John Hancock Life Insurance Company (U.S.A) v. Employers Reassurance Corporation

Filing 22

Judge Denise J. Casper: ORDER entered. MEMORANDUM AND ORDER - The Court DENIES John Hancock's petition. D. 7.(Hourihan, Lisa)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
__________________________________________
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JOHN HANCOCK LIFE INSURANCE
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COMPANY (U.S.A.)
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Plaintiff,
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Civil Action No. 15-cv-13626
v.
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EMPLOYERS REASSURANCE
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CORPORATION,
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Defendant.
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__________________________________________)
MEMORANDUM AND ORDER
CASPER, J.
I.

June 21, 2016

Introduction
Plaintiff John Hancock Life Insurance Company U.S.A. (“John Hancock”) brings this

“petition and motion for enforcement of arbitration agreement” (“the Petition”). D. 7. Invoking
the Federal Arbitration Act (the “FAA”), 9 U.S.C. §§ 4 and 5, John Hancock asks the Court to
remove the arbitrator Employers Reassurance Corporation (“Employers”) has appointed to sit on
the panel presiding over a pending arbitration between John Hancock and Employers. Id. ¶ 1.
John Hancock contends that the arbitrator that Employers appointed does not meet the
qualification requirements set out in the parties’ arbitration agreement, Agreement No. EP19A01
(the “Agreement”). Id. For the reasons stated below, the Court DENIES the Petition.
II.

Factual Allegations
The central facts underlying the Petition are undisputed. John Hancock is an insurance

company organized under the laws of Michigan with its principal place of business in Boston,
Massachusetts. D. 7 ¶ 2. Employers is a reinsurance company organized under the laws of
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Kansas with its principal place of business in or around Overland Park, Kansas. Id. ¶ 3. The
Agreement between Employers and John Hancock became effective on July 1, 1999. D. 7 ¶ 1;
D. 18-3 at 4. Pursuant to the Agreement, John Hancock agreed to cede and Employers to accept
a percentage of John Hancock’s retention of liability under specified insurance policies issued
prior to the effective date of the Agreement. D. 7 ¶ 7.
The Agreement provides that any dispute that arises relating to the Agreement shall be
resolved by arbitration. D. 3-1 at 12; D. 7 ¶ 1; D. 18 at 1. The Agreement further provides that
each party will appoint one arbitrator and those two arbitrators will then select the third
arbitrator. D. 3-1 at 12; D. 7 ¶ 10; D. 18 at 3. The second arbitrator must be selected within two
weeks after notice is provided that the first arbitrator has been selected. D. 3-1 at 12; D. 7 ¶ 10.
The two party-appointed arbitrators are instructed to select the third arbitrator within two weeks
of appointment of the second arbitrator. D. 3-1 at 12; D. 7 ¶ 10. The Agreement specifies that
“[a]ll three arbitrators must be officers of Life Insurance Companies or Life Reinsurance
Companies, excluding however, officers of the two parties to this Agreement, their affiliates or
subsidiaries or past employees of any of these entities.” D. 3-1 at 12; D. 7 ¶ 11; D. 18 at 4.
On August 14, 2015, John Hancock initiated arbitration to resolve a dispute regarding
Employers’ right to increase the reinsurance premiums charged to John Hancock under the
Agreement. D. 7 ¶ 12; D. 18 at 3. On August 14, 2015, John Hancock sent Employers a letter
naming Thomas M. Zurek as an arbitrator. D. 3-2; D. 7 ¶ 13; D. 18 at 3. On August 28, 2015,
Employers responded with a letter naming Denis Loring (“Loring”) as an arbitrator. D. 3-4; D. 7
¶ 14; D. 18 at 3. On September 4, 2015, John Hancock demanded that Employers withdraw
Loring; John Hancock contended that Loring could not serve as an arbitrator because Loring was
once employed by one of John Hancock’s affiliates, specifically, John Hancock Mutual Life

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Insurance Company. D. 3-6; D. 7 ¶ 15; D. 18 at 3. Employers refused to withdraw Loring. D. 7
¶ 16; D. 18 at 3; D. 18-3 at 7-9.
III.

Procedural History
On October 23, 2015, John Hancock instituted this civil action seeking the removal of

Loring. D. 1. That same day, John Hancock filed a “petition and motion for enforcement of
arbitration agreement.”1 D. 7. After a hearing, the Court took the matter under advisement.
D. 21.
IV.

