Confirmation / Vacation of Arbitration Awards

ARBITRATION AWARD REVIEW ROUNDUP

April 10, 2013 by Carlton Fields

Manifest Disregard/Exceeding Powers

Tivo, Inc. v. Goldwasser, Case No. 12-cv-07142 (USDC S.D.N.Y. Feb. 14, 2013) (denying motion to vacate award; granting motion to confirm award; panel did not exceed authority for allegedly basing award on theory not advanced by parties; panel’s patent licensing determinations not a “manifest disregard” of the law)

Giller v. Oracle USA, Inc., No. 12-895 (2d Cir. Feb 22, 2013) (affirming order granting motion to dismiss petition to vacate award in employment dispute; no grounds for vacatur for arbitrator’s interpretation of underlying contract; noting that “manifest disregard” still regarded as a “judicial gloss” on the FAA in the Second Circuit)

Peterson v. Macy’s, Case No. 10-cv-05119 (USDC E.D.N.Y. Feb. 25, 2013) (denying motion to vacate in pro se employment discrimination action; “since, inter alia, there is more than a ‘colorable justification’ for the arbitrator’s decision, the arbitration award was not rendered in manifest disregard of the law”)

Department of Professional & Financial Regulation v. Maine State Employees Association, Case No. 2013 ME 23 (Me. Feb. 28, 2013) (reversing and remanding for lower court to enter order denying motion to vacate award that reinstated employee; because the award “did not violate a public policy ‘affirmatively expressed or defined in the laws of Maine,’ the arbitrator did not exceed his powers, and the award is not subject to further judicial scrutiny on that basis”)

Choice of Law

Orbitcom, Inc. v. Qwest Communications Co., Case No. 12-cv-01639 (USDC D. Co. March 12, 2013) (granting motion to confirm award; denying motion to vacate; arbitrator did not exceed powers for 16-month delay of entry of final award; arbitrator correctly applied FAA for arbitration procedure, rather than New York law, notwithstanding New York substantive choice of law provision)

Abu Dhabi Investment Authority v. Citigroup, Inc., Case No. 12-cv-00283 (USDC S.D.N.Y. March 4, 2013) (denying petition to vacate award; no manifest disregard for New York choice of law; proceedings were not fundamentally unfair, notwithstanding tribunal’s denial of certain discovery)

Subject Matter Jurisdiction

Duffy v. Legal Aid Society, Case No. 12-cv-02152 (USDC S.D.N.Y. Feb. 12, 2013) (dismissing petitioner’s pro se action to vacate arbitration decision in employment dispute; employee lacked standing to challenge arbitration between union and employer; petitioner failed to argue that union did not provide fair representation; argument that arbitration decision was “confusing and contradictory” not grounds for vacatur)

Smith v. Cheesecake Factory Restaurants, Inc., Case No. 06-cv-00829 (USDC M.D. Tenn. Feb. 8, 2013) (denying motion to vacate award; arbitrator’s award authorizing collective arbitration under Fair Labor Standards Act was an interim decision and vacatur was thus not ripe for judicial review)

Conclusory Challenge

Wanken v. Wanken, No. 12-10562 (5th Cir. Feb. 11, 2013) (affirming order denying motion for relief from judgment and confirming arbitration award; appellant failed to show that court ignored evidence allegedly showing that appellees gave perjured testimony and fraudulently procured the arbitration award)

Bailey Brake Farms, Inc. v. Trout, Case No. 2011-CA-00610 (Miss. Feb. 28, 2013) (reversing vacatur of arbitration award that set the value of shares under a stock buy-sell agreement; court’s order lacked any analysis or findings supporting grounds for vacatur, such as exceeding authority, “undue means,” or “unresolved issues”)

This post written by Michael Wolgin.

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SECOND CIRCUIT AFFIRMS JUDGMENT CONFIRMING ARBITRATION AWARD AND DENYING MOTION TO VACATE

March 7, 2013 by Carlton Fields

In a summary order, the Second Circuit Court of Appeals affirmed the district court’s confirmation of an arbitration award issued in favor of NCG Network Asia and the denial of PAC Pacific Group International’s motion to vacate. The court found that the arbitrator had properly disclosed a prior business relationship that indirectly linked him with NCG Network Asia, nothing about the relationship would compel a reasonable person to believe that the arbitrator was partial, and that PAC Pacific Group had thus not made the requisite showing to entitle it to post-arbitration discovery on the arbitrator’s alleged bias. The court also held that there was nothing inappropriate in denying PAC Pacific Group’s challenges to the arbitrator based on alleged impartiality, which denials complied with governing AAA rules and, further, that the arbitrator’s conclusion that there was no breach of the implied covenant of good faith and fair dealing was in accord with applicable law. NGC Network Asia, LLC v. PAC Pacific Group International, Inc., No. 12-0967 (2d Cir. Feb. 11, 2013).

