74 F. Supp. 3d 474
D.D.C.2014Background
- In 2013 Nuyen demanded AAA commercial arbitration against Hong Ly Thai alleging breaches of three partnership agreements (written or oral) and sought damages; Thai denied agreements but agreed to arbitrate.
- Arbitrator Matthew Ruble held a two-day hearing in May 2014; Thai testified remotely (intended via Skype; testified by phone when Skype failed) and was cross-examined without objection.
- Nuyen alleged the agreements were signed earlier (2002–2003) or else backdated in 2012; Ruble found Nuyen’s testimony inconsistent and incredible and noted evidence Nuyen was incarcerated at times he claimed agreements were formed.
- Competing handwriting experts produced equivocal results; Ruble found the expert evidence in equipoise and concluded Nuyen failed to prove existence or terms of any written or oral partnership agreements, and denied all claims.
- Nuyen filed a petition to vacate the arbitration award under 9 U.S.C. §§ 10, 11; Thai moved to confirm the award. The district court held argument and denied vacatur, confirming the award.
Issues
| Issue | Nuyen's Argument | Thai's Argument | Held |
|---|---|---|---|
| Whether arbitrator had authority to decide existence of contracts/oral agreements | Ruble lost authority by finding no valid arbitration agreement; thus federal court can hear claims later | Both parties submitted dispute to AAA; arbitrator properly decided existence of written/oral agreements | Arbitrator had authority; Nuyen forfeited objection by not contesting jurisdiction at arbitration; award confirmed |
| Whether arbitration was fundamentally unfair due to Thai’s remote testimony | Thai’s remote testimony prevented demeanor observation and prejudiced Nuyen’s cross-examination rights | Thai testified by phone with no objection; AAA rules permit alternative testimony; hearing was fundamentally fair | No due-process violation; telephone testimony and cross-examination were permissible |
| Whether arbitrator refused to hear material evidence (e.g., damages, partnership/agency theories) | Arbitrator excluded post-hearing accounting and allegedly refused relevant evidence/theories | Arbitrator heard evidence both parties presented; late filings were prejudicial and properly rejected | Arbitrator acted within discretion; rejection of late materials and denial of unproven theories upheld |
| Whether arbitrator exceeded powers or manifestly disregarded law (statutory vacatur standard) | Arbitrator ignored doctrines (continuing tort) and misapplied law, warranting vacatur under 9 U.S.C. § 10(a)(4) | Arbitrator interpreted/applicated contract issues within agreement scope; no manifest disregard or dispensing of "own brand of justice" | Nuyen failed to meet the high standard for vacatur; errors of fact or law insufficient; award not vacated |
Key Cases Cited
- Revere Copper & Brass v. Overseas Private Inv. Corp., 628 F.2d 81 (D.C. Cir. 1980) (arbitration chosen to avoid litigation complications; judicial review is narrow)
- Rush Prudential HMO, Inc. v. Moran, 536 U.S. 355 (Sup. Ct. 2002) (arbitration review is limited)
- Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (Sup. Ct. 1991) (arbitration trades judicial procedures for expedition)
- Atkinson v. Sinclair Refining Co., 370 U.S. 238 (Sup. Ct. 1962) (arbitration is by consent; parties cannot be compelled beyond agreement)
- Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (Sup. Ct. 2006) (validity of underlying contract is for the arbitrator unless challenge is to arbitration clause)
- Major League Baseball Players Ass’n v. Garvey, 532 U.S. 504 (Sup. Ct. 2001) (arbitrator’s contractual construction is binding unless he dispensed his own brand of justice)
- United Paperworkers Int’l Union v. Misco, Inc., 484 U.S. 29 (Sup. Ct. 1987) (errors of fact or law do not justify vacatur)
- LaPrade v. Kidder Peabody & Co., 246 F.3d 702 (D.C. Cir. 2001) (manifest disregard requires arbitrators knew and ignored a clear governing legal principle)
- Howard Univ. v. Metro. Campus Police Officer's Union, 512 F.3d 716 (D.C. Cir. 2008) (failure to object to arbitrator jurisdiction during arbitration forfeits later challenge)
- Stolt–Nielsen S.A. v. AnimalFeeds Int'l Corp., 559 U.S. 662 (Sup. Ct. 2010) (courts generally do not second-guess arbitrator’s evidentiary decisions)
- Oxford Health Plans LLC v. Sutter, 569 U.S. 564 (Sup. Ct. 2013) (party seeking vacatur under § 10(a)(4) bears heavy burden)