Circumstances Did Not Fall Into “Legally Dispositive Facts” Vacatur Principle.
In VIP Mortgage Incorporated v. Gates, No. 24-7624 (9th Cir. Dec. 22, 2025) (published), a vacatur request was denied where an arbitration award granted attorney’s fees and costs to a plaintiff on the defense’s counterclaims even though the parties had stipulated that fees and costs would be borne by other sides as it related to the counterclaims. The arbitration was governed by the Federal Arbitration Act (FAA). The Ninth Circuit affirmed. The facts showed that the parties failed to remind the arbitrator about the stipulation, which led the Court of Appeals to find that the arbitrator simply forgot about the stipulation in subsequently granting fees/costs to plaintiff. Under these circumstances, the “legally dispositive facts” principle on a vacatur did not apply, because there was no indication that the arbitrator was intentionally trying to steer an outcome in plaintiff’s favor. One of the ending observations by the Ninth Circuit is important for any litigants and practitioners having to engage in an arbitration: “[Arbitrator] errors are risks inherent in arbitration proceedings.”