Legal Standard
The FAA “embodies the national policy favoring arbitration,” Buckeye Check Cashing,

Inc. v. Cardegna, 546 U.S. 440, 443 (2006), and “was designed to promote arbitration.” SotoFonalledas v. Ritz-Carlton San Juan Hotel Spa & Casino, 640 F.3d 471, 474 (1st Cir. 2011)
(citation and internal quotation mark omitted). Thus, the FAA “provides that written agreements
to arbitrate controversies arising out of an existing contract ‘shall be valid, irrevocable, and
enforceable, save upon such grounds as exist at law or in equity for the revocation of any
contract.’” Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985) (citing 9 U.S.C. § 2).
In further keeping with its goal of promoting arbitration, the FAA provides for judicial
enforcement of written arbitration agreements, Circuit City Stores, Inc. v. Adams, 532 U.S. 105,
111 (2001) (citing 9 U.S.C. § 2), and “expedited judicial review to confirm, vacate, or modify
arbitration awards” once the awards have been issued. Hall St. Assocs., L.L.C. v. Mattel, Inc.,
552 U.S. 576, 578 (2008) (citing 9 U.S.C. §§ 9-11).

With regard to the enforcement of

arbitration, “[b]y its terms, the [FAA] leaves no place for the exercise of discretion by a district

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John Hancock previously filed a motion to compel enforcement of arbitration agreement. D. 1.
John Hancock subsequently withdrew that motion. D. 6. In light of John Hancock’s withdrawal,
the Court denies John Hancock’s motion to compel, D. 1, as moot.
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court, but instead mandates that district courts shall direct the parties to proceed to arbitration on
issues as to which an arbitration agreement has been signed.” Dean Witter, 470 U.S. at 218
(emphasis in original).
V.

Analysis
A. The FAA Does Not Authorize the Court to Remove an Arbitrator Before a Final
Arbitration Award Has Been Issued
John Hancock’s petition requests that the Court (1) remove Loring and (2) order

Employers to “name a replacement arbitrator in compliance with the Agreement.” D. 7 ¶ 1.
John Hancock alleges that the appointment of Loring violates the Agreement’s express
prohibition on the appointment of past or present employees of John Hancock or of John
Hancock’s affiliates. D. 7 ¶ 15; D. 9 at 1, 5. According to John Hancock, Loring cannot serve as
an arbitrator because he is a former employee of John Hancock Mutual Life Insurance and John
Hancock Mutual Life Insurance was an affiliate of John Hancock. D. 7 ¶ 15; D. 9 at 1, 5. In
Employers’ view, however, Loring’s appointment is consistent with the Agreement because
Loring ceased working for John Hancock Mutual Life Insurance before John Hancock Mutual
Life Insurance became affiliated with John Hancock and John Hancock Mutual Life Insurance is
no longer affiliated with John Hancock. D. 18 at 8-9. Thus, the parties appear to disagree as to
the specifics of the corporate history between John Hancock and John Hancock Mutual Life
Insurance. Compare D. 9 at 8-9 with D. 18 at 9. The parties also disagree as to whether the
prohibition in the Agreement extends to individuals who have worked for entities that once were,
but no longer are, affiliates of John Hancock. Compare D. 9 at 9 with D. 18 at 9-10.
John Hancock describes its petition to remove Loring as arising under section 4 of the
FAA and asserts that the Court’s authority to remove Loring prior to the conclusion of the
arbitration arises under section 5 of the FAA. D. 9 at 6. Section 4 of the FAA allows “part[ies]
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aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written
agreement for arbitration” to seek an order from a district court compelling that “arbitration
proceed in the manner provided for in such agreement.” 9 U.S.C. § 4. Section 5 indicates that if
the arbitration agreement provides a method for appointing arbitrators, that method “shall be
followed.” 9 U.S.C. § 5. Section 5 also grants courts the authority to appoint an arbitrator in
certain specified circumstances: where the arbitration agreement does not provide a method for
appointing arbitrators, where a party fails to “avail himself of such method” or “if for any other
reason there shall be a lapse in the naming of an arbitrator.” Id. John Hancock’s petition,
however, does not seek to compel arbitration, as there is no contention that Employers is refusing
to arbitrate the underlying dispute. D. 7 ¶ 14. John Hancock’s petition also does not invoke the
Court’s power under the FAA to appoint an arbitrator. Instead, John Hancock specifically
requests that the Court remove the arbitrator that Employers timely appointed. D. 7 ¶ 1. Courtremoval of a party-appointed arbitrator and court-appointment of an arbitrator are distinct
actions. See Nat’l Cas. Co. v. OneBeacon Am. Ins. Co., No. 12-cv-11874-DJC, 2013 WL
3335022, at *10 (D. Mass. July 1, 2013) (citing Gulf Guar. Life Ins. Co. v. Conn. Gen. Life Ins.
Co., 304 F.3d 476, 489-90 (5th Cir. 2002)) (recognizing the distinction between appointing and
removing an arbitrator), aff’d sub nom. Emp’rs Ins. Co. of Wausau v. OneBeacon Am. Ins. Co.,
744 F.3d 25 (1st Cir. 2014). Thus, the Court will consider John Hancock’s request in the terms it
has been presented – as a removal of an arbitrator.
John Hancock’s request for removal is premised upon John Hancock’s contention that the
FAA grants courts a limited authority to remove party-appointed arbitrators prior to the issuance
of the arbitration award. D. 9 at 6. John Hancock acknowledges that there is a general rule
barring judicial removal of party-appointed arbitrators prior to the conclusion of the arbitration.

