A federal appeals court on Monday reinstated a $5.3 million employment arbitration award against medical-device maker Masimo Corp. in a case where the company made an issue of the arbitrator’s family ties to Cooley chairman Stephen Neal.
Masimo’s appellate team at Knobbe, Martens, Olson & Bear had claimed JAMS neutral Richard Neal, a former justice on the Second District Court of Appeal, was biased because his brother had lost two big-ticket cases against the company.
The argument persuaded U.S. District Judge Cormac Carney of the Central District of California to toss the arbitration award in 2014, finding that Richard Neal was partial to two former Masimo employees suing the company and had imposed excessive punitive damages. (Richard Neal died on Jan. 1, 2015, while the appeal was pending.)
In an unpublished decision issued Monday, the U.S. Court of Appeals for the Ninth Circuit said that Masimo had failed to demonstrate partiality and the arbitration award should stand.