This post written by Ben Seessel.

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ARBITRATION AWARD ROUNDUP

February 27, 2013 by Carlton Fields

Following is a summary of selected court opinions addressing requests for confirmation and vacation of arbitration awards.

Manifest disregard

NYKCool A.B. v. Pacific Fruit, Inc., No. 11-4246 (2d Cir. Jan 16, 2013) (affirming judgment by S.D.N.Y. confirming an arbitration award based on finding that defendant did not establish a “manifest disregard of the law,” or that the panel exceeded its authority or that the panel denied defendant a fundamentally fair hearing)

Murray v. Citigroup Global Markets, Inc., No. 11-4355 (6th Cir. Jan. 10, 2013) (affirming district court’s denial of plaintiff’s motion to vacate or modify an arbitration award; court could not determine whether the panel acted in “manifest disregard of the law” because plaintiff did not request a reasoned award from the panel)

Swarm, LLC v. Cohen, Case No. 10-03188 (C.D. Cal. Dec. 7, 2012) (granting defendants’ motion to confirm final arbitration award based on finding that arbitrator’s application of the alter ego doctrine, finding of a written agreement, and reliance on the same evidence presented by plaintiff for two different claims is not a “manifest disregard of the law” under the FAA)

Ometto v. ASA Bioenergy Holding A.G., Case No. 12-1328 (S.D.N.Y. Jan. 9, 2013) (denying petitioners’ motion to vacate two arbitration awards and granting respondents’ motion to confirm the awards based on finding that petitioners’ grounds for vacatur were without merit, including allegations that the tribunal’s chairman was partial, the tribunal acted in manifest disregard of the law, and the awards were procured through fraud)

Budget Blinds Inc. v. LeClair, Case No. 12-1101 (C.D. Cal. Jan. 16, 2013) (denying petition to vacate arbitration award and granting cross-petition to confirm award, on grounds that petition to vacate did not establish “manifest disregard of the law” or that arbitrator exceeded her authority and was merely an attempt to re-litigate the arbitrator’s factual findings)

Fuchs & Associates, Inc. v. Lesso, No. B239246 (Cal. Ct. App. Jan. 8, 2013) (affirming trial court’s judgment confirming an arbitration award based on finding that the arbitrator did not exceed his authority and there was no “manifest disregard of the law”)

Exceeding authority

Brotherhood of Locomotive Engineers and Trainmen v. United Transportation Union, No. 11-4177 (6th Cir. Dec. 5, 2012) (affirming district court’s reinstatement of arbitration award following magistrate judge’s vacatur; arbitration board did not exceed its jurisdiction when it interpreted contractual provisions)

Zhao v. Ming Due International Trade, Inc., No. B236813 (Cal. Ct. App. Jan. 7, 2013) (affirming trial court’s judgment confirming an arbitration award based on finding that arbitrator did not exceed the scope of his power by denying plaintiff’s motion for an uncontested arbitration, especially since the parties stipulated to binding arbitration in which the arbitrator would control the proceedings in “his sole discretion”)

Disclosure inadequacy

Gray v. Chiu, No. B238304 (Cal. Ct. App. Jan. 22, 2013) (reversing trial court’s denial of appellant’s petition to vacate a medical malpractice arbitration award on grounds that the arbitrator violated the disclosure provisions of the California Arbitration Act and the California Ethics Standards for Neutral Arbitrators in Contractual Arbitrations by failing to disclose that counsel for the defendant was affiliated with the abritrator’s firm)

Re-litigating arbitrators’ decisions

Citigroup Global Markets, Inc. v. Bock, Case No. 10-24157 (S.D. Fla. Jan. 17, 2013) (confirming FINRA arbitration award and denying respondent’s motion to vacate the award as an attempt to “re-litigate discovery decisions that were properly before the arbitration panel”)

Untimely vacation request

Domnarski v. UBS Financial Services, Inc., Case No. 12-30139 (D. Mass. Jan. 23, 2013) (denying plaintiff’s motion to vacate a FINRA arbitration award and allowing defendant’s motion to confirm the award because plaintiff filed her motion outside the 3 month limitations period established by the FAA)

Foreign Arbitration Awards – jurisdiction

Covington Marine Corp. v. Xiamen Shipbuilding Industry Co., No. 12-30383 (5th Cir. Dec. 21, 2012) (affirming district court’s decision to deny confirmation of a foreign arbitral award under the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards against a Chinese shipbuilding company and the People’s Republic of China due to lack of personal and subject matter jurisdiction)

This post written by Abigail Kortz.

