April 24, 2019 Feature

Vacating the Arbitration Award: Arbitration as a Final Adjudication

By Joseph H. Wolenski, DeWitte Thompson, and Stephanie Geer

So, the arbitrator has ruled against your client, the surety. It was a well-presented case on your side. The witnesses were prepared, and the evidence was delivered in a persuasive, coherent fashion. Your client, who sat in the trenches with you during the arbitration, now turns to you and asks, “Is there anything else we can do?”

The short answer is yes, but the statutory grounds for vacating an arbitration award—frequently called vacatur or a vacatur action—are “among the narrowest known to law,”1 and, as we shall see, appear to be focused on the reliability of the process as opposed to an analysis of the result. Thus, before committing additional funds to attempt to set aside an arbitration award, it is paramount for the surety to evaluate the merits of the case objectively.

But before we start our discussion, the authors would like to indulge the reader and skip to the end. By the end, we mean the end of the vacatur action that you, as advocate and attorney, just won (hypothetically, of course). The adverse award that unfairly punished your client is vacated, so what happens next? Well, the remedy sought via vacatur should come with a warning—and perhaps one that warrants its own name in lights.

The Federal Arbitration Act (FAA) states that

if an award is vacated and the time within which the agreement required the award to be made has not expired, the court may, in its discretion, direct a rehearing by the arbitrators.2

One legal scholar noted that

absent corruption, fraud, or other misconduct on the part of the arbitrator[,] . . . the court vacating the arbitration award should order rehearing before the same panel, though that decision remains with the court’s discretion.3

In other words, even when a vacatur action is successful, the remedy is often no better than a do-over. In some instances, where there is no evidence of corruption or anything of that nature, the do-over may take place before the same arbitrator as the one who just issued the adverse award.

Certainly, as with the nature of all things arbitration, surety counsel should be mindful that the expense and cost of that second arbitration will be borne by the parties.

Substantive Considerations: The FAA and Statutory Grounds to Vacate

The FAA4 provides that if the parties have agreed to arbitrate their dispute, then the court’s role in resolving that dispute is limited to ascertaining whether or not one of the grounds specified by 9 U.S.C. § 10(a) for vacation of the award exists. Those four categories are as follows:

  1. where the award was procured by corruption, fraud, or undue means;
  2. where there was evident partiality or corruption in the arbitrators, or either of them;
  3. where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced; or
  4. where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made.5

Award procured by corruption, fraud, or undue means. According to the U.S. Court of Appeals for the Fifth Circuit in a ruling widely adopted by other courts in some fashion or another, to show that an award was obtained by “corruption, fraud, or undue means,” under the FAA, the moving party must demonstrate (1) by clear and convincing evidence that the fraud, corruption, or undue means occurred; (2) that the misconduct was not discoverable by due diligence before or during the arbitration; and (3) that the fraud, corruption, or undue means materially related to an issue in the arbitration.6

The last element cited in the preceding paragraph is possible in theory but difficult to establish as a practical matter. Despite evidence of corruption, fraud, or undue means, it seems, in general, that courts will not grant vacatur if the complaining party cannot show a “nexus” between the fraud and the basis for the arbitrator’s decision.7 In other words, the corruption, fraud, or undue means must have affected the arbitrator’s decision-making. Fraudulent conduct alone means very little in the eyes of a reviewing judge as arbitration awards are given great deference by the courts. To a certain extent, the nexus requirement very well may involve proving the mental processes or reasoning that the arbitrator had in his or her head at the time the decision was issued. Many litigants have sought to prove this nexus but failed.

