An arbitration panel entered an award in a legal malpractice matter in favor of the claimant and the attorneys and law firm moved to vacate the award. The district court denied the motion to vacate, and the Ninth Circuit affirmed. The court of appeals rejected two proffered bases for vacation: (1) that the panel's finding that the claim was not barred by a one year statute of limitation amounted to manifest disregard of law; and (2) that the alleged perjury of a witness in an underlying action justified vacature on the basis that the award violated public policy.
The Court held that even if the panel had made an error of law in its finding that the claim was not barred by the statute of limitation, the record did not reflect a factual basis for a finding that it had manifestly disregarded the law by "intentionally" disregarding the law, and that the movants had failed to carry their burden to prove manifest disregard. Without a reasoned award or a hearing transcript specifically providing a record on this issue proving manifest disregard may be a challenge.
With respect to the public policy ground for vacation, the Court found that the panel expressly considered the claim of perjury and questioned the witness concerning the allegedly perjured testimony. The Court declined to vacate the award on this basis because doing so "would require the Court to revisit the arbitrator's findings of fact and conclusions of law with respect to Defendant's perjury argument put forth to the arbitrator ...."
The court of appeal did partially vacate the district court's ruling. The arbitrator had awarded pre-judgment interest from June 30, 2011. The defendants did not challenge that part of the award in the motion to vacate the award, but after the award was confirmed contended, in a FRCP 59(e) motion to amend the judgment, that pre-judgment interest should have run from a later date, July 30, 2014. The district court granted that motion. The court of appeals vacated that ruling, holding that the Rule 59(e) motion amounted to a late and improper attempt to circumvent the provisions of the Federal Arbitration Act. , Nos. 15-15205, 16-15078, 16-51534 (9th Cir. June 7, 2017).
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