasury, HHS and state insurance regulators. ECAPS’s argument that DOL enforcement has been minimal did not move the court, but it identifies the pressure point providers are likely to press next.
• Claims the decision does not reach. The opinion addresses a claim to enforce the NSA itself. It does not address whether a provider can pursue other claims arising from the same services — for example, claims under a separate network agreement like the MultiPlan contract described in the complaint. Cigna’s related action against ECAPS, alleging $8.5 million in overpayments, was not before the court on this appeal.

What This Means for Resolving Payor-Provider Disputes

Arbitration finality means an award is hard to undo. Under the NSA as these two circuits read it, an IDR award is both hard to undo and unenforceable by the winner in court. The award still binds the parties, but its practical weight now depends on the regulatory risk the losing party runs by not paying, rather than on the threat of a judgment.

That changes what an unpaid award is worth at the negotiating table rather than whether it is worth anything. An IDR determination remains a neutral’s answer to what a set of services was worth, which gives both sides a shared reference point. Where, as here, a provider’s unpaid awards sit alongside a plan’s overpayment and fraud claims against the same provider, the disputes tend to travel together, and the two numbers tend to be resolved together rather than one at a time.

John Libby is an arbitrator, mediator, and settlement counsel with LibbyADR LLC. This post contains his own summaries of the decisions discussed, prepared for general informational purposes only. The summaries are not intended to be a complete statement of any court’s reasoning, nor should they be taken to indicate how he would rule as an arbitrator in any particular case. In addition, the summaries are not legal advice, nor should they be construed as legal advice. Readers should not act on these posts, but should review the decisions themselves and consult with legal counsel.

Courts enforce arbitration agreements and review awards narrowly. It is, therefore, notoriously difficult to overturn an unfavorable arbitration award – the grounds are narrow by statute, and courts are loath to expand the grounds by judicial fiat. This past summer brought five decisions in under two months that turned away five different theories: functus officio, manifest disregard, public policy, plain untimeliness, and arbitrator legal error. One decision does open a door, though not for the party that lost. The Third Circuit held that an arbitration panel may revisit its own award to clarify a genuine ambiguity, and that, where the parties’ chosen arbitration rules let the panel interpret the limits of its own powers, a reviewing court should defer to the clarification – once again, an example of judicial reticence to interfere in the arbitration process.

Executive Summary

Between July and August 2026, the Second, Third and Eighth Circuits, the Southern District of New York, and a California Court of Appeal each declined to disturb an arbitration award, on five distinct grounds. In Prospect Capital Management L.P. v. Stratera Holdings, LLC, 185 F.4th 429 (3d Cir. 2026), the Third Circuit held that a panel’s revised award clarifying an ambiguous fee ruling fell within the ambiguity exception to functus officio, and — because the parties’ AAA rules delegated that question to the panel — deferred to it as at least a rational clarification. In Acorda Therapeutics, Inc. v. Alkermes PLC, No. 25-1896, 2026 WL 2042719 (2d Cir. July 15, 2026) (summary order), the Second Circuit refused to add $65 million to a $16.5 million restitution award in the licensee’s favor, holding the tribunal had not manifestly disregarded patent law because Supreme Court precedent in the patent area does not require restitution of royalties a licensee knowingly paid. In Compeer Financial, ACA v. Corporate America Lending, Inc., 180 F.4th 1119 (8th Cir. 2026), the Eighth Circuit declined to decide whether a public-policy exception survives the Supreme Court’s decision in Hall Street Associates, L.L.C. v. Mattel, Inc., 552 U.S. 576 (2008) that the Federal Arbitration Act provides the exclusive ground for vacatur, because the panel had rested on independent alternative grounds that made any violation harmless. In Triad Health LLC d/b/a MediraRx v. Novus Health, Inc., No. 26-CV-1957 (JPO), 2026 WL 2532306 (S.D.N.Y. Aug. 27, 2026), the Southern District of New York confirmed a AAA award in a 340B third-party-administrator dispute, deferring to the arbitrator’s finding that the challenger had waived its jurisdictional objection by not raising it in time, and rejecting an evident-partiality challenge both because no objection was made by the AAA’s deadline and because the disclosed relationship was remote and insubstantial. And in Saberin v. Alation, Inc., 122 Cal.App.5th 165 (2026), a California Court of Appeal held that an arbitrator’s legal error that forecloses a hearing on the merits of an employee’s unwaivable FEHA claim is subject to judicial review — and then affirmed the denial of vacatur anyway, deferring to the arbitrator’s factual findings.

