Jules v. Andre Balazs Properties

    Issues

    When jurisdiction is otherwise lacking, do federal courts have jurisdictional authority over the decision to confirm or vacate arbitration awards when the court exercised jurisdiction over the case before it went to arbitration?

    Oral argument:
    March 30, 2026
    Court below:
    United States Court of Appeals for the Second Circuit

    This case asks the Supreme Court to determine whether federal courts retain jurisdictional authority to confirm or vacate arbitration awards stemming from cases they previously stayed under the Federal Arbitration Act (“FAA”). Petitioner argues that the FAA does not confer on federal courts an independent jurisdictional basis for awarding or vacating post-arbitral awards after staying a pre-existing federal suit. Respondents rely on 28 U.S.C. § 1367 and ancillary jurisdiction to argue that a federal court with preexisting original jurisdiction may resolve FAA post-arbitration motions in the same pending case. The outcome of this case has policy implications for judicial efficiency, raising concerns about forum shopping and increased litigation in federal courts.

    Questions as Framed for the Court by the Parties

    Whether a federal court that initially exercises jurisdiction and stays a case pending arbitration maintains jurisdiction over a post-arbitration Section 9 or 10 application where jurisdiction would otherwise be lacking. 

    Facts

    In December 2020, Petitioner Adrian Jules (“Jules”) filed a lawsuit against Respondents Andre Balazs Properties and related entities (collectively “Balazs”) in the United States District Court for the Southern District of New York (“S.D.N.Y.”), a federal district court. Jules’s suit brought sixteen causes of action under state and federal law related to his former employment at Chateau Marmont. In response, Balazs moved to either compel arbitration under Section 4 of the Federal Arbitration Act (“FAA”) or stay the lawsuit pending arbitration under Section 3 of the FAA, based on an arbitration agreement between Jules and Chateau Holdings, Ltd. (“Chateau”). In May 2021, the district court stayed the case under Section 3 of the FAA and the arbitration process moved forward in early 2022. 

    In May 2022, Jules sought to amend his complaint to add Andre Balazs, the CEO of Andre Balazs Properties, although Jules had previously dismissed claims against him. The arbitrator allowed Jules to amend the complaint but warned that costs could be imposed if the claims lacked a good-faith basis. The arbitrator ultimately denied the amendment because Jules failed to properly allege claims against the CEO, instead introducing new allegations against Chateau and other entities. Balazs sought costs, which the arbitrator treated as a request for sanctions. Instead of filing a brief opposing sanctions, Jules attempted to withdraw from arbitration.

    In October 2022, the arbitrator ruled that Jules’s withdrawal lacked merit and that Balazs was entitled to sanctions at the end of the arbitration. In January 2023, the arbitrator found that Jules had failed to prove his claims, issuing an award to Balazs. The arbitrator also awarded sanctions of $11,416.50 against Jules and $23,026.50 against Jules’s lawyer.

    Section 9 and Section 10 of the FAA allow a party to apply to a court to confirm an arbitration award or to vacate it on limited grounds. Balazs petitioned S.D.N.Y. to confirm the arbitration award under Section 9 of the FAA. Chateau also joined the motion even though it was not a party to the court action. Jules sought to have the award vacated under Section 10 of the FAA, arguing that the district court lacked subject matter jurisdiction. The district court held that it retained subject matter jurisdiction. Thus, the court confirmed the award in favor of Balazs and Chateau, noting it lacked a reason to vacate the judgment under Section 10.

    Jules appealed the district court’s ruling to the United States Court of Appeals for the Second Circuit. The Second Circuit affirmed the lower court’s ruling against Jules. The circuit court determined that Balaz’s application to confirm the arbitration award does not alone provide a basis for subject matter jurisdiction. However, the circuit court held that the district court did have jurisdiction to confirm the arbitration award because the district court previously had the power to stay the case for arbitration under Section 3, and the award in question came from the proceeding arbitration. This legal mechanism is known as the “jurisdictional anchor theory.” The court distinguished the case from the Supreme Court’s holding in Badgerow v. Walters, noting that the federal court in Badgerow did not have jurisdiction because the case originated in state court and was brought to a federal court solely on a petition to vacate an arbitration award, whereas Jules invoked federal question jurisdiction in bringing the employment claims to the district court before arbitration.

    On July 22, 2025, Jules petitioned the Supreme Court of the United States for a writ of certiorari, which was granted on December 5, 2025. 

