Justia.com Opinion Summary: DTC filed a complaint with the Court of Chancery against the Union and Harry Bruckner, a para-transit driver, in the nature of a declaratory judgment action (Complaint) pursuant to Title 1, Chapter 65. The Complaint sought an order vacating or modifying a labor arbitration award issued by a certain arbitrator pursuant to a collective bargaining agreement between DTC and the Union. The award reinstated Bruckner, who was terminated by DTC, with back pay less interim earnings. The Court of Chancery granted the Union's motion for summary judgment. DTC's sole argument on appeal was that the arbitrator's decision should be vacated due to the appearance of bias or partiality on the part of the arbitrator. The court held that the alleged bias or partiality which DTC attributed to the arbitrator failed to meet the "evident partiality" standard where the mere fact that an arbitrator may share a personal life experience with a party or a party's agent was legally insufficient to constitute a substantial relationship that a reasonable person would conclude was powerfully suggestive of bias. Accordingly, the judgment was affirmed.
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IN THE SUPREME COURT OF THE STATE OF DELAWARE
DELAWARE TRANSIT
CORPORATION,
Plaintiff Below,
Appellant,
v.
AMALGAMATED TRANSIT
UNION LOCAL 842 and HARRY
BRUCKNER,
Defendants Below,
Appellees.
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No. 85, 2011
Court Below – Court of Chancery
of the State of Delaware
C.A. No. 5345
Submitted: October 26, 2011
Decided: November 28, 2011
Before HOLLAND, JACOBS and RIDGELY, Justices.
Upon appeal from the Superior Court. AFFIRMED.
Andrew G. Kerber, Esquire, Department of Justice, Wilmington,
Delaware, for appellant.
Perry F. Goldlust, Esquire, Perry F. Goldlust, P.A., Wilmington,
Delaware, Alaine S. Williams, Esquire, and Amy L. Rosenberger, Esquire
(argued), Willig, Williams & Davidson, Philadelphia, Pennsylvania, for
appellee, Amalgamated Transit Union Local 842.
HOLLAND, Justice:
Delaware Transit Corporation (“DTC”) filed a complaint with the
Court of Chancery of the State of Delaware against the Amalgamated
Transit Union, Local 842 (“Union”) and Harry Bruckner (“Bruckner”) in the
nature of a declaratory judgment action (“Complaint”), pursuant to Title 10,
Chapter 65. The Complaint sought an order vacating or modifying a labor
arbitration award (“Award”) issued by Arbitrator Alan A. Symonette
(“Arbitrator”), pursuant to a collective bargaining agreement (“CBA”)
between DTC and the Union.1 The Award reinstated Bruckner, who was
terminated by DTC, with back pay less interim earnings.
The Court of Chancery granted the Union’s motion for summary
judgment.
DTC’s sole argument in this appeal is that the Arbitrator’s
decision should be vacated due to the appearance of bias or partiality on the
part of the Arbitrator. We have concluded that argument is without merit.
Therefore, the judgment of the Court of Chancery must be affirmed.
Facts
The DTC hired Bruckner as a para-transit driver in 2004 – a job in
which his responsibilities included picking up and transporting people who
1
The Delaware Uniform Arbitration Act in Title 10, Chapter 57 does not apply to “labor
contracts with either public or private employers where such contracts have been
negotiated by, or the employees covered thereby are represented by, any labor
organization or collective bargaining agent or representative.” Del. Code Ann. tit. 10, §
5725 (West 2006).
2
met DTC criteria. At the time of his hire, Bruckner was married and had
four children. His wife is employed as a nurse and works the midnight shift
from approximately 11 p.m. through 7 a.m. Bruckner drove a split shift
from Monday through Friday, beginning at 7 a.m. to 10 a.m. and then
following up at 2 p.m. to 6 p.m.
Given their work schedules, Bruckner or his wife were able to be
present for their children for all hours of the day except from approximately
6 a.m. to 8 a.m. Prior to June 2008, Bruckner’s mother-in-law provided
child care during those two hours, while residing in the couple’s home. In
June 2008, Bruckner’s mother-in-law was undergoing treatments for cancer
and was losing her sight. Nevertheless, she continued to provide childcare
for the two hours in which both parents were at work.