Taken together: the substantive doors remain narrow, the procedural ones close on a clock, and even the one merits door that is genuinely open leaves the arbitrator’s factual findings in place.

Background: The Legal Landscape After Hall Street

The Federal Arbitration Act permits vacatur only on narrow grounds — corruption, fraud or undue means; evident partiality or corruption in the arbitrators; misconduct or misbehavior that prejudiced a party’s rights; and arbitrators exceeding their powers, or so imperfectly executing them that no mutual, final and definite award was made. 9 U.S.C. § 10(a). Section 11 permits modification or correction for evident material miscalculations or misdescriptions, awards on matters not submitted (unless the matter does not affect the merits of the decision on what was submitted), and imperfections of form not affecting the merits. Id. § 11. Some courts have added two judicial glosses: manifest disregard of the law, and a public-policy exception. Both have been in doubt since the Supreme Court decided Hall Street in 2008.

Hall Street arose from a lease dispute in which the parties, partway through federal litigation, agreed to arbitrate one issue and wrote their own standard of review into the agreement: the court would vacate or modify any award whose findings of fact were not supported by substantial evidence or whose conclusions of law were erroneous. 552 U.S. at 579. The Supreme Court held that the FAA would not enforce that bargain. Sections 10 and 11, it held, “provide the FAA’s exclusive grounds for expedited vacatur and modification,” id. at 584, and Section 9’s command that a court “must grant” confirmation unless the award is vacated, modified or corrected under those sections leaves no room for more: “There is nothing malleable about ‘must grant.’” Id. at 587. Parties can agree to arbitrate, and they can shape how the arbitration is run, but under the FAA they cannot contract for a court to review the result based on anything other than what the FAA provides, including expanded appellate review.

That holding put both judicial glosses in doubt. Manifest disregard traces to a phrase in Wilko v. Swan, 346 U.S. 427, 436–37 (1953), overruled on other grounds by Rodriguez de Quijas v. Shearson/American Express, Inc., 490 U.S. 477 (1989), and Hall Street declined to say what the phrase meant: perhaps a new ground for review, perhaps a reference to the Section 10 grounds collectively, or perhaps “shorthand for § 10(a)(3) or § 10(a)(4).” 552 U.S. at 585. Two years later, the Court expressly left the question open. Stolt-Nielsen S.A. v. AnimalFeeds International Corp., 559 U.S. 662, 672 n.3 (2010). The circuits have answered it differently. The Second Circuit treats manifest disregard as a “judicial gloss” on Section 10, T.Co Metals, LLC v. Dempsey Pipe & Supply, Inc., 592 F.3d 329, 340 (2d Cir. 2010); the Ninth folds it into Section 10(a)(4), Comedy Club, Inc. v. Improv West Associates, 553 F.3d 1277, 1290 (9th Cir. 2009); and the Fifth and Eleventh hold that the statutory grounds are exclusive, Citigroup Global Markets, Inc. v. Bacon, 562 F.3d 349, 355 (5th Cir. 2009); Frazier v. CitiFinancial Corp., 604 F.3d 1313, 1324 (11th Cir. 2010). The Fourth Circuit, expressly declining to follow the Fifth and Eleventh, holds that manifest disregard survives — as an independent ground or as a judicial gloss on Section 10 — without deciding which. Wachovia Securities, LLC v. Brand, 671 F.3d 472, 483 (4th Cir. 2012). The public-policy exception has a different pedigree — W.R. Grace & Co. v. Local Union 759, 461 U.S. 757, 766 (1983), a labor-arbitration case — but after Hall Street it faces the same objection: it is not in Section 10. Hall Street did leave one door ajar. The FAA, the Court said, “is not the only way into court for parties wanting review of arbitration awards,” and state statutory or common law may supply review of a different scope. 552 U.S. at 590.

