According to the United States District Court for the Eastern District of Michigan, the Federal Rules of Civil Procedure govern the timeliness of amended motions to vacate clause construction awards, and reviews of clause construction awards are within courts' subject-matter jurisdiction. Furthermore, the Court held that motions to vacate a claim construction award can only be granted due to a "manifest disregard of applicable law" by arbitrators.

In Dealer Computer Services, Inc. v. Dub Herring Ford, No. 07-10263, 2007 WL 1560204 (E.D. Mich. May 29, 2007), a three-arbitrator panel entered a clause construction award, determining that a putative class of automobile dealers could be formed for arbitration against Dealer Computer Services (DCS). This award prompted a motion by DCS to vacate the panel's ruling, either under the Federal Arbitration Act (FAA), or, in the alternative, due to the panel's alleged manifest disregard of applicable law. In response, the putative dealer class filed a motion to dismiss DCS's motion to vacate, arguing DCS's motion was not timely under the FAA, and that the Court lacked subject-matter jurisdiction because the clause construction award was not a final judgment.

The Court first denied the putative dealer class's motion, finding DCS's motion to be timely and within the jurisdiction of the Court.

First, the putative dealer had argued that DCS had not filed the motion to vacate within three months of the panel's ruling as required by the FAA. The Court observed that the initial motion to vacate was filed within three months as required, but the amended motion was filed after three months. The Court found that the "FAA did not include any provisions on amending a motion to vacate an award," and cited the Eleventh Circuit's observation that, according to Fed.R.Civ.P 81(a)(3), "the Federal Rules of Civil Procedure apply to disputes arising out of arbitration in situations where the FAA does not contain a procedural requirement that is on point." The Court then applied Fed.R.Civ.P. 15 to find that such an amendment should "be freely given when justice so requires." Since there was no showing of prejudice to the putative dealer class by allowing the amendment, the Court denied the motion to dismiss on the timeliness issue.

Second, the putative dealer class argued that DCS's motion failed on subject-matter grounds because the clause construction award was "merely an interlocutory procedural ruling" and did not "constitute a final judgment" that the Court had jurisdiction to address. In denying the putative class's motion, the Court observed that the arbitration rules expressly "permit any party to move a court of competent jurisdiction to confirm or to vacate" after a clause construction award is entered, "plainly evinc[ing] an intent that such matters are properly reviewed by a federal district court even though a final result had not yet been reached."

After denying the putative dealer class's motion, the court also denied DCS's motion to vacate on both grounds.

On statutory grounds, the Court acknowledged the right to appeal an arbitrator's decision pursuant to the FAA "where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter was not made." However, the Court agreed with the Ninth Circuit's interpretation of the rule in Kyocera Corp. v. Prudential-Bache Trade Servs. Inc., 341 F.3d 987, 997 (9th Cir. 2003) as only applicable "when the award is completely irrational, or exhibits a manifest disregard of law." Under this standard, the Court found no grounds to vacate the arbitrator's clause construction award, noting that the United States Supreme Court's decision in Green Tree Financial Corp. v. Bazzle, 539 U.S. 444, 447 (2003) made it "clear that an arbitrator must make the initial decision whether to permit class arbitration when the subject agreement is silent on this point."

Under the judicially-created "manifest disregard of applicable law" theory, the Court agreed with the Sixth Circuit in Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Jaros, 70 F.3d 418, 421 (6th Cir.1995) that to meet this standard "the decision must fly in the face of clearly established legal precedent," and that arbitrators do not violate this standard unless "(1) the applicable legal principle is clearly defined and not subject to reasonable debate; and (2) the arbitrators refused to heed that legal principle." The Court found "nothing … to support a finding that the arbitration panel disregarded applicable law in coming to its decision."