Volanda Woods v. Pam Transport Inc-Lu
Concurring Opinion
concurring:
I fully join the panel quorum’s opinion and judgment. I write further only to set forth an additional basis for affirming the district court’s decision to enforce the arbitrator’s award, with the exception of the district court’s determinations regarding the pre- and post-judgment interest issues.
Even if P.A.M. could demonstrate conclusively that the arbitrator was removed from the AAA’s Roster before the final award was entered, P.A.M. would not be entitled to vacatur on that basis. Under 9 U.S.C. § 10(a)(4), an arbitration award may be vacated “where the arbitrators exceeded their powers.”
“Arbitration is a matter of contract: The powers of an arbitrator are dependent on the provisions under which the arbitrators were appointed.”
The Plan requires that the arbitration be “administered by the [AAA] under its then-current National Rules for the Resolution of Employment Disputes ... before an arbitrator from the [AAA].” It is at best ambiguous whether this language requires that an arbitrator who was on the Roster throughout the duration of the arbitration proceedings also be on the Roster at the time he enters the award. The plain terms require merely that the arbitration be administered by an arbitrator from the AAA.
The meaning of the phrase “an arbitrator from the [AAA]” does not clearly require that an arbitrator selected from the Roster remain on that Roster until after the arbitrator’s decision is issued. The phrase could reasonably be interpreted to require that the arbitrator be selected pursuant to the AAA’s rules. It is far from clear that this provision states a limitation on the authority of the arbitrator in the unexpected event that he is removed from the Roster after the arbitration proceedings have concluded.
The Plan expressly incorporates the rules of the AAA. This court has previously held, in addressing an arbitrator’s qualification under NASD rules, that “[i]n the absence of a specific agreement to the contrary, determining [an arbitrator’s] qualifications and eligibility is a matter left to the NASD.”
. Apache Bohai Corp. LDC v. Texaco China BV, 480 F.3d 397, 401 (5th Cir. 2007) (internal quotation marks omitted) (quoting Brook v. Peak Int'l, 294 F.3d 668, 672 (5th Cir. 2002)).
. Id. (quoting Delta Queen Steamboat Co. v. AFL-CIO, 889 F.2d 599, 604 (5th Cir. 1989)).
. Id.
. Id. at 402 (quoting Action Indus., Inc. v. U.S. Fid. & Guar. Co., 358 F.3d 337, 343 (5th Cir. 2004)).
. Positive Software Solutions, Inc. v. New Century Mortg. Corp., 476 F.3d 278, 280 (5th Cir. 2007) (en banc).
. Apache Bohai, 480 F.3d at 402 (quoting Action Indus., 358 F.3d at 343).
. Teamsters Local No. 5 v. Formosa Plastics Corp., 363 F.3d 368, 371 (5th Cir. 2004).
. See Zeiler v. Deitsch, 500 F.3d 157, 166-167 (2d Cir. 2007) (concluding that an arbitration agreement that specifically listed three arbitrators who were to compose the arbitration panel did not "state a limitation on the authority of the panel to continue in the unexpected event that one of the members might resign”); but see El Vocero De Puerto Rico v. Union De Periodistas, 532 F.Supp. 13, 14-16 (D.P.R. 1981) (concluding, after considering
. See United Transp. Union v. Gateway W. Ry. Co., 284 F.3d 710, 713 (7th Cir. 2002) (suggesting that the National Mediation Board could remove an arbitrator from its Roster while not removing him from any existing panels).
. According to the AAA, an arbitrator may be removed for various reasons, including: (1) career change requiring resignation; (2) failure to meet all training requirements; (3) unsuccessful participation or performance in training programs; (4) a dearth of cases in the arbitrator’s area of expertise or geographical location; (5) unprofessional conduct; (6) failure to make appropriate and sufficient disclosures on a case; (7) failure to manage the arbitration process effectively and efficiently; (8) higher fees or inconsistent billing practices; and (9) failure to act in accordance with AAA Rules and procedures. India Johnson, Reality vs. Myth: The Truth About Management of the AAA Commercial Roster (March 2003), http://www.adr.org/si.asp?id= 3523.
. Id. Rule 16(a).
. Bulko v. Morgan Stanley DW Inc., 450 F.3d 622, 626 (5th Cir. 2006).
. See American Arbitration Association, Employment Arbitration Rules and Mediation Procedures, Rule 16(b) (July 1, 2006), http:// www.adr.org/sp.asp?id=36105 ("Upon objection of a party to the continued service of an arbitrator, or on its own initiative, the AAA shall determine whether the arbitrator should be disqualified under the grounds set out above, and shall inform the parties of its decision, which decision shall be conclusive.”).
. Id. Rule 1 ("The parties shall be deemed to have made these rules a part of their arbitration agreement whenever they have provided for arbitration by the American Arbitration Association....”).
. Id. Rule 12(b).