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Id. John Hancock argues, however, that the prohibition on judicial intervention is limited to preaward challenges regarding the bias of arbitrators. Id. In John Hancock’s view, there is an
exception permitting pre-award judicial removal of an arbitrator where removal is based upon
“[the] arbitrator’s failure to meet the criteria specified in the arbitration agreement.”

Id.

Accordingly, in assessing John Hancock’s argument, the Court will first review the general
prohibition on pre-award removal of a party-appointed arbitrator and then consider the exception
that John Hancock suggests exists.
The FAA contains no provision expressly granting courts the authority to remove a partyappointed arbitrator prior to the conclusion of the arbitration. 9 U.S.C. §§ 1-16. Notably, neither
section 4 nor section 5 of the FAA, which John Hancock invokes, contains any express language
regarding removal. 9 U.S.C. §§ 4, 5. The FAA lays out specific avenues through which district
courts may review arbitration proceedings, including naming remedies for concerns regarding
party-appointed arbitrators; pre-award removal is not a listed remedy. Instead, pursuant to
section 10, any party to an arbitration may petition a district court to vacate an arbitration award
based upon several enumerated grounds, including if “the award was procured by . . . undue
means,” if there was “evident partiality or corruption in the arbitrators,” if there was arbitrator
“misbehavior” and if “the arbitrators exceeded their powers, or so imperfectly executed them.” 9
U.S.C. § 10. Similarly, pursuant to section 11, any party to an arbitration may petition a district
court to modify an arbitration award. 9 U.S.C. § 11. In either circumstance, “[i]t is essential for
the district court’s jurisdiction that the arbitrator’s decision was final.” El Mundo Broad. Corp.
v. United Steelworkers of Am., AFL-CIO CLC, 116 F.3d 7, 9 (1st Cir. 1997) (citations omitted).
Thus, based upon the express terms of the FAA, challenges to a party-appointed
arbitrator, such as allegations of bias, are properly considered by courts only at the conclusion of