California runs a parallel regime under its own arbitration statute. Code of Civil Procedure section 1286.2 supplies its own vacatur grounds, including that the arbitrator exceeded their powers. Under Moncharsh v. Heily & Blase, 3 Cal.4th 1, 11 (1992), an arbitrator’s decision generally cannot be reviewed for errors of fact or law, but Moncharsh reserved “limited and exceptional circumstances.” Id. at 32. Pearson Dental Supplies, Inc. v. Superior Court, 48 Cal.4th 665 (2010), identified one: a clear legal error that prevented an employee subject to mandatory arbitration from obtaining a hearing on the merits of his FEHA claim, which the court held could be vacated under section 1286.2(a)(4). Id. at 669–670, 679–680. Pearson expressly declined to decide whether all legal errors in that setting are reviewable, and it noted that several federal circuits reach comparable errors through manifest disregard as part of Section 10(a)(4). Id. at 677 n.3, 679.

Separately, as a default rule, functus officio prevents arbitrators from redetermining the merits of an issue they have finally decided. Parties may contract around the rule. Its traditional exceptions permit correction of facial clerical or arithmetic errors, resolution of issues that were submitted but not decided, and clarification of genuine ambiguity. Prospect Capital, 185 F.4th at 434–437 & n.1.

That is the toolkit these five cases used over the summer. They show how little of it helps the losing party in arbitration.

Legal Analysis of the Summer 2026 Cases

The arbitral panel has more authority over its own award than a court does. In Prospect Capital, a panel found that Prospect had breached a fee agreement by excluding one category of shares from a calculation, but the award did not make clear how that ruling applied to the other disputed categories. When the parties raised the point, the panel issued a revised award confirming it applied to all of them. Prospect argued that the arbitral panel no longer had jurisdiction and thus functus officio barred the revision. The Third Circuit disagreed. An ambiguity arises where an award “fails to address a contingency that later arises or when the award is susceptible to more than one interpretation” (citation omitted), and this award was. Prospect Capital, 185 F.4th at 438. The court then deferred, concluding the revised award “was at least a rational clarification of its earlier award.” Id. at 440. It tied that deference to the parties’ adoption of the AAA rules, which let the arbitrators interpret and apply the rules governing their own powers — including the rule barring them from redetermining the merits of a decided claim. Id. at 434–435, 440. Two threshold rulings travel with it: an interim award resolving liability but reserving remedy is final as to liability for functus officio purposes, and the doctrine itself remains good law in the Third Circuit.

The court’s power to modify an arbitration award is limited. In Acorda, the fight was over money Acorda had already paid. Acorda licensed a patent from Alkermes and, as its contracts required, kept paying royalties after the patent expired in 2018. About two years later it demanded arbitration and began paying under protest. A tribunal of three retired judges agreed that the clauses requiring post-expiration royalties were unenforceable and ordered Alkermes to refund the roughly $16.5 million Acorda had paid under protest. But it refused to order a refund of the larger sums Acorda had paid earlier without protest, applying New York’s voluntary-payment doctrine, which bars recovery of payments made with full knowledge of the facts. Acorda, 2026 WL 2042719, at *1. Acorda then asked the district court to vacate or modify the award so that it would recover another $65 million, arguing that the tribunal had manifestly disregarded federal patent law. Manifest disregard is not one of the FAA’s statutory grounds, and the Second Circuit treats it as a judicial gloss on the vacatur grounds in Section 10, and a “severely limited” one at that: the challenger must identify “well-defined” and “explicit” law that the arbitrators ignored, and the award stands so long as there is “a barely colorable justification for the outcome reached by the arbitrators.” Acorda, 2026 WL 2042719, at *1–2. (The district court had noted that, since Hall Street, the Second Circuit has recognized manifest disregard only as a ground for vacatur, not modification; the Second Circuit found it unnecessary to decide that question. Id. at *1 n.1.) Acorda could not point to any explicit law requiring full restitution. The cases it relied on, Brulotte v. Thys Co., 379 U.S. 29 (1964), and Kimble v. Marvel Entertainment, LLC, 576 U.S. 446 (2015), bar royalties for post-expiration use of the patented invention; neither establishes that a licensee who knowingly paid the challenged royalties is entitled to complete restitution. Acorda had conceded as much during the arbitration: “neither Brulotte nor Kimble addressed damages.” Id. at *2. With no explicit federal rule requiring full restitution, the tribunal’s use of New York law to measure Acorda’s state-law restitution claim had at least a colorable justification. Id. at *3. The court assumed, without deciding, that a public-policy challenge remains available, and rejected it for the same reason. Id. at *1 n.2, *2–3.

