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Sanctions for attacking arbitration awards
March 01, 2006 by Ross Runkel at LawMemo

Two courts have said they've had enough of appeals from parties who have lost at arbitration, have no legal basis for attacking the award, and take it to court anyhow.

Sanctions against the "never-say-die" litigants and lawyers?

The 11th Circuit has issued a warning:

"this Court is exasperated by those who attempt to salvage arbitration losses through litigation that has no sound basis in the law applicable to arbitration awards. The warning this opinion provides is that in order to further the purposes of the FAA and to protect arbitration as a remedy we are ready, willing, and able to consider imposing sanctions in appropriate cases."

The quote is from B.L. Harbert Intl v. Hercules Steel (11th Cir 02/28/2006), in which one of the parties did not like the way the arbitrator interpreted a contract, and fought it all the way up to the federal court of appeals. (For those who don't know, the fact that an arbitrator was "wrong" in his or her interpretation of a contract is not a ground for having the arbitrator's award overturned by a court.)

A California court of appeal did award sanctions, saying:

"Courts have repeatedly instructed litigants that challenges to the arbitrator's rulings on discovery, admission of evidence, reasoning, and conduct of the proceedings do not lie. [citations omitted.] Plaintiffs' crude attempt to characterize their claims so they would fall within acceptable bases for an appeal is an artifice we condemn. Further, most of plaintiffs' claims are patently disingenuous."

The quote is from Evans v. Centerstone (California Ct App 11/21/2005). The sanctions: (1) Attorney fees and (2) an equal amount as a sanction.

Earlier reports on the 11th Circuit case: Workplace Prof Blog (by Paul Secunda) and How Appealing (by Howard Bashman). Thanks Paul and Howard!

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