Victorian v. Valero St. Charles Refinery et al

Filing 33

ORDER & REASONS denying 19 Motion to Vacate Arbitration Award. Signed by Judge Carl Barbier on 8/21/13. (sek, )

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
CIVIL ACTION
DONALD R. VICTORIAN
VERSUS

NO: 09-5866

VALERO ST. CHARLES REFINERY
VALERO REFINING-NEW ORLEANS,
L.L.C., VALERO ENERGY CORP.

SECTION: "J”(1)

ORDER AND REASONS
Before the Court is a Motion to Vacate Arbitration Award (Rec.
Doc. 19), filed by Plaintiff, Donald Victorian. Defendants, Valero
Refining-New Orleans, L.L.C., d/b/a Valero St. Charles Refinery,
Valero Energy Corp., and Valero Services, Inc. (collectively,
"Valero"), oppose the motion. (Rec. Doc. 28) Plaintiff has replied.
(Rec. Doc. 32) On November 7, 2012, the motion was submitted to the
Court on the briefs. Having considered the motion, the memoranda,
the record, and the applicable law, the Court now finds that
Plaintiff's motion (Rec. Doc. 19) should be DENIED.
Plaintiff filed suit against Valero alleging that he was
terminated by Valero on the basis of race in violation of Title VII
of the 1964 Civil Rights Act and La. R.S. 23:301 et seq. Valero
claimed that Plaintiff was terminated from his position as a lead
lab tech for falsifying company documents by reporting fictitious
lab results. Pursuant to a mandatory arbitration agreement between
the parties, the matter was submitted to arbitration on October 35, 2011 and December 20-21, 2011. The parties submitted post-

hearing briefing between March and May 2012. On June 19, 2012, the
arbitrator issued a ruling finding in favor of Valero on all
claims.

Plaintiff

now

seeks

to

vacate

the

arbitration

award

pursuant to § 10 of the Federal Arbitration Act ("FAA").
Section 10 of the FAA provides the exclusive grounds for
vacatur

of

an

arbitration

award

under

the

FAA.

Hall

Street

Associates, L.L.C. v. Mattel, Inc., 552 U.S. 576, 584 (2008);
Citigroup Global Markets, Inc. v. Bacon, 562 F.3d 349, 350 (2009)
("from this point forward, arbitration awards under the FAA may be
vacated only for reasons provided in § 10"). The Fifth Circuit has
explained:
Under § 10, courts are permitted to vacate an arbitration
award
(1) where the award was procured by corruption, fraud, or
undue means;
(2) where there was evident partiality or corruption in
the arbitrators, or either of them;
(3) where the arbitrators were guilty of misconduct in
refusing to postpone the hearing, upon sufficient cause
shown, or in refusing to hear evidence pertinent and
material to the controversy; or of any other misbehavior
by which the rights of any party have been prejudiced; or
(4) where the arbitrators exceeded their powers, or so
imperfectly executed them that a mutual, final, and
definite award upon the subject matter submitted was not
made."
Id. at 352 (citing 9 U.S.C. § 10(a)).
Plaintiff argues that there are three bases upon which the
Court may vacate the arbitrator's decision in favor of Valero.

2

First, Plaintiff argues that the Court should vacate the award
under § 10(a)(2), because the arbitrator's award and written
reasons reflect evident partiality by the arbitrator in favor of
Valero.1 Plaintiff asserts that "the most glaring example of this
is the arbitrator's acceptance of Defendants' characterization of
the evidence without any analysis of or, in most cases, even a
reference
accuses

to

evidence

the

Plaintiff

Victorian's

that

arbitrator
he

did

of
not

evidence."

ignoring
and

would

allegedly
not

Plaintiff

also

uncontroverted

intentionally

post

inaccurate results.2
Second, Plaintiff argues that the arbitrator's alleged refusal
to

expressly

acknowledge

or

discuss

the

evidence

Plaintiff

presented at the hearing constituted a "refusal to hear evidence
pertinent and material to the controversy" within the meaning of §
10(a)(3). Third, Plaintiff alleges that the arbitrator failed to
decide the case in accordance with the applicable law.
DISCUSSION
The Court agrees with Defendant that Plaintiff has failed to
establish

any

of

the

statutory

grounds

for

vacatur

of

an

arbitration award and is instead improperly seeking review of the
1

(Mem. in Supp., Rec. Doc. 19-1, pp. 1-2, 6-7).