Of the three grounds (corruption, fraud, undue means), it is the latter, undue means, that generates the most jurisprudence. Undue means “more than necessary; not proper; illegal” and “denotes something wrong.”8 Thus, in a vacatur action where a zealous lawyer argued numerous meritless defenses, the court upheld the award because although the lawyer’s advocacy may have been “more than necessary,” it was not deemed “illegal.”9

Other examples of failure to prove undue means include the following:

  1. Perjury of a witness when testimony in question relates to a remote topic does not constitute “undue means.”10
  2. A party’s inducement of another party to arbitrate under the pretense that “judicial review” of the award existed—when, in fact, it did not—was not considered “undue means.”11
  3. Witness intimidation where the arbitrator did not accord substantial weight to witness testimony does not constitute “undue means.”12

Evident partiality or corruption in the arbitrators. The “evident partiality” basis for vacatur was developed because use of the standard of “appearance of bias” (such as that standard used in the recusal of federal judges) was considered a standard too low for invocation of 9 U.S.C. § 10(a)(2); and, correspondingly, “proof of actual bias” was determined to be a standard that was too high.13 Therefore, evident partiality is not concerned so much with corruption as it is with whether a reasonable person would conclude that the arbitrator was partial to one party over another.14 Though 9 U.S.C. § 10(a)(2) is straightforward in nature, it is complex in application.

The U.S. Court of Appeals for the Second Circuit has proffered a nonexclusive list to determine whether a party has established evident partiality. That list includes the following factors:

  1. the extent and character of personal interest . . . of the arbitrator in the proceedings;
  2. the directness of the relationship between the arbitrator and the party that he is alleged to favor;
  3. the connection of that relationship to the arbitrator; and
  4. the proximity in time between the relationship and the arbitration proceeding.15

The Fifth Circuit has emphasized that evident partiality is a “stern standard” and that “nondisclosure alone does not require vacatur” of an award for evident partiality, but instead the “failure to disclosure must involve a significant compromising connection to the parties” and create a “concrete, not speculative,” impression of bias.16

The totality of the many decisions on this topic highlights that the standard established by the courts essentially requires some kind of intentional act by the arbitrator to conceal acts that, if revealed, would raise the proverbial eyebrow of a reasonable passerby. Such a factual scenario was displayed in Karlseng v. Cooke, where the arbitrator and the lawyer for the winning side presented themselves as complete strangers and where the arbitrator stated on his personal disclosure statement that he did not have any personal relationships with either party or either party’s counsel.17 The truth was, however, that the arbitrator had a decades-long personal and social relationship with the lawyer for the prevailing party. This social relationship included valuable gifts and meals, paid for by the lawyer. None of this was disclosed prior to the arbitration, and a $22 million award was vacated.

For each case where a court vacates an award due to evident partiality, however, there are probably 10 cases where this argument fails. From these losing attempts emerges a theme: Reliance upon the existence of a conflict of interest is not normally enough to vacate under 9 U.S.C. § 10(a)(2). To set aside an award for arbitration partiality, “the interest or bias . . . must be direct, definite and capable of demonstration rather than remote, uncertain or speculative.”18 Even in such instances, courts are not quick to set aside the results of arbitration because of the arbitrator’s alleged failure to disclose information.

Arbitrator misconduct that prejudices the rights of any party. Out of the four subsections in 9 U.S.C. § 10 that address vacating an arbitration award, the third subsection contains the most to unpack. This subsection contains jurisprudence related to a number of failings by the arbitrator. A short list includes failure to hold a hearing; refusal to postpone a hearing; refusal to hear evidence; failure to state reasons in support of an award; failure to allow briefs; failure to allow oral argument; failure to allow discovery; and, of course, failure by the arbitrator to follow the rules of evidence (more on that later). When viewed at the macro level, all of these arguments fit under the question of whether the arbitrator’s conduct led to a fair or unfair hearing. We will not discuss every nuance but point out two in particular: (1) refusal to give notice of a hearing and to postpone a hearing and (2) refusal to hear evidence and to follow rules of evidence.

Generally speaking, the parties can determine of their own accord whether to have a hearing, but there is technically no requirement to do so, and parties can waive oral hearing at any time in any case.19 Canon IV of the American Arbitration Association (AAA) Code of Ethics states only that the arbitrator “should” afford to all parties the right to be heard and should be provided with due notice of any hearing. Canon IV further states that the arbitrator “should allow each party a fair opportunity to present its evidence and arguments. . . .” In practice, a hearing is customary. However, in Cragwood Managers, LLC v. Reliance Insurance Co., a federal judge upheld an arbitration award even though it was issued without a formal hearing.20 The court reasoned that because both parties were given every opportunity to present evidence and because the losing party never requested an oral hearing, a decision based on paper evidence alone did not violate fundamental fairness.

