Opinion
Civil Action No. 3:99-CV-2809-G.
March 10, 2000.
MEMORANDUM ORDER
Before the court is the motion of the petitioner, Olen I. Lovell ("Lovell"), to vacate an arbitration award, as well as the motion of the respondents, Harris Methodist Health System, Texas Health System, and Texas Health Resources, (collectively, the "respondents"), to confirm the same award. For the reasons discussed below, Lovell's motion is denied, and the respondents' motion is granted.
I. BACKGROUND
In September of 1998, Lovell was terminated from his employment with respondents for breaching patient confidentiality. Respondents' Response to Petitioner's Motion to Vacate the Arbitration Award and Motion to Confirm Arbitration Award with Supporting Brief ("Response") at 1-2. At that time, the respondents had in place an alternative dispute resolution policy that made binding arbitration the final step in resolving employment-related issues. Harris Methodist Health System Alternative Dispute Resolution Procedure, § 1.2.1. attached as Exhibit J to Response. Pursuant to that policy, Lovell requested arbitration in November of 1998, contending that he was a white male who was subjected to a harsher punishment than a black co-employee accused of the same conduct. Letter and Enclosures from David L. Smith, attorney for Lovell, to Texas Health Services, November 2, 1998, attached as Exhibit A to Response. In November of 1998, the parties agreed to use JAMS/ENDISPUTE ("JAMS"), an arbitration service, to conduct the proceedings. Response at 2. In April of 1999, Lovell's attorney notified the respondents and JAMS that Lovell "is actually both a White male and an Hispanic male," that the co-employee who was treated less harshly than Lovell was in fact Hispanic, and that Lovell's termination was illegally based on racial classification. Facsimile Transmission from David L. Smith to JAMS, April 7, 1999, attached as Exhibit B to Response.
The arbitration took place over four days in August, 1999. Response at 2. At the hearing, Lovell had almost three days to present witnesses, while the respondents were given only three and a half hours for their case. Facsimile from JAMS to David L. Smith and Tara Tankersley, attorney for respondents, August 12, 1999, attached as Exhibit F to Response. On September 17, 1999, the JAMS arbitrator issued an award denying both the claims and remedies sought by Lovell and the respondents' motion for costs. Award of Arbitration, attached as Exhibit H to Response. On December 13, 1999, Lovell filed this motion to vacate the arbitration award, alleging six claims: (1) the arbitrator committed misconduct by limiting the scope of arbitration to preclude Lovell from litigating his claim of wrongful termination of employment; (2) the arbitrator committed misconduct by arbitrating the issue of whether the Federal Arbitration Act ("FAA") is federal substantive law which preempts Texas law on wrongful termination claims; (3) the arbitrator committed misconduct by refusing to hear evidence pertinent and material to the controversy; (4) the arbitrator committed other misbehavior that prejudiced Lovell's rights by issuing an award that was unsupported by and/or contrary to the law or substantial evidence in the record; (5) the arbitrator exhibited evident partiality or corruption; and (6) the arbitrator exceeded her powers or imperfectly executed them. Petitioner's Motion to Vacate the Arbitration Award, and Brief in Support Thereof ("Motion to Vacate") at 1-4. The respondents filed a response, along with a motion to confirm the arbitration award. Response at 1.
II. ANALYSIS A. Federal Arbitration Act
Vacatur of an arbitration award is governed by section 10 of the Federal Arbitration Act ("FAA"), which states in pertinent part:
[T]he United States court in and for the district wherein the award was made may make an order vacating the award upon the application of any party to the arbitration —
(1) Where the award was procured by corruption, fraud, or undue means.
(2) Where there was evident partiality or corruption in the arbitrators, or either of them,
(3) Where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights on any party have been prejudiced.
(4) Where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made.9 U.S.C. § 10.
