Louisiana 2nd Circuit Reiterates Difficulty in Overturning Arbitration Awards

Check out our Arbitration & ADR category of posts at the Louisiana Construction Law Blog, where we discuss cases and statutes applicable to arbitration proceedings and decisions under Louisiana law. The treatment of arbitration clauses and arbitration awards in Louisiana under the Louisiana Arbitration Act is very similiar to how such clauses and awards are treated under the FAA (Federal Arbitration Act), in Washington and Oregon, and elsewhere. How? Strictly. If you sign an arbitration agreement, you'll likely be compelled to arbitrate. And, as the Louisiana 2nd Circuit, reiterated in a decision this week in Gilbert v. Robert Angel Builder, Inc., when arbitration awards are rendered...the parties are usually stuck with them. This case originally made headlines in 2008 when the arbitrator destroyed the case record immediately following the arbitration. The plaintiffs filed a Motion to Compel the arbitrator in state court, and argued the arbitrator failed to properly safeguard the evidence. This original controversy, however, was reduced to a mere footnote by the 2nd Circuit in the decision published this week. The guts of the appellate decision turned on the guts of the Louisiana Arbitration Act insofar as challenges to arbitration awards are concerned....and that means the 2nd Circuit considered this from the Act:
The grounds for vacating an arbitration award are: (A) where the award was procured by corruption, fraud or undue means; (B) where any of the arbitrators evidenced partiality or corruption; (C) where the arbitrators refused to postpone the hearing, upon sufficient cause shown, refused to heard evidence pertinent and material to the controversy, or are guilty of any other misconduct prejudicial to the rights of any party; or (D) 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. Quoting La. R.S. 9:4210.
Construing this statute, the 2nd Circuit refused to consider any evidence or argument that spoke to the merits of the decision. They were only curious as to these four factors - all of which have nothing to do with the underlying dispute. Finding nothing to show that the decision was improperly made (not even the destruction of the record following the arbitration), the arbitration award was confirmed. Lesson: Arbitration is an alternative to litigation...but remember, its benefits (speed) can also be its warts (finality and lack of appealability). This article was originally posted on Wolfe Law Group’s topic-specific Louisiana Construction Law Blog.
Scott Wolfe About the Author: Scott Wolfe
Scott Wolfe, Jr. obtained his J.D. degree from Loyola University of New Orleans, and his B.A. from Southern Methodist University in Dallas, TX. In 2006, 2007, 2008 and 2009, Scott was recognized as a Leader in Law by CityBusiness Magazine. The son and grandson of general contractors, Scott is a construction litigator in the Pacific Northwest, and the founding member of the bi-coastal law firm, Wolfe Law Group. Scott is also the founder and CEO of Express Lien, Inc., a legal document preparation service for contractors. In 2008, City Business Magazine recognized Scott as one of its Innovators of the Year for the Express Lien concept. As an entrepreneur himself, Scott has a strong background in business and commercial transactions and laws. He focuses his practice on the legal issues facing the construction industry, and has represented clients in multi-million dollar construction disputes in litigation and alternative dispute resolution proceedings. Scott is a LEED AP.

2 comments on “Louisiana 2nd Circuit Reiterates Difficulty in Overturning Arbitration Awards”

  • Arbitration is similarly fairly strickly enforced in North Carolina. However, your characterization of arbitration as being speedy is something I might take issue with– esp if you are talking about a three-panel AAA arbitration!

    • Thanks for the comment. You’re absolutely right about the speediness of arbitration. Usually things in the legal industry gets a bad wrap….arbitration somehow gets a “good wrap.” It can sometimes be just as frustrating and problematic as plain litigation, sometimes more so. Am involved with one now where the AAA’s administration is very poor, and leaves the parties simply stuck in an arbitration purgatory.

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