The arbitrator’s decision to exclude (or refuse to hear) certain evidence rarely constitutes misconduct requiring vacatur of the award under the FAA. The only instance where a federal court will vacate an award for refusal of the arbitrator to hear evidence is when the exclusion of said evidence so affects the rights of one party that it is deprived of a fair hearing.21 Occasionally, during arbitration, one side will attempt to invoke the Federal Rules of Evidence. If that party did so, he or she has been wrong, at least since 1956. Arbitrators are not bound by the rules of evidence.22

Arbitrators exceed or imperfectly execute powers, leading to an award. The final statutory basis on which to vacate an arbitration award is, in actuality, the most popular—or, at least, the most frequently used basis deployed by parties that seek to vacate an award. Although there are many cases that fit under the “arbitrator exceeded his or her power” argument, there is one case in particular that is both recent in time and apt in facts when compared to typical disputes in the surety industry. Because it is so on point, and deploys reasoning and logic consistent with other cases that invoked similar grounds to vacate, we will depart from our usual federal law narrative and afford Nappa Construction Management, LLC v. Flynn extended discussion.23

The facts were as follows: Nappa Construction (Nappa) and a husband-wife team (we’ll call them the Flynns) signed a contract in September 2012 whereby Nappa Construction agreed to construct a car repair facility. The contract gave the Flynns the right to suspend the work for cause at any time. The contract further gave the Flynns the power to terminate the contract for convenience without cause.

Needless to say, after the work began in earnest, a dispute arose with regard to deficiencies in the concrete foundation. The Flynns, concerned that the foundation may have been poured incorrectly, exercised their contractual right to suspend work on the project without cause, for purposes of investigation. In response, Nappa Construction sent the Flynns a pay application for the foundation work, which the Flynns refused to pay. Nappa then declared the Flynns in breach of contract and demobilized from the project. The Flynns filed a lawsuit against Nappa and joined Nappa’s surety as a codefendant. The contract contained an arbitration clause, so the parties arbitrated in early 2015. On March 13, 2015, the arbitrator issued his award.

The rationale of the award was puzzling. The arbitrator essentially concluded that both parties were at fault. The Flynns were at fault for suspending the work, which, according to the arbitrator, “was not a satisfactory way to address these problems, and only served to exacerbate the deteriorating situation.”24 But the arbitrator reasoned that Nappa was also at fault because it “failed to act in the best interest of the project” and was not justified in terminating the contract for failure of the Flynns to pay the aforementioned payment application. Having established what he perceived to be errors on both sides, the arbitrator, of his own accord, invoked the contract’s termination-for-convenience clause, though no one had asked him to do that. He declared that the relationship between the parties was “dysfunctional” and that neither party should be in breach of contract. Despite this, however, the arbitrator concluded that Nappa was entitled to the value of the completed work less the cost to repair the defective concrete.25 When all was said and done, the award instructed the Flynns to pay Nappa $37,979.97.

The Flynns moved to vacate the award, but the trial court upheld the award. The Flynns appealed to the Supreme Court of Rhode Island.

Ultimately, the Supreme Court of Rhode Island vacated the award, but it centered its discussion on the notion that the arbitrator exceeded his authority because his award “fail[ed] to draw its essence from the parties’ agreement.”26 Specifically, the court reasoned that the arbitrator’s award departed from the essence of the contract on several fronts. First, the award contradicted the arbitrator’s own factual findings. For instance, the Flynns had a contractual right to suspend the work, which is the only contractual provision that the Flynns ever invoked—so how could the arbitrator reason that very action by the Flynns “was not a satisfactory way to address [their] problems” with the foundation?27 Second, the court took issue with the idea that the arbitrator found that Nappa was unjustified in terminating the contract but nevertheless was awarded $37,979.97.28 The court elaborated thus:

Having effectively found Nappa to be in breach of contract, rather than determining damages, the arbitrator essentially converted Nappa’s wrongful termination into a termination for convenience, which under the contract was a right exercisable only by the Flynns.29

The court reasoned that because the arbitrator’s conclusions were in discord with his factual findings, his conclusions failed to draw from the essence of the agreement; therefore, the court vacated the award.30

Unfortunately, however, the court’s decision to vacate the award did not resolve the issue one way or another. It simply meant that the existing award was vacated. The contract’s original arbitration provision was still in full force and effect. Thus, through extensive litigation by both sides, the parties found themselves in exactly the same position as they were years earlier.