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the arbitration. See, e.g., Allstate Ins. Co. v. OneBeacon Am. Ins. Co., 989 F. Supp. 2d 143, 147
(D. Mass. 2013) (citation omitted) (stating that “[t]he time to challenge an arbitration, on
whatever grounds, including bias, is when the arbitration is completed and an award rendered”);
Smith v. Am. Arbitration Ass’n, Inc., 233 F.3d 502, 506 (7th Cir. 2000) (citations omitted)
(stating the same); Florasynth, Inc. v. Pickholz, 750 F.2d 171, 174 (2d Cir. 1984) (noting that
“[t]he Arbitration Act does not provide for judicial scrutiny of an arbitrator’s qualifications to
serve, other than in a proceeding to confirm or vacate an award, which necessarily occurs after
the arbitrator has rendered his service”); Certain Underwriters at Lloyd’s London v. Argonaut
Ins. Co., 264 F. Supp. 2d 926, 937 (N.D. Cal. 2003) (recognizing that “other courts have
consistently held that courts do not have the power under the FAA to disqualify an arbitrator
while proceedings are pending”). Courts have granted relief through post-award motions for
vacatur or modification. See, e.g., Avis Rent A Car Sys., Inc. v. Garage Emps. Union, Local
272, 791 F.2d 22, 25 (2d Cir. 1986) (citations omitted) (noting that “[c]ourts generally enforce . .
. clauses [relating to arbitrator selection process] strictly, vacating awards entered by arbitrators
whose qualifications or method of appointment fail to conform to arbitration clauses”); Serv.
Emps. Int’l Union, Local 32BJ v. Coby Grand Concourse, LLC, No. 04-cv-9580-CSH, 2006 WL
692000, at *5 (S.D.N.Y. Mar. 16, 2006) (citing 9 U.S.C. § 10(a)(4)) (concluding that “[s]ince the
unilaterally selected arbitrator in this case was chosen in complete contravention of the
arbitration provision of the [agreement], the arbitrator’s award was without effect, and is
therefore vacated”).
John Hancock’s argument that there is an exception to this body of case law, an exception
that permits pre-award removal where the challenge is based upon contract-based qualifications,
has been considered and rejected by the Fifth Circuit. See Gulf Guar. Life Ins. Co., 304 F.3d at

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490-91. In Gulf Guaranty Life Insurance Co., the Fifth Circuit relied upon the language of the
FAA to conclude that courts do not have authority to remove arbitrators pre-award even if the
challenge arises from an express term in the arbitration agreement. Id. In Gulf Guaranty Life
Insurance Co., two insurance companies entered into a reinsurance contract that contained an
arbitration clause. Id. at 479-80. When a dispute arose, pursuant to the arbitration agreement,
each of the companies selected an arbitrator. Id. at 480. Before the arbitration concluded, the
moving party asked a district court to strike the non-moving party’s designated arbitrator on the
grounds that the arbitrator did not satisfy the requirements listed in the arbitration agreement. Id.
at 481. The district court granted the motion, reasoning that the challenged arbitrator’s status as
an executive of a reinsurance company did not satisfy the arbitration agreement’s express
requirement that the arbitrators had to be executives of life insurance companies. Id. at 489. On
appeal, the Fifth Circuit reversed. Id. at 491. The Fifth Circuit explained that “[u]nder the FAA,
jurisdiction by the courts to intervene into the arbitral process prior to issuance of an award is
very limited.” Id. at 486 (citing Larry’s United Super, Inc. v. Werries, 253 F.3d 1083, 1085 (8th
Cir. 2001)). Recognizing, first, that “there is no authorization under the FAA’s express terms for
a court to remove an arbitrator from service” and, second, that the FAA invites pre-award
judicial intervention only where challenges “raise[] concerns rising to the level that the very
validity of the agreement be at issue,” the court concluded that “a court may not entertain
disputes over the qualifications of an arbitrator to serve merely because a party claims that
enforcement of the contract by its terms is at issue.” Id. at 490-91 (footnote omitted). The mere
reliance upon a term of the arbitration agreement, without more, does not grant the court
jurisdiction to interrupt an arbitration to which the parties have properly agreed.

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In deciding Gulf Guaranty Life Insurance Co., the Fifth Circuit relied upon a Second
Circuit decision, Aviall, Inc. v. Ryder Sys., Inc., 110 F.3d 892 (2d Cir. 1997), that also rejected a
request for pre-award removal of a party-appointed arbitrator even though the challenge to the
arbitrator invoked a contractual provision. In Aviall, Inc., the moving party argued that the court
had to remove the appointed arbitrator because the arbitrator was no longer serving as the
“independent” auditor for both of the parties, as was required by the terms of the arbitration
agreement. Id. at 893-95. Instead, the arbitrator served as “regular outside auditor” for the nonmoving party, which, in the moving party’s view, rendered the arbitrator “disqualifie[d].” Id. at
895. In response, the Second Circuit turned to the language of the FAA and determined that
“[a]lthough the FAA provides that a court can vacate an award ‘[w]here there was evident
partiality or corruption in the arbitrators,’ . . . it does not provide for pre-award removal of an
arbitrator.” Id. (quoting 9 U.S.C. § 10(a)(2)). The court described the rule that “a district court
cannot entertain an attack upon the qualifications or partiality of arbitrators until after the
conclusion of the arbitration and the rendition of an award” as “well established.” Aviall, Inc.,
110 F.3d at 895 (quoting Michaels v. Mariforum Shipping, S.A., 624 F.2d 411, 414 n.4 (2d
Cir.1980)) (internal quotation marks omitted).
This Court agrees with the reasoning of the Fifth Circuit, Second Circuit and multiple
district courts that have rejected the argument that courts have jurisdiction to remove an
arbitrator pre-award simply because the challenge to the arbitrator invokes a qualification set out
in the arbitration agreement. See, e.g., Trustmark Ins. Co. v. Clarendon Nat’l Ins. Co., No. 09cv-6169-HDL, 2010 WL 431592, at *2-3 (N.D. Ill. Feb. 1, 2010) (citations omitted) (concluding
that the FAA does not provide courts the power to remove an arbitrator and noting that a
“[p]laintiff cannot avoid this outcome by merely restating the qualification challenge as a breach