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COURT REFUSES TO VACATE AWARD WHERE INSURER’S PRE-ARBITRATION APPEALS PROCESS NOT FOLLOWED

January 25, 2013 by Carlton Fields

Plaintiff USA Chiropractic commenced arbitration proceedings against PIP carrier NJ Re-Insurance Co., seeking coverage under an assignment of rights for medical treatment provided to NJ-Re’s insured. The arbitrator entered an award dismissing the claim, holding that USA Chiropractic lacked standing because it had not complied with the insurer’s appeals process before demanding arbitration. USA Chiropractic sought vacatur and also sued arbitration tribunal NAF in state court, arguing that the arbitrator had misapplied the law. The court denied plaintiff’s claims, holding that USA Chiropractic lacked standing for failure to follow NJ-Re’s pre-arbitration appeals process and, further, that NAF was immune from suit. The appellate court affirmed, finding that the trial court did not exceed its authority in denying USA Chiropractic’s request to set aside the award and that it was thus unnecessary to reach plaintiff’s appeal regarding whether NAF was an indispensable party to the litigation. USA Chiropractic v. NJ Re-Insurance Co., No. A-3108-11T1 (N.J. Ct. App. Dec. 14, 2012).

This post written by Ben Seessel.

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ARBITRATION ROUND-UP

January 3, 2013 by Carlton Fields

Evident Partiality, Fraud, Corruption, Undue Means

Dubois v. Macy’s Retail Holdings, Inc., Case No. 11-4904 (USDC E.D.N.Y. Sept. 13, 2012) (accepting magistrate’s report and recommendation denying motion to vacate, no corruption, fraud, undue means, or evident partiality; granting motion to confirm)

Burbach Aquatics, Inc. v. Huntley Illinois Park District, Case No. 12-6613 (USDC N.D. Ill Nov. 21, 2012) (denying motion to vacate, no evident partiality, no manifest disregard of the law)

Gambino v. Alfonso Electrical Services, Case No. 10-10860 (USDC D. Mass. Nov. 20, 2012) (granting motion to vacate, evident partiality where arbitrator owed fiduciary duty as trustee to prevailing party)

Failure or Refusal to Hear Material Evidence

Allstate Ins. Co. v. GEICO, No. D36443 (N.Y. App. Div. Oct. 9, 2012) (reversing trial court decision granting motion to vacate for failure or refusal to hear evidence, reinstating and confirming award)

Exeeding Scope of Submission

Integrated Construction Enterprises, Inc. v. Bradley Sciocchetti, Inc., No. A-2511-10T4 (N.J. App. Div. Nov. 20, 2012) (affirming denial of vacatur, arbitrator did not exceed powers by awarding prevailing party costs associated with arbitration, no evident mathematical error in damages award)

Arbitration Procedure

OneBeacon America Insurance Co. v. Swiss Reinsurance America Corp., Case No. 12-5043 (USDC S.D.N.Y. Oct. 19, 2012) (granting petition for appointment of neutral third arbitrator for tri-partite panel)

Hofer Builders, Inc. v. Captstone Building Corp., Case No. 12-1367 (USDC E.D. La. Nov. 20, 2012) (denying interlocutory motion to vacate arbitrator decision denying summary judgment, as decision did not constitute a “final award”)

Oakley Fertilizer, Inc. v. Hagrpota for Trading & Distribution, Ltd., Case No. 11-7799 (USDC S.D.N.Y. Nov. 16, 2012) (granting motion to confirm award under Convention on Recognition and Enforcement of Foreign Arbitral Awards and the FAA, where losing party in arbitration was refusing to pay award)

Choice Hotels International, Inc. v. Jai Shree Navdurga, LLC, Case No. 11-2893 (USDC D. Md. Nov. 29, 2012) (confirming award by default judgment, denying motion for costs not pled in initial complaint)

This post written by John Pitblado.

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