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711 F.3d 719
6th Cir.
2013
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Background

  • Kinkade and the Whites arbitrated under AAA Commercial Arbitration Rules; Kowalsky served as neutral chair after two party arbitrators selected him.
  • Over five years and about 50 hearing days, Kowalsky’s firm later provided substantial services to the Whites and to Morganroth, the Whites’ arbitrator-advocate, creating potential conflicts.
  • Kowalsky announced that Morganroth and David White had hired his firm, prompting Kinkade to object to the overlapping representation.
  • Kowalsky directed the Whites to supplement damages proof; the Whites eventually produced thousands of pages of financial records previously withheld.
  • A May 2008 Interim Award granted the Whites approximately $567,300 in damages and other relief; final award in 2009 awarded over $1.4 million overall, including attorney fees and costs, which Kinkade sought to vacate.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether evident partiality was shown Kinkade shows motive and actual favoritism by Kowalsky. Whites contend no bias beyond disclosure exists. Yes; evident partiality shown
Effect of disclosures on partiality finding Disclosures were sufficient to reveal conflicts to objectors. Disclosures were inadequate or late, undermining fairness. Disclosures insufficient; partiality still shown
Whether the district court properly vacated the Final Award Vacatur appropriate given evident partiality and flawed proceedings. District court erred in vacating; award supported by record. Yes; district court properly vacated

Key Cases Cited

  • Andersons, Inc. v. Horton Farms, Inc., 166 F.3d 308 (6th Cir. 1998) (evident partiality standard requires concrete improper motives)
  • Uhl v. Komatsu Forklift Co., Ltd., 512 F.3d 294 (6th Cir. 2008) (clear-error factual review; de novo law review)
  • Bhd. of Maint. of Way Emps. v. Terminal R.R. Ass’n, 307 F.3d 737 (8th Cir. 2002) (arbitrator neutrality and perception of advocacy on panel)
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Case Details

Case Name: Thomas Kinkade Company v. Nancy White
Court Name: Court of Appeals for the Sixth Circuit
Date Published: Apr 2, 2013
Citations: 711 F.3d 719; 2013 WL 1296238; 2013 U.S. App. LEXIS 6537; 10-1634
Docket Number: 10-1634
Court Abbreviation: 6th Cir.
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    Thomas Kinkade Company v. Nancy White, 711 F.3d 719