Unvacated: 11th Circuit Finds Repeat Arbitrator Not Biased
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The Eleventh Circuit has a lesson for future litigants: the presence of a repeat player is not enough to show the evident partiality needed to vacate an arbitration award under the Federal Arbitration Act.
In Johnson v. Directory Assistants, Inc., __ F.3d __, 2015 WL 4939578 (11th Cir. Aug. 20, 2015), an advertising company demanded arbitration against its client for breach of contract. The arbitrator disclosed that he had arbitrated a dispute involving the advertising company five years earlier. The client challenged the arbitrator and the arbitral forum (the Alternative Dispute Resolution Center, “ADRC”) denied the challenge. Days before the hearing, the client requested and received a continuance. A week before the rescheduled hearing, the client declared that because of “the current state of affairs” in its industry, it was “not able to continue with the arbitration.” Therefore, the arbitrator proceeded with the hearing and allowed the advertising company to put on its case, despite the absence of the client. The arbitrator awarded the advertising company roughly $100,000 in liquidated damages, late fees, and arbitration costs.
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