District Court Had Inadequate Cause for Intervention in an Arbirtration
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In Sussex v. U.S. Dist. Ct. for the Dt. of Nevada, Las Vegas, Petitioners filed a writ of mandamus seeking to overturn the District Court’s disqualification of an arbitrator for “evident partiality.” The underlying arbitration involved several civil actions against Turnberry/MGM Grand Towers, LLC, the developer and seller of a condominium project. Turnberry sought removal of the arbitrator, who had become involved in business ventures, which he characterized as “completely dormant,” through which he sought to create a fund as an investment vehicle that would provide capital for litigation. The District Court granted Turnberry’s motion to disqualify the arbitrator.
On a writ of mandamus, the Ninth Circuit applies the “clear error” standard. The Ninth Circuit articulated its test for when a District Court may intervene in an arbitration in Aerojet-General Corp. v. Am. Arbitration Ass’n, 478 F.2d 248 (9th Cir. 1973). That test provides that a court should intervene only in “extreme cases.” The Ninth Circuit characterized this standard as very close to a blanket rule against court intervention in an ongoing arbitration.
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