On June 15, 2008, Bruckner incurred a “miss,” which at the time was
his fifth miss within a twelve-month period. A miss is defined as an instance
in which an employee fails to report on time for the scheduled work day.
The CBA permits progressive discipline for individuals who incur a miss
during a floating twelve-month period (“Miss Rules”). Pursuant to the CBA,
an individual receives progressive penalties over eight steps with the final
step being termination from employment. After his fifth miss, DTC placed
Bruckner on the two-day list status for the fifth miss in a rolling twelve3
month period. Around the same time, Bruckner’s mother-in-law became
very ill and was suffering from the side effects of chemotherapy treatment.
She died on July 6, 2008.
According to testimony by Bruckner at the hearing, the loss of his
mother-in-law resulted in further violations of the Miss Rules because he
could not secure dependable childcare. On July 28, 2008, Bruckner incurred
his sixth miss, and, on August 7, 2008, his seventh miss.
Prior to incurring his eighth miss, Bruckner attempted to take steps to
prevent that from happening.
He contacted his supervisor, the labor
relations specialist, and the executive director. He asked for retroactive
leave pursuant to the Family Medical Leave Act, but was not eligible since
that Act does not provide coverage for the illness or death of one’s motherin-law. He asked for a leave of absence pursuant to Article 20.1 of the CBA,
which gave DTC the ability to provide discretionary leave. DTC denied that
request, as it was permitted to under the CBA. He asked to have his start
time changed to an uncovered para-transit run that fit his childcare needs.
DTC, without consulting the Union, denied that request because it
unilaterally concluded that such action would constitute a violation of the
CBA.
4
Arbitrator’s Award
On November 9, 2009, a hearing was held before the Arbitrator. At
the arbitration hearing, the Union and DTC, who were both represented by
counsel, stipulated to the issue to be decided by the Arbitrator: “Was the
grievant, Mr. Harry Bruckner, terminated for just cause? If not, what shall
the remedy be?” On January 5, 2010, the Arbitrator issued an opinion and
Award in which he sustained the grievance and ordered Bruckner to be
reinstated with back pay less any interim earnings.
In rendering his decision, the Arbitrator relied upon several sections
of the CBA. First, he cited Section 13 of the Miss Rules, which outlines
progressive discipline for up to eight misses within a floating twelve-month
period. Second, he quoted from Section 20, Leaves of Absence, which gives
the DTC discretion to provide unpaid leaves of absence to employees who
make a written request. Third, he quoted, in part, Section 35, Bid Shifts,
which describes the process by which employees may bid on particular runs
at DTC (“Bidding Rules”). Although the Arbitrator did not specifically
mention Section 10, Discipline, he did rely upon it in finding that DTC did
not have “just cause” in terminating Bruckner.
Section 10 states, in
pertinent part, that “[n]o employee who has successfully completed the
probationary period shall be discharged or disciplined without just cause.”
5
The Arbitrator found that DTC’s failure to consider the option of
allowing Bruckner to switch runs was either arbitrary or constituted
disparate treatment:
In this case, management’s failure to consider that option at
least to the extent of consulting with the Union to reach an
accommodation was at least arbitrary or at most an instance of
disparate treatment. It was clear that the grievant was
attempting to correct his situation and had come to management
for help. Even though the solution may have been a deviation
from the language of the contract, given the history between the
parties in which waivers have been granted and that this
accommodation would not have affected any other employees,
management could have at least spoken to the Union to
determine whether this is a possibility. It is for this reason that
I sustain this grievance.
As a remedy, the Arbitrator directed DTC to return Bruckner to his
former position with back pay less any interim earnings. The Arbitrator also
directed that Bruckner be placed on the disciplinary step of the Miss Rules
that he was on at the time of his termination.
Court of Chancery Ruling
On March 17, 2010, DTC filed the Complaint in the Court of
Chancery seeking to vacate the Award to Bruckner. The Union filed a
motion for summary judgment, arguing that none of the three grounds for
vacating a labor arbitration award applied in this case. Therefore, the Union
argued that the Arbitrator’s Award should be affirmed summarily.
