History
  • No items yet
midpage
922 F.3d 320
5th Cir.
2019
Read the full case

Background

  • Ashcroft‑Smith (attorney) provided legal services to Light‑Age over ~5 years; Light‑Age disputed $344,990.58 in fees as excessive.
  • Parties agreed to arbitrate under the Houston Bar Association Fee Dispute Committee (FDC) rules, which require three‑member panels with one non‑lawyer and prohibit non‑lawyers from having financial interests in law practice.
  • The FDC appointed Ana Davis as the non‑lawyer arbitrator; Davis was a payroll manager for law firm Jackson Walker, L.L.P., a fact shown in her email signature but allegedly not discovered by Light‑Age before the hearing.
  • Light‑Age (represented by CEO Don Heller, pro se) did not object to Davis’s participation at the arbitration hearing; after the award ($274,813.58) issued and Light‑Age learned of Davis’s employment, Light‑Age objected to the panel composition.
  • Light‑Age petitioned the district court to vacate the award; the district court confirmed the award, finding Davis qualified; Light‑Age appealed.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether Light‑Age may vacate arbitration award based on improper composition of panel Panel was improperly constituted because the non‑lawyer arbitrator worked for a law firm, violating FDC rule Objection was waived because Light‑Age failed to object at hearing; Davis was qualified under FDC rules Waived: court applies constructive‑knowledge standard and affirms award
Whether constructive‑knowledge waiver applies to §5 vacatur claims Different statutory vacatur provision (§5) requires different rule; no waiver if not timely objected Constructive‑knowledge standard should apply to preserve finality and efficiency Constructive‑knowledge standard applies; party must timely object or is deemed to have waived

Key Cases Cited

  • Rainier DSC 1, L.L.C. v. Rainier Capital Mgmt., L.P., 828 F.3d 362 (5th Cir. 2016) (standard of review for confirmation of arbitration awards)
  • Brook v. Peak Int’l, Ltd., 294 F.3d 668 (5th Cir. 2002) (objections to panel composition must be raised at hearing)
  • Bernstein Seawell & Kove v. Bosarge, 813 F.2d 726 (5th Cir. 1987) (same—timely objection requirement)
  • Gateway Techs., Inc. v. MCI Telecommc’ns Corp., 64 F.3d 993 (5th Cir. 1995) (parties must preserve arbitration objections for later review)
  • Goldman, Sachs & Co. v. Athena Venture Partners, L.P., 803 F.3d 144 (3d Cir. 2015) (applies constructive‑knowledge waiver for arbitrator conflicts)
  • Lucent Techs., Inc. v. Tatung Co., 379 F.3d 24 (2d Cir. 2004) (same—constructive knowledge leads to waiver)
  • Hall St. Assocs. v. Mattel, Inc., 552 U.S. 576 (2008) (relevant to limits on judicial vacatur standards)
Read the full case

Case Details

Case Name: Light-Age, Incorporated v. Clifford Ashcroft-Smith
Court Name: Court of Appeals for the Fifth Circuit
Date Published: Apr 25, 2019
Citations: 922 F.3d 320; 18-20098
Docket Number: 18-20098
Court Abbreviation: 5th Cir.
Log In
    Light-Age, Incorporated v. Clifford Ashcroft-Smith, 922 F.3d 320