May 30, 2017

Federal Judge Vacates State Judgment Entered in Error Where Case Removed

Alison Austin

On May 25, a California federal judge agreed with a state court ruling allowing a $1.07 million arbitration award to an Afghan subcontractor. ECC Centcom Constructors LLC asked U.S. District Judge Yvonne Gonzalez Rogers to vacate a California State Court judgment that awarded Aspic Engineering and Construction Company asserting it was entered in error.

Both Aspic and ECC agreed there was a mistake in the state court judgment, and Judge Rogers concurred. Rogers stated that the judgment was stamped before the minimum time for each party to respond in California proceedings. Rogers confirmed that because of this, both parties agreement to vacate the judgment is granted.

General federal district courts do not have the authority to exercise appellate review over final state court judgments; however, Judge Rogers noted that federal courts are not barred from “proper exercise of its jurisdiction to manage its cases” even if this “has the secondary effect of voiding a state court determination." Because the case had been removed to federal court, Rogers had jurisdiction to vacate the judgment entered in error.

Conflict originally began with two subcontracts ECC awarded to Aspic supporting construction with Afghan National Police training facilities in Sheberghan Province and Badghis Province, Afghanistan. The prime and subcontracts were later terminated by the Army Corps and ECC. After this, ECC felt that the $1 million awarded to Aspic, who disputed, and eventually the arbitrator sided with Aspic and they were awarded the $1.07 million. Aspic was still unhappy with the arbitrator as it didn’t cover attorney fees, and asked the court to award $450 thousand plus interest.

Meanwhile, ECC pleaded that the award itself should be vacated because the arbitrator overextended their powers and used intuition instead of being guided by the law, and settle issues not even brought up by other parties. Federal Judge Rogers has yet to reach a decision on this matter.

Alison Austin

Austin Law Firm in Raleigh, North Carolina