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of contract claim”); Ins. Co. of N. Am. v. Pennant Ins. Co., No. 97-cv-154-FSVA, 1998 WL
103305, at *3 (E.D. Pa. Feb. 18, 1998) (relying upon Aviall, Inc. in declining to review an
arbitrator’s qualifications before the arbitration was concluded); Marc Rich & Co., A. G. v.
Transmarine Seaways Corp. of Monrovia, 443 F. Supp. 386, 388 (S.D.N.Y. 1978) (citation
omitted) (rejecting request for pre-award judicial intervention because “the question of
qualification, where initially committed to the arbitrators themselves, is subject to judicial review
only after an award has been made”).
John Hancock interprets the FAA to allow for pre-award removal where the challenge to
the arbitrator is based upon qualifications. D. 20 at 5. John Hancock takes the position that a
request for pre-award removal based upon arbitrator qualifications is distinct from a court
impermissibly intervening to remove a biased arbitrator because the qualifications-based request
turns upon the express requirements of the Agreement. Id. This distinction, however, is not
supported by the language of the FAA. As emphasized by the Fifth Circuit in Gulf Guaranty
Life Insurance Co., the FAA does not contain language authorizing “court inquiry into the
capacity of any arbitrator to serve prior to issuance of an arbitral award.” Gulf Guar. Life Ins.
Co., 304 F.3d at 490.

The FAA provides no express authorization for pre-award judicial

intervention regardless of the grounds for removal; whether an arbitrator satisfies a provision of
the arbitration agreement is a question of the arbitrator’s capacity to serve just as much as a
challenge regarding the arbitrator’s bias is a question of capacity to serve. John Hancock’s
attempt to rely upon section 5 of the FAA to salvage its argument, D. 20 at 4, is unavailing.
Even if John Hancock is correct that “this Court has statutory authority to enter an order
compelling [Employers] to follow the method of naming or appointing an arbitrator or arbitrators
set out in the Agreement,” id. (citation and internal quotation marks omitted), any order issued

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pursuant to section 5 could only instruct that the method for appointing an arbitrator that is
reflected in the Agreement is followed; section 5 does not provide authority for judicial inquiry
into a particular arbitrator’s qualifications. Thus, John Hancock’s request for pre-award removal
based upon Loring’s alleged lack of qualifications – particularly given that it is undisputed that
the Agreement granted Employers the right to appoint one arbitrator, Employers appointed
Loring in a timely fashion and Employers properly notified John Hancock of its appointment,
D. 7 ¶¶ 10-16 – is not authorized by section 5.
In the absence of statutory language supporting the alleged distinction between biasbased challenges and qualifications-based challenges, John Hancock relies upon policy, arguing
that “addressing the threshold issue of []Loring’s eligibility at this juncture promotes the goals of
speed and efficiency that arbitration and the FAA are supposed to foster.” D. 20 at 5. The policy
aims of the FAA, however, neither support pre-award judicial interference into arbitrator
appointments as a general matter nor support creating a separate rule based upon the nature of
the challenge to the arbitrator. In interpreting the FAA, courts can draw critical guidance from
the fact that “Congress’s clear intent [with the FAA was] to move the parties to an arbitrable
dispute out of court and into arbitration as quickly and easily as possible.” Moses H. Cone
Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 22 (1983). Arbitration is first and foremost
“‘a matter of contract,’” Dialysis Access Ctr., LLC v. RMS Lifeline, Inc., 638 F.3d 367, 376 (1st
Cir. 2011) (citing Rent-A-Ctr., W., Inc. v. Jackson, 561 U.S. 63, 67 (2010)), and “‘strictly a
matter of consent.’” Id. (quoting Granite Rock Co. v. Int’l Bhd. of Teamsters, 561 U.S. 287, 299
(2010)). As the Seventh Circuit has articulated, “[t]he choice of arbitration is a choice to trade
off certain procedural safeguards, such as appellate review, against hoped-for savings in time and