Arbitration awards under the FAA are reviewed by district courts under a standard of deference and will be vacated only where a party shows one of the "extraordinarily narrow" exceptions found in Section 10 above. See Antwine v. Prudential Bache Securities, Inc., 899 F.2d 410, 413 (5th Cir. 1990); Matter of Arbitration Between Trans Chemical Limited and China National Machinery Import and Export Corporation, 978 F. Supp. 266, 303 (S.D. Tex. 1997), aff'd, 161 F.3d 314 (5th Cir. 1998). "The statutory bases for overturning an arbitral tribunal are precisely and narrowly drawn to prohibit . . . complete de novo review of the substance of the award." Legion Insurance Company v. Insurance General Agency, Inc., 822 F.2d 541, 543 (5th Cir. 1987). The court's inquiry, therefore, is limited to whether the arbitration proceedings were "fundamentally unfair." Gulf Coast Industrial Workers Union v. Exxon Company, USA, 70 F.3d 847, 850 (5th Cir. 1995); Forsythe International, S.A. v. Gibbs Oil Company of Texas, 915 F.2d 1017, 1020 (5th Cir. 1990); Trans Chemical, 978 F. Supp. at 303. Furthermore, such an inquiry does not require a full hearing on appellant's motion. See Legion Insurance, 822 F.2d at 543. And the party moving to vacate the arbitration award — in this case Lovell — has the burden of proof. See Trans Chemical, 978 F. Supp. at 303.
To determine whether the arbitration proceeding was "fundamentally unfair," this court will review each of the claims Lovell advances to support vacatur of the arbitration award, applying the appropriate provisions of the FAA and the JAMS rules that governed the arbitration proceeding.
B. Lovell's Claims of Arbitrator Misconduct 1. Limitation of Scope
Lovell first contends that the arbitrator limited the scope of arbitration, precluding him from litigating his wrongful termination of employment claim under the FAA. Motion to Vacate at 1. After a thorough review, this court finds no provision of the FAA supplying substantive law that governs wrongful termination of employment. See 9 U.S.C. § 1 et seq. Furthermore, the scope of arbitration was limited by respondents' alternate dispute resolution policy to "those issues for which a legal remedy would otherwise be available in a court of law." Harris Methodist Health System Alternative Dispute Resolution Procedure, § 3.0, attached as Exhibit J to Response. After conducting a hearing, the arbitrator issued an order providing that the arbitration would be limited to "only those claims that [Lovell] could have brought in a court of law under Texas and/or Federal law." Order Regarding Scope of Arbitration, attached as Exhibit E to Response, page 3. Reviewed by this court under a standard of deference, the arbitrator's order limiting the scope of the arbitration does not fall within any of the FAA statutory bases for vacatur discussed above.
2. Decision on Arbitrability
Next, Lovell claims that the arbitrator committed misconduct by arbitrating the issue of whether the FAA constitutes federal substantive law instead of granting Lovell's request to transfer that issue to a federal district court for resolution. Motion to Vacate at 2. In interpreting arbitration clauses, courts must show appropriate deference to the strong federal policy favoring arbitration over litigation. Southland Corporation v. Keating, 465 U.S. 1, 10 (1984). In fact, when addressing questions of arbitrability, all doubts concerning the scope of the arbitration clause in a contract should be resolved in favor of arbitration. See United Steelworkers of America v. Warrior and Gulf Navigation Company, 363 U.S. 574, 583 (1960). JAMS's own rules and procedures governing the arbitration of employment disputes — to which the parties agreed to be bound — support this position, stating that the "Arbitrator will . . . determine jurisdictional or arbitrability disputes . . . unless the relevant law requires that a court make such determinations. . . ." JAMS Arbitration for Employment Disputes Rules and Procedures ("JAMS Rules"), Rule 8(a), attached as Exhibit D to Response. Lovell cites no relevant law — and the court has found none — mandating that a federal district court determine this issue. The arbitrator therefore had the power to determine the issue of arbitrability and committed no misconduct in doing so.
The record does not reflect that Lovell ever made such a request to the arbitrator.
