Opinion
Civil Action No. 04-1465 Section: "J"(5).
September 27, 2004
Before the Court is a motion by plaintiff, Harry Shoemaker, to vacate an arbitration award and enter judgment. (Rec. Doc. 1) The defendant, First Level Capital, Inc. filed an opposition to plaintiff's motion. (Rec. Doc. 2). For the reasons stated herein, plaintiff's motion is denied.
BACKGROUND
On or about October 28, 2002, plaintiff brought an arbitration claim against the defendant. An arbitration hearing was conducted on January 12 and 13, 2004. On January 27, 2004, the arbitration panel awarded plaintiff compensatory damages of $15,000 with interest at the rate of 8% per year from thirty days after the date of the award, plus $500 for reimbursement of the filing fee previously paid for arbitration. On April 15, 2004, plaintiff filed a "Motion to Vacate Arbitration Award and Enter Judgment in the Matter" in the Civil District Court of Orleans Parish. On May 24, 2004, defendant removed the case to this Court based on diversity of citizenship jurisdiction.LAW
According to 9 U.S.C. § 10(a) (2001), also known as the Federal Arbitration Act ("FAA"), a district court's review of an arbitration award is "extraordinarily narrow." Under the FAA, a district court may vacate an award only if: (1) the award was procured by corruption, fraud, or undue means; (2) there is evidence of partiality or corruption among the arbitrators; (3) the arbitrators were guilty of misconduct which prejudiced the rights of one of the parties; or (4) the arbitrators exceeded their powers. In addition to the statutory basis for vacating an arbitration award, an award may also be vacated if in making the award the arbitrator acted with "manifest disregard for the law."DISCUSSION
The plaintiff does not allege, nor is there any evidence that the award was procured by fraud, there was partiality among the arbitrators, or the arbitrators were guilty of misconduct that prejudiced the rights of one of the parties. Plaintiff alleges that the arbitrators exceeded their powers in violation of (1) La.R.S. § 9:4210(D) and (2) acted with manifest disregard for the law.(1) Louisiana Revised Statute § 9:4210(D)
Louisiana Revised Statute section 9:4210(D) provides that a court shall issue an order vacating an arbitration award "[w]here arbitrators exceeded their powers or so imperfectly executed them that a mutual, final, and definite award upon the subject matter was not made." According to Louisiana jurisprudence, an award may be vacated under § 9:4210(D) when one of the grounds for vacation has been proven. "Unless otherwise provided by statute or by the submission itself, arbitrators are not required to state in the award each matter considered, or to set out the evidence, or to make findings of fact or conclusions of law. They need not give reasons for their award or conclusions or the grounds which form the basis for the arbitrators' determination, describe the process by which they arrived at their decision, or spell out the rationale of the award." In Godeau v. Picheloup Construction, the Louisiana Third Circuit Court of Appeal considered an arbitration award challenged under La.R.S. § 9:4210(D). The court explained that the award was clear and unambiguous and there was no demonstration that the arbitrators exceeded their power. Further, the court stated that there was "nothing in the record or the allegations of the parties to lead to the conclusion that the arbitrator awarded on a matter not submitted to him or that the award was imperfect in a matter of form not affecting the merits of the controversy."
Godeau v. Picheloup Construction Co., Inc., 567 So. 2d 697, 699 (La.App. 3 Cir. 1990) (emphasis added).
Id. (citation and footnotes omitted).
Id. at 699.
Godeau, 567 So. 2d at 699.
In the matter at hand, plaintiff asserts that the arbitrators exceeded their power under § 9:4210(D) because the award was "shocking" and "totally unsupported." Based on plaintiff's perception that the award was low, plaintiff concludes that the arbitrators exceeded their power, however, plaintiff does not provide any evidence as to how the arbitrators might have exceeded their power. Consequently, plaintiff's claim under La.R.S. § 9:4210(D) fails.
(2) Manifest Disregard of the Law
The United States Fifth Circuit Court of Appeals has adopted the "manifest disregard of the law" standard as a non-statutory ground for vacating an arbitration award. The "'manifest disregard' standard is an extremely narrow, judicially-created rule with limited applicability." In a recent Fifth Circuit case, the court upheld an arbitration award after finding that there was no indication the "arbitrators ignored the existence of any clearly governing principle in reaching its award." Similarly, in this case there is no indication that the arbitrators disregarded any clearly governing principle of law. Again, plaintiff asserts that because the award was low, the arbitrators acted in manifest disregard of the law. Specifically, plaintiff states
Prestige Ford, 324 F.3d at 395.
Id. at 395-96.
Prestige Ford, 324 F.3d at 396.
the Panel [of arbitrators] filed and delivered an arbitration Award on January 27, 2004, which inexplicitly only awarded $15,000.00 in compensatory damages to Shoemaker. No reasons were given whatsoever for this woefully low and inadequate award. Petitioner submits that such an absurdly low award in this case amounted to a complete and manifest disregard of the law by the Panel, and entitles petitioner to judicial intervention and correction of this manifest and outrageous injustice.
Motion to Vacate Arbitration Award, p. 3.
Plaintiff's unsupported conclusory assertion that the award was made in disregard of the law does not provide sufficient grounds for vacating the award. Again, there is no indication that the arbitrators ignored the existence of any clearly governing principle of law in reaching their award.
Accordingly, plaintiff's motion to vacate an arbitration award and enter judgment should be and hereby is denied and this case is dismissed.