2

(Mem. in Supp., Rec. Doc. 19-1, p. 2) ("Madame Arbitrator turned a
blind eye and deaf ear to the uncontroverted evidence proffered by Victorian
that he would not and did not intentionally post inaccurate results. To reach
her finding, Madame Arbitrator relied almost exclusively on the testimony of
Greg Burns, the Valero's lab director who knew absolutely nothing about the
lab he oversaw at the time.") (emphasis added).

3

merits of the underlying claim.
A. Evident Partiality under Section 10(a)(2) of the FAA
First, Plaintiff's allegations that (a) the arbitrator refused
to expressly acknowledge or discuss evidence Plaintiff presented,3
and (b) that the arbitrator ignored uncontroverted evidence in his
favor, do not satisfy his burden of showing "evident partiality"
within the meaning of § 10(a)(2). The Fifth Circuit has explained
that:
[t]o establish evident partiality based on actual bias,
the party urging vacatur must produce specific facts from
which 'a reasonable person would have to conclude that
the arbitrator was partial to one party.' This is an
'onerous burden,' because the urging party must
demonstrate that the alleged partiality is 'direct,
definite, and capable of demonstration rather than
remote, uncertain, or speculative.'
Householder Grp. v. Caughran, 354 F. App'x 848, 852 (5th Cir.
2009)(citing Weber v. Merrill Lynch Pierce Fenner & Smith, Inc.,
455 F. Supp. 2d 545, 550 (N.D. Tex. 2006)). Furthermore, the cases
in which courts have granted vacatur on the basis of "evident
partiality"

involve

some

form

of

relationship

between

the

arbitrator and a party to the arbitration. Positive Software

3

(Mem. in Supp., Rec. Doc. 19-1, p. 7) ("The arbitrator also accepted
the testimony as characterized by Defendants' witnesses. The arbitrator did
not address Plaintiff's responses to Defendants' characterization of the
evidence or acknowledge the evidence in Plaintiff's favor. For instance, the
arbitrator accepted Defendants' assertion that there was no other explanation
other than that Plaintiff falsified results he entered into the LIMS system.
However, Plaintiff presented evidence that he had no intention of falsifying
test results, and that the lab equipment that analyzed and documented those
same test results continually malfunctioned. The arbitrator failed to even
acknowledge Plaintiff's refutation of Defendants' 'evidence,' much less
explain why he found it to not be worthy of any consideration whatsoever.")

4

Solutions, Inc. v. New Century Mortgage Corp., 476 F.3d 278, 284
(5th Cir. 2007) (collecting cases). Plaintiff has neither directed
the Court's attention to any precedent granting vacatur based on
"evident partiality," in the absence of some relationship between
the

arbitrator

and

a

party

nor

alleged

that

there

was

any

relationship at all between the arbitrator and Valero, instead
relying entirely on the arbitrator's written reasoning to support
his "evident partiality" argument.
In Householder Group, a party moved to vacate an arbitration
award on the grounds of "evident partiality" arguing that the
arbitration panel's rulings were one-sided and against him and that
the arbitration panel wanted him to lose despite the overwhelming
evidence in his favor. Id.

The Fifth Circuit rejected these

arguments as "speculative assertions" that were "insufficient to
establish that vacatur is warranted under Section 10(a)(2)." Id.
Given that the assertions Plaintiff makes in the instant motion are
essentially the same, the Court finds that they are insufficient to
warrant vacatur under Section 10(a)(2).
Moreover, the Court finds that in this case, Plaintiff has
failed to produce specific facts from which a reasonable person
would have to conclude that the arbitrator was partial to one
party.