6
The standards for judicial intervention in arbitration proceedings are
always narrowly drawn.2 The role of the Court of Chancery in conducting
post-arbitration judicial review is limited in a labor dispute to three issues:
Delaware has long had a policy favoring arbitration, and its
courts have applied a deferential standard when reviewing labor
arbitration awards. [The Court of Chancery] will not disturb a
labor arbitration award unless (a) the integrity of the arbitration
has been compromised by, for example, fraud, procedural
irregularity, or a specific command of law; (b) the award does
not claim its essence from the CBA; or (c) the award violates a
clearly defined public policy.
Where a grievance is arbitrated under a collective bargaining
agreement, courts will not review the merits of the arbitration
award other than on the grounds listed above. To do otherwise
would give courts the final say on the merits of arbitration
awards and undercut benefits of labor arbitration-namely,
speed, flexibility, informality and finality.3
In opposing the Union’s motion for summary judgment, DTC argued
that the Award should be vacated on the grounds that the integrity of the
arbitration was compromised because the Arbitrator failed to disclose to the
parties that his wife had died of cancer a few months before the arbitration
hearing. According to DTC, this created the appearance of bias or partiality
because Bruckner argued that he failed to arrive at work in a timely fashion
after his mother-in-law, who had provided daycare for his children, died of
2
Merit Ins. Co. v. Leatherby Ins. Co., 714 F.2d 673, 681 (7th Cir. 1983); Blue Tee Corp.
v. Koehring Co., 754 F. Supp. 26, 30 (S.D.N.Y. 1990).
3
Meades v. Wilmington Hous. Auth., 2003 WL 939863, at *4 (Del. Ch. Mar. 6, 2003).
7
cancer. DTC raised no other issue in opposition to the Union’s motion for
summary judgment.
In this appeal, DTC does not argue that the Award violates public
policy. It also does not argue that the Award “does not claim its essence
from the CBA.” The only grounds for vacating the Award that DTC raises
in its opening brief to this Court is that the integrity of the arbitration was
compromised because the Arbitrator’s shared life experience gave the
appearance of bias or partiality.4
Labor Arbitration Rule 17
In support of its sole argument on appeal, DTC relies upon Rule 17
(Disclosure and Challenge Procedure) of the American Arbitration
Association Labor Arbitration Rules (“Rule 17”).
Rule 17 states, in
pertinent part:
No person shall serve as a neutral arbitrator in any arbitration
under these rules in which that person has any financial or
personal interest in the result of the arbitration.
Any
prospective or designated neutral arbitrator shall immediately
disclose any circumstance likely to affect impartiality, including
any bias or financial or personal interest in the result of the
arbitration.5
4
Emerald Partners v. Berlin, 726 A.2d 1215, 1224 (Del. 1999) (“Issues not briefed are
deemed waived.”); Murphy v. State, 632 A.2d 1150, 1152 (Del. 1993) (“The failure to
raise a legal issue in the text of the opening brief generally constitutes a waiver of that
claim on appeal.”) (footnote omitted).
5
Labor Arbitration Rules of the American Arbitration Association R.17,
http://www.adr.org/sp.asp?id=25730#17 (amended and effective July 1, 2005).
8
The rule requires that “any circumstance likely to affect impartiality”
be disclosed.6 DTC submits that if an arbitrator has a shared personal life
experience that might possibly cause the arbitrator to be sympathetic or
empathetic to the position of one of the parties, it must be disclosed and is a
basis for disqualification. Thus, DTC contends that the Arbitrator’s failure
to disclose his wife’s death from cancer to the parties constituted a violation
of Rule 17, and, therefore, requires vacating the Award.
The Court of Chancery concluded that Rule 17 concerns actual
financial or personal relationships between the arbitrator and a party, an
agent of a party, or an attorney for a party. The ethics rules for arbitrators,
written and approved by the American Arbitration Association (“AAA”), the
National Academy of Arbitrators, and the Federal Mediation and
Conciliation Service, support that conclusion.
The AAA requires its
arbitrators to abide by the Code of Professional Responsibility for
Arbitrators of Labor Management Disputes.7
Under section 2(B)(1),
arbitrators presiding over labor-management disputes are required to
disclose (1) “any current or past managerial, representational, or consultative
relationship with any company or union involved in a proceeding in which
6
Id.
The Code of Professional Responsibility is published by the National Academy of
Arbitrators, American Arbitration Association, and Federal Mediation and Conciliation
Service.