    Analysis

    JURISDICTIONAL ANCHOR THEORY UNDER BADGEROW

    Petitioner Adrian Jules (“Jules”) argues that a prior stayed lawsuit initiated under a federal question does not act as a “jurisdictional anchor” for federal courts to later adjudicate post-arbitration motions under Sections 9 and 10 of the Federal Arbitration Act (“FAA”). Jules contends that the Supreme Court’s holding in Badgerow v. Walters, in conjunction with the text, structure, and purpose of the FAA, does not support a finding of jurisdiction, or adjudicatory power, in a case such as this. Jules explains that Badgerow requires an independent jurisdictional basis, and that a pre-existing stayed federal suit does not qualify as such a basis. Jules contends that Badgerow held that the FAA statute does not itself grant jurisdiction to federal courts to hear Section 9 and 10 applications. According to Jules, a “jurisdictional anchor” allows a federal court to retain jurisdiction over a case in a later related proceeding. Jules argues that the FAA does not confer a “jurisdictional anchor” between the initial lawsuit and a Section 9 application to confirm an arbitration award. Similarly, Jules asserts that the text of the FAA does not state that the court retains jurisdiction for Sections 9 or 10 petitions. Jules posits that although Section 3 preserves existing jurisdiction during a stay, it provides no “return ticket” after “arbitration has been had,” making award enforcement a new controversy. Jules also compares Sections 9 and 10 to Section 4, contending that Section 4 explicitly allows courts to “look through” an arbitration agreement to determine jurisdiction, while Sections 9 and 10 do not include that language. Because of this, according to Jules, federal jurisdiction under Sections 9 and 10 must be established independently, and courts cannot import Section 4’s broader rule into those provisions. Furthermore, Jules notes that Sections 9 and 10 contain no text indicating or creating special treatment for applications tied to earlier lawsuits. Jules then compares Sections 9 and 10 to Section 8, which states “the court . . . shall retain jurisdiction to enter its decree upon the award,” in maritime arbitration cases. Jules posits that the difference between these sections demonstrates that Congress knew how to create a jurisdictional anchor but chose not to do so for non-maritime cases, such as this case.

    Respondents Andre Balazs Properties and related entities (“Balazs”) argue that Jules misinterprets Badgerow. Balazs explains that Badgerow addressed whether the FAA itself confers federal jurisdiction for the first time for post-arbitration motions—not whether a federal court retains jurisdiction. Specifically, Balazs posits that the Supreme Court did not consider situations in which the federal court already has jurisdiction over a pending case. Balazs adds that Badgerow did not bar other Title 28 jurisdictional statutes, such as 28 U.S.C. § 1367. Balazs argues that Section 1367 provides “permissive post-arbitration” jurisdiction at the discretion of the court, allowing courts to decide whether to hear post-arbitration applications. Section 1367 according to Balazs, may operate alongside the FAA. Balazs contends that supplemental jurisdiction allows federal courts to hear additional claims that the court would ordinarily not have jurisdiction over, so long as the claims form part of the same case. Balazs argues that it would be illogical for jurisdiction to exist before arbitration begins but disappear immediately after arbitration concludes. Balazs also notes that a federal court maintains jurisdiction during a stay because, unlike a dismissal, the case is still “before the court” during the stay. In addressing Jules’ Section 8 argument, Balazs acknowledges that Section 8 does set out a “limited rule for maritime cases.” However, Balaz argues, Section 8’s jurisdictional grant does not impact other sections of the FAA. Balazs posits that although Section 8 expressly provides that courts “shall retain jurisdiction” in maritime arbitration cases, this provision does not prohibit courts from exercising jurisdiction in other contexts when authorized by separate statutes such as Section 1367. Further, Balazs maintains that nothing in Section 8 of the FAA replaces the grant of jurisdiction available through 28 U.S.C. § 1367. Balazs therefore argues that Section 8 mandates jurisdiction in maritime arbitration cases, while jurisdiction for non-maritime cases remains discretionary.

    ANCILLARY JURISDICTION 

    Jules asserts that the ancillary jurisdiction doctrine does not apply to post-arbitration motions under the FAA. First, Jules argues that ancillary jurisdiction is judge-made law whereas the power to confer jurisdiction falls to Congress. Jules adds that the FAA establishes a detailed framework specifying when a federal court may exercise jurisdiction. Jules contends that courts cannot undercut Congress’s authority to limit the jurisdiction of federal courts. Jules therefore argues that the jurisdictional scheme contained in the FAA replaces ancillary jurisdiction doctrine in arbitration cases. Jules then argues that even if ancillary jurisdiction doctrine still exists, it would not apply here. Jules explains that courts may exercise jurisdiction over otherwise jurisdictionally barred claims when the facts of the claim are interdependent with the facts of the original lawsuit. Jules argues that ancillary jurisdiction does not apply to Sections 9 and 10 of the FAA because Section 9 and 10 applications are not “factually interdependent” with the federal case. Jules explains that a court deciding whether to confirm or vacate an arbitration award under Sections 9 and 10 does not consider the same facts as the original lawsuit that led to arbitration.

