Delaware Transit Corp. v. Amalgamated Transit Union Local 842
2011 Del. LEXIS 627
| Del. | 2011Background
- DTC filed a declaratory judgment action in Delaware Court of Chancery to vacate an arbitration award reinstating Bruckner with back pay.
- Arbitrator Symonette sustained the grievance, finding no just cause and directing reinstatement with back pay after considering sections of the CBA.
- DTC challenged the award on grounds of alleged arbitrator bias arising from the arbitrator's personal life experience (his wife’s death from cancer).
- DTC relied on AAA Labor Arbitration Rule 17 to argue disclosure was required and that failure to disclose created an appearance of bias.
- Chancery applied the evident partiality standard, ultimately holding that undisclosed shared life experience did not constitute evident partiality warranting vacatur.
- Court affirmed the Chancery judgment upholding the award, ruling no duty to disclose the arbitrator’s personal life event.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does undisclosed shared life experience create evident partiality? | Bruckner shared cancer-related experiences create bias. | Beebe/Known ethics require disclosure only for substantial relationships; not for shared life experiences. | No; shared life experience alone does not constitute evident partiality. |
| Does Rule 17 require disclosure of a personal life event during arbitration? | Rule 17 requires disclosure of circumstances likely to affect impartiality, including personal life events. | Rule 17 targets financial/personal relationships with parties, not generic life events. | Rule 17 concerns actual relationships; disclosure of a spouse’s death was not required. |
| Was the award vacatable under Commonwealth Coatings if disclosure was lacking? | Undisclosed connections may vacate under evident partiality. | Commonwealth Coatings supports appearance standard but not in this non-relationship context. | No; the record does not show a substantial relationship that powerfully suggests bias. |
Key Cases Cited
- Commonwealth Coatings Corp. v. Cont’l Cas. Co., 393 U.S. 145 (plurality 1969) (arbital bias must consider appearance and impartiality)
- Kaplan v. First Options of Chicago, Inc., 19 F.3d 1503 (3d Cir.1994) (evident partiality requires reasonable person to view bias)
- Beebe Med. Ctr., Inc. v. InSight Health Servs. Corp., 751 A.2d 426 (Del.Ch.1999) (adopts reasonable person standard for evident partiality)
- Sanko S.S. Co. v. Cook Indus., Inc., 495 F.2d 1260 (2d Cir.1973) (disclosure standards for arbitrators)
- Commonwealth Coatings v. Cont’l Cas. Co., 393 U.S. 145 (Supreme Court 1969) (appearance of bias standard in arbitration)