Third Circuit Rules No Second Bite at the Arbitration Apple

On September 29, 2015, the U.S. Court of Appeals for the Third Circuit issued a precedential decision concerning whether and when a party to arbitration waives its right to challenge the arbitration award. The Third Circuit joined a number of other circuits, and cited as persuasive authority holdings from the Second, Eighth, and Ninth Circuits, in adopting a constructive knowledge standard in the assessment of motions to vacate an arbitration award as a result of an arbitrator's failure to disclose. Essentially, a party to an arbitration should not wait to investigate or allege arbitrator malfeasance until after a decision is issued, because if such knowledge could have been discovered prior, with reasonable care and diligence, the party will waive its ability to subsequently challenge the award.