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Supreme Court to decide questions of authority in arbitration enforcement

By Natalie M. McMahan

This article appeared as a Guest Column in The Journal Record on November 18, 2021.

Attorney Natalie M. McMahan is a litigation attorney who represents individuals and both privately-held and public companies in a wide range of civil litigation matters.

Arbitration clauses, often included in consumer and employment agreements as an alternative to litigation, require legal disputes to be resolved by the decision of a private third party rather than a court. The 1925 Federal Arbitration Act (FAA) sought to enforce arbitration agreements involving interstate or foreign commerce by limiting courts from reviewing and setting aside arbitration awards. Disputes over federal jurisdiction to confirm or vacate arbitration awards continues to be hotly contested, with the case of Badgerow v. Walters reaching the Supreme Court this term.

On Nov. 2, the Supreme Court heard oral argument in Badgerow v. Walters. In this case, a terminated employee, Badgerow, filed a claim with an arbitration panel, pursuant to her employment contract’s arbitration clause. Badgerow sought damages for tortious interference of contract and for violation of Louisiana’s whistleblower law. When the arbitration panel sided with her former employer, REJ Properties Inc., Badgerow filed a lawsuit in Louisiana state court alleging her former employer obtained the award by fraud. REJ Properties Inc. removed the case to federal court, claiming the underlying issues were based on federal securities law.

The federal court found that it had jurisdiction in the case due to the questions of federal law and confirmed the arbitration award following the “look through” approach, as established in a previous decision, Vaden v. Discover Bank, regarding motions to compel arbitration. In other words, the federal court “looked through” to the underlying dispute involving federal securities law.

At issue is whether federal courts have jurisdiction to confirm or vacate arbitration awards when the only basis for jurisdiction is that the underlying dispute involves a question of federal law. Federal courts, unlike state courts, have limited jurisdiction that can only hear cases and controversies where the Constitution or Congress has granted them such authority.

During oral argument, SCOTUS justices’ questions revolved around two points: one, the Supreme Court’s previous statements that the FAA’s provisions do not automatically establish federal jurisdiction, and two, whether the “look through” approach to determine federal jurisdiction over motions to compel arbitration also applies to motions to vacate or confirm an arbitration award. The ultimate decision likely comes down to whether SCOTUS will extend its reasoning in Vaden to allow federal courts to confirm or vacate arbitration awards where federal courts would have jurisdiction to hear the underlying dispute had the issue been litigated.

Businesses should consider revisiting the arbitration clause language included in its contracts with award confirmation in mind.


For more information on this alert and its impact on your business, please call 405.552.2437 or email Natalie M. McMahan.

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Executive order addresses cybersecurity

By Natalie M. McMahan

This article appeared as a Guest Column in The Journal Record on June 23, 2021.

Cybercriminals have held a number of industries hostage in recent months, and otherwise exploited companies’ vulnerabilities to profit directly from the stolen data. Most notably, ransomware attacks shut down meat producer JBS and the Colonial Pipeline. Other recent data breaches affected McDonald’s, Volkswagen, and approximately 100 companies using SolarWinds. Last month, the city of Tulsa suffered its own shutdown caused by a ransomware attack.

Attorney Natalie M. McMahan is a litigation attorney who represents individuals and both privately-held and public companies in a wide range of civil litigation matters.

On May 12, the president issued an executive order outlining the administration’s plans to address “malicious cyber campaigns that threaten” both the public and private sectors. The Biden administration also created a new cybersecurity role on the National Security Council; Deputy National Security Advisor Anne Neuberger recently met with the National Association of Attorneys General to discuss the administration’s ransomware strategy. She has also engaged business leaders to work with the federal government in its efforts to elevate cybersecurity issues.

The cybersecurity executive order matters because it will push industry and those that do business with the federal government to implement heightened security protocols.

Here are some key takeaways from the executive order that may be aspirational but will certainly be influential:

  • Removing barriers to sharing threat information.
  • Modernizing cybersecurity, including the adoption of best practices.
  • Enhancing software supply chain security.
  • Establishing a cyber safety review board (similar to the National Transportation Safety Board).
  • Standardizing the government’s response to cybersecurity vulnerabilities and incidents.
  • Improving monitoring operations and alerts to identify and respond to cyber incidents.

If this order does not impact your business directly, it will certainly impact the commercial-off-the-shelf (COTS) software that your company uses, as the government is likely a user of the same product. In terms of cybersecurity, this is good news.

While all 50 states have passed legislation requiring notifying individuals in the event of a data breach that discloses their personal information, additional data privacy regulations primarily exist at the federal level and only apply to certain highly regulated industries, i.e. health and financial information. Several states have passed consumer data privacy laws that regulate how businesses collect data from customers. However, in the most recent legislative session, Oklahoma did not pass expanded privacy protections for customers.

Cybersecurity measures, outside of making required notifications in the event of a data breach, are not mandated by Oklahoma law or the Biden administration’s new executive order. However, the most compelling reason to implement and maintain cybersecurity measures is money. Breaches are expensive, consuming time and resources to remedy. The adage holds true that an ounce of prevention is worth a pound of cure.

Creating an information assurance plan for your business requires critically thinking about the confidentiality, integrity, and availability of both your network and the data stored on it for employees accessing from their workspace, or, as many of us have over the past year, from home.


For more information on how the information in this article may impact your business, please call 405.552.2437 or email Natalie M. McMahan.

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McMahan elected to OCBA Young Lawyers Division board

Attorney Natalie M. McMahan is a litigation attorney who represents individuals and both privately-held and public companies in a wide range of civil litigation matters.

The Oklahoma County Bar Association elected Attorney Natalie M. McMahan to the Board of Directors for the Young Lawyers Division (YLD) for 2021.

“I am looking forward to being connected to the larger community of young attorneys in Oklahoma County,” McMahan said. “The Board’s efforts to connect its members and contribute to the larger community through service and philanthropy are important to the profession and to me.

“I’ve already enjoyed getting to know the Board and look forward to becoming more involved as event planning resumes later this year.”

McMahan will serve as a member of the YLD Board of Directors through November.

The YLD was organized in 1966 to provide an avenue for Oklahoma’s young lawyers, who have been in practice for 10 years or less, to work on bar-related and public service-related projects.

In 2019, the Firm was honored by OCBA YLD with the “Friend of the YLD” award for the support Phillips Murrah and its attorneys have consistently displayed through volunteering and sponsorship.

Read more about McMahan and her legal experience here.