The

arbitrator's

reliance

on

certain

testimony

merely

reflects the arbitrator's credibility determinations. Although
Plaintiff

asserts

that

the

arbitrator

5

ignored

uncontroverted

evidence that he did not intentionally post inaccurate results, he
actually concedes in his memorandum in support of his motion to
vacate that his testimony was controverted by the testimony of
Valero witnesses:
Madame Arbitrator turned a blind eye and a deaf ear to
the uncontroverted evidence proffered by Victorian that
he would not and did not intentionally post inaccurate
results. To reach her finding, Madame Arbitrator relied
almost exclusively on the testimony of Greg Burns, the
Valero's lab director who knew absolutely nothing about
the lab he oversaw at the time ... according to
Defendants, instead of heeding the grave, final warning
that he had just been issued, Victorian suddenly and
inexplicably began falsifying lab test results . . .
Specifically, according to Defendants, Victorian reported
lab test results on samples without ever running the
corresponding tests ... and reported results from an
instrument incapable of performing the test allegedly run
... Burns reached the following conclusion: 'I don't know
exactly what he did that night, but he didn't run the
samples per the protocol we had established on the
machines that were capable or running it, and there was
no data to back up the information we had in the our
[sic] LIMS database ... the only thing I came up with is
that he had to have made it up.'
(Mem. in Supp., Rec. Doc. 19-1, pp. 2-3). Although Plaintiff
attacks Burns' credibility and the arbitrator's reliance on his
testimony4 the Court lacks authority to disturb the arbitrator's
credibility determinations and thereby substitute its judgment for
that of the arbitrator. Ameser v. Nordstrom, Inc., 442 F. App'x
967, 971 (5th Cir. 2011) ("Our case law makes clear that we are not
to substitute our judgment with that of the arbitrator."); Tassin
v. Ryan's Family Steakhouse, Inc., 509 F. Supp. 2d 585, 590 (M.D.

4

(Mem. in Supp., Rec. Doc. 19-1, p. 2).

6

La. 2007) ("The Court is not in a position to question the
credibility assessments made by the panel.")
In addition, given that arbitrators are not required to give
reasons for or explain their decisions,5 the Court finds that an
arbitrator's alleged failure to explain why they relied on some
evidence more than other evidence does not provide a basis for
vacatur

of

situations

an

arbitration

would

award.

"seriously

Awarding

jeopardize

vacatur
the

in

such

finality

of

arbitration," by allowing parties to challenge the award every time
they disagreed with an arbitrator's credibility determinations, a
scenario that the Fifth Circuit has refused to sanction. See
Positive Software Solutions, Inc., 476 F.3d at 285.
B. Refusal to Hear Evidence Pertinent and Material to the
Controversy Under Section 10(a)(3) of the FAA
Plaintiff faults the arbitrator for a "refusal to acknowledge
pertinent and material evidence presented by Plaintiff," without
directing the Court's attention to any evidentiary errors or
evidence excluded by the arbitrator. Instead, Plaintiff generally
attacks the arbitrator's credibility determinations and complains
that the arbitrator paid insufficient attention to the evidence
Plaintiff presented at the hearing. This argument is meritless.

5
Antwine v. Prudential Bache Securities, Inc., 899 F.2d 410, 412 (5th
Cir. 1990) (citing United Steel Workers of America v. Enterprise Wheel & Car
Corp., 363 U.S. 593, 598 (1960)) ("It has long been settled that arbitrators
are not required to disclose or explain the reasons underlying an award.")

7

Arbitrators are only required to give each of the parties an
adequate opportunity to present their evidence and argument; they
are not bound to hear all of the evidence tendered by the parties.
Householder Grp., 354 F. App'x at 851. Moreover, an evidentiary
error does not provide a basis for vacatur under Section 10(a)(3)
unless it "so affects the rights of a party that it may be said
that

he

was

deprived

of

a

fair

hearing."

Id.

The

record

demonstrates that Plaintiff was granted an adequate opportunity to
present evidence and argument; Plaintiff has not pointed to a
single evidentiary error or even an instance where the arbitrator
excluded pertinent, material evidence, much less demonstrated that
any error rose to the level of depriving him of a fair hearing. As
discussed above, the Court will not disturb the arbitrator's
credibility determinations.
C. Failure to Decide the Case in Accordance with Applicable
Law
Plaintiff's third argument, that the arbitrator failed to
decide

the

case

in

accordance

with

the

applicable

law,6

is

insufficient to warrant vacatur of the arbitration award. Prior to
Citigroup Global Markets,7 the Fifth Circuit recognized "manifest
6

(Mem. in Supp., Rec. Doc. 19-1, pp. 6-7) ("The arbitrator clearly
failed to decide the case in accordance with the applicable law ... The
arbitrator relied on the wrong legal standard for determining whether
Plaintiff was 'similarly situated' to his comparator, Conrad Cooper).
7