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expense (other than the expense of the tribunal), a measure of procedural simplicity and
informality, and a differently constituted tribunal.” Smith, 233 F.3d at 506 (citations omitted).
John Hancock’s decision to resolve its disputes with Employers through arbitration
“would be disrupted by allowing [either] party to arbitration to obtain an interlocutory appeal to
a federal district court.” Id. If the Court removed Loring now, “there would be no assurance that
[John Hancock] would be satisfied with [Loring’s] successor and would not bring yet another
proceeding to disqualify him or her.” Gulf Guar. Life Ins. Co., 304 F.3d at 492 (quoting Marc
Rich & Co., A. G., 443 F. Supp. at 387-88) (internal quotation marks omitted). In this way, the
rule John Hancock proposes could “spawn endless applications [to the courts] and indefinite
delay.” Id. (alteration in original) (quoting Marc Rich & Co., A. G., 443 F. Supp. at 387-88)
(internal quotation marks omitted). That outcome would be inconsistent with a “prime objective
of arbitration law,” which is “permit[ting] a just and expeditious result with a minimum of
judicial interference.” Id. (citation and internal quotation marks omitted). In sum, the policy
objectives of the FAA call for a close reading of the language of the FAA and the authority
therein granted to courts. Moreover, contrary to John Hancock’s suggestions, D. 20 at 5, the
determination of which categories of challenges may be reviewed by a court pre-award does not
turn upon the “difficulty” of resolving the challenge, but rather on whether the FAA grants courts
the authority to review the challenge and whether that review is consistent with the policies
animating the FAA. Here, neither statutory language nor policy supports pre-award judicial
intervention.
B. Case Law Also Does Not Support John Hancock’s Position
Importantly, neither the parties nor the Court have found a single Massachusetts federal
decision removing an arbitrator before the conclusion of the arbitration for failure to satisfy
contractual requirements.

The two Massachusetts cases upon which John Hancock relies,
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Allstate Insurance Co., 989 F. Supp. 2d 143, and National Casualty Co., 2013 WL 3335022, do
not “adopt” an exception to the well-settled rule against pre-award judicial review of arbitrators,
as John Hancock suggests. D. 9 at 6-7. In the process of declining to remove an arbitrator preaward, the Allstate Ins. Co. and National Casualty Co. courts merely acknowledged, without
endorsing, the existence of two out-of-district cases that allowed for pre-award judicial removal
of an arbitrator.
In Allstate Insurance Co., the moving party argued that the nonmoving party’s
inadvertent disclosure to the arbitrator of the identity of the party that had appointed the
arbitrator violated the arbitration agreement’s provision for “disinterested umpire[s].” Allstate
Ins. Co., 989 F. Supp. 2d at 148 (internal quotation marks omitted). Even though a contractual
provision had been invoked, the court dismissed the challenge as “a dressed-up bias claim
against an allegedly impartial arbitrator.” Id. at 149. In reaching its conclusion, the court merely
acknowledged the existence of a single out of circuit decision that granted pre-award removal of
an arbitrator. Id. at 147 (citing Jefferson-Pilot Life Ins. Co. v. LeafRe Reinsurance Co., No. 00cv-5257-JBZ, 2000 WL 1724661, at *2 (N.D. Ill. Nov. 20, 2000)). The court neither endorsed
nor applied any exception to the bar on pre-award intervention.
In National Casualty Co., this Court rejected a request for pre-award removal of an
arbitrator based upon the alleged lack of impartiality. See Nat’l Cas. Co., 2013 WL 3335022, at
*4, *13. This Court recognized “courts’ reluctance to remove an arbitrator prior to an arbitral
award” and described the intervention that was being sought as “premature.” Id. at *12. This
Court distinguished two decisions – B/E Aerospace, Inc. v. Jet Aviation St. Louis, Inc., No. 11cv-4032-BSJ, 2011 WL 2852857, at *1-2 (S.D.N.Y. July 1, 2011) and Jefferson-Pilot Life Ins.
Co., 2000 WL 1724661, *1-2 – in which courts had removed arbitrators prior to the arbitration

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award. See Nat’l Cas. Co., 2013 WL 3335022, at *12. Because B/E Aerospace, Inc. and
Jefferson-Pilot Life Ins. Co. addressed challenges regarding whether the appointment of a
particular arbitrator satisfied contractual requirements, this Court determined that the cases did
not apply to the question of pre-award removal of an arbitrator based upon bias (with no contract
language invoked). Id. This Court did not endorse the reasoning of B/E Aerospace, Inc. or
Jefferson-Pilot Life Ins. Co..

