arguments in the mid atlantic capital good morning may it please the court in opposing counsel my name is andy stanton from jones day here on behalf of appellant mid atlantic capital corp this case presents an issue of first impression for this court and that is whether section eleven as a of the federal arbitration act constrains a district court to review only the four corners of an arbitration award document itself when determining whether there has been an evident material miscalculation of figures in that award and the district court below found that the final damages award in the arbitration at issue was quote unquote disturbing he found that it included a double recovery of the afa lee's last and initial investment and then he went on to hold that notwithstanding that fact he was not able to rectify it because section eleven a confines of the district court review to quote unquote the face of the award now that language the face of the award is a phrase that doesn't appear in the statute doesn't come from any case law in this circuit and in fact has its origins in a southern district of new york opinion applying the new york state c p l are which is i guess if we dig down deep enough it's the source new york arbitration was the source of our arbitration rules so doesn't that carry some weight this historic interpretation of that phrase and that we look only for errors we only look as deep as the face of the award your honor it's a good question and yes acknowledging that the new york rules historically provide source material for the federal arbitration act there are two points to make in response to your question the first is that even the quotation from that southern district of new york case has been bastardized and shortened so the circuit court opinion in acts which was cited by the district court has a quotation from this southern district case which is which is called how where it has an ellipsis in the quotation ellipsis is important because the full content of what the court house said was that arbitration awards won't be changed unless there is an error on the face of the award or miscalculation can be clearly inferred that portion of the quote from the southern district opinion was not included in the apex courts the or the error can be inferred part yes or can be analysis starts as it has to start with the language of the statute itself and you know that the language is very clear it says district courts may make an order modifying  correcting the award where there was an evident material miscalculation of figures this phrase does not impose a quantitative limitation on what a district court may look at it is a qualit standard evident means clear material is a well known and often used term of our in law and i would posit to the core that that word in and of itself renders the proposition that review is confined to the word document nonsensical because how will a court ever know even if aim a miscalculation is apparent on the face of an award document itself something akin to two plus two equals five how will a court determine if that's material and the answer is maybe if the award coincidentally happens to provide enough  determination could be made but maybe not and there is no basis in logic or the language of the statute to say when a properly submitted record is before a district court as was the case here and from that record which district courts are highly competent to review that's what they do from that record the district court can determine there has been a clear miscalculation there is no basis in the language of the statute to say however district court you can't fix it even if you go beyond the face of the war here why is it so readily apparent that you meet the statutory standard i mean even  alluded to the fact that it was unclear how you would compute the assignment that had taken place in this case and so that was an issue the fact that mr wellman didn't receive an individual in his initial investment lost in the  because i mean i think there are really two there are really two parts to the answer your question the first is and it goes to the this court standard of review the trial judge made a factual finding that there was a double recovery he also went on to say it's not clear how i would resolve this issue if i had the authority to do so which i don't because there was a reassignment requirement and i would have to hold a hearing a doesn't say district courts can't hold hearings in order to make determinations as to whether miscalculations are evident or to resolve them how is that how is that consistent with the standard or the incredibly deferential standard of review that you have is a really arbitration words when you're holding hearings and eyes presumably which could include taking testimony i mean you were digging into the weeds of the decision that in a way to suggest a no go review does suggest it's extremely differential standard that you have so i don't know number one even if we were to adopt the view that we go on the face of the word it's not clear to me with the limiting principle is and you are you know giving me  isn't clear with the limiting principle well i think there's a there's a very clear limiting principle judge and that limiting principle is the district corps is bound to review the record ok so the district court and respectfully case law from the eleventh circuit up held the district court's modification of an award for material miscalculation where the entire proposition was ascertained from outside of the arbitration record both the mistake itself and how to fix it and that's the trans nitrite decision and the court there pointed to the last line of section eleven which is important that story line that i want to write for the record the last line of section eleven the order may modify and correct the award so as to affect the intent there of and promote justice between the parties and the dreams of a mack truck through that and you know it since we have this rate the differential standard if you were to  full range and i don't necessarily disagree with you judge but i but i do think what we are advocating for is far short of what was indorsed in trans niter and is much more akin to what happened in the alger case all we're saying is first of all the trial courts ruling that section eleven a does not permit a district court to review anything other than the award document itself and therefore nothing more can be done that isn't a roni s interpretation of the statute so that interpretation is laid out we don't have any case in our circuit that says that he has you said when you started this is a case of first impression is correct judge and have a unpublished case right that says that you don't go beyond the face of the document you have an unpublished decision in the new come in the new computer but judge i would say if you read that case carefully there's not an analysis of the statutory language and there's not an analysis at all of the question what is the corpus of information that a trial court can properly consider in order to determine whether there has been an evident miscalculation of figures regrettably when i look at elater and i look plumbing neither one of them as a full some analysis justifying why they're doing what they're doing that's well i agree one hundred percent judge i don't think there is a case and not not only is this a case of first impression for you i think it's a fair reading of the case law that's that's out there that it's an issue of first impression period none of these decisions analyze the text of the statute and speak about what is it that a district court can look at so your question which i want to answer judge homes again evident material miscalculation is a qualitative standard you're saying you get it's got to be clear it's got a matter and it has to be a math mistake it doesn't say what am i allowed to look at in order to determine so when you review a trial court for clear error if a district court in a summary judgment opinion says i find that the car was red but there is a stipulation  stipulation where the parties stipulate that the car was blue no one would say well it's broadening the standard of review to permit an appellate court to look at that stipulation in order to ascertain whether the error was clear i guess it depends on whether the appellate courts are reviewing an arbitration award or lower federal court i i agree your honor it's only an analogy that i'm making but i mean we have very very narrow review authority he there's no doubt however it's not nonexistent as the court knowledge or said let's not confuse narrow with nonexistent it's narrow because the mistake has to be clear it can only be a math error if it goes to the merits you can't fix it and it has to be material but why does it serve the purpose of furthering a narrow standard of review to tell a district court you can't consider the arbitration record in making that determination let me just give you one last hypothetical you have two awards ok assume hypothetical worlds where there are two awards awarded a says damages are two two for a total of five miscalculation it's evident on the face of the award award b says damages are five but the same mistake was made under one and posit further that in the second scenario if you just looked at the arbitration record about which there is no dispute you could figure it out what purpose does it serve even with respect to the standard of review to say you can fix the first one but not the second one it's the same mistake the purposes are as your hypothetical positives the easy cases and the one the rule that we adopt here is not going to say flashing lights we're only doing the easy cases if this  it real deep to determine what is supposedly evident in at that point your overture you are overruling the bargain that the parties made to take this path respectfully judge i disagree i  ever again evident just means it has to be clear the limiting principle is the trial judge is constrained to review the record of the arbitration proceedings if it wasn't in the record you can't rely on it and we're not advocating that the judge rely on it really when we have it don't we have a problem here too that this whole issue of what is the correct number was not an issue that you or your client raised in arbitration now we don't focus the focus there was on statute of limitations yet we don't have that issue judge because the reality is yeah our client it's fair game now to daraa bout it our client didn't put on a damages expert but of course our borrowing and challenge the damages that were asserted well our client did in fact cross examine the damages expert but importantly and i