John Peebles v. The Terminix International Company, LP
20-14365
| 11th Cir. | Dec 14, 2021Background
- In Dec. 2016 the Peebles filed for arbitration against Terminix under a 2014 arbitration agreement attached to their demand.
- After a two-week hearing the arbitrator found for Peebles and awarded $883,281 in compensatory damages (including $45,000 for litigation expenses), $883,281 in punitive damages, and $397,476 in attorneys’ fees.
- Peebles moved to confirm the award in federal district court; Terminix moved to vacate the fees/expenses award, submitting a different 2010 arbitration agreement (not presented to the arbitrator) that required each party to bear its own fees.
- The district court vacated the award of attorneys’ fees and litigation expenses under 9 U.S.C. § 10(a)(4), relying on the 2010 agreement.
- Peebles appealed, arguing the only arbitration provision before the arbitrator was the 2014 agreement (which did not bar fee awards) and that the district court erred in relying on the 2010 agreement.
- The Eleventh Circuit reversed, holding the district court clearly erred by relying on an agreement not before the arbitrator and explaining vacatur is narrowly construed; the arbitrator had authority under the 2014 provision to award fees and expenses.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the district court properly vacated the arbitrator’s award of attorneys’ fees and litigation expenses under FAA §10(a)(4) | Peebles: arbitrator had authority under the 2014 arbitration provision (the only provision submitted to the arbitrator), and fees were properly awarded after full arbitration proceedings | Terminix: the 2010 agreement (each party bears its own fees) precludes fee awards; district court should rely on it to vacate fees | Reversed: district court erred relying on the 2010 agreement not before the arbitrator; arbitrator did not exceed authority and fee award stands |
| Whether vacatur under §10(a)(4) should be applied given the arbitrator’s contract interpretation | Peebles: FAA presumes confirmation; arbitrator interpreted the submitted contract and litigated fee availability | Terminix: argued arbitrator’s fee award was unauthorized and thus subject to vacatur | Held: FAA vacatur standard is narrow; because the award was an interpretation of the contract rather than dispensing ‘‘his own brand of justice,’’ vacatur was improper |
Key Cases Cited
- Gherardi v. Citigroup Glob. Mkts. Inc., 975 F.3d 1232 (11th Cir. 2020) (vacatur under §10(a)(4) is narrowly construed; arbitrator must not stray beyond contract interpretation)
- First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (U.S. 1995) (federal courts give deference to arbitration awards)
- Major League Baseball Players Ass’n v. Garvey, 532 U.S. 504 (U.S. 2001) (vacatur permitted only when arbitrator effectively dispenses his own brand of industrial justice)
- Frazier v. CitiFinancial Corp., LLC, 604 F.3d 1313 (11th Cir. 2010) (presumption of confirming arbitration awards; defer to arbitrator’s contract interpretations)
- Johnson v. Directory Assistants Inc., 797 F.3d 1294 (11th Cir. 2015) (standard of review for district court findings and legal conclusions when reviewing vacatur of arbitration awards)