The public-policy question survived by not being reached. In Compeer, the losing party argued the award enforced a contract that violated the Farm Credit Act and therefore public policy. The Eighth Circuit observed that the circuits divide over whether judge-made grounds for vacatur survive Hall Street — as noted above, the Ninth Circuit treats manifest disregard as part of § 10(a)(4), while the Fifth and Eleventh Circuits hold the statutory grounds exclusive — and expressly declined to decide whether the public-policy exception survives. Compeer, 180 F.4th at 1128–29. It did not have to. The panel had granted alternative claims for breach of the implied covenant of good faith and fair dealing and for unjust enrichment, so even if part of the award offended public policy, the result rested on independent grounds, and any error was harmless. Id. at 1129.

That reasoning is worth more than the holding. An award resting on alternative independent grounds is materially harder to unwind, because a challenger attacking the substance of the award has to defeat every route to the same result rather than the most vulnerable one — though a defect that taints the whole award, such as partiality, is a different matter.

Objections not raised in time during the arbitration are hard to revive. In Triad Health, a 340B third-party administrator, MediraRx, moved to vacate a AAA award holding that the covered entity had properly terminated their administration agreement. It raised three grounds, and none succeeded. First, it argued that the award reached into related pharmacy contracts that carried their own forum-selection clauses. The court disagreed: the award resolved only rights under the administration agreement and, as the arbitrator had found, left the pharmacy contracts to be decided on their own merits in their own forums. Triad Health, 2026 WL 2532306, at *5–6. Second, MediraRx argued that the arbitrator had usurped a court’s role in deciding whether those later contracts limited the arbitration clause. The arbitrator had found that MediraRx waived that objection by not raising it in time under AAA Commercial Rule 7(c), and the court deferred to that finding, explaining that its own view of whether waiver occurred was “irrelevant.” Id. at *7–8. An objection to arbitrability “must be made on a timely basis, or it is waived.” Id. at *7 n.4 (quoting ConnTech Dev. Co. v. Univ. of Conn. Educ. Props., Inc., 102 F.3d 677, 685 (2d Cir. 1996)). Third, MediraRx challenged the arbitrator’s mid-case disclosure of an old connection with its own counsel’s firm. It had never objected by the AAA’s deadline, and in any event the relationship was disclosed, remote and insubstantial, and the claimed bias speculative. Id. at *4–5. The court confirmed the award and declined to award fees, finding that the record did not show the petition was brought in bad faith. Id. at *8.

California review is available, but the arbitrator’s findings still control. Saberin turns on geography. Pejman Saberin, an engineer, worked for Alation, Inc., a data-software company headquartered in California. But he lived in Utah and worked remotely from there, and his direct supervisor worked remotely from Washington state. In October 2023, he was arrested in Florida while returning from a vacation. The two executives who decided to terminate him — one who worked from Utah, the other who ordinarily worked from his home in California — were both in Illinois when they made the decision, with “input” from a human-resources employee who worked in California. The criminal case was later dismissed. Saberin, 122 Cal.App.5th at 170–171, 179–180.

Saberin claimed that Alation violated two California statutes that bar employers from considering an arrest that did not lead to a conviction: Government Code section 12952, part of FEHA, and Labor Code section 432.7. The claims went to arbitration under his employment agreements, one of which called for arbitration “pursuant to California law.” Alation argued that neither statute reaches an employee who lives and works outside California, and the arbitrator agreed. Because Saberin could identify no Utah, federal, or other non-California law under which to proceed, the parties stipulated to an award in Alation’s favor so that he could challenge the ruling promptly. He then petitioned to vacate under Code of Civil Procedure section 1286.2(a)(4), arguing that the arbitrator had exceeded his powers. Id. at 170–172.

The Court of Appeal first held that the ruling was reviewable. Under Pearson, an arbitrator’s legal error that deprives an employee of a hearing on the merits of an unwaivable FEHA claim is subject to judicial review, and the arbitrator’s ruling here had done exactly that. Id. at 173–174. (The court assumed, without deciding, that the same was true of the Labor Code claim. Id. at 173 n.2.) Nor had Saberin waived review. Nothing in Moncharsh suggests a party gives up a section 1286.2(a)(4) challenge “by simply agreeing to arbitrate a dispute,” and Saberin had pressed his California-law arguments before the arbitrator; he did not also have to predict that an adverse ruling would exceed the arbitrator’s powers. Id. at 174–175.