3. Refusing to Hear Evidence
Lovell's third claim of misconduct alleges that the arbitrator refused to hear evidence pertinent and material to the controversy, thus depriving Lovell of his constitutional right to due process of law. Motion to Vacate at 2-3. JAMS's rules give the arbitrator great discretion in hearing and considering evidence, allowing the arbitrator to "limit testimony to exclude evidence that would be immaterial or unduly repetitive. . . ." JAMS Rule 17(d). Lovell claims that the arbitrator arbitrarily and unreasonably struck witnesses from Lovell's witness list, which contained fifty-one names. Motion to Vacate at 2-3; Response at 7-8; Plaintiff's Witness List, attached as Exhibit K to Response. But Lovell's witness list states that forty-eight of these witnesses would testify about exactly the same subject matter, specifically the deposition testimony of one of respondents' employees and the authenticity and relevance of specified documents. Plaintiff's Witness List. Thus, the arbitrator was neither arbitrary nor unreasonable in striking witnesses whose testimony would be unduly repetitive.
4. Disregarding Expert Witness
Lovell's fourth claim accuses the arbitrator of other misbehavior that prejudiced Lovell's rights, including disregarding the testimony of Lovell's expert witness, Dr. John M. Goldenring. Motion to Vacate at 3. Again, JAMS's rules specifically allow the arbitrator to "consider evidence that he or she finds relevant and material to the dispute, giving the evidence such weight as he or she determines is appropriate." JAMS Rule 17(d). Because he agreed to the arbitration rules that gave the arbitrator the discretion to weigh the relevance, materiality, and credibility of all evidence and witnesses, including Dr. Goldenring's testimony, Lovell cannot now argue that the arbitrator "misbehaved" by exercising that discretion.
5. Partiality and Corruption
Lovell's fifth claim alleges that the arbitrator exhibited evident partiality or corruption and was obligated to disqualify herself from the arbitration proceedings. Motion to Vacate at 4. JAMS provides a specific provision for challenging an arbitrator's service: "At any time during the Arbitration process, a Party may challenge the continued service of an Arbitrator for cause. . . . The Director of Professional Services, Senior Judicial Officer or other `lead neutral' of the particular JAMS/ENDISPUTE office will promptly rule on such challenges, and his or her decision will be final." JAMS Rule 12(f). Though Lovell could have challenged the arbitrator at any time before the award was rendered, he never exercised that right, and thus he cannot now complain of it after an award has been rendered against him.
6. Exceeding Powers
Finally, Lovell's sixth claim states that the arbitrator exceeded her powers or imperfectly executed them so that a mutual, final, and definite award was not made. Motion to Vacate at 4. Lovell offers no facts or legal arguments to support this last claim, however, and thus has not met his burden of proof. See Trans Chemical, 978 F. Supp. at 303.
III. CONCLUSION
In sum, none of Lovell's arguments establishes that the arbitration proceeding was "fundamentally unfair." The Court of Appeals has counseled district courts in this district to "pierce the rhetoric of parties . . . who would embark on a costly legal path solely to challenge the factual or legal accuracy of an arbitration award." See Legion Insurance, 822 F.2d at 544. Each of Lovell's claims is conclusory in nature and unsupported by any specific facts or properly-applied legal principles. Furthermore, most of Lovell's concerns were specifically addressed within the JAMS rules that governed the arbitration proceedings — rules he agreed to before the arbitration began. These same rules provided means of relief that Lovell failed to pursue before the award was rendered against him.
Because Lovell has failed to establish any grounds to support vacatur of the arbitration award, his motion to vacate is DENIED. And under the FAA, if any party to the arbitration proceeding applies for an order confirming the award, "the court must grant such an order unless the award is vacated, modified, or corrected. . . ." 9 U.S.C. § 9. Lovell having failed to show grounds for vacating the award, and the respondents having moved for confirmation, the award is accordingly CONFIRMED.
SO ORDERED.
March 10, 2000.
A. JOE FISH United States District Judge