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Tenth Circuit courts address claims of evident partiality under the “actual bias” standard, and will not find such partiality when an arbitrator considers prior findings made by a judge who merely worked at the same law firm, attended the same law school, and shared membership in a social group.
In Amicorp Inc. v. General Steel Domestic Sales, LLC, No. 07-cv-01105-LTB-BNB, 2007 WL 2890089 (D. Colo. Sept. 27, 2007), Amicorp and General Steel were embroiled in a construction dispute. The parties agreed to resolve the dispute via arbitration and selected Kahn as the arbitrator, with Kahn ultimately rendering an award in favor of Amicorp.
Amicorp filed a motion to confirm the award. In opposing the motion, General Steel argued that the award should be vacated for evident partiality on the part of Kahn. Specifically, General Steel alleged that Kahn had prior social and professional relationships with one Judge Jackson, which led Kahn to improperly consider Judge Jackson’s finding in a prior case that General Steel had made misrepresentations to its customers in violation of Colorado law. General Steel maintained that Kahn failed to properly disclose that relationship to the parties, and that such failure warranted vacatur.
The Court held that Kahn did not exhibit evident partiality in considering Judge Jackson’s prior ruling in rendering the award, and that Kahn did not violate a duty to disclose his alleged relationship with Judge Jackson.
In confirming the award, the Court noted that Tenth Circuit precedent required it to apply the “actual bias” standard to the question of evident partiality. Under this standard, “only clear evidence of impropriety… justifies the denial of summary confirmation of an arbitration award.”
The Court held that General Steel failed to sustain its burden under the “actual bias” standard. According to the Court, even if the social and professional relationship alleged by General Steel did exist, there was “absolutely no evidence that it had any influence on Mr. Kahn’s decision.” The Court found that Kahn and Judge Jackson’s attendance at the same law school, membership in a common social group, and previous employment at the same law firm did not constitute evidence of evident partiality that was “direct, definite and capable of demonstration,” but was instead “remote, uncertain, and speculative.”
Furthermore, the Court observed that even under the “appearance of bias” standard applied in other circuits, General Steel failed to satisfy its burden because there were no facts giving rise to the appearance or impression of bias and any connection drawn from their commonalities was “merely speculative.”
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