Reviewing the question de novo, the court then held that Saberin could not invoke either statute. Id. at 175. The fact that he had chosen a California forum and California law did not change the answer. The court accepted that California law governed, whether through the choice-of-law clause in his employment agreement or the rule that a forum applies its own law. But California law includes the presumption that its statutes are meant to apply only within the state, so a clause selecting California law brings that presumption with it. Id. at 175–176. The question was therefore not which state’s law applied, but whether the Legislature meant these two California statutes to reach a worker like Saberin, who resided outside of California. Following Ward v. United Airlines, Inc., 9 Cal.5th 732 (2020), which requires a statute-by-statute inquiry into geographic reach, the court concluded that, for a worker outside California, each statute applies only if the unlawful conduct — here, the decision to terminate him because of the arrest — has a sufficient connection to California. Saberin, 122 Cal.App.5th at 176–179. There was none. Saberin, his supervisor, and the arrest all occurred outside the state, and the termination decision was made in Illinois. The decisionmaker’s usual California home did not change that, since nothing suggested he had been sent out of state to avoid California law. As for the HR employee’s input, the arbitrator had called it a “tenuous” thread; the court read that as an implied factual finding that the input was not substantive, and deferred to it. Id. at 179–181.

The sequence is the lesson. Saberin won the argument about whether a court could review the ruling and lost the case anyway: a door to review is not a remedy. Because the court affirmed, it never had to decide what the remedy would have been — Saberin had argued that the arbitration agreement should be set aside and the case returned to court, and the court expressly left that open. Id. at 181 n.6. Note also what survived de novo review: the arbitrator’s factual findings still drew deference. Even in this narrow posture, the reviewing court works from the record the arbitrator built.

Holdings

Prospect Capital: affirmed. The ambiguity exception to functus officio permitted the panel’s revised award, and the clarification was entitled to deference given the parties’ adoption of AAA rules delegating that question to the panel. Precedential.

Acorda: affirmed. No manifest disregard; public-policy challenge rejected, assuming without deciding that such a challenge remains available; the district court correctly confirmed without modifying. Summary order, non-precedential but citable under Second Circuit Local Rule 32.1.1.

Compeer: affirmed, including appointment of a receiver. Whether a public-policy exception survives Hall Street left open; any violation harmless given independent alternative grounds. Precedential.

Triad Health: petition and motion to vacate denied; cross-petition to confirm granted; fees denied. Slip copy.

Saberin: affirmed. An arbitrator’s legal error that deprives an employee of a hearing on the merits of an unwaivable FEHA claim is reviewable under Code Civ. Proc. § 1286.2(a)(4) (assumed, without deciding, for the Labor Code claim), and the challenge is not waived by having agreed to arbitrate; on de novo review, neither statute reached this out-of-state employee, and the award stood. Certified for publication.

Arbitration Awards Remain Difficult to Overturn

For a party weighing a challenge, the arithmetic has not improved. The statutory grounds remain narrow, the judicial glosses remain contested, and procedural objections are held to strict time periods. Where California’s arbitration review rules apply, the statutory-rights exception can permit review of a ruling that forecloses a merits hearing — but Saberin shows that obtaining review is not the same as obtaining vacatur.

For a neutral drafting an award, Prospect Capital is the useful decision, and it cuts both ways. A panel may clarify a genuine ambiguity and, where the parties’ chosen rules leave that call to the panel, a court will defer — but the cleanest form of that protection is an award that was never ambiguous. Say how the ruling applies to every category before anyone has to ask. Compeer is a quiet argument for reaching alternative grounds where the record supports them, since an award with two independent legs is far harder to knock over.