    Balazs counters that the principles of ancillary jurisdiction support the authority of federal courts to decide post-arbitration motions ancillary to federal suits. Balazs posits that a federal court with preexisting original jurisdiction is authorized to resolve FAA post-arbitration motions in the same pending case under 28 U.S.C. § 1367. Accordingly, Balazs argues that the court possesses ancillary jurisdiction, as well as original jurisdiction, after staying for arbitration. However, Balazs questions whether ancillary jurisdiction is even necessary in this case. Balazs argues that Jules misunderstands the nature of post-arbitration motions. Balazs contends that the arbitration and post-arbitration processes are not only factually related but are, in fact, the same dispute. Balazs emphasizes that the post-arbitration motion in question here is part of a stayed case, not a dismissed case that requires reopening, meaning the motion is still part of the original case. Balazs argues that showing ancillary jurisdiction here is likely not necessary because motions, such as Section 9 and 10 applications, do not require additional jurisdiction where jurisdiction over the case as a whole already exists.

    Discussion

    FORUM SHOPPING AND EFFICIENCY

    Petitioner Adrian Jules (“Jules”) argues that if federal courts automatically have jurisdiction over post-arbitration proceedings, parties will only file cases in federal court to use them as “jurisdictional anchors,” flooding federal courts with unnecessary litigation.  Jules expresses concern that two parties may prefer different forums for post-arbitration proceedings, and that the party who prefers a federal forum may attempt to file motions in federal court exclusively to secure federal jurisdiction for later proceedings. Jules hypothesizes that if a party knew the other intended to initiate arbitration, the would-be defendant could file a pre-emptive declaratory judgment in federal court, establishing a favorable federal forum for any future proceedings. According to Jules, both these examples demonstrate ways in which granting federal jurisdiction facilitates forum-shopping, incentivizing further litigation rather than moving disputes out of court. Jules argues that this would defeat the original purpose of the Federal Arbitration Act (“FAA”), which was intended to move parties towards arbitration as quickly and efficiently as possible and minimize litigation.

    Respondents Andre Balazs Properties and related entities (“Balazs”) argue that there is no evidence to date of parties attempting to establish “anchor jurisdiction,” and insist that Jules’ concerns regarding excessive federal cases are purely hypothetical. The Chamber of Commerce of the United States (“the Chamber”) emphasizes this point, further arguing that Jules does not cite a single real case to support this theory. Balazs contends that parties usually bring suits where they want to actually litigate the case, rather than attempting to establish jurisdiction for later post-arbitration motions. Balazs points out that the FAA allows federal courts to dismiss cases if they suspect parties of attempting to abuse the system in this manner. Further, Balazs maintains that Jules’ interpretation of jurisdiction would invite “two-track challenges,” wherein cases appear simultaneously in federal and state courts because parties wish to challenge the initial arbitration order and litigate post-arbitration orders at the same time. Balazs argues that parties would waste additional time, money, and resources if forced to restart litigation in state court to confirm an arbitration award, creating even greater judicial efficiency issues than any concerns brought up by Jules.

    JUDICIAL DIVISION OF LABOR

    Jules argues that not finding federal jurisdiction in cases such as these follows Congress’s intended division of labor between state and federal courts and will have little impact on the enforcement of arbitration awards. Jules recounts that, historically, the contractual rights implicated in this case have been handled by state courts, as contract rights are created by state law. Jules acknowledges Congressional concerns that state courts are generally hostile to arbitration and might refuse to compel parties to arbitration but argues that there is little reason to be concerned about enforcement once parties have already gone to arbitration and the award has been made. Therefore, Jules posits that Congress likely intended a federal forum for parties to compel arbitration, but that federal jurisdiction is unnecessary for post-arbitration applications. As a result, Jules argues that a state court forum will have no impact on whether or not parties can rely on arbitration awards.

    The Chamber of Commerce argues that, due to state-court hostility towards arbitration, arbitration awards are less likely to be enforced by state courts. The Chamber contends that the original purpose of the FAA was to encourage arbitration and, as such, granted parties a federal forum for enforcement because state courts might be unwilling to compel parties to follow arbitration clauses. The Chamber cites several examples in which state courts have refused to enforce the FAA. The Chamber expresses concerns that under Jules’ understanding of jurisdiction, federal courts will not be able to enforce arbitration awards despite having jurisdiction over the original dispute, leaving the matter to hostile state courts. The Chamber speculates that this would make commercial contracts with arbitration clauses less reliable and discourage arbitration, as parties could no longer rely on the courts to enforce agreements. The Chamber argues that allowing state courts to handle arbitration agreements goes against the purpose of the FAA: to ensure that disputes are handled quickly and efficiently out of court.

    Conclusion

    Authors

    Written by:    Ria Panchal and Brenda Narvaez

    Edited by:      Sara Fischer

    Additional Resources