7
9
the arbitrator is being considered for appointment or has been tentatively
designated to serve” and (2) “any pertinent pecuniary interest.”8
Additionally, section 2(B)(3) states that “[a]n arbitrator must not permit
personal relationships to affect decision-making.”9
The Court of Chancery noted that all the cases cited by both parties
involved situations where the arbitrator had a personal relationship or
financial interest with a party, an agent of a party, or an attorney of a party,
and that none of the cited cases involved a situation where the arbitrator’s
personal life experiences constituted the basis for the alleged bias or
partiality. Since the alleged bias in this case did not involve a personal or
financial relationship, the Court of Chancery held that it did not compromise
the integrity of the arbitration proceeding.
The Court of Chancery
concluded: “So I do not think that this type of affinity – potential affinity –
is the type of thing that taints a proceeding or would require disclosure.”
DTC challenges that conclusion in this appeal.
8
Code of Professional Responsibility for Arbitrators of Labor-Management Disputes, §
2(B)(1)(2007).
9
Id. at § 2(B)(3).
10
Evident Partiality Standard
Commonwealth Coatings Corp. v. Cont’l Cas. Co. is the leading case
addressing arbitrator disclosure and is relied upon by DTC in this appeal.10
Commonwealth Coatings involved a dispute between a prime contractor and
a subcontractor. The member of the three-person arbitration panel selected
as a “neutral” was an engineering consultant. The prime contractor was one
of the engineering consultant’s regular customers. As the Supreme Court
explained, “[a]n arbitration was held, but the facts concerning the close
business connections between the third arbitrator and the prime contractor
were unknown to [the other party] and were never revealed to it by this
arbitrator, by the prime contractor, or by anyone else until after an award had
been made.”11 In a plurality decision by Justice Black, the Supreme Court
stated:
[A]ny tribunal permitted by law to try cases and controversies
not only must be unbiased but also must avoid even the
appearance of bias. We cannot believe that it was the purpose
of Congress to authorize litigants to submit their cases and
controversies to arbitration boards that might reasonably be
though biased against one litigant and favorable to another.12
10
Commonwealth Coatings Corp. v. Cont’l Cas. Co., 393 U.S. 145, 146-50 (plurality
opinion), reh’g denied, 393 U.S. 1112 (1969).
11
Id. at 146.
12
Id. at 150.
11
The plurality, therefore, vacated the award on the ground that the neutral
arbitrator demonstrated “evident partiality” in failing to disclose his prior
relationship with one of the parties. Justice White’s concurring opinion
stated that he joined in Justice Black’s opinion. However, Justice White’s
concurring opinion limited Justice Black’s statement in the plurality opinion
about the “appearance of bias” as follows: “[t]he Court does not decide
today that arbitrators are to be held to the standards of judicial decorum of
Article III judges, or indeed of any judges.”13
Ever since Commonwealth Coatings was decided, it has been
generally accepted that an arbitrator’s failure to disclose a substantial
relationship with a party or a party’s attorney justifies vacatur under an
“evident partiality” standard.14 Nevertheless, courts are divided on what
constitutes “evident partiality.”15 Some courts follow Justice Black’s
plurality opinion in Commonwealth Coatings, by adopting a standard
whereby a failure to disclose may be grounds for vacatur of an arbitration
award if the undisclosed relationship creates an appearance or impression of
13
Id. (White, J., concurring).
See, e.g., Woods v. Saturn Distrib. Corp., 78 F.3d 424, 427 (9th Cir. 1996) (“In
nondisclosure cases, vacatur is appropriate where the arbitrator’s failure to disclose
information gives the impression of bias in favor of one party.”).
15
Deseriee A. Kennedy, Predisposed with Integrity: The Elusive Quest for Justice in
Tripartite Arbitrations, 8 Geo. J. Legal Ethics 749, 773-76 (1995).
14
12
bias.16 In other courts, however, this standard is limited in favor of a more
narrow reasonableness standard,17 requiring “more than a mere appearance
of bias,”18 such that an award will be vacated where the undisclosed
relationship would lead a reasonable person to conclude that the arbitrator
actually lacked impartiality.19
Most courts have concluded that evident partiality requires more than
an appearance of bias but less than actual bias.20 The evolving standard of
16
See, e.g., Olson v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 51 F.3d 157, 159 (8th
Cir. 1995) (noting uncertainty among courts of appeals following the Commonwealth
Coatings decision).
