Cat Charter, LLC v. Schurtenberger
2011 U.S. App. LEXIS 14266
| 11th Cir. | 2011Background
- Cat Charter, LLC and the Ryans paid MTI about $2 million to construct the yacht 'Magic', which MTI did not deliver.
- Arbitration proceeded under AAA Commercial Arbitration Rules before a three-arbitrator panel; the parties agreed the panel would issue a reasoned award and determine prevailing party on each claim.
- Panel issued a December 7, 2009 Award ruling in favor of Plaintiffs on some claims, denying others, and awarding fees and costs to Plaintiffs; first lien on the Magic was granted.
- Plaintiffs moved to confirm the Award; Defendants moved to vacate on § 10(a)(4) grounds for lack of a reasoned award; the district court vacated the Award.
- The district court held that the Panel exceeded its powers by failing to provide a reasoned award and remand was barred by functus officio.
- Eleventh Circuit reversed, holding the Award was a valid, reasoned award and should be reinstated; arbitration should not be reopened.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did lack of a reasoned award violate the contract and §10(a)(4)? | Plaintiffs | Schurtenberger/MTI | No; award was reasoned and within powers |
| What constitutes a 'reasoned award' under the FAA and contract? | Plaintiffs argued for detailed support for credibility determinations | Defendants argued minimal explanation suffices | Reasoned award found; statements on credibility suffice |
| Should the award be vacated or the panel remanded given the dispute over reasons? | Vacatur warranted due to lack of reasons | Remand not appropriate; award should be confirmed | Vacatur reversed; award reinstated |
Key Cases Cited
- Hall Street Assocs., LLC v. Mattel, Inc., 552 U.S. 576 (U.S. 2008) (FAA grounds are exclusive; limited post-arbitral review)
- United Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. 593 (U.S. 1960) (arbitrators need not provide reasons in ordinary awards)
- Szuts v. Dean Witter Reynolds, Inc., 931 F.2d 830 (11th Cir. 1991) (arbitrators exceed powers if contract requires multi-arbitrator panel)
- Green v. Ameritech Corp., 200 F.3d 967 (6th Cir. 2000) (remand vs. vacatur when reasoned award issue arises)
- Vold v. Broin & Assocs., Inc., 699 N.W.2d 482 (Minn. 2005) (finding no reason given can justify vacatur in some contexts)
- Major League Baseball Players Ass'n v. Garvey, 532 U.S. 504 (U.S. 2001) (importance of arbitration as speedy resolution with limited review)