Mendel et al v. Morgan Keegan & Company Inc

Filing 17

MEMORANDUM OPINION AND ORDER re 14 First MOTION to Vacate: Plaintiff's appeal and motion to vacate is SET for Evidentiary Hearing on February 4, 2014 at 10:30 AM in Hugo L Black US Courthouse, Birmingham, AL before Judge William M Acker Jr. Signed by Judge William M Acker, Jr on 12/3/13. (SAC )

FILED
2013 Dec-03 AM 11:08
U.S. DISTRICT COURT
N.D. OF ALABAMA

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
JAKE MENDEL, etc., et al.,
Plaintiffs,
v.
MORGAN KEEGAN & COMPANY,
INC.,
Defendant.

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CIVIL ACTION NO.
13-AR-1630-S

MEMORANDUM OPINION AND ORDER
In his appeal and motion to vacate, plaintiff seeks to set
aside the arbitration award and to refer the controversy to another
panel of arbitrators.

The challenge to the award is based on,

among other things, the alleged “evident partiality” of one of the
arbitrators.

The “evident partiality” of an arbitrator is one of

the grounds for vacatur listed in the Federal Arbitration Act, 9
U.S.C. § 10(a).
arbitration

panel

Plaintiff alleges that the chairman of the
failed

to

disclose

the

attorney-client

relationship between his employer and defendant and that this nondisclosure gives a reasonable impression of partiality.

Plaintiff

bears the burden of proving facts that support such a reasonable
impression of partiality. See Middlesex Mutual Ins. Co. v. Levine,
675 F.2d 1197, 1200-01 (11th Cir. 1982).

In cases of non-

disclosure, such as in the instant case, the movant also must
provide

evidence,

whether

direct

or

circumstantial,

that

the

arbitrator had actual knowledge of the undisclosed fact. Gianelli

Money Purchase Plan & Trust v. ADM Investor Servs., Inc., 146 F.3d
1309, 1312-13 (11th Cir. 1998).
Plaintiff alleges that the facts give a reasonable impression
of partiality, but he does not allege that the arbitrator had
actual knowledge of the undisclosed attorney-client relationship.
Although the “‘mere appearance of bias or partiality is not enough
to set aside an arbitration award,’ [] it is enough to require the
district court to grant an evidentiary hearing.” F.D.I.C. v. IIG
Capital LLC, 525 F. App'x 904, 905 (11th Cir. 2013) (quoting Univ.
Commons-Urbana v. Universal Constructors, Inc., 304 F.3d 1331, 1340
(11th Cir. 2002)).

Moreover, “[t]he ‘evident partiality’ question

necessarily entails a fact intensive inquiry [as t]his is one area
of the law which is highly dependent on the unique factual settings
of each particular case.”•Univ. Commons-Urbana, Ltd. v. Universal
Constructors Inc., 304 F.3d 1331, 1345 (11th Cir. 2002) (quoting
Lifecare Int'l, Inc. v. CD Med., Inc., 68 F.3d 429, 435 (11th Cir.
1995)) (internal quotation marks omitted).

To like effect is

Terminix Int’l Co., L.P. v. Scott, 1111232, 2013 WL 5394441 (Ala.
Sept. 27, 2013).

In Terminix, the Supreme Court of Alabama, as

recently as September 27, 2013, reached the following conclusion:
[W]e conclude that Terminix has presented evidence in
support of its postjudgment motion to vacate the
arbitration award that “raises a threshold inference of
possible bias” necessary “to warrant a hearing for the
purpose of determining whether adequate evidence exists
to grant” Terminix's motion to vacate the arbitration
award [on grounds of evident partiality]. Upon remand as
to this issue, we note that the trial court should
2

“review the offered evidence pursuant to the ‘reasonable
impression of partiality’ standard,” . . . and, in
assessing whether [the arbitrator] was “biased or partial
in his arbitration of the underlying dispute is to
consider whether [Terminix] makes a showing through
admissible evidence that the court finds to be credible,
that gives rise to an impression of bias that is direct,
definite, and capable of demonstration, as distinct from
a ‘mere appearance’ of bias that is remote, uncertain,
and speculative.
Id. at *13 (citations omitted).
In accordance with the foregoing, plaintiff’s appeal and
motion to vacate is hereby SET for evidentiary hearing at 10:30
A.M., February 4, 2014.

Given that credibility will be important

to the inquiry, the parties may present witness testimony in the
form of live testimony or video deposition only.

This requirement

applies prospectively through the discovery deadline of January 28,
2014, but not to any depositions that have been taken before entry
of this order.

DONE this 3rd day of December, 2013.

_____________________________
WILLIAM M. ACKER, JR.
UNITED STATES DISTRICT JUDGE

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