17
See, e.g., Gianelli Money Purchase Plant & Trust v. ADM Investor Servs. Inc., 146
F.3d 1309, 1312 (11th Cir. 1998) (explaining awards may be vacated only when an actual
conflict exists or where a failure to disclose offends the reasonable person standard);
Lifecare Int’l, Inc. v. CD Med., Inc., 68 F.3d 429, 433 (11th Cir. 1995) (stating that the
mere appearance of bias is insufficient to vacate an arbitration award); Morelite Constr.
Corp. v. New York City Dist. Council Carpenters Benefit Funds, 748 F.2d 79, 83-84 (2d
Cir. 1984) (adopting a reasonable person standard); Int’l Produce, Inc. v. A/S Rosshavet,
638 F.2d 548, 551 (2d Cir. 1981) (noting that appearance of bias does not necessarily rise
to evident partiality).
18
Health Svcs. Mgmt. Corp. v. Hughes, 975 F.2d 1253, 1264 (7th Cir. 1992) (noting that
arbitrators often have “interests and relationships that overlap with the matter they are
considering” and “[t]he mere appearance of bias that might disqualify a judge will not
disqualify an arbitrator” (quoting Florasynth, Inc. v. Pickholz, 750 F.2d 171, 173 (2d Cir.
1984))).
19
See, e.g., Dawahare v. Spencer, 210 F.3d 666, 669 (6th Cir. 2000); Peoples Sec. Life
Ins. Co. v. Monumental Life Ins. Co., 991 F.2d 141, 146 (4th Cir. 1993).
20
See Health Svcs. Mgmt. Corp. v. Hughes, 975 F.2d at 1264 (holding that relationship
between arbitrator and party must be “so intimate—personally, socially, professionally,
or financially—as to cast serious doubt on the arbitrator’s impartiality” (quoting Merit
Ins. Co. v. Leatherby Ins. Co., 714 F.2d 673, 680 (7th Cir. 1983))); Apperson v. Fleet
Carrier Corp., 879 F.2d 1344, 1358 (6th Cir. 1989) (rejecting the exacting standard of
“proof of actual bias”); Sheet Metal Workers Int’l Ass’n Local Union #420 v. Kinney Air
Conditioning Co., 756 F.2d 742, 745-46 (9th Cir. 1985) (adopting a “reasonable
impression of partiality” standard); Morelite Constr. Corp. v. New York City Dist.
Council Carpenters Benefit Funds, 748 F.2d at 84 (suggesting that “proof of actual bias”
would prove an insurmountable burden for moving party); Aetna Cas. & Sur. Co. v.
13
judicial review is that a reasonable person would have to conclude that a
neutral arbitrator was partial or biased.21 In Kaplan v. First Options of
Chicago, Inc.,22 the Third Circuit Court of Appeals recognized that after
Commonwealth Coatings the proper standard for considering a claim of
arbitrator bias is “evident partiality” and joined the courts that have adopted
the reasonable person test. The Third Circuit stated:
In order to show “evident partiality,” “the challenging party
must show ‘a reasonable person would have to conclude that
the arbitrator was partial’ to the other party to the arbitration.”
“Evident partiality” is strong language and requires proof of
circumstances “powerfully suggestive of bias.”23
In Beebe Med. Ctr., Inc. v. InSight Health Servs. Corp.,24 the Court of
Chancery also recognized and applied the “evident partiality” standard
arising from Commonwealth Coatings and adopted the reasonable person
test. The Court of Chancery stated:
Grabbert, 590 A.2d 88, 96 (R.I. 1991) (asserting that evident partiality requires a
showing of “less than actual bias.”).
21
See Sunkist Soft Drinks, Inc. v. Sunkist Growers, Inc., 10 F.3d 753, 758 (11th Cir.
