Although we usually expect arbitrators to be impartial, the Supreme Court of Texas vacated an arbitration award because the chosen arbitrators were too impartial. Americo Life, Inc. v. Myer, __S.W.3d__, 2014 WL 2789429 (Tex. June 20, 2014). Because the court found the parties’ agreement allowed each side to choose an arbitrator who was partial
Alabama Confirms Arbitrators' Grant of Judgment As A Matter of Law
Just as SCOTUS held its nose and confirmed an arbitration award it thought stunk in Sutter, the Supreme Court of Alabama has confirmed an arbitration award made after only the claimant presented evidence and grounded in a possible misunderstanding of Alabama law. Tucker v. Ernst & Young, __ So.3d__, 2014 WL 2619860 (Ala. June
Two Circuit Courts Demonstrate How Difficult It Is To Vacate Arbitration Awards
In recent weeks, both the Second and Sixth Circuits showed how difficult it is to vacate arbitration awards.
The Second Circuit decision has more drama, so I’ll start there. In Kolel Beth Yechiel Mechil of Tartik-Ov, Inc. v. YLL Irrevocable Trust, __ F.3d __, 2013 WL 4609100 (2d Cir. Aug. 30, 2013), the losing party
If "Grave Error" Is Not Enough to Vacate An Arbitrator's Decision, What Is?
The recent Sutter decision drives home repeatedly that a court may not vacate an arbitrator’s decision under the FAA just because a judge thinks the arbitrator reached the wrong result. Justice Kagan said that under Section 10(a)(4) the court cannot second-guess the award, not even in the face of “grave error.” Instead, the award must
Arbitrator's Creative IP Remedy Upheld Because It Furthered "General Aims of Agreement"
In a dispute over whether an arbitrator has authority to grant a video game developer and publisher a perpetual license in the intellectual property as a remedy for the developer’s fraud and breaches of contract, the Fifth Circuit found that the arbitrator’s creative award must be upheld under the Federal Arbitration Act, and set forth
SCOTUS Struggles With Standard Of Review For Arbitrator's Decision To Allow Class Arbitration
While the oral argument before the United States Supreme Court in Sutter today was ostensibly about whether to affirm an arbitrator’s decision that the parties’ contract authorized class arbitration, the decision really turns on how the Court will review all arbitration decisions. (Transcript here.) Multiple Justices expressed an unwillingness to create a special
Seventh Circuit Is Sick Of Arbitration Appeals; Threatens "High Risk of Sanctions"
In an opinion released yesterday, the Seventh Circuit schooled appellant’s counsel first on the application of the New York Convention and Panama Convention, then on the high standard of review it applies to commercial arbitration awards, and finally expressed profound disappointment with the frequency of motions to vacate arbitration awards. “Attempts to obtain judicial review
Arbitrators Labeling Your Securities "Crap" Does Not Entitle You To Vacate The Award
In the last post, the Fifth Circuit affirmed an arbitration award against Morgan Keegan. The Ninth Circuit just affirmed an arbitration award against Morgan Keegan in a sister case. In less than two pages, the Ninth Circuit rejected Morgan Keegan’s arguments that the arbitrators were partial or exceeded their power. Morgan Keegan & Co. v.
Expert's Trick (changed damage calculation) Does Not Entitle Arbitration Loser to a Treat (a/k/a vacatur)
The Fifth Circuit recently refused to vacate an arbitration award, despite the loser’s arguments that: the arbitrators decided claims outside the scope of the arbitration agreement; and the winner’s expert used incorrect damage numbers in his testimony. Morgan Keegan & Co., Inc. v. Garrett, 2012 WL 5209985 (5th Cir. Oct. 23, 2012).
At issue in
Plaintiff Finds You Can Beat City Hall (in arbitration)
While a court may vacate an arbitration award if the arbitrator exceeds the scope of his authority, the City of Lebanon was unable to convince the Supreme Court of New Hampshire that an arbitrator exceeded his authority when siding against the City in a tax dispute.
The plaintiff in Lebanon Hanger Assoc. v. City of