Substantive Considerations: Manifest Disregard after Hall Street

“Manifest disregard of the law” is an argument to vacate often mixed in with the statute-based arguments discussed above. One must tread carefully, however, because not all courts recognize the concept of manifest disregard, which first appeared in dicta in a 1953 U.S. Supreme Court decision called Wilko v. Swan.31

Several circuit courts of appeal have criticized the manner in which manifest disregard has become a basis for vacatur in its own right. Perhaps the most stinging rebuke comes from the U.S. Court of Appeals for the Seventh Circuit, which in 1994 wrote thus:

We can understand neither the need for the [manifest disregard] nor the role that it plays in judicial review of arbitration (we suspect none—that it is just words). If it is meant to smuggle review for clear error in by the back door, it is inconsistent with the entire modern law of arbitration. If it is intended to be synonymous with the statutory formula that it most nearly resembles—whether the arbitrators “exceeded their powers”—it is superfluous and confusing.32

In 2008, the U.S. Supreme Court issued a decision in Hall Street Associates, LLC v. Mattel, Inc. holding that arbitration awards under the FAA may be vacated only for statutory reasons provided in 9 U.S.C. § 10(a)(1)–(4).33 The implication, of course, was that nonstatutory grounds such as manifest disregard no longer constituted a valid basis for vacatur. Many federal circuit courts, including the First, Fifth, Seventh, Eighth, and Eleventh Circuits, interpreted this to mean that manifest disregard was finally dead.34 However, not all courts agreed. The Second, Fourth, Sixth, and Ninth Circuits have concluded that manifest disregard of the law has survived under various factual scenarios.35

In 2010, the U.S. Supreme Court took up manifest disregard again, but again only on the periphery. In Stolt-Nielsen, S.A. v. Animalfeeds International Corp., the Court declined to resolve the dispute among the circuits as to whether manifest disregard survived its decision in Hall Street as grounds to vacate an arbitration award.36 Instead, the Court stated only that assuming arguendo that manifest disregard was to survive, then it would

require a showing that the arbitrators knew of the relevant [legal] principle, appreciated that this principle controlled the outcome of the disputed issue, and nonetheless willfully flouted the governing law by refusing to apply it. . . .37

Procedural Considerations

In addition to the various substantive considerations, there are, as the reader may surmise, various procedural considerations to take into account before filing a vacatur action. Not to be confused with “procedural defenses” (of which there are essentially none under the FAA, save for maybe the defense that the vacatur action is time-barred), the following considerations represent a list of potential boxes to check prior to bringing a motion to vacate an arbitration award.

Finality of award. The concept of finality in arbitration—seemingly an absolute—is actually relative. That is, one cannot begin a discussion of the question “When is an arbitration result final?” without first elaborating on the purpose for which it is final.

If the question is focused on the matter of finality of an award for purposes of enforcement, then the question effectively becomes “When is an award final such that a court of law will undertake to confirm it and issue a corresponding judgment?” Not surprisingly, the question rarely arises and can be answered relatively easily:

To be considered final, an arbitration award must be intended by the arbitrator to be a complete determination of every issue submitted. It must resolve all the issues submitted to arbitration definitely enough so that the rights and obligations of the parties, with respect to the issues submitted to the arbitrator, need no further adjudication.38

The finality of an award for purposes of enforcement is determined, in general, by the interplay between the rules of the arbitration forum (e.g., AAA) and the state or federal law that provides a framework for confirmation of the award by a court. Under most circumstances, the process is unambiguous; arbitrators typically issue comprehensive rulings that are clearly denominated as final and that clearly dispose of all of the claims submitted for arbitration.

