Docs of Ct, LLC v. Biotek Services, LLC
Docs of Ct, LLC v. Biotek Services, LLC
Opinion
Opinion
321 Ga. 588 FINAL COPY S24G0435. DOCS OF CT, LLC v. BIOTEK SERVICES, LLC.
PINSON, Justice.
Georgia’s Arbitration Code sets out a process by which a party may ask a court to vacate an award granted in arbitration. We granted review of this case to determine how to assess whether and when ex parte communications in an arbitration proceeding are grounds for vacating an arbitral award. Although we asked the par- ties to address several questions in that regard, we reach in this de- cision only the standard for assessing whether the rights of the af- fected party are “prejudiced by” ex parte communications. See OCGA § 9-9-13 (b). As we explain below, to establish that its rights were “prejudiced by” one of the listed grounds for vacatur, the party seeking vacatur of an arbitral award under OCGA § 9-9-13 (b) must show that the conduct in question — here, certain ex parte commu- nications — affected or influenced the outcome of the arbitration.
Because the party seeking vacatur of the award in this case failed to make that showing, the Court of Appeals’s decision affirming the award is affirmed.
1. Background In April 2018, Docs of CT and Biotek submitted a contract dis- pute to arbitration. An arbitrator found Docs of CT in default as to liability, and a hearing was set to determine damages only. Before that hearing, Docs of CT failed to provide discovery called for in the scheduling order, and as a consequence, the arbitrator told counsel for Docs of CT that the company would not be allowed to introduce evidence at the damages hearing if discovery was not provided. Soon after, counsel for Docs of CT withdrew from representation. No new counsel entered an appearance on behalf of Docs of CT, and Docs of CT never provided the required discovery. After counsel for Docs of CT withdrew, the arbitrator repeatedly told the company’s repre- sentative, Dr. J.D. Sidana, that he would not be allowed to present any evidence at the damages hearing both because he was not an attorney and because Docs of CT was in default.
At the damages hearing, Dr. Sidana was allowed to observe but not participate, and the arbitrator did not receive evidence from Docs of CT at the hearing or after it. The arbitrator ultimately awarded Biotek $447,633.49 in “contract damages,” interest, and at- torney fees and $1,273,704.48 in “trade secret damages” and attor- ney fees.
Docs of CT moved to vacate the arbitration award in superior court under OCGA § 9-9-13, asserting (among other things) that the arbitrator exhibited partiality and engaged in misconduct.1 In sup- port, Docs of CT submitted to the trial court copies of e-mails be- tween the arbitrator and Biotek’s attorneys that were sent after counsel for Docs of CT withdrew. Dr. Sidana was not copied on any of the e-mails. Docs of CT pointed out that the rules of arbitration
The ex parte e-mails included some that were sent before the evidentiary hearing, when the arbitrator asked for copies of exhibits in advance of the hearing and for Biotek to prepare a spreadsheet for purposes of calculating damages; Biotek responded with the re- quested exhibits and spreadsheet. Docs of CT also pointed to more than 25 e-mails between the arbitrator and counsel for Biotek that took place after the damages hearing and in which the arbitrator sought information and feedback from Biotek on the arbitrator’s damages calculations. Other post-hearing e-mails included Biotek’s e-mailed submission of a post-hearing brief; the arbitrator’s re- sponse thanking Biotek for the brief and stating, “You did a good job”; and the arbitrator’s request that Biotek’s counsel let him know in what court Biotek filed to enforce the award because the arbitra- tor “assum[ed he would] need that court to help get Docs of CT’s portion of the arbitration fees paid.”
After a hearing, the trial court denied Docs of CT’s motion and confirmed the award to Biotek, concluding that the alleged ex parte communications did not demonstrate misconduct or partiality by the arbitrator.
The Court of Appeals affirmed. The court explained that the ex parte e-mails between the arbitrator and counsel for Biotek “should not have happened” but that Docs of CT had not established that the arbitrator was partial. And, assuming that the ex parte e-mails es- tablished misconduct, the Court of Appeals concluded that Docs of CT had not shown that its rights were prejudiced, see OCGA § 9-9- (b), because Docs of CT “failed to articulate resulting prejudice” and the record showed that the arbitrator “ultimately declined to award” some of the damages Biotek sought in its post-hearing brief- ing and e-mails. Docs of CT v. Biotek Servs., 369 Ga. App. 804, 810- (2) (894 SE2d 634) (2023). The court reasoned that Docs of CT had not articulated how it was prejudiced by the alleged misconduct, so the trial court did not clearly err in confirming the award. Id. Judge Land dissented. He would have concluded that the ex parte e-mails were both improper and prejudicial, so the award should have been vacated. Docs of CT, 369 Ga. App. at 812 (Land, J., dissenting).
2. Analysis We granted review in this case to consider how the standards set out in OCGA § 9-9-13 (b) for vacating an arbitral award apply to ex parte communications. As it turns out, we need to address only one of those standards: the one for assessing prejudice.2 Under OCGA § 9-9-13 (b), even if one of the listed grounds for vacating an arbitral award is present, the award must be vacated only if the court finds that “the rights of [the affected] party were prejudiced
(a) Prejudice Standard Start with what it means for the rights of an affected party to be “prejudiced by” one of the grounds for vacatur. OCGA § 9-9-13 (b).
