When Arbitration Goes Too Far — Eighth Circuit Vacates $5M Award in Lindell Election Data Dispute
A closely watched decision by the Eighth Circuit has reversed a $5 million arbitration award granted to cyber expert Robert Zeidman in a challenge initiated under MyPillow founder Mike Lindell’s “Prove Mike Wrong” contest. This ruling provides a compelling case study in when courts can—and should—vacate arbitration awards, especially when arbitrators exceed their contractual authority.
To read the opinion, click here.
Background: The “Prove Mike Wrong” Contest
In 2021, Lindell hosted a cybersecurity symposium in South Dakota, offering a $5 million reward to anyone who could prove the data he provided was not valid data from the November 2020 election. As you may recall, Lindell was convinced that fraud occurred in the 2020 election. Lindell, widely known as “MyPillow Guy,” claimed that China interfered with the 2020 election results and he had evidence to back it up. He then launched a “Prove Mike Wrong Challenge,” a stunt in which contestants tried to debunk his evidence, offering $5 million to anyone who could do it. Zeidman, a software engineer with decades of experience, produced a 15‑page report asserting the files were not “packet capture” (PCAP) data and therefore not election-related.
Despite unanimous rejection by the contest judges, Zeidman invoked the official contest rules to demand arbitration under AAA rules. A tribunal—including one arbitrator appointed by Lindell—ultimately found in Zeidman’s favor, concluding the data did not meet the criteria outlined in the contest rules. Lindell was ordered to pay the full $5 million.
Although the federal district court affirmed the award—citing the deferential standard under the Federal Arbitration Act (FAA)—the Eighth Circuit issued a resounding reversal.
Why the Award Was Vacated
Under the FAA, courts may vacate an arbitration award only in narrow circumstances, including where arbitrators exceed their contractual authority. In Lindell, the appellate panel held that the arbitrators violated Minnesota contract law by effectively rewriting the contest rules rather than interpreting them.
Key findings from the opinion include:
The official rules were deemed clear and unambiguous, requiring proof that the data “unequivocally does NOT reflect information related to the November 2020 election.”
The panel interpreted that provision to mean “PCAP data only,” yet neither the word “PCAP” nor any form-based limitation appeared in the written rules.
Minnesota law prohibits reliance on extrinsic evidence to interpret unambiguous terms—yet the panel used Lindell’s promotional materials and expert testimony to impose a new contract requirement.
In doing so, the arbitrators had ventured beyond the plain contract language and into reformation of the agreement—exceeding their authority under FAA § 10(a)(4).
The Eighth Circuit concluded that the award did not “draw its essence” from the contract, meaning the arbitration tribunal had acted outside the scope of its mandate.
What This Means for Arbitration Awards
This decision reinforces critical elements of arbitration law and practice:
1. Arbitration authority is strictly contractual. Arbitrators cannot add or alter contract terms—even in service of perceived fairness.
2. Courts retain limited but meaningful review. While judicial deference remains strong, vacatur is proper when arbitrators step outside predefined boundaries.
3. Contract clarity is essential. Organizations offering contests, rewards, or arbitration under their own terms must ensure rules are clearly defined and avoid ambiguity that may tempt overreach.
This matter marks a rare instance where a unanimous arbitration award was no longer upheld—a reminder that arbitrator discretion is not limitless.
Practical Lessons for Contract Drafters and ADR Professionals
Define contest rules or arbitration triggers with specificity. Avoid vague or qualitative language where possible.
Exclude interpretive discretion in critical provisions. If a factual standard is required, spell it out you clearly.
Use severable arbitration clauses that allow the clause to survive even if other parts of the contract are disputed.
Ensure arbitrator mandates align with contract scope. Panels should be guided strictly by agreement language—not their own interpretation of intent.
A Strategic Approach to Arbitration Clauses
The Lindell decision speaks directly to Nationwide ADR’s core practice areas: arbitration and mediation in business, tort, consumer, and employment disputes. A well-constructed arbitration clause anticipates potential misinterpretations and avoids reliance on external evidence to define scope.
For example:
If a contract states “payment due within 30 days,” it should not rely on off-contract marketing language that might expand liability.
If arbitration jurisdiction is limited to “claims arising directly from this contract,” it should not be interpreted to encompass post-contract behavior unless explicitly stated.
Structured, enforceable dispute terms protect both parties—and reduce the risk of award vacatur.
Beyond the Award: Broader Implications
This ruling may influence future cases involving arbitration over novel claims or public contests. Whether in consumer law, employment practices, data disputes, or accidental elite competitions, parties will increasingly rely on contract clarity to avoid procedural vulnerabilities.
It also highlights the role of courts in policing arbitration boundaries without substituting judicial judgment for arbitral decision-making. Courts may confirm an award even if convinced the arbitration panel made a legal error—unless the panel exceeded its contract-defined powers.
Why This Decision Matters
It affirms that arbitration is not a free-for-all. Arbitrators must operate within the confines of the agreement.
It places responsibility on drafters. Organizations must anticipate how contract terms could be tested in ADR.
It clarifies judicial reach. Courts will enforce awards that stay within scope—and will vacate those that don’t.
In sum, the Lindell case is a textbook example of precisely the kind of excess that arbitration law prohibits—despite public or media scrutiny of the facts or outcome.
Final Thought
When disputes hinge on technical interpretations, precise language matters. The Eighth Circuit’s decision to vacate the Lindell arbitration award highlights the necessity of rigorous contract drafting—and the limits of arbitral discretion.
At Nationwide ADR, meticulous attention to contractual language and alignment between dispute resolution terms and the authority granted to arbitrators is foundational. Whether drafting new arbitration clauses or managing existing ones, Nationwide ADR offers clarity, neutrality, and process leadership.
Unlocking Solutions for Demanding Cases
Trusted. Balanced. Resolution Driven.