Opinion of the Court
Volanda Woods initiated this action in the district court seeking enforcement of an arbitration award she obtained against her former employer, P.A.M. Transport, Inc.-L.U. (P.A.M.), on claims arising out of an on-the-job injury. Woods initiated the arbitration proceedings and sought compensation pursuant to the P.A.M. Transport Texas Injury Plan (Plan), an ERISA plan that provides for mandatory arbitration of all on-the-job injury claims. The district court granted Woods’s request for enforcement of the arbitration award after modifying the award of pre-judgment interest. P.A.M. appeals several aspects of the district court’s order. We affirm in part, reverse in part, and remand for further proceedings.
P.A.M. initially contended that this court lacked subject matter jurisdiction, asserting that there was no diversity of citizenship, the only basis on which Woods now asserts jurisdiction. P.A.M. has since conceded that there is diversity of citizenship, and we granted leave to amend to reflect that fact.
In the district court, P.A.M. sought to void the arbitrator’s award, challenging the arbitrator’s power to decide the parties’ underlying dispute. P.A.M. asserts that the district court abused its discretion in denying its request for discovery from the American Arbitration Association (AAA) for the purpose of determining when and for what reason the arbitrator was allegedly removed from the AAA’s Roster of Neutrals (Roster). P.A.M. alleges that the arbitrator was removed from the Roster sometime after the arbitration proceedings concluded but before the arbitrator entered the award. P.A.M. further asserts that if the arbitrator was in fact not on the Roster at this time, he exceeded his powers under the Plan, requiring vaca-tur of the award pursuant to 9 U.S.C. § 10(a)(4).
The district court denied P.A.M.’s discovery request, stating that P.A.M.’s assertion that the arbitrator was removed from the Roster alone, without any additional specifics, was not sufficient to support its discovery request and that, in any event, P.A.M. had not demonstrated that the arbitrator’s removal from the Roster would provide sufficient grounds for vaca-tur.
We review a district court’s discovery rulings for abuse of discretion
In district court, P.A.M. consistently asserted, on information and belief, that the arbitrator was removed from the Roster prior to entering the award. But, P.A.M. does not provide any additional specifics beyond this assertion. In particular, although acknowledging that the Roster is not publicly available and alleging that the AAA refused to provide P.A.M. with information concerning the Roster, P.A.M. has not provided even the vaguest indication in district court or on appeal of how it may have learned that the arbitrator was in fact removed from the Roster. “Despite having been given time to do so, [P.A.M.] has brought forward nothing to show that its claim [that the arbitrator was not on the Roster when he entered the award] had any semblance of substance or that it was even asserted in good faith. The claim never achieved any more dignity than that of a conclusory statement in an unverified answer [and other court memo-randa].”
II
P.A.M. also contests the amount of the district court’s award of pre- and post-judgment interest. We agree that the district court erred in its calculation of both pre- and post-judgment interest and reverse that portion of the judgment.
A
The arbitrator’s written decision awards damages by category, including compensation for past and future medical expenses, mental anguish, pain and suffering, physical impairment, and lost earning capacity. It further provides for an award of “prejudgment interest for past pain and suffering under section 304, Sub-chapter B, of the Texas Finance Code, which authorizes prejudgment interest in personal injury cases.” In confirming the award, however, the district court awarded pre-judgment interest on all “past damages awarded” rather than only on the amount attributable to past pain and suffering.
P.A.M. argues that the district court was required to enforce the arbitrator’s award as written and therefore erred in its prejudgment interest calculation. Woods, on the other hand, argues that under the provision of Texas law cited by the arbitrator, an award of pre-judgment interest in personal injury actions must be awarded as a matter of course on the entire amount of damages for past injury, not just pain and suffering. Woods asserts a number of grounds on which she claims the district court was authorized to correct this error.
Woods first argues that the district court had the authority to correct the arbitrator’s alleged error under 9 U.S.C. § 13, which provides that a judgment affirming, modifying, or correcting an arbitration award has “the same force and effect” as, and is “subject to all the provisions of law relating to, a judgment in an action,” and “may be enforced as if it had been ren
Alternatively, Woods argues that the district court properly refused to affirm the arbitrator’s award of pre-judgment interest because the arbitrator manifestly disregarded the law. This court previously recognized “manifest disregard for the law” as an additional, nonstatutory basis for vacating an arbitrator’s award.
Finally, Woods argues that the district court acted properly in modifying the arbitrator’s award of pre-judgment interest under 9 U.S.C. § 11(a) and (c), which allow for modification or correction where (1) “there was an evident material miscalculation of figures,”
For the reasons discussed above, the district court erred in modifying the arbitrator’s award of pre-judgment interest on past pain and suffering.
B
The arbitrator summarily awarded post-judgment interest “at the maximum rate allowed by law beginning from the issuance of this Award until the Award is satisfied.” Accordingly, the arbitrator largely left the matter of post-judgment interest to the court enforcing the award. In turn, the district court awarded post-judgment interest at the maximum rate allowed by Texas state law, or 7.25%.
