September 13, 2018 practice point

Award Confirmed Despite Exclusion of Evidence

By Mark Kantor

Arbitrators are sometimes concerned that their ruling to decline or limit proffered evidence may lead the losing party to challenge the arbitration award. Arbitrators may react to this concern with evidentiary and other rulings that allow purportedly far-fetched evidentiary submissions, thereby extending the duration and expense of the arbitral proceedings. Critics label that kind of arbitrator conduct as “due process paranoia.” Others regard that kind of arbitrator conduct as sensible in light of the alleged unpredictability of the courts hearing those challenges.

In Floridians for Solar Choice, Inc. v. PCI Consultants, Inc. Case No. 15-cv-62688-Bloom/Valle, (D. Fla. June 8, 2018), a Florida district court rejected the losing party’s argument that it had been denied a fair hearing due to the arbitrator’s exclusion of evidence, and it then confirmed the arbitration award. The court’s analysis did not break new ground, but it is quoted below as a reminder that arbitrators have broad discretion in making evidentiary rulings and that the federal courts will not substitute their judgment for that of the arbitrator when the challenged evidentiary rulings do not deprive the parties of a fundamentally fair hearing.

“Arbitrators enjoy wide latitude in conducting an arbitration hearing, and they are not constrained by formal rules of procedure or evidence." Rosensweig v. Morgan Stanley & Co., 494 F.3d 1328, 1333 (11th Cir. 2007) (citation and quotation marks omitted). An arbitrator is not required to accept all the evidence a party seeks to introduce in an arbitration proceeding so long as the parties receive a fundamentally fair hearing. Scott v. Prudential Sec., Inc., 141 F.3d 1007, 1017 (11th Cir. 1998), overruled on other grounds by Hall St. Assocs., LLC v. Mattel, Inc., 552 U.S. 576, 588 (2008). Thus, when a party challenges an evidentiary decision of the arbitration panel, a federal court may vacate the award only if the arbitrator's refusal to hear pertinent and material evidence prejudiced the rights of the parties to the arbitration proceedings. Rosensweig, 494 F.3d at 1333.


The Court has carefully reviewed the transcripts from the hearing and notes that for each of the areas of inquiry, the Arbitrator either allowed some limited evidence . . . or precluded introduction of that evidence based on an evidentiary ruling stated on the record. . . The Arbitrator had a reasonable basis to limit the evidence introduced at the hearing to the 2016 ballot initiative and the contracts and parties before the Arbitrator, and to exclude evidence related to SACE's tax reporting requirements as more prejudicial than probative. Rosensweig, 494 F.3d at 1334 (finding "the arbitrators committed no misconduct because they had several reasonable bases for limiting evidence . . ."). Defendants admit that vacatur is only appropriate based on an evidentiary ruling that so affects the rights of the party that they were deprived of a fair hearing. . . . Defendants' complained of evidentiary rulings do not meet that standard.”


Mark Kantor is a member of the College of Commercial Arbitrators in Washington, D.C.

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