US Supreme Court holds that federal courts retain jurisdiction to confirm or vacate arbitration awards in previously stayed actions under the Federal Arbitration Act

The United States Supreme Court has issued a unanimous decision in Jules v. Andre Balazs Properties, holding that a federal court that has previously stayed trial in a pending action awaiting arbitration of arbitrable issues, as authorized by Section 3 of the Federal Arbitration Act (FAA), retains jurisdiction to confirm or vacate a resulting arbitral award, even when the motion to confirm or vacate does not independently present a basis for federal jurisdiction.

In a decision authored by Justice Sonia Sotomayor, the Court reasoned that a federal court’s original jurisdiction over claims that lead to a stay under Section 3 is not eliminated by the FAA while parties arbitrate.[1] The Court’s decision preserves a federal forum for the purpose of enforcing awards arising out of disputes that originated in federal courts.

Below, we provide a summary of the case and discuss its impact for parties engaged in arbitrations that originate from federal litigation.

Background

The petitioner, Adrian Jules, worked at the Chateau Marmont Hotel in Los Angeles, California from 2017 to 2020. When the hotel ended his employment in March 2020, Jules sued in the US District Court for the Southern District of New York, alleging that the respondents unlawfully discriminated against him in violation of federal and state law. The respondents moved to stay the federal proceedings pending arbitration under Section 3 of the FAA, citing an arbitration agreement Jules had signed before beginning work at the hotel.

In 2021, the District Court agreed that Jules’s claims were arbitrable and stayed proceedings pending their resolution.

In 2023, the arbitrator issued a final award ruling against Jules on all claims and awarded approximately $34,500 in sanctions to the respondents based on misconduct by Jules and his attorney during the arbitral proceedings.

The respondents moved to confirm the award under Section 9 in the same District Court that had previously stayed the action. Jules opposed confirmation and cross-moved to vacate the award under Section 10. In addition to raising several bases for vacating the award, Jules also argued, in the alternative, that under the Supreme Court’s prior decision in Badgerow v. Walters, 596 U.S. 1 (2022), the District Court lacked subject-matter jurisdiction because the parties’ motions to confirm and vacate the award did not present federal questions or satisfy the requirements for diversity jurisdiction.[2]

The District Court disagreed and confirmed the award. The Second Circuit affirmed, reasoning that Badgerow involved a freestanding action commenced for the sole purpose of vacating an arbitral award, and was thus distinguishable from a case that had started as a federal question suit before it was stayed pending arbitration.[3]

The Court’s opinion

The Supreme Court affirmed the Second Circuit’s judgment in a unanimous opinion. The Court’s reasoning rested on the principles articulated by the Supreme Court in Badgerow that “[j]urisdiction to decide [a] case includes jurisdiction to decide [a] motion” within that case and that there is ordinarily “no need to ‘look through’ the motion in search of a jurisdictional basis outside the court.”[4]

Unlike the freestanding applications at issue in Vaden v. Discover Bank, 556 U.S. 49 (2009) and Badgerow, assessing jurisdiction over a Section 9 or Section 10 motion in a case originally filed in federal court does not require “looking through” the filed action to the parties’ underlying dispute. Instead, the court may assess its jurisdiction by looking at the suit that is already before it. The District Court had original jurisdiction under 28 U.S.C. § 1331 over Jules’s federal claims, and nothing in the FAA eliminated that jurisdiction while the parties arbitrated.[5]

The Court distinguished Badgerow, noting that this case was not, as the petitioner asserted, “Badgerow all over again.”[6] In Badgerow, the first and only question that was put before the federal court was to confirm or vacate an arbitration award, and there were therefore only two places for the court to look for federal jurisdiction: 1) the face of the motions under the FAA or 2) the underlying dispute that was not before the court. In Jules, however, the Court identified an “obvious third place to look for jurisdiction: the original claims themselves,” which were sufficient to establish federal question jurisdiction.[7]

The Court further observed that the structure of the FAA confirms this result. Citing its decision in Smith v. Spizzirri, 601 U.S. 472 (2024), the Court confirmed that Section 3 requires a stay rather than dismissal, which “comports with the supervisory role that the FAA envisions for the courts,” including assisting parties in arbitration and facilitating recovery on an arbitral award.[8] Under the rule adopted by the Court, the FAA requires a stay so that a court that has granted a stay under Section 3 can supervise the arbitration to the end, including through confirmation or vacatur under Sections 9 or 10.

Conclusion

The Supreme Court’s decision in Jules resolves a circuit split. The Second, Third, and Seventh Circuits had held that Badgerow’s rule is limited to freestanding applications under Sections 9 and 10 and does not apply where claims were filed in federal court before they were resolved in arbitration, while the Fourth Circuit had held that Badgerow’s holding applies to all Sections 9 and 10 motions regardless of whether a pre-existing federal lawsuit was pending.[9] Jules therefore provides clarity for parties engaged in arbitrations that originate from federal litigation, confirming that a federal court that stays an action under Section 3 retains jurisdiction to see the case through to conclusion, including through confirmation or vacatur of the resulting award.

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_{[1] Jules v. Andre Balazs Properties, No. 25-83, slip op. at 7 (U.S. May 14, 2026).}

_{[2] Badgerow v. Walters, 596 U.S. 1, 5 (2022).}

_{[3] Jules, slip op. at 6.}

_{[4] Badgerow, 596 U.S. at 15.}

_{[5] Jules, slip op. at 7.}

_{[6] Id. at 8.}

_[7] Id.

_{[8] Smith v. Spizzirri, 601 U.S. 472, 478 (2024).}

_{[9] Compare George v. Rushmore Serv. Center, LLC, 114 F. 4th 226, 238, n.16 (3d Cir. 2024), and Kinsella v. Baker Hughes Oilfields Operations, LLC, 66 F. 4th 1099, 1103 (7th Cir. 2023), with SmartSky Networks, LLC v. DAG Wireless, LTD., 93 F. 4th 175, 183 (4th Cir. 2024).}