P.A.M. argues that the district court erred in looking to Texas law rather than federal law to determine the applicable interest rate. As noted above, under 9 U.S.C. § 13, a judgment of a federal court confirming, modifying, or correcting an arbitration award has the “the same force aná effect” as, and is “subject to all the provisions of law relating to, a judgment in an action,” and “may be enforced as if it had been rendered in an action in the court in which it is entered.”
Accordingly, the district court erred in applying Texas law to calculate post-judgment interest. On remand, the district court should recalculate the amount utilizing the appropriate rate.
The district court’s judgment is REVERSED IN PART, and this matter is REMANDED for further proceedings consistent with this opinion.
Pursuant to 5th Cir. R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5th Cm. R. 47.5.4.
. See 28 U.S.C. § 1653 ("Defective allegations of jurisdiction may be amended, upon terms, in the trial or appellate courts.”).
. Wiwa v. Royal Dutch Petroleum Co., 392 F.3d 812, 817 (5th Cir. 2004).
. Id. (internal quotation marks omitted).
. Freeman v. United States, 556 F.3d 326, 341 (5th Cir. 2009).
. See Imperial Ethiopian Gov't v. Baruch-Foster Corp., 535 F.2d 334, 337 (5th Cir. 1976) (stating that a party seeking vacatur of an arbitration award based on allegations of a disqualifying connection between the opposing party and the arbitrator does not have an "unqualified right to any discovery it requested, limited by only relevancy,” particularly in a summary proceeding where the party had failed to "come forward with anything tending to show that the claim was asserted in good faith and for any reason other than delay”).
. Id.
. See Lyeth v. Chrysler Corp., 929 F.2d 891, 899 (2d Cir. 1991) (stating that the district court did not err in observing that the discovery requests aimed at the AAA were attempts to "engagfe] in a fishing expedition in an attempt to determine if there is some basis, however farfetched, to prosecute a claim of bias”); see also Freeman v. United States, 556 F.3d 326, 341 (5th Cir. 2009) ("The party seeking discovery bears the burden of showing its necessity.”).
.Positive Software Solutions v. New Century Mortg. Corp., 476 F.3d 278, 280 (5th Cir. 2007) (en banc) ("To assure that arbitration serves as an efficient and cost-effective alternative to litigation, and to hold parties to their agreements to arbitrate, the FAA narrowly restricts judicial review of arbitrator's awards.”).
. 9 U.S.C. § 13(c).
. Harris v. Parker Coll. of Chiropractic, 286 F.3d 790, 792 (5th Cir. 2002) (quoting Antwine v. Prudential Bache Securities, Inc., 899 F.2d 410, 413 (5th Cir. 1990)).
. See Hall Street Assocs. v. Mattel, Inc., 552 U.S. 576, 584-86, 128 S.Ct. 1396, 170 L.Ed.2d 254 (2008) (holding that 9 U.S.C. §§10 and 11 provide the exclusive grounds upon which an arbitration award may be vacated or modified, and that the parties may not agree to expand the scope of judicial review to allow vacatur or modification based on the arbitrator’s legal error).
. See Glover v. IBP, Inc., 334 F.3d 471, 474 (5th Cir. 2003) (quoting Harris, 286 F.3d at 792).
. 552 U.S. at 584-86, 128 S.Ct. 1396.
. Citigroup Global Markets, Inc. v. Bacon, 562 F.3d 349, 350 (5th Cir. 2009) (citing Hall Street Assocs., 552 U.S. at 584, 128 S.Ct. 1396).
. Hall Street Assocs., 552 U.S. at 584, 586, 128 S.Ct. 1396.
. 9 U.S.C. § 11(a).
. Id.% 11(c).
. Prestige Ford v. Ford Dealer Computer Servs., Inc., 324 F.3d 391, 396 (5th Cir. 2003) (quoting Valentine Sugars, Inc. v. Donau Corp., 981 F.2d 210, 214 (5th Cir. 1993)).
. See West Virginia v. United States, 479 U.S. 305, 310, 107 S.Ct. 702, 93 L.Ed.2d 639 (1987) ("Prejudgment interest is an element of complete compensation.” (citation omitted)).
. 9 U.S.C. § 13(c).
. Travelers Ins. Co. v. Liljeberg Enters., Inc., 7 F.3d 1203, 1209 (5th Cir. 1993); see also Parsons & Whittemore Ala. Mach. & Servs. Corp. v. Yeargin Constr. Co., 744 F.2d 1482, 1484 (11th Cir. 1984) (stating that "a district court judgment affirming an arbitration award is governed by statutory post-judgment interest rates”).
. 28 U.S.C. § 1961(a).
. Board of Governors of the Fed. Reserve Sys., Market Yield on U.S. Treasury Securities at 1-year Constant Maturity, Quoted on Investment Basis, http://federalreserve.gov/ releases/li 15/data.htm (last updated Apr. 13, 2011).
Reference
- Full Case Name
- Volanda WOODS, Plaintiff-Appellee, v. P.A.M. TRANSPORT INC.-L.U., Defendant-Appellant
- Cited By
- 7 cases
- Status
- Unpublished