1993) (stating that arbitral awards can be set aside for conduct that creates “a reasonable
appearance of bias”); Peoples Sec. Life Ins. Co. v. Monumental Life Ins. Co., 991 F.2d at
146 (adopting a standard that “a reasonable person would have to conclude that an
arbitrator was partial to the other party to the arbitration”) (internal quotation marks
omitted); Sheet Metal Workers Int’l Ass’n Local Union #420 v. Kinney Air Conditioning
Co, 756 F.2d at 746 (moving party must establish “reasonable impression of partiality”);
Morelite Constr. Corp. v. New York City Dist. Council Carpenters Benefit Funds, 748
F.2d at 84.
22
Kaplan v. First Options of Chicago, Inc., 19 F.3d 1503 (3d Cir. 1994).
23
Id. at 1523 n.30 (citation omitted).
24
Beebe Med. Ctr., Inc. v. InSight Health Servs. Corp., 751 A.2d 426 (Del. Ch. 1999).
14
In the wake of Commonwealth Coatings, it is almost
universally accepted that an arbitrator’s failure to disclose a
substantial relationship with a party or a party’s attorney
justifies vacatur under the evident partiality standard. Judges
have spilled many words on the pages of the federal reporters
trying to put this standard into simple terms, but most agree that
an arbitrator’s nondisclosure of a relationship [with a party or
the party’s attorney] substantial enough to create a reasonable
impression of bias will ordinarily dictate vacatur.25
In Beebe, the Court of Chancery found that the reasonable person test was
satisfied where the arbitrator, a lawyer, failed to disclose that one of the
corporate parties to an arbitration he heard was represented by a law firm
that was simultaneously representing the arbitrator in litigation in a
Delaware court.26
DTC characterizes the Court of Chancery’s opinion in Beebe as
calling for a strong pro-disclosure policy for arbitrators. DTC argues that
this Court should follow the Second Circuit’s holding in Sanko S.S. Co. v.
Cook Indus. Inc.:27
To be sure, the broad disclosure called for in Commonwealth
Coatings does not require that an arbitrator “provide the parties
with his complete and unexpurgated business biography.”28 But
where dealings “might create an impression of possible bias,”
they must be disclosed. Indeed, it seems to us that the better
practice is that arbitrators should disclose fully all their
25
Id. at 434-35 (emphasis added).
Id. at 427.
27
Sanko S.S. Co. v. Cook Indus., Inc., 495 F.2d 1260, 1263-64 (2d Cir. 1973).
28
Commonwealth Coatings v. Cont’l Cas. Co., 393 U.S. at 151; Reed & Martin, Inc. v.
Westinghouse Elec. Corp., 439 F.2d 1268 (2d Cir. 1971).
26
15
relationships with the parties, whether these ties be of a direct
or indirect nature. Although some unnecessary disclosure may
result, if arbitrators err on the side of disclosure, it will not be
difficult for courts to identify those undisclosed relationships
which are too insubstantial to warrant vacating an award. 29
The Commonwealth Coatings progeny of cases, including Sanko, set
forth an evident partiality standard that confines post-arbitration judicial
review to narrow issues essential to the integrity of the arbitration process.
The practical effects of the evident partiality standard are to focus on the
disclosure of an arbitrator’s past and present personal or financial
relationships with the parties and their representatives.
That standard
requires vacatur whenever an arbitrator fails to disclose a substantial
relationship with a party, their agent, or their attorney that creates
circumstances powerfully suggestive of bias.30
We agree that arbitrators should disclose all of their past and present
personal or financial relationships with the parties, their agents, and their
attorneys.
We hold that to demonstrate evident partiality sufficient to
require vacatur, however, the record must reflect that an arbitrator failed to
disclose a substantial personal or financial relationship with a party, a
party’s agent, or a party’s attorney that a reasonable person would conclude
29
Sanko S.S. Co. v. Cook Indus., Inc., 495 F.2d at 1263-64 (emphasis added).
Kaplan v. First Options of Chicago, Inc., 19 F.3d at 1523 n.30; Beebe Med. Ctr., Inc. v.
InSight Health Servs. Corp., 751 A.2d at 438-39.
30
16
was powerfully suggestive of bias.31 The question presented in this appeal is
whether an undisclosed shared life experience is sufficient to constitute
evident partiality and to require vacatur.32
DTC acknowledges that under Rule 17 and the applicable ethics rules,
the Arbitrator in this case had no duty to disclose before the arbitration
hearing commenced because he had no past or present personal or financial
relationship with any party, their agent, or their attorney. Arbitrators are
under an ongoing obligation, however, to disclose information they acquire
that might make them partial.
