Opinion
Case No. 6:20-cv-00608-MK
01-27-2021
FALLON TRADING CO., INC.; AMANDA FALLON Plaintiffs, v. MICHAEL ROTH. Defendant.
FINDINGS AND RECOMMENDATION
KASUBHAI, United States Magistrate Judge:
Petitioners Fallon Trading Company, Inc., and Amanda Fallon (collectively "Petitioners") move for an order granting their petition for confirmation of an arbitration award against Respondent Michael Roth ("Respondent") pursuant to the Federal Arbitration Act ("FAA"), 9 U.S.C. § 9, et seq. See ECF No. 11. For the reasons that follow, Petitioners' motion should be GRANTED and the Award should be CONFIRMED.
BACKGROUND
In December 2018, Petitioners and Respondent entered into an Independent Contractor Agreement ("Agreement"), which contained the following provision: "Any dispute arising from this Agreement shall be resolved through binding arbitration conducted in accordance with the rules of the American Arbitration Association." Petition ¶ 6, ECF No. 1; see also id., Ex. 1 Agreement § 15, ECF No. 1-1. In May 2019, Petitioners filed a demand for arbitration with the American Arbitration Association ("AAA") asserting claims against Respondent. Id. at ¶ 7. Thereafter, Respondent filed suit in Oregon state court, which ultimately dismissed Respondent's lawsuit without prejudice and ordered the parties to arbitration. Id. at ¶¶ 8-13. An arbitrator held a hearing in November 2019, at which Respondent failed to appear. Id. at ¶¶ 14-15. However, both parties submitted post-hearing briefs to the arbitrator. Id. at 16-17. Ultimately, the arbitrator issued an Award in Petitioners' favor granting, as relevant here, the following relief:
a. The Arbitrator declares that the non-compete and non-solicit covenants and the covenants regarding confidential and proprietary information contained in the Independent Contractor Agreement entered into by and between Michael Roth and Fallon Trading Co., Inc. are valid and enforceable.
b. Michael Roth is hereby enjoined from competing with Fallon Trading Co., Inc. and/or soliciting any Fallon Trading Co., Inc. customer, client, supplier or vendor, directly or indirectly through any individual, d/b/a, partnership, corporation, LLC or any other entity or business through September 3, 2020.
c. Michael Roth is permanently enjoined from disclosing Fallon Trading Co., Inc.'s confidential and proprietary information to any third party, person or entity.
d. Pursuant to section 6(d) of the Independent Contractor Agreement, Claimants are awarded attorneys' fees and costs in the instant arbitration in the sum of $82,351.56 and fees and costs in the Oregon litigation of $11,787.00, a total of $94,138.56.
e. The sum of $1,302.00, representing the cost of the corporate laptop computer Mr. Roth was required to return to Fallon, but failed to return.Petition, Ex. 2 ("Award") § 1, ECF No. 1-2. In total, the arbitrator ordered the above monetary award of $95,440.56, including post-Award interests, as well as costs of $12,422.20. Id. After the arbitrator denied Respondent's application for "Modification/Clarification," the arbitrator reaffirmed the final Award. Petition ¶ 23. Petitioners subsequently filed for Confirmation of the Award in April 2013. See Petition, ECF No. 1.
STANDARD OF REVIEW
Under the FAA, "[r]eview of an arbitration award is both limited and highly deferential." Comedy Club, Inc. v. Improv West Assocs., 553 F.3d 1277, 1288 (9th Cir. 2009) (quotation marks and citation omitted); see also Imagination Int'l, Inc. v. Kabushiki Kaisha Too Marker Prod., Inc., No. 6:19-cv-00203-MK, 2020 WL 3317940, at *7 (D. Or. May 14, 2020), adopted, 2020 WL 3316753 (D. Or. June 18, 2020). Pursuant to the FAA, where a party to an arbitration seeks "an order confirming the [arbitration] award, . . . the court must grant such an order unless the award is vacated, modified, or corrected as prescribed in sections 10 and 11 of this title." 9 U.S.C. § 9. Sections 10 and 11 of the FAA, in turn, permit judicial review only in narrow circumstances to:
correct a technical error, [] strike all or a portion of an award pertaining to an issue not at all subject to arbitration, [or] vacate an award that evidences affirmative misconduct in the arbitral process or the final result or that is completely irrational or exhibits a manifest disregard for the law.Kyocera Corp. v. Prudential-Bache Trade Services, Inc., 341 F.3d 987, 997-98 (9th Cir. 2003).
DISCUSSION
Petitioners move for an order confirming the Award in their favor asserting that Respondent failed to vacate or modify the Award as permitted by the FAA. Such a failure, Petitioners argue, makes confirmation of the Award and entry of judgment in their favor appropriate. Significantly, Respondent did not file a response to Petitioners' motion to confirm the Award despite the Court expressly permitting leave to do so after initially failing to respond to the motion within the timeframe permitted by Local Rule. See November 11, 2020 Minute Order, ECF No. 17 ("Respondent Michael Roth has seven (7) days from the date of this Order to file a response to Petitioner's motion for an order confirming the arbitration award."); see also LR 7-1(e)(1) ("A party must file and serve any response within 14 days after service of the motion.").
Having independently reviewed the record in this case, the Court finds that none of the conditions outlined in sections 10 and 11 of the FAA justify vacating, modifying, or otherwise correcting the Award. Verasonics, Inc. v. Alpinion Med. Sys. Co., 2017 WL 11417479, at *1 (W.D. Wash. Aug. 17, 2017) (finding the same and confirming an award under the FAA where the defendant did "not oppose [the] motion and thus raise[d] no argument to the contrary"); Goldman v. Gagnard, 2011 WL 13177619, at *2 (N.D. Cal. Oct. 27, 2011) (granting motion confirming final award where the defendants had "not alleged any grounds for modification or correction").
Because no grounds have been established for vacating or modifying the arbitrator's Award it should be confirmed in its entirety. See 9 U.S.C. § 9. /// ///
RECOMMENDATION
For the reasons above, Petitioners' motion for an order confirming the arbitration award (ECF No. 11) should be GRANTED and the Award should be CONFIRMED. A final judgment should be prepared, incorporating the terms of the arbitrator's Award. See Award, ECF No. 1-2
This recommendation is not an order that is immediately appealable to the Ninth Circuit Court of Appeals. Any notice of appeal pursuant to Federal Rule of Appellate Procedure 4(a)(1) should not be filed until entry of the district court's judgment or appealable order.
The Findings and Recommendation will be referred to a district judge. Objections to this Findings and Recommendation, if any, are due fourteen (14) days from today's date. See Fed. R. Civ. P. 72. Failure to file objections within the specified time may waive the right to appeal the District Court's order. Martinez v. Ylst, 951 F.2d 1153 (9th Cir. 1991).
DATED this 27th day of January 2021.
s/ Mustafa T. Kasubhai
MUSTAFA T. KASUBHAI (He / Him)
United States Magistrate Judge
See also AAA Case Number 01-19-0001-5160.