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Rule 11 sanctions for attacking award
March 20, 2006 by Ross Runkel at LawMemo
An interesting trend: Courts awarding sanctions against parties who lose in arbitration and then attack the award in court.
The latest: CUNA Mutual Insurance v. Office and Professional Employees (7th Cir 03/16/2006)
The employer brought an action seeking to vacate a grievance arbitration award rendered in the union's favor. The trial court granted summary judgment in favor of the union and awarded sanctions under Fed.R.Civ.P. 11.
The employer appealed only the Rule 11 sanctions. The 7th Circuit affirmed.
The court noted that there exists a "long line of Seventh Circuit cases that have discouraged parties from challenging arbitration awards and have upheld Rule 11 sanctions in cases where the challenge to the award was substantially without merit."
In particular, in Dreis & Krump Manufacturing Co., v. Int'l Assoc. Machinists District 8, 802 F.2d 247 (7th Cir 1986), the 7th Circuit observed that "[a] company dissatisfied with the decisions of labor arbitrators need not include an arbitration clause in its collective bargaining contracts, but having agreed to include such a clause it will not be permitted to nullify the advantages to the union by spinning out the arbitration process unconscionably through the filing of meritless suits and appeals. For such conduct the law authorizes sanctions that this court will not hesitate to impose."
The court concluded ultimately, "[w]e find that [the employer's] claims were meritless and were very unlikely to succeed in the lower court based on the straight-forward case law relevant to these claims."
Other recent cases: Sanctions for attacking arbitration awards.
Last week the ABA Journal eReport carried this article (including fairly accurate quotes from yours truly): NO PITY FOR 'POOR LOSERS' The 11th Circuit threatens sanctions against some litigants appealing arbitration rulings.
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