485 F. App'x 724
5th Cir.2012Background
- DCS and MMC had a contract with an arbitration clause for disputes
- MMC demanded arbitration; a three-member panel heard the case
- The panel’s award favored DCS; MMC moved to vacate for evident partiality by DCS-appointed arbitrator
- The district court vacated the award finding a reasonable impression of bias
- Butner disclosed prior arbitrations; MMC argued disclosures were inadequate
- The appellate court vacated the district court’s orders and remanded to confirm the arbitration award
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Waiver of evident partiality claim under FAA §10(a)(2) | MMC did not know of Venus Ford panel; objections timely | Waiver should apply; failure to object during arbitration is a waiver unless knowledge existed | Waiver applied; MMC’s objections were waived |
| Sufficiency of arbitrator disclosures | Butner’s disclosures, plus online Webfile, gave MMC notice of potential conflict | Disclosures were inadequate or incomplete given prior service | Disclosures were sufficient to place MMC on notice of potential bias |
| Standard of review and result on vacatur | Arbitration awards reviewed narrowly; deference owed to panel | Vacatur proper due to evident partiality | District court erred; vacatur vacated and award to be confirmed |
Key Cases Cited
- Positive Software Solutions Inc. v. New Century Mortg. Corp., 476 F.3d 278 (5th Cir. 2007) (narrow review of arbitrator awards; strong deference to arbitral tribunals)
- Lucent Technologies, Inc. v. Tatung Co., 379 F.3d 24 (2d Cir. 2004) (undisclosed relationships; duty to investigate possible bias)
- Kiernan v. Piper Jaffray Cos., Inc., 137 F.3d 588 (8th Cir. 1998) (facts indicating bias; objector's duty to investigate before arbitration")
- Bosarge v. Seawell & Kove, 813 F.2d 726 (5th Cir. 1987) (objection to arbitrator must be raised during proceedings to avoid waiver)
- Delta Mine Holding Co. v. AFC Coal Props., Inc., 280 F.3d 815 (8th Cir. 2001) (waiver principle; objecting party must raise issue)
