Confirming an arbitration award in a dispute between a credit card company and a cardholder, a California federal court rejected a challenge to the award alleging arbitrator partiality, as the allegations were groundless and unsupported.

In Millan v. Chase Bank USA, N.A., No. 2:07-CV-02819-FMC-FF, 2008 WL 375987 (C.D. Cal. Jan. 23, 2008), a dispute arose over Millan's failure to pay credit card debt owed to MBNA. After Millan failed to pay, Chase filed an arbitration claim with the National Arbitration Forum (FORUM). Millan objected to the FORUM's jurisdiction. The arbitrator concluded that a valid arbitration agreement existed and continued with the arbitration, awarding $4,789.43 to Chase.

Millan subsequently sued Chase for alleged Truth in Lending Act violations, breach of contract, and infringement of his right to due process. Further, he petitioned to vacate the arbitration award, alleging arbitrator bias. Chase moved to confirm the award.

The Court granted the motion to confirm the arbitration award, holding that Millan and Chase had agreed to arbitrate any disputes. Under the Federal Arbitration Act, a court may only vacate an arbitration award for (1) fraud or corruption in procuring the award; (2) partiality or corruption of the arbitrator; (3) arbitrator misconduct prejudicing a party; (4) an arbitrator exceeded his power; or (5) evident material mistake or miscalculation in the award.

The Court found Millan failed to establish any statutory grounds for vacating the award. The Court rejected Millan's claim that the arbitrator violated California Code of Procedure Sec. 1281.2 by determining arbitrability after Millan had "repudiated" the arbitrator's jurisdiction because Delaware law rather than California law governed the agreement.

The Court also rejected Millan's claim that the FORUM arbitrator was partial because Chase provides repeat business. Under Ninth Circuit precedent, "the party alleging evident partiality… must establish specific facts which indicate improper motives." Woods v. Saturn Distrib. Corp., 78 F.3d 424, 427 (9th Cir. 1996). Here, Millan merely made unsupported assertions against the FORUM rather than specific charges of partiality. Given that "the [FORUM's] procedures have been cited approvingly by the Supreme Court and lower courts for their fairness in preserving procedural protections," the Court deemed Millan's allegations without merit.