In Citigroup Global Markets, in light of the Supreme Court's decision
in Hall, the Fifth Circuit held (a) that § 10 provides the exclusive bases for
vacatur of an arbitration award under the FAA and (b) that "manifest disregard

8

disregard of the law," as an independent, nonstatutory basis to
vacate an arbitration award under the FAA.8 However, the Fifth
Circuit has never recognized an arbitrator's mere failure "to
decide the case in accordance with the applicable law," or legal
error, as sufficient to warrant vacatur. Kergosien v. Ocean Energy,
Inc., 390 F.3d 346, 354 (5th Cir. 2004), overruled on other
grounds,

Citigroup

Global

Markets,

Inc.,

562

F.3d

at

358

(acknowledging that arbitrator's failure to follow the law is not
recognized in the Fifth Circuit as a basis for vacatur of an
arbitration

award).

Plaintiff,

relying

on

Reed

v.

Florida

of the law is no longer an independent ground for vacating arbitration awards
under the FAA." 562 F.3d at 350, 358 ("In light of the Supreme Court's clear
language that, under the FAA, the statutory provisions are the exclusive
grounds for vacatur, manifest disregard of the law as an independent,
nonstatutory ground for setting aside an award must be abandoned and
rejected.")The Court reads Citigroup Global Markets, Inc. to leave open the
possibility that conduct by an arbitrator constituting "manifest disregard of
the law," as previously defined by the Fifth Circuit, might also constitute an
instance where the arbitrator "exceeded their powers, or so imperfectly
executed them that a mutual, final, and definite award upon the subject matter
submitted was not made," within the meaning of § 10(a)(4). Id. at 357-58.
(vacating the district court judgment to determine whether "the grounds
asserted for vacating the award" (manifest disregard of the law) might support
vacatur under any of the statutory grounds). However, given that Plaintiff
argues neither that the arbitrator acted in "manifest disregard of the law,"
nor "exceeded her powers," under § 10(a)(4), it is unnecessary to consider
whether the conduct alleged provides a basis for vacatur under § 10(a)(4).
8

To satisfy that standard, a litigant was required to show:

'more than error or misunderstanding with respect to the law. The
error must have been obvious and capable of being readily and
instantly perceived by the average person qualified to serve as an
arbitrator. Moreover, the term 'disregard' implies that the
arbitrator appreciates the existence of a clearly governing
principle but decides to ignore or pay not attention to it.'
Kergosien, 390 F.3d at 355 (quoting Prestige Ford v. Ford Dealer Computer Servs.,
Inc., 324 F.3d 391, 395 (5th Cir. 2003)), overruled, Citigroup Global Markets,
Inc., at 562 F.3d at 358.

9

Metropolitan University Inc., 681 F.3d 630, 637 (5th Cir. 2012),
asserts

that

"an

arbitrator's

failure

to

decide

a

case

in

accordance with the applicable law may constitute grounds for
vacating the award if that failure is made clearly to appear."
However, in response to a nearly identical argument, Judge Africk
recently observed:
Reed has been abrogated. Oxford Health Plans LLC v.
Sutter, No. 12-135, 2013 WL 2459522 (U.S. June 10, 2013).
As the Supreme Court observed, 'convincing a court of an
arbitrator's error — even his grave error — is not
enough....'
White v. Valero Refining New Orleans, LLC, No. 11-1014, 2013
WL 3154731, at *5 (E.D. La. June 19, 2013).
Thus, the Court lacks the authority to vacate the award on the
basis of a mere error of law. Although Plaintiff clearly disagrees
with the arbitrator's decision, a party's disagreement with the
arbitrator's decision, absent some statutory basis, does warrant
vacatur. Bailey v. Northrop Grumman Ship Systems, Inc., No. 084685, 2011 WL 378774, at *2 (E.D. La. Feb. 2, 2011).
Accordingly,
IT

IS

HEREBY

ORDERED

that

Plaintiff's

Motion

to

Vacate

Arbitration Award (Rec. Doc. 19) is DENIED.
New Orleans, Louisiana, this 21st day of August, 2013.

CARL J. BARBIER
UNITED STATES DISTRICT JUDGE
10