We determine that meaning by reading the relevant language in its “most natural and reasonable way” given the “context in which it appears,” see Chambers v. State, 320 Ga. 770, 772 (1) (911 SE2d 616) (2025) (punctuation omitted), including the surrounding statutory language, the statute’s structure and history, and other law that makes up the legal backdrop against which the language was en- acted, see State v. Cook, 317 Ga. 659, 660 (1) (893 SE2d 670) (2023).
When this “prejudiced by” language first entered Georgia’s Arbitra- tion Code in 1978, see Ga. L. 1978, p. 2278, the verb “prejudice” was used as a general matter to connote being injured, harmed, or af- fected detrimentally. See, e.g., Prejudice, v.t., Webster Deluxe Una- bridged Dictionary 1420 (2d ed. 1983) (“to injure or harm, as by some judgment or action; as, his mistake prejudiced the outcome”); Preju- diced, tr. v., American Heritage Dictionary 1033 (Family ed. 1979) (“To affect injuriously or detrimentally by some judgment or act”).3 But in legal parlance, the word “prejudice” carried (and still typically carries) with it a particular sense of harm: a material influence on the outcome of the proceeding in question. This outcome-focused un- derstanding of prejudice shows up in various contexts around the
City of Winder v. Barrow County, 318 Ga. 550, 555 (1) (899 SE2d 157) (2024) (punctuation omitted). time the term was added to our Arbitration Code, from Brady viola- tions, see Taylor v. State, 243 Ga. 222, 222-223 (1) (253 SE2d 191) (1979), and constitutional speedy trial claims, see State v. Madden, 242 Ga. 637, 637 (250 SE2d 484) (1978), to juror-bias claims, see Florence v. State, 243 Ga. 738, 740 (2) (256 SE2d 467) (1979), and claims of ineffective assistance of counsel, see Strickland v. Wash- ington, 466 U.S. 668, 692 (III) (B) (104 SCt 2052, 80 LE2d 674) (1984).
And most notably, this is how federal courts have applied ma- terially similar language in the federal Arbitration Code.4 We have looked to federal decisions applying the federal Arbitration Code as important evidence of the meaning of our own Arbitration Code be- cause our Code’s structure and language “closely tracks” the federal
Docs of CT resists this traditional, outcome-focused under- standing of prejudice. It contends that the affected party’s “rights are prejudiced by” conduct that causes “any harm” to the party’s “right to a fair hearing” (or any other rights implicated) and that the affected party need not show “how the outcome might have been dif- ferent.” But Docs of CT offers no relevant authority in support of this view, and in any event, it does not ultimately help its case. Docs of CT is not wrong that the affected party’s rights are prejudiced if its right to a fair hearing is impaired. But the ordinary way to establish that a party was deprived of a fair proceeding, and that its rights were therefore “prejudiced,” is to show that the conduct in question
Water Act, as amended in 1987, where the federal law had remained un- changed and the relevant Georgia law was “identical in all material respects” to its federal counterpart). Cf. Bowden v. The Medical Center, Inc., 297 Ga. 285, 291 (2) (a) n.5 (773 SE2d 692) (2015) (noting that a Georgia statute at issue was identical to the 1972 version of a federal statute, such that federal deci- sions and commentary from that period are “persuasive authority,” but that the federal statute had since been substantially revised while the Georgia stat- ute had not). affected or influenced the outcome of the proceeding. See, e.g., Strickland, 466 U.S. at 687 (III), 694 (III) (B) (a criminal defendant proves “prejudice” from counsel’s deficient performance by “showing that counsel’s errors were so serious as to deprive the defendant of a fair trial, a trial whose result is reliable,” and a defendant does that by demonstrating “a reasonable probability that, but for coun- sel’s unprofessional errors, the result of the proceeding would have been different”). So yes, prejudice is, in a basic sense, harm to the affected party’s rights, including the right to a fair proceeding. But that harm is ordinarily established by showing an effect or influence on the outcome of the proceeding. And, we conclude, that is the most reasonable understanding of OCGA § 9-9-13 (b)’s prejudice require- ment.
(b) Presumed or Actual Prejudice As a general rule, when this prejudice standard applies, the affected party must establish “actual” prejudice by demonstrating how the conduct in question affected or influenced the outcome of the proceeding. See, e.g., King v. King, 354 Ga. App. 19, 28 (2) (c) (840 SE2d 108) (2020) (husband showed he was prejudiced by arbi- trator’s “imperfect execution of his authority” in a divorce action be- cause the omission of agreed-upon terms in the arbitration award “severely curtailed” husband’s ability to “review the arbitrator’s de- cision for error and to seek meaningful (albeit limited) judicial re- view of the award”); Conmac Corp. v. Southern Diversified Dev., Inc., 245 Ga. App. 895, 898 (1) (c) (539 SE2d 532) (2000) (party demon- strated prejudice from modification of arbitration award where the modified award subjected the party to liability on a bond “where no such liability existed under the original award”); Sweatt v. Int’l Dev.
