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A California appellate court held that an arbitrator does not exceed her powers by denying a party's request to file a "sur-reply" brief when the denial in no way prevents the party from fairly presenting his case.
In Gwire v. Roulac Group, No. A118914, 2008 WL 3907403 (Cal. Ct. App. Aug. 26, 2008), Gwire was an attorney representing his client in a jury trial. Gwire hired The Roulac Group (TRG) to perform an economic analysis of the case, and their contract contained an arbitration agreement.
A payment dispute arose between the parties, so TRG commenced arbitration against Gwire. TRG submitted an opening brief to which Gwire replied, and TRG then submitted its own reply brief. Gwire then asked for leave to file a "sur-reply," arguing that TRG had raised new issues in its reply brief. The arbitrator denied Gwire's request and later issued an award in favor of TRG.
Gwire moved to vacate the award, and TRG moved to confirm the award. The trial court denied Gwire's motion and confirmed the award. Gwire appealed.
On appeal, Gwire argued that the arbitrator violated Cal. Code Civ. Proc. § 1286.2, which provides that a court shall vacate an award if the rights of a party are substantially prejudiced by the refusal of the arbitrators to hear evidence material to the controversy. In assessing Gwire's argument, the Court held that § 1286.2 does not "provide[] a back door . . . through which parties may routinely test the validity of legal theories of arbitrators." Rather, it is a "safety valve in private arbitration that permits a court to intercede when an arbitrator has prevented a party from fairly presenting its case."
The Court then rejected Gwire's argument and held that the arbitrator's ruling did not prevent Gwire from fairly presenting his case. The Court held that Gwire had presented his case "quite thoroughly" in his initial reply brief, which consisted of a 17-page brief, an 11-page declaration, 28 pages of exhibits, and an 8-page declaration by his client. The Court also held that TRG did not raise new issues in its reply brief. As a result, the Court held that the arbitrator's denial in no way prevented Gwire from fairly presenting his case.
Citing precedent, the Court also noted that an argument like Gwire's "could be made in virtually every case where the arbitrator has excluded some evidence or placed limitations on discovery . . . Plainly, this type of attack on the arbitrator's decision, if not properly limited, could swallow the rule that arbitration awards are generally not reviewable on the merits." Consequently, the Court rejected Gwire's arguments and affirmed the decision of the trial court to confirm the arbitration award.
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