Confirmation / Vacation of Arbitration Awards

ARBITRATION ROUND UP

August 18, 2010 by Carlton Fields

Manifest Disregard:

ABS Brokerage Services, LLC v. Penson Financial Services, Inc., Case No. 09-4590 (USDC D.N.J. July 8, 2010) (denying motion to vacate, granting motion to confirm, no manifest disregard)

Arora v. TD Ameritrade, Inc., Case No. CV-10-01216 (USDC N.D. Cal. July 26, 2010) (denying motion to vacate FINRA award, no manifest disregard).

Dealer Computer Services, Inc. v. Johnson Ford Lincoln Mercury Nissan, Inc., Case No H-10-719 (USDC S.D. Tex. July 26, 2010) (granting motion to confirm, denying motion to vacate, no manifest disregard, and awarding attorneys fees and court costs to plaintiff as defendant had “no legally non-frivolous” basis for its challenge to the award and refusal to pay award was in bad faith)

Alpaca Shop Franchise Co. v. Roxburgh, Case No. 3:05-cv-1203 (USDC D. Conn. July 22, 2010) (granting petition to confirm, no manifest disregard, no ambiguity in award)

The First Baptist Church of Glenarden v. New Market Metalcraft, Inc., Case No. 8:10-cv-00543 (USDC S.D. Md. July 30, 2010) (granting motion to confirm, no manifest disregard).

Evident Partiality:

Hernandez v. Smart & Final, Inc., Case No. 3:09-CV-02266 (USDC S.D. Cal. June 17, 2010) (granting petition to confirm, denying petition to vacate award, no manifest disregard, no evident partiality)

Haddad v. Jackson, Case No. 1:07-cv-01676 (USDC E.D. Cal. July 16, 2010) (granting motion to confirm, denying motion to vacate, no evident partiality)

Procedure / Jurisdiction:

Technologists, Inc. v. Mir’s Ltd., Case No. 09-1339 (USDC D.D.C. July 27, 2010) (granting Rule 60(b) motion to vacate default judgment on petition to vacate, re-opening post-arbitration proceeding to further briefing on confirmation/vacatur)

Cargill Inc. v. Morgan, Case No. 1:10-cv-00088 (USDC E.D. Mo. July 28, 2010) (denying motion to vacate award, no arbitrator misconduct, and failure to exhaust arbitration appeal process under National Grain and Feed Association rules)

Exceed Powers:

Valve Corp. v. Activision Blizzard, Inc., Case No. 09-35800 (9th Cir. July 30, 2010) (affirming order requiring further arbitration proceedings on an offset issue the arbitrator initially refused to decide, finding arbitrator’s refusal to decide properly presented issue exceeded powers)

Samaritan Medical Center v. Local 1199, Service Employees Int’l Union, Case No. 7:09-cv-01072 (USDC N.D.N.Y. July 19, 2010) (denying motion to vacate, granting motion to confirm, arbitrator did not exceed powers by crafting remedy not provided for in collective bargaining agreement)

This post written by John Pitblado.

11TH CIRCUIT UPHOLDS CONFIRMATION OF ARBITRATION AWARD PURSUANT TO LIQUIDATED DAMAGES CLAUSE

August 12, 2010 by Carlton Fields

Following the district court’s confirmation of an arbitration award of damages to Seaborne Virgin Islands, National Aerotech Aviation appealed to the 11th Circuit Court of Appeals arguing that the district court “improperly and erroneously weighed the material facts” in determining whether the arbitrator acted in manifest disregard of the law. The 11th Circuit affirmed the district court’s decision, concluding that Aerotech had offered no evidence to suggest that the arbitrator deliberately ignored the law, and further holding that Georgia law explicitly allows parties to a contract to agree to liquidated damages. Thus, the district court did not err in granting summary judgment in favor of Seaborne. Aviation’s final argument – that the district court should have allowed discovery to proceed – was quickly dismissed by the Court, noting that district courts are granted wide discretion in ruling on discovery motions. National Aerotech Aviation, Inc. v. Seaborne Virgin Islands, Inc., Case No. 09-3252 (11th Cir. July 19, 2010).

This post written by John Black.

FEDERAL JUDGE CONFIRMS REINSURANCE ARBITRATION AWARD

August 5, 2010 by Carlton Fields

After arbitration between insurers Praetorian Insurance Co. (f/k/a Insurance Corporation of Hannover) and Clarendon Insurance Group Inc., and their reinsurer, American Constantine Insurance Co., the U.S. District Court for the Southern District of New York granted an unopposed petition to confirm the $7 million arbitration award. The award requires the reinsurer to place the amounts owed to the insurers either in escrow or in lines of credit for the insurers’ benefit, as collateral for the reinsurer’s share of reserves and incurred but not reported losses. Clarendon Am. Ins. Co. v. Am. Constantine Ins. Co., No. 10-2928 (USDC S.D.N.Y. June 8, 2010).

This post written by Michael Wolgin.

EIGHTH CIRCUIT HOLDS THAT HALL STREET ELIMINATED MANIFEST DISREGARD OF LAW DOCTRINE; AFFIRMS ARBITRATION AWARD

July 27, 2010 by Carlton Fields

Following an arbitration award and district court confirmation granting Medicine Shoppe International lost future profits and future license fees, defendants/appellants Turner Investments and Donnie Turner (President of Turner Investment) appealed to the Eighth Circuit arguing that the district court erred in confirming the award because the arbitrator showed a manifest disregard for the law. Specifically, Turner Investments assert that Medicine Shoppe failed to demonstrate future profits with reasonable certainty as required by Missouri law, that Medicine Shoppe failed to mitigate damages, and that the award of future fees to a franchisor hampered the growth of important franchise markets contrary to public policy. The Eighth Circuit affirmed the award, citing Hall Street Assoc. LLC v. Mattel, Inc., 552 U.S. 576 (2008) for the proposition that only the enumerated reasons listed in the FAA justify vacatur of an arbitration award. Having found that none of the enumerated reasons existed, the Court affirmed the judgment of the district court. The Eighth Circuit therefore joins the list of Circuit Courts of Appeal which have held that the doctrine of manifest disregard of law did not survive Hall Street. Medicine Shoppe Int’l, Inc. v. Turner Investments, Inc., Case No. 09-2179 (8th Cir. July 21, 2010).

This post written by John Black.

NO MANIFEST DISREGARD IN AWARD AGAINST TEAMSTERS’ UNION

July 22, 2010 by Carlton Fields

A federal court in New Jersey granted an employer’s motion to dismiss a complaint filed by the union representing a terminated employee. The union sought to vacate an arbitrator’s award in an employment dispute pertaining to the employee’s termination. The court noted the “narrow” standard in overturning an arbitrator’s award, and that even “improvident” or “silly” factfinding by the arbitrator would not constitute a “manifest disregard” of the law. The court analyzed whether the collective bargaining agreement containing the arbitration clause was valid, for lack of signature by an authorized employer representative, but ultimately agreed with the arbitrator’s decision on that point and others, finding the decision “well-reasoned” and “supported by the record.” Int’l Brotherhood of Teamsters, Local 701 v. Stroehmann Bakeries, No. 09-6205 (USDC D.N.J. June 22, 2010)

This post written by John Pitblado.