Arbitration Update

Disclosure of Arbitrator's History

The Court of Appeal of California, First Appellate District, Division Two, decided that under Calif. Civ. Code Proc. Sec. 1281.9(a)(4), an arbitrator must disclose his prior work as a neutral arbitrator in a non-collective bargaining case in which attorneys for an entertainment union in the current arbitration represented a party. International Alliance of Theatrical Stage Employees and Moving Picture Machine Operators of the United States and Canada, Local 16 v. Laughon, 117 Cal. App. 4th 1188 (2004). The failure to disclose raised a reasonable doubt of impartiality on which to vacate the current arbitration award. But the arbitrator wasn't required to disclose his prior work in collective bargaining arbitrations because those disputes don't raise the same doubt of impartiality, the court of appeal noted.

The U.S. Circuit Court of Appeals for the Ninth Circuit affirmed a district court grant of a motion to compel arbitration of a dispute over blackout requirements in a sublicense to broadcast the World Cup soccer tournament. Televisa S.A. De C.V. v. DTVLA WC Inc., 363 F.3d 840 (2004). Televisa, the sublicense, had filed suit for a declaratory judgment that the sublicensor's arbitration demand was outside the scope of an arbitration clause in the parties' sublicense agreement. Televisa argued that the dispute should he heard in a Mexican court, per the language in a letter agreement signed by the parties at the same time as the sublicense agreement. But the appeals court emphasized that the sublicense agreement was the more comprehensive document.

A Manhattan federal district court granted a motion to confirm an interim arbitration award by the creator and rights owner, including Barry Manilow, of the play “Harmony.” Manilow v. Snorkel Productions Inc., 04-1866. The petitioners had entered into an agreement for Snorkel Productions to produce “Harmony” within a certain time. An arbitration panel later issued an interim ruling that the producer's rights had expired. Snorkel Productions claimed that the panel's failure to specifically address the producer's affirmative defense of promissory estoppel amounted to “manifest disregard” that barred the district court from confirming the award. But the district court noted that while the arbitrators didn't mention estoppel in their one-page interim award letter, they had expressly stated that they had exercised “full consideration of the alternate theories presented by the Parties.”

The U.S. District Court for the Southern District of Ohio, Eastern Division, declined to enforce several provisions of an arbitration agreement between a TV news anchor and his former station employer. Scovill v. WSYX/ABC, 2:02-CV-679. Peter Scovill filed suit for age discrimination after his employment contract was terminated. Citing the arbitration agreement, the district court granted the station's motion to dismiss the suit. But the district court found the cost-shifting, remedies and evidentiary-standards provisions of the arbitration agreement to be unenforceable. According to the court: “Upon proceeding to arbitration, the parties shall be subject to the same substantive law and remedies regarding age discrimination that would apply in this Court.”

The cost-shifting provision, which required Scovill to pay all the station's costs, including attorney fees, if he lost the arbitration, was voided because the clause presented “a substantial deterrent to arbitration for the defined class of potential litigants [ie, news anchors] in this case.”

Disclosure of Arbitrator's History

The Court of Appeal of California, First Appellate District, Division Two, decided that under Calif. Civ. Code Proc. Sec. 1281.9(a)(4), an arbitrator must disclose his prior work as a neutral arbitrator in a non-collective bargaining case in which attorneys for an entertainment union in the current arbitration represented a party. International Alliance of Theatrical Stage Employees and Moving Picture Machine Operators of the United States and Canada, Local 16 v. Laughon , 117 Cal. App. 4th 1188 (2004). The failure to disclose raised a reasonable doubt of impartiality on which to vacate the current arbitration award. But the arbitrator wasn't required to disclose his prior work in collective bargaining arbitrations because those disputes don't raise the same doubt of impartiality, the court of appeal noted.

The U.S. Circuit Court of Appeals for the Ninth Circuit affirmed a district court grant of a motion to compel arbitration of a dispute over blackout requirements in a sublicense to broadcast the World Cup soccer tournament. Televisa S.A. De C.V. v. DTVLA WC Inc., 363 F.3d 840 (2004). Televisa, the sublicense, had filed suit for a declaratory judgment that the sublicensor's arbitration demand was outside the scope of an arbitration clause in the parties' sublicense agreement. Televisa argued that the dispute should he heard in a Mexican court, per the language in a letter agreement signed by the parties at the same time as the sublicense agreement. But the appeals court emphasized that the sublicense agreement was the more comprehensive document.

A Manhattan federal district court granted a motion to confirm an interim arbitration award by the creator and rights owner, including Barry Manilow, of the play “Harmony.” Manilow v. Snorkel Productions Inc., 04-1866. The petitioners had entered into an agreement for Snorkel Productions to produce “Harmony” within a certain time. An arbitration panel later issued an interim ruling that the producer's rights had expired. Snorkel Productions claimed that the panel's failure to specifically address the producer's affirmative defense of promissory estoppel amounted to “manifest disregard” that barred the district court from confirming the award. But the district court noted that while the arbitrators didn't mention estoppel in their one-page interim award letter, they had expressly stated that they had exercised “full consideration of the alternate theories presented by the Parties.”

The U.S. District Court for the Southern District of Ohio, Eastern Division, declined to enforce several provisions of an arbitration agreement between a TV news anchor and his former station employer. Scovill v. WSYX/ABC, 2:02-CV-679. Peter Scovill filed suit for age discrimination after his employment contract was terminated. Citing the arbitration agreement, the district court granted the station's motion to dismiss the suit. But the district court found the cost-shifting, remedies and evidentiary-standards provisions of the arbitration agreement to be unenforceable. According to the court: “Upon proceeding to arbitration, the parties shall be subject to the same substantive law and remedies regarding age discrimination that would apply in this Court.”

The cost-shifting provision, which required Scovill to pay all the station's costs, including attorney fees, if he lost the arbitration, was voided because the clause presented “a substantial deterrent to arbitration for the defined class of potential litigants [ie, news anchors] in this case.”