In addition to the rules for mandatory
disclosure, the AAA’s ethics rules also provide that “[i]f the circumstances
requiring disclosure are not known to the arbitrator prior to acceptance of
appointment, disclosure must be made when such circumstances become
known to the arbitrator.”33 DTC contends that, when Bruckner’s mother-inlaw’s death from cancer became known during the hearing, the Arbitrator
was required to disclose his shared life experience with his wife’s death
from cancer.
31
Beebe Med. Ctr., Inc. v.InSight Health Servs. Corp., 751 A.2d at 435; Kaplan v. First
Options of Chicago, Inc., 19 F.3d at 1523 n.30.
32
See Merrick T. Rossein and Jennifer Hope, Disclosure and Disqualification Standards
for Neutral Arbitrators: How Far to Cast the Net and What is Sufficient to Vacate Award,
81 St. John’s L. Rev. 203, 209-13, 219, 228 (2007).
33
Code of Professional Responsibility for Arbitrators of Labor-Management Disputes, §
2(B)(4).
17
In deciding whether an arbitrator’s personal life experiences should be
disclosed either before acceptance of an appointment or during the course of
arbitration proceedings, the rules for judicial officers’ recusal and
disqualification are not binding on arbitrators.34 However, they are didactic.
The general rule is that a judge “is not disqualifiable because of his [or her]
own life experiences.”35
“[L]ifetime experiences, good or bad, are
something all judges bring with them to the bench, and only in unusual
circumstances would a judge be required to recuse” because of a shared life
experience.36 “Obviously a judge is not disqualified from presiding at an
automobile accident trial merely because he was once himself in an
automobile accident. Nor is a judge disqualified from trying a divorce case
either because he is himself married or divorced, or from trying a contested
adoption case because he has either natural children or adopted children.”37
The party seeking the disqualification of an arbitrator bears the burden
of establishing the basis for a recusal. Other courts have concluded that to
set aside an award for evident partiality, the moving party must identify an
34
Commonwealth Coatings v. Cont’l Cas. Co., 393 U.S. at 149.
Johnson v. Salem Corp., 458 A.2d 1290, 1295 (N.J. Super. Ct. App. Div. 1983);
Richard E. Flamm, Judicial Disqualification: Recusal and Disqualification of Judges (2d
ed. 2007).
36
Bravo Santiago v. Ford Motor Co., 206 F. Supp.2d 294, 297 (D.P.R. 2002). See id. at
298 (holding a judge was not disqualified from presiding over a case involving injuries
sustained in an automobile accident merely because, years before, he sued a different car
manufacturer for injuries.).
37
Johnson v. Salem Corp., 458 A.2d at 1295.
35
18
undisclosed relationship between the arbitrator and a party or the party’s
agent that is “so intimate—personally, socially, professionally or
financially—as to cast serious doubt on [the arbitrator’s] impartiality.”38 We
agree.
In addition, the alleged past or present conflicting personal or
financial relationship with the arbitrator “must be direct, definite, and
capable of demonstration rather than remote, uncertain or speculative.”39
The alleged bias or partiality which DTC attributes to the Arbitrator in
this matter fails to meet the “evident partiality” standard. The mere fact that
an arbitrator may share a personal life experience with a party or a party’s
agent is legally insufficient to constitute a substantial relationship that a
reasonable person would conclude is powerfully suggestive of bias. We
hold that arbitrators are not disqualified because of their shared life
experience with a party or a party’s agent and that the disclosure of a shared
life experience is not mandatory.
In this case, the Arbitrator had no
obligation to disclose that his wife had recently died from cancer.
Conclusion
The judgment of the Court of Chancery is affirmed.
38
Merit Ins. Co. v. Leatherby Ins. Co., 714 F.2d at 680.
Health Svcs. Mgmt. Corp. v. Hughes, 975 F.2d at 1264 (quoting Tamari v. Bache
Halsey Stuart Inc., 619 F.2d 1196, 1200 (7th Cir. 1980)); see also Ormsbee Dev. Co. v.
Grace, 668 F.2d 1140, 1147 (10th Cir. 1982).
39
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