What to Watch

First, whether the Eighth Circuit returns to the public-policy question it reserved in Compeer; it now sits beside an acknowledged split without having chosen a side. Second, how far Prospect Capital reaches — it is precedential, and the line between a permissible clarification and an impermissible second look will be tested by the next party that dislikes what a panel clarified. Third, the timeliness holding in Triad Health is not new law, but it is a recurring and avoidable reason a challenge fails and the one most within a party’s own control. Fourth, for arbitration practitioners, the part of Saberin that matters most is its reviewability holding, which sits alongside a statute-specific extraterritoriality holding that decided the case — expect it to be cited by employees seeking review of adverse FEHA arbitration rulings, and expect employers to press the narrow reading that Pearson reaches only a ruling that forecloses a merits hearing altogether.

Cases cited in this blog: Acorda Therapeutics, Inc. v. Alkermes PLC, No. 25-1896, 2026 WL 2042719 (2d Cir. July 15, 2026) (summary order) | Brulotte v. Thys Co., 379 U.S. 29 (1964) | Citigroup Global Markets, Inc. v. Bacon, 562 F.3d 349 (5th Cir. 2009) | Comedy Club, Inc. v. Improv West Associates, 553 F.3d 1277 (9th Cir. 2009) | Compeer Financial, ACA v. Corporate America Lending, Inc., 180 F.4th 1119 (8th Cir. 2026) | ConnTech Dev. Co. v. Univ. of Conn. Educ. Props., Inc., 102 F.3d 677 (2d Cir. 1996) | Frazier v. CitiFinancial Corp., 604 F.3d 1313 (11th Cir. 2010) | Hall Street Associates, L.L.C. v. Mattel, Inc., 552 U.S. 576 (2008) | Kimble v. Marvel Entertainment, LLC, 576 U.S. 446 (2015) | Moncharsh v. Heily & Blase, 3 Cal.4th 1 (1992) | Pearson Dental Supplies, Inc. v. Superior Court, 48 Cal.4th 665 (2010) | Prospect Capital Management L.P. v. Stratera Holdings, LLC, 185 F.4th 429 (3d Cir. 2026) | Rodriguez de Quijas v. Shearson/American Express, Inc., 490 U.S. 477 (1989) | Saberin v. Alation, Inc., 122 Cal.App.5th 165 (2026) | Stolt-Nielsen S.A. v. AnimalFeeds International Corp., 559 U.S. 662 (2010) | T.Co Metals, LLC v. Dempsey Pipe & Supply, Inc., 592 F.3d 329 (2d Cir. 2010) | Triad Health LLC d/b/a MediraRx v. Novus Health, Inc., No. 26-CV-1957 (JPO), 2026 WL 2532306 (S.D.N.Y. Aug. 27, 2026) | W.R. Grace & Co. v. Local Union 759, 461 U.S. 757 (1983) | Wachovia Securities, LLC v. Brand, 671 F.3d 472 (4th Cir. 2012) | Ward v. United Airlines, Inc., 9 Cal.5th 732 (2020) | Wilko v. Swan, 346 U.S. 427 (1953), overruled on other grounds by Rodriguez de Quijas v. Shearson/American Express, Inc., 490 U.S. 477 (1989)

John Libby is an arbitrator, mediator, and settlement counsel with LibbyADR LLC. This post contains his own summaries of the decisions discussed, prepared for general informational purposes only. The summaries are not intended to be a complete statement of any court’s reasoning, nor should they be taken to indicate how he would rule as an arbitrator in any particular case. In addition, the summaries are not legal advice, nor should they be construed as legal advice. Readers should not act on these posts, but should review the decisions themselves and consult with legal counsel.

Introduction

Arbitral institutions are competing on efficiency — the ICC’s revised Rules took effect June 1, 2026 with a highly expedited track and codified early determination, and the AAA amended its Commercial Rules in 2022 to make arbitrators weigh the cost of a dispositive motion before allowing one. None of that reaches the decisions that actually drive cost. Those belong to counsel, and most of them are made in the first sixty days. What follows is my top ten list of what counsel can do to make arbitration truly efficient and cost effective for their clients.

