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Raytheon Company v. Automated Business Systems, Inc.
Court of Appeals for the First Circuit (1989) | 882 F.2d 6; 1989 WL 85255
TL;DR: A company challenged an arbitration award of punitive damages, arguing its general arbitration clause did not grant such authority. The court affirmed, holding that a broad clause incorporating AAA rules, which permit any "just and equitable" remedy, implicitly empowers arbitrators to award punitive damages unless explicitly forbidden.
Legal Significance: This case establishes that a broad commercial arbitration clause incorporating AAA rules empowers arbitrators to award punitive damages, even without explicit authorization. It places the burden on parties to expressly exclude such remedies if they wish to limit the arbitrator's authority.