Preservation of error. Prior to filing a vacatur action, surety counsel should confirm that the basis for the vacatur was preserved at arbitration.39 The AAA Construction Rules further state that a “party must object to the jurisdiction of the arbitrator or to the arbitrability of a claim or counterclaim” if that objection is to be preserved.40

The preservation of the objection itself can be oral, but diligent surety advocates often will double down on the objection and file it in writing as well, with copies to all parties involved, including the case manager.41 This step is particularly important if there is no transcript and a reviewing court must base its decision on the representations of the parties.

Reasoned decisions. Usually, arbitrators need not provide reasons for their awards.42 The only basis that supports a requirement of a written award at all is found in Rule 47 of the AAA Construction Rules. AAA Rule 47(b) states that “in all cases, unless waived by agreement of the parties, the arbitrator shall provide a concise written financial breakdown of any monetary awards. . . .” AAA Rule 47(c) states that the parties may “request” a reasoned opinion but, should they elect to choose such a remedy, must do so by the preliminary management hearing.43

A record. Similar to any plaintiff in any civil action, the party bringing the vacatur action bears the burden to bring forth a complete record that establishes its basis for relief.44 Moreover, AAA Construction Rule 29 (stenographic record) permits a written record to be taken of the arbitration proceeding but puts the burden on the party desiring such a record to make arrangements directly with the stenographer. Note, however, that a stenographic record is not the “official” record unless submitted to the arbitrator to be the “official record of the proceeding.”45

Deadlines for vacatur action. A party seeking to confirm an arbitration award has one year to apply to a court for confirmation.46 Notice of a motion to vacate an award must be served within three months after the award is filed or delivered.47

Good-faith basis for vacatur. Over the past several years, judges have cautioned litigants not to use the courts at every turn when they find themselves unhappy or dissatisfied with an arbitration award. The opinion of the U.S. Court of Appeals for the Eleventh Circuit in B.L. Harbert International, LLC v. Hercules Steel Co. is one example of a party pushing the court just a bit too far.48

Hercules Steel concerned a construction dispute over scheduling, progress, and payment. The parties arbitrated their dispute pursuant to the subcontract, and the arbitrator issued an award. The losing party challenged the award on one nonstatutory basis: manifest disregard of the law, which the Eleventh Circuit, even prior to Hall Street, did not place in high regard as a reason to vacate an award.49 The district court affirmed the award, but the losing party persisted and filed an appeal, again arguing manifest disregard as the sole reason to vacate.

The Eleventh Circuit diligently reviewed the case and issued an order affirming the lower court; but as it concluded its opinion, it went on to issue a fairly direct warning:

If we permit parties who lose in arbitration to freely relitigate their cases in court, arbitration will do nothing to reduce congestion in the judicial system; dispute resolution will be slower instead of faster; and reaching a final decision will cost more instead of less. This case is a good example of the poor loser problem and it provides us with an opportunity to discuss a potential solution.50

But it gets better . . .

When a party who loses an arbitration award assumes a never-say-die attitude and drags the dispute through the court system without an objectively reasonable belief it will prevail, the promise of arbitration is broken. . . . The more cases there are, like this one, in which the arbitrator is only the first stop along the way, the less arbitration there will be.51

And better still . . .

A realistic threat of sanctions may discourage baseless litigation over arbitration awards and help fulfill the purposes of the pro-arbitration policy contained in the FAA. It is an idea worth considering.

We have considered ordering [the losing party] and its counsel to show cause why sanctions should not be imposed in this case, but have decided against doing so.52

This decision offers a good reminder that a party’s rights to vacate an arbitration award are extremely limited. Before moving forward with filing a vacatur action, a party must objectively consider whether any of the grounds to vacate listed in 9 U.S.C. § 10 (as discussed above) exist.

Conclusion

There are a number of assumptions that must go in the surety’s favor in order to travel from “I lost” to “I won” at arbitration. The two most important assumptions (or variables) are (1) the surety must persuade the reviewing judge to vacate the award; and (2) the surety must prevail in the second arbitration, whether it is in front of a different arbitrator or the same one.

Occam’s razor dictates that among several competing hypotheses, the choice with the fewest assumptions should be selected. In that light, a losing party at arbitration should contemplate long and hard on its overall litigation strategy and what it hopes to achieve. 

Notes

1. Denver & Rio Grande W. R.R. v. Union Pac. R.R., 119 F.3d 847, 849 (10th Cir. 1997) (internal citations omitted).

2. 9 U.S.C. § 10(b) (1947).

3. Thomas H. Oehmke, Appealing Adverse Arbitration Awards, 94 Am. Juris. Trials 211, § 40 (2014).

4. Because this is a national publication and because most states tend to model their respective arbitration laws after the Federal Arbitration Act (FAA), this paper’s primary focus will address vacatur issues under the FAA.

5. 9 U.S.C. § 10(a)(1)–(4).

6. Morgan Keegan & Co. v. Garrett, 495 F. App’x 443, 446 (5th Cir. 2012); see also Conoco, Inc. v. Oil, Chem. & Atomic Workers Int’l Union, 26 F. Supp. 2d 1310 (N.D. Okla. 1998).

7. Forsythe Int’l, S.A. v. Gibbs Oil Co., 915 F.2d 1017, 1022 (5th Cir. 1990).

8. A.G. Edwards & Sons, Inc. v. McCollough, 967 F.2d 1401, 1403 (9th Cir 1992).

9. Id.

10. Commonw. Coatings Corp. v. Cont’l Cas. Co., 393 U.S. 145 (1968).

11. Kyocera Corp. v. Prudential-Bache T Servs., 341 F.3d 987 (9th Cir. 2003).

12. Local Union 1160 v. Busy Beaver Bldg. Ctrs., 616 F. Supp. 812 (W.D. Pa. 1985).

13. Morelite Constr. Corp. v. N.Y.C. Dist. Council Carpenters Benefit Funds, 748 F.2d 79, 84 (2d Cir. 1984).

14. Id.

15. Scandinavian Reins. Co. v. St. Paul Fire & Marine Ins. Co., 668 F.3d 60 (2d Cir. 2012) (internal citations omitted).

16. Positive Software Solutions, Inc. v. New Century Mortg. Corp., 476 F. 3d 278, 281 (5th Cir. 2007).

17. Karlseng v. Cooke, 346 S.W.3d 85, 87–94, 96–100 (Tex. App., Dallas 2011); see also Mark Trachtenberg, Challenging Arbitration Awards (June 5–6, 2014), available at www.haynesboone.com/~/media/files/attorney %20publications/2014/challengingarbitrationawards.ashx.

18. Health Servs. Mgmt. Corp. v. Hughes, 975 F.2d 1253, 1264 (7th Cir. 1992) (emphasis added).

19. See AAA Constr. R. 33(d).

20. 132 F. Supp. 2d 285 (S.D.N.Y. 2001).

21. See Lessin v. Merrill Lynch, 481 F.3d 813 (D.C. Cir. 2007); Stifel, Nicolaus & Co. v. Forster, 2015 Dist. LEXIS 14970 (S.D.N.Y. Feb. 6, 2015); see also LJL 33d St. Assocs., LLC v. Pitcairn Props., 725 F.3d 184 (2d Cir. 2013) (finding that arbitrator’s exclusion of hearsay evidence concerning value of real estate was proper because exclusion did not impair fundamental fairness of proceeding); Century Indem. Co. v. Certain Underwriters of Lloyd’s, 584 F.3d 513 (3d Cir. 2009) (finding that arbitrator’s decision to exclude evidence proffered by losing party based on evidence’s relevance was well within arbitrator’s authority).

22. Bernhardt v. Polygraphic Co., 350 U.S. 198, 203–04, n.4 (1956).

23. 152 A.3d 1128 (R.I. 2017).

24. Id. at 1130.

25. Id. at 1136.

26. Id. at 1133.

27. Id. at 1134.

28. Id. at 1134–35.

29. Id. at 1135.

30. Other examples include Wyandot, Inc. v. Local 227, United Food & Commercial Workers Union, 205 F.3d 922, 929 (6th Cir. 2000) (noting that although an arbitrator “may construe ambiguous contract language, he is without authority to disregard or modify plain and unambiguous provisions”), and Excel Corp. v. United Food & Commercial Workers Int’l Union, Local 431, 102 F.3d 1464, 1468 (8th Cir. 1996) (“Although an arbitrator’s award is given great deference by the reviewing court, the arbitrator is not free to ignore or abandon the plain language of the [agreement], which would amend or alter the agreement without authority.”).

31. 346 U.S. 427, 436–37 (1953).

32. Baravati v. Josephthal, Lyon & Ross, Inc., 28 F.3d 704, 706 (7th Cir. 1994).

33. 552 U.S. 576, 584 (2008).

34. See Affymax, Inc. v. Ortho-McNeil-Janssen Pharm., Inc., 660 F.3d 281, 284 (7th Cir. 2011); Med. Shoppe Int’l, Inc. v. Turner Invs., Inc., 614 F.3d 485, 489 (8th Cir. 2010); Frazier v. CitiFin. Corp., LLC, 604 F.3d 1313, 1324 (11th Cir. 2010); Citigroup Global Markets, Inc. v. Bacon, 562 F.3d 349 (5th Cir. 2009); Ramos-Santiago v. United Parcel Serv., 542 F.3d 120, 124 n.3 (1st Cir. 2008). But see Montes v. Shearson Lehman Bros., Inc., 128 F.3d 1456 (11th Cir. 1997) (sole case where Eleventh Circuit vacated arbitration award based on manifest disregard under exceptional facts).

35. See Wachovia Sec., LLC v. Brand, 671 F.3d 472, 482 (4th Cir. 2012); Coffee Beanery, Ltd. v. WW, L.L.C., 300 F. App’x 415, 418–19 (6th Cir. 2009); Comedy Club, Inc. v. Improv W. Assocs., 553 F.3d 1277, 1290 (9th Cir. 2009); Stolt-Nielsen, S.A. v. Animalfeeds Int’l Corp., 548 F.3d 85, 93–95 (2d Cir. 2008).

36. 559 U.S. 661, 130 S. Ct. 1758, 1768 n.3 (2010).

37. Id.

38. Oehmke, supra note 3, § 40.

39. See, e.g., Vigorito v. UBS Painewebber, Inc., 557 F. Supp. 2d 303 (D. Conn. 2008) (declining to vacate arbitration award because although plaintiff’s attorney was informed of a potential arbitrator conflict, attorney never asked arbitrator to recuse himself or otherwise attempt to preserve objection); see also Questar Capital Corp. v. Gorter, 909 F. Supp. 2d 789 (W.D. Ky. 2012) (finding that “a party cannot remain silent as to perceived or actual bias and then later object after the panel reaches an unfavorable decision”).

40. AAA Constr. R. 9(c).

41. Oehmke, supra note 3, § 40.

42. Atkinson v. Sinclair Ref. Co., 370 U.S. 238 (1962); Folkways Music Publishers, Inc. v. Weiss, 989 F.3d 108, 112 (2d Cir. 1993).

43. AAA Constr. R. 47(c).

44. Weber v. Merrill Lynch Pierce Fenner & Smith, Inc., 455 F. Supp. 2d 545 (N.D. Tex. 2006); Paper, Allied-Industrial, Chem. & Energy Workers Int’l Union, Local 1-9 AFL-CIO v. S.D. Warren Co., 382 F. Supp. 2d 130 (D. Me. 2005).

45. AAA Constr. R. 29(b).

46. 9 U.S.C. § 9.

47. Id. § 12.

48. 441 F.3d 905 (11th Cir. 2006).

49. Id. at 907–08.

50. Id. at 907.

51. Id. at 913.

52. Id. at 913–14.

Entity:
Topic:

By Joseph H. Wolenski, DeWitte Thompson, and Stephanie Geer

Joseph H. Wolenski is a partner with Thompson & Slagle, LLC, in Suwanee, Georgia, and may be reached at jwolenski@tandslawfirm.com. DeWitte Thompson is a partner with the same firm and may be reached at dthompson@tandslawfirm.com. Stephanie Geer is surety claims counsel with Liberty Mutual Surety in Duluth, Georgia, and may be reached at stephanie.geer@libertymutual.com.