Corp., 242 Ga. App. 753, 755 (1) (531 SE2d 192) (2000) (parties es- tablished they were prejudiced by “[a]n overstepping by the arbitra- tors of their authority” where the arbitrator awarded actual dam- ages in violation of the terms of the underlying contract between the parties, which permitted only the recovery of liquidated damages (punctuation omitted)); Totem Marine Tug & Barge, Inc., 607 F2d at 652-653 (party showed prejudice from arbitrators’ misconduct where
the final damages amount owed by it “hinged on” improperly ob- tained ex parte evidence). By contrast, prejudice is “per se” or “pre- sumed” — meaning that the affected party need not demonstrate how the outcome was likely affected — only as a rare exception in certain contexts, like claims of actual or constructive denial of (or state interference with) the assistance of counsel, see Strickland, 466 U.S. at 692 (III) (B) (citing United States v. Cronic, 466 U.S. 648, 659 (III) & n.25 (104 SCt 2039, 80 LE2d 657) (1984)). This rare ex- ception has been applied when there is some reason specific to those contexts for dispensing with the need to prove prejudice on a case- by-case basis and is largely confined to certain constitutional rights of criminal defendants. See, e.g., Strickland, 466 U.S. at 692 (III) (B) (explaining that prejudice is presumed in cases of actual or construc- tive denial of the assistance of counsel or state interference with counsel’s assistance because “[p]rejudice in these circumstances is so likely that case-by-case inquiry into prejudice is not worth the cost”).
This case presents no basis for departing from the general rule.
Docs of CT offers no particular reason that an affected party could not or need not show how the outcome of a proceeding was affected or influenced by ex parte communications to establish prejudice in any given case. And although our Court has not had occasion to ad- dress a claim seeking vacatur of an arbitral award because of ex parte communications, federal courts that have addressed such claims — both around the time we adopted the federal Code’s preju- dice language and after — have consistently required the affected party to prove prejudice from such conduct by showing how the ex parte communications affected or influenced the outcome of the pro- ceeding. See Totem Marine Tug & Barge, Inc., 607 F2d at 652-653 (party established prejudice from ex parte phone call where arbitra- tors obtained the figure that the final award “hinged on”); Mutual Fire, Marine & Inland Ins. Co., 868 F2d at 57 (III) (B) (“mere asser- tion” that the arbitrators “used” the improperly obtained ex parte information to render their decision and assess a witnesses’ credibil- ity was not enough to show the challenger was prejudiced by the misconduct); Employers Ins. of Wausau, 933 F2d at 1490 (III) (C) (party “failed to demonstrate that any prejudice resulted from the ex parte contacts”); M & A Elec. Power Coop., 977 F2d at 1238 (“party seeking a vacation of an award on the basis of ex parte conduct must demonstrate that the conduct influenced the outcome of the arbitra- tion”); Remmey, 32 F3d at 149 (III) (B) (assuming arbitrator’s al- leged ex parte comments about seating arrangements were im- proper, appellant failed to show how the remarks influenced the out- come of the arbitration). We conclude that OCGA § 9-9-13 requires the same: the party seeking vacatur of an arbitration award under OCGA § 9-9-13 (b) must establish that its rights were “prejudiced by” one of the listed grounds for vacatur by showing that the conduct in question affected or influenced the outcome of the arbitration.
(c) Application Under the proper standard for assessing prejudice, Docs of CT has not established that its rights were prejudiced by the ex parte communications in this case. Even assuming those communications amounted to misconduct or some other ground for vacatur under
OCGA § 9-9-13 (b), Docs of CT offers no basis in the record or other- wise for concluding that they affected or influenced the outcome of the arbitration proceedings. Instead, Docs of CT points to the ex parte e-mails about exhibits and damages calculations without ex- plaining how it was prejudiced by the ex parte nature of these com- munications. As just a few examples, it does not show what evidence it would have presented in support of a lower damage award; what objections it could have made or defenses it could have raised to Bi- otek’s exhibits or the arbitrator’s damages calculations before, dur- ing, or after the hearing that would have altered the final result; what testimony it might have elicited on cross-examination that would have led to a different result; what arguments it would have made in post-hearing briefing to rebut Biotek’s damages calcula- tions; or anything else that would tend to show that, but for the ex parte nature of the communications at issue here, the outcome of the arbitration, i.e., the amount of damages awarded to Biotek, likely
would have been different.7 Absent any such showing, Docs of CT has failed to establish that its rights were prejudiced by ex parte communications in the arbitration proceeding.
Judgment affirmed. Peterson, C. J., Warren, P. J., and Bethel, Ellington, McMillian, LaGrua, and Colvin, JJ., concur.
Decided May 28, 2025.
Certiorari to the Court of Appeals of Georgia — 369 Ga. App. 804.
Nelson Mullins Riley & Scarborough, Erika C. Birg, for appel- lant.
Brunson Law, Bryan C. Brunson, for appellee.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.