To the contrary, in National Casualty Co., this Court relied

extensively and approvingly upon the reasoning of Gulf Guaranty Life Insurance Co., which, as
discussed, flatly rejected the precise type of pre-arbitration award relief that John Hancock seeks.
See Nat’l Cas. Co., 2013 WL 3335022, at *11 (citing Gulf Guar. Life Ins. Co., 304 F.3d at 492).
Finally, the Court finds the four out of circuit opinions that John Hancock relies upon to
be unpersuasive here. See Jefferson-Pilot Life Ins. Co., 2000 WL 1724661; B/E Aerospace, Inc.,
2011 WL 2852857; Farrell v. Subway Int’l, B.V., No. 11-cv-08-JFK, 2011 WL 1085017, at *5
(S.D.N.Y. Mar. 23, 2011); Oakland-Macomb Interceptor Drain Drainage Dist. v. Ric-Man
Const., Inc., 304 Mich. App. 46, 57 (2014). First, Farrell is inapposite because it addresses a
challenge concerning what set of rules should govern an arbitration, rather than a qualificationsbased challenge to an individual arbitrator. See Farrell, 2011 WL 1085017, at *4. Second, the
remaining three cases do not reflect the close reading of the FAA that is consistent with the
policy aims of the FAA. None of these cases points to express language in the FAA authorizing
pre-award removal of arbitrators based upon qualifications. Instead, the courts rely upon section
5 and, in so doing, read into section 5 authority that is not provided by the language of that
section. See Jefferson-Pilot Life Ins. Co., 2000 WL 1724661, at *2 (citing 9 U.S.C. § 5); B/E
Aerospace, Inc., 2011 WL 2852857, at *1 (citing 9 U.S.C. § 5); Oakland-Macomb, 304 Mich.
App. at 57 (citing 9 U.S.C. §§ 4, 5).

As discussed, section 5 instructs that courts have

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jurisdiction pre-award to require parties to follow the “method” provided for in the arbitration
agreement. 9 U.S.C. § 5. Where the method – that is the process – for selecting the arbitrator
that is contained in the arbitration agreement has been honored, the authority granted by section
5 ends.
Moreover, the courts in B/E Aerospace, Inc. and Jefferson-Pilot Life Ins. Co. concede
that there exists a general prohibition on pre-award removal of an arbitrator. See B/E Aerospace,
Inc., 2011 WL 2852857, at *1 (noting that “[t]he Court is mindful that the Second Circuit has
interpreted the FAA to preclude pre-award removal of arbitrators in most cases”); Jefferson-Pilot
Life Ins. Co., 2000 WL 1724661, at *2 (acknowledging that “[t]here is little disagreement among
courts that (except in exceptional circumstances) allegations of an arbitrator’s bias or impartiality
cannot be litigated at the pre-award stage”). In Oakland-Macomb, the court cabined its decision
to circumstances where “the arbitration agreement explicitly specifies detailed qualifications the
arbitrator must possess.” Oakland-Macomb, 304 Mich. App. at 57-58. I
In the end, because John Hancock has not alleged that its concerns regarding Employers’
appointment of Loring raise questions about “the very validity” of the Agreement, Gulf Guar.
Life Ins. Co., 304 F.3d at 491, John Hancock’s attempt to cast its request for pre-award judicial
intervention as a matter of contract enforcement is unconvincing. The Court does not have the
authority pursuant to the FAA to remove Loring as an arbitrator prior to the conclusion of the
arbitration. As it is undisputed that there is a valid arbitration agreement that applies to this
dispute, the Court directs the parties to arbitration.
VI.

Conclusion
For all of these reasons, the Court DENIES John Hancock’s petition. D. 7.
So Ordered.

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/s/ Denise J. Casper
United States District Judge

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