ADR Update: Can Post-Award Searches Vacate Arbitration Awards?

By Paul J. Dubow

Paul J. Dubow

In the olden days (about ten years ago) an attorney, suspecting that an adverse decision in an arbitration that should have been won was the consequence of an undisclosed arbitrator bias, could not do much about it. But today, thanks to the magic of internet googling, something can be done. All the attorney need do is use the magical device and — presto — if there is an undisclosed bias lurking, it will appear.

The most recent evocation of the internet’s ability to unearth hidden arbitrator bias (whether apparent or actual) materialized in Mt. Holyoke Homes, L.P. v. Jeffer Mangels Butler & Mitchell, LLP (2013) 219 Cal. App.4th 1299. Plaintiffs filed an arbitration claim alleging malpractice against the law firm that had represented them in a real estate transaction. The law firm filed a cross-complaint for unpaid legal fees. The parties chose as their arbitrator a retired superior court judge who had an impeccable reputation as an arbitrator. Upon his appointment, the arbitrator disclosed that he had known for many years the attorney whom the plaintiffs had originally retained (but who was not involved in the proceeding that led to the malpractice claim) and that in the previous five years he had mediated a matter in which the defendant law firm had represented a party, and he had been the neutral in an arbitration and a mediation in which one of the plaintiffs was a party. Neither side objected to his service. After a hearing, the arbitrator rejected the malpractice claim and awarded the defendant firm in excess of $400,000 in legal fees.