Chapter 19 – Are Arbitrator’s Above The Law?

A discussion of THE “MANIFEST DISREGARD OF THE LAW” standard.

Quoting and citing the work of Michael Leroy, “Common law doctrines provide non-statutory avenues to prevent awards from becoming binding. This Article contemplates the role of courts when they review awards that “manifestly disregard the law”—a term that means the arbitrator knew the law but deliberately ignored it. When judges review awards too closely, they undermine finality. But when a judge confirms an award in which the arbitrator flouts the law, does the finality rule put the arbitrator above the law?” See more from Michael Leroy here.02_leroy

The discussion of many a legal scholar discusses, explores, and it appears universally conclude that as general concepts like “manifest disregard of the law (md)”, which have been developed over centuries of legal precedent and analysis, when these generalized but broad moral directives are codified into more specific guidelines of a review, that the broader concept can be lost. That appears to be the case for the Federal Arbitration Act, which has offered more specificity and guidance to the bench. But the interpretation of that guidance in the hands of any given Judge is that broader more concepts like md may be seen as in addition to the Act or in the alternative already considered by the ACT, precluding further consideration.

Consider this example. Lets say that an arbitrator refuses to allow evidence in and therefore is subject to having his ruling vacated. In the alternative arbitrators could allow the evidence to be presented, allow it to become part of the record and simply choose to ignore it. Reversing an arbitration award even when an arbitrator makes a mistake is not generally grounds enough for a Judge to vacate the award. Arbitrators make a lot of mistakes. However, a judge who believes that the Manifest Disregard of The Law standard is still available may choose to weigh the egregiousness of the arbitrator’s refusal to follow the law…and would perhaps Vacate the Award or Modify the Award.

And so lets consider this in context to the M arbitration.  Arbitrator C decided that M would not be penalized for knowingly destroying his computers, emails (that we owned), reformatting a hard drive we owned, withholding software programs written by him (which we owned) and otherwise destroying key evidence. By contrast M’s attorney demanded that we not destroy our hard dries, our computers, etc. and we did not destroy that evidence. But M did. How did Marshall know they would get away with that? The law would have required that M’s knowing destruction of the evidence he held would either require a dismissal of his case or an inference that the evidence he destroyed was damaging to him. Thus the evidence would have proven that he received the email sent to him terminating his employment and therefore his entire case fails and it fails because he was fired before he filed his false complaint to the Oregon Department of Justice. When we testified and presented forensically verifiable evidence that an email was sent and M was terminated before he filed the complaint, then M’s destroyed computers and emails infer agreement with our evidence. But C did not follow this law. It’s as if we did not present the evidence.

There is of course more. When M testified that he never did claim we were engaged in criminal activity, but rather inappropriate activity, he was saying that his attorney filed an incorrect complaint…that his attorney misinterpreted his intention. His case fails. But C did not follow this and it was M’s testimony supporting our position this time. If you recall M testified that he believed we were engaging in inappropriate behavior if we reduce a client’s invoice. We are all “inappropriate” when we buy at a discount. Childish. An arbitrator need not embrace childishness.

When a Judge uses judicial discretion, he does so recognizing that an Appeals Court is itching to reverse him…if there are other errors of significance. But the abuses by C were beyond judicial discretion. I can understand that he may have been angry, but the job requires putting the facts ahead of any form of bias. He did not do that.

I keep coming back to the get out of jail card Marshal submitted during arbitration. Doing this during a regular trial, in front of a real judge, may have been enough to cause a mistrial and loss of a jury. And yet C received it. The get out of jail card was a case summary where Robert E. Jones, U.S. Federal Judge, assisted a Plaintiff in an earlier trial before him. That Plaintiff was Sean Jones. I don’t think he was related to Judge Jones but it did not dawn on me to ask at that time. And the message is that Judge Jones did not like Rote (me) and you should set the facts aside to dislike him as well. As transparent as that was, and believe me I was surprised that she did it on the record, it may have had an impact. Is it code? Is it just one attorney’s knowledge that the system is broken and this is the road to a win. There is a disgusting inference to be drawn by Marshall putting the Jones case on the record. It’s sad and demeaning. But it’s Marshall & apparently C.

Mr. C I think you proved arbitrators are effectively above the Law. No one stopped you.  Your opinion was not easily appealable. And I suspect that you knew no one would. But this history, this written record of the arbitration, this blog and other work I hope points out that opportunity for abuse is real even if that was not the arbitrator’s mental state. And I don’t think it was his mental state. I think he was angry for being called out on the former work relationship. No doubt that someone with his background of integrity absolutely hates it when someone challenges his fundamental ethics. I know how that feels.

The Honorable Robert E. Jones is receiving a lifetime achievement award tomorrow night. The press will be there. Congratulations Judge Jones. Perhaps more often than not our legacies are not what we wanted them to be. [ Note that this paragraph was used by Marshall and Christiansen to contact Judge Jones Chamber and conveying all kinds of things supporting their opinion that I intended to hurt Judge Jones the night of his award. It was hard for me to anticipate the stupidity of their allegations, but apparently not hard for them to see some opportunity to garner sympathy if not support].

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