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