The case of the day is JC Cannistraro LLC v. Columbia Construction Co. (Mass. 2026). Columbia had a contract to renovate a building in Walpole, Mass. It had a subcontract with Cannistraro, which had an arbitration clause that read:

At the sole election of [Columbia], any disputes shall be resolved by arbitration in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association.

Cannistraro did work under the subcontract and made monthly requisitions for payment. It also submitted change order requests, which Columbia rejected. Nevertheless, Cannistraro sent invoices for nearly $1 million for payment for the change order work. Columbia rejected the invoices, but it did not include with its rejection a certification under Massachusetts’s “prompt pay” statute, which requires a certification that the rejection was made in good faith. Cannistraro sued for the amount of the invoices, and Columbia moved to compel arbitration. The court granted the motion, and the case was then arbitrated. The arbitrator decided, apparently in an interlocutory order and not in the final award, that under Massachusetts law, the certification of good faith was essential, and that without it, the invoices were deemed to have been approved. He ordered Columbia to pay the invoices. Columbia paid, but it sought and received permission to assert a new counterclaim seeking recoupment. The arbitrator then held an evidentiary hearing, found that the recoupment claim was not barred by the prompt pay statute, that the invoices were not fair and reasonable, and that Columbia was entitled to damages. Cannistraro moved to vacate the award under the Massachusetts Uniform Arbitration Act, arguing that the arbitrator had exceeded his authority. After that, but before the judge acted on the motion to vacate, the Supreme Judicial Court held that a contractor that had not paid an invoice could not invoke a common law defense to a subcontractor’s breach of contract claim if the contractor had not paid the invoice. In light of the new decision, the judge found that the arbitrator had exceeded his authority. The SJC granted an application for direct appellate review (which means the case went directly to the SJC, bypassing the intermediate Appeals Court).

Massachusetts precedent provides that an arbitrator exceeds his authority “by granting relief beyond the scope of the arbitration agreement, by awarding relief beyond that to which the parties bound themselves, or by awarding relief prohibited by law.” But the SJC explained that “relief prohibited by law” is not the same as relief resulting from an “error of law.” And mistake of law is not a basis for vacating an arbitral award. Rather, it is relief that “offends public policy” or “directs or requires a result contrary to express statutory provision.”

The decision was not contrary to an express statutory provision, even though it was contrary to the statute as the SJC later interpreted it. Public policy is a squishier basis for vacating an award, and the court noted the importance of preserving the deference accorded to awards to avoid “judicializing” the arbitration process. It explained that public policy had been almost exclusively a way of reversing arbitral decisions requiring the government to reinstate public employees who had “engaged in malfeasance.” The exception has to be kept narrow, and the court found it hadn’t been met. The court’s explanation is, in my view, not terrific: the discussion focuses on the reasons why the arbitrator’s decision about the law and the facts was reasonable. It’s not really clear what public policy was said to be violated. In any event, the court came to what seems clearly to be the right decision: it reversed and remanded for entry of a judgment confirming the award.