A panel of the Tenth Circuit today affirmed an order that denied a motion to vacate an arbitrator's award in favor of Qwest, the telephone company.
The movant, DMA International, accused the neutral of misdeeds but mainly called him dumb for reading an unclear contract such that he ruled that DMA couldn't get $3.7 million more than the $1.7 million Qwest already paid it. The court of appeals held that, while DMA might have had a point or two, the arbitrator did his job well enough. DMA Int'l, Inc. v. Qwest Communications Int'l, Inc., No. 08-1392 (10th Cir. Nov. 4, 2009).
Things grew worse. Qwest had filed a motion against DMA's lawyers for taking a vexatious and frivolous appeal. The panel granted the motion under both 28 U.S.C. 1927 and Federal Rule of Appellate Procedure 38. It explained:
We fully appreciate the financial burden this decision will impose upon DMA's counsel. But only by imposing sanctions in cases like this case we give breath to the "national policy favoring arbitration." Hall St. Assocs. [v. Mattel, Inc.], 128 S. Ct. [1396,] 1405 [(2008)]. "If we permit parties who lose in arbitration to freely religitte their cases in court, arbitration will do nothing to reduce congestion in the judicial system; dispute resolution will be slower instead of faster; and reaching a final decision will cost more instead of less." B.L. Harbert[ Int'l, Inc. v. Hercules Steel Co.], 441 F.3d [905,] 907[ (11th Cir. 2006)]. "If arbitration is to be a meaningful alternative to litigation, the parties must be able to trust that the arbitrator's decision will be honored sooner instead of later." Id. at 913. In this case, it was later. Sanctions are therefore warranted to compensate Qwest for the unnecessary legal fees it was forced to spend defending the arbitration award on appeal.
DMA Int'l, slip op. at 8-9.
Blawgletter notes, wryly, that Chief Judge Easterbrook of the Seventh Circuit not long ago said this:
According to Health Grades, access to the information [that the parties to an arbitration agreed to keep secret] would undermine the national policy favoring arbitration. There is no such policy.
"Party Can't Agree to Keep Docs Secret; Easterbrook the Activist", Blawgletter®, Sept. 3, 2009. His Honor must've missed the Hall Street memo.
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