The List

1. Draft the clause so it can run itself. If you are drafting the arbitration clause as transactional counsel, or one in a post-dispute agreement to arbitrate, sweat the details – but don’t handcuff the arbitrator and litigation counsel down the road. Name the forum and the rules, and set the seat, governing law, selection method, and form of award. Be careful about discovery – don’t incorporate statutory or procedural rules wholesale, but it might be wise to leave the shape of discovery to the preliminary hearing once the contours of the dispute are known. Watch the recurring defects: conditions precedent so strict a party forfeits the right to arbitrate by missing a step, and a three-arbitrator panel in a contract whose disputes will cost less than the panel.
2. Treat the preliminary hearing as the most important hour in the case. It is not a scheduling call. It is where the schedule, discovery scope, form of testimony, expert treatment, motion protocol and award type are either resolved or scheduled to be resolved. Meet and confer in earnest beforehand and arrive with positions on these critical issues in addition to a calendar. The difference between a conference where counsel have actually spoken and one where they have not is not subtle.
3. Build a schedule that will hold — and book the extra hearing days now. The goal is not the earliest dates; it is dates that survive. Finding additional hearing days later means finding them across three calendars plus the arbitrator’s (or a panel’s, even more complicated), which is how an arbitration starts looking more like litigation. Ask the arbitrator to require good cause for any modification, and put status calls on the calendar while slippage is still correctable.
4. Help the arbitrator get disclosure right. Failure to disclose a prior or ongoing relationship is the most common route to vacatur under the Federal Arbitration Act, and an arbitrator can only run conflicts against names actually supplied. Give the full list — counsel, parties and their ownership, witnesses, experts — and supplement as the case develops. States such as California have specific requirements regarding disclosure, including permitting peremptory disqualification within fifteen days of disclosures, and solicitation-disclosure requirements in consumer matters. The party best served by clean disclosure is the one that prevails.
5. Right-size discovery to the case, not to the rules you are used to. Parties trade the jury and meaningful appellate review for speed and cost. Counsel who then run federal-court discovery have given up the benefits and kept the costs. Focus on what you actually have to present and prove to a sophisticated arbitrator, not a lay jury. Address third-party discovery early, because an arbitrator’s subpoena power is more constrained than that of a court, and disputes over third-party discovery need to be resolved early.
6. Decide the form of testimony before you pick your witnesses and experts. Whether written statements will stand in for direct testimony, and whether opposing experts will be heard concurrently, changes how you prepare for the hearing and can change which expert you retain. Deferring these questions to the eve of the hearing forfeits the savings entirely.
7. Handle procedural disputes with a letter and a phone call. The most efficient protocol in wide use is a three-page letter followed by a call within a day or two. An informal discovery conference with the arbitrator frequently resolves the dispute by the act of being scheduled — parties who have to explain a disagreement out loud tend to settle it first.
8. Reserve dispositive motions for pure questions of law. Provider rules set a deliberately high bar: permission first, plus a showing the motion is likely to succeed and to narrow the case. The reason is Section 10 of the FAA, which permits vacatur where an arbitrator refused to hear evidence “pertinent and material to the controversy.” A dispositive ruling that passes over a genuine factual dispute is the award most exposed on review. Move only where there are no disputed facts at all — not merely none that are material — or make the same argument at the hearing, on a developed record, at a fraction of the risk.
9. Try the case to the arbitrator, not to a jury. Having a third witness read a contract section into the record is a habit imported from jury trials, and it is among the largest recoverable time losses in a hearing. Say you are turning to Section 3 and move on. Enter into as many stipulations as the parties may agree to. Use written direct for minor and records witnesses — but not for a party, and not for a witness who has to teach something like a damages model, and always take some live direct so the witness is settled before cross.
10. Carve out the issue that decides the case, and choose the award form before you need it. A great many disputes turn on one question — whether a contract was formed, whether particular conduct was a breach. Resolving it first gives both sides a shared reference point, and the interim ruling often does more to resolve the matter than the rest of the hearing would have. Mind the difference between an interim award and a partial final award, because a final award starts the clock on confirmation and vacatur. On the award itself: decide at the preliminary hearing whether you want standard, reasoned, or findings and conclusions, note that provider rules impose deadlines for requesting a reasoned award, and remember that if there is any prospect of seeking vacatur, a reasoned award is the one to have.

The Common Thread

Every item on this list is a decision counsel can make, most of them early, and nearly all of them are forfeited by default rather than lost on the merits. Arbitration’s advantage is that it is the parties’ process — almost every procedural feature is negotiable at a point when negotiating it still matters. Counsel who treat the rules as a fixed track have paid for an option they never exercise.

John Libby is an arbitrator, mediator, and settlement counsel with LibbyADR LLC. This post discusses arbitration practice for general informational purposes and is not legal advice.