While I was busy blogging out listicles and “think pieces” last month, my stack of unread arbitration cases grew exponentially.  August was apparently a very busy month for publishing arbitration opinions.  Maybe most surprisingly, the federal appellate courts vacated three arbitration awards in recent weeks.  So I will start there, and end with two headline-worthy awards that got confirmed.

First, in Bankers Life & Cas. Ins. Co. v. CBRE, Inc., __ F3d __, 2016 WL 4056400 (7th Cir. July 29, 2016), the Seventh Circuit vacated an arbitration award after finding the panel of arbitrators “exceeded its authority.”  The panel had concluded that a real estate broker did not violate its listing agreement with a client when the broker provided an inaccurate cost-benefit analysis to the client.  The panel said that because the cost-benefit analysis had a disclaimer on it, the broker was not responsible.  The district court had confirmed the award.  Writing for the Seventh Circuit, Judge Posner found that because the panel was only authorized to interpret the contract, not the cost-benefit analysis, “[t]he panel’s reliance on the disclaimer in the CBAs was … unjustified.”  One bit of helpful context here is that the court found the Illinois Uniform Arbitration Act applied.  I don’t think this result would fly under the FAA or Sutter .

Second, in Star Ins. Co. v. Nat’l Union Fire Ins. Co. of Pittsburgh, 2016 WL 4394563 (6th Cir. Aug. 18, 2016), the Sixth Circuit vacated an arbitration award pursuant to the arbitration act in Michigan.  Although the district court had confirmed the award, the appellate court reversed due to one arbitrator’s ex parte communications with the party who selected that arbitrator.  That communication violated the parties’ agreement to arbitrate as set forth in the scheduling orders.

Third, although not exactly a vacatur, in Linde Health Care Staffing, Inc. v. Claiborne County Hospital, __ So.3d __, 2016 WL 4245435 (Miss. Aug. 11, 2016), the Mississippi Supreme Court refused to recognize a Missouri judgment based on an arbitration award.  It found the losing party was not a party to the arbitration agreement.  Intriguingly, the winning party claimed that the three months for vacating the award had already passed, so the judgment could not be set aside.  The court refused to apply the FAA, however, asking “How can the Hospital be bound by the FAA’s procedural rules if it never entered a contract with an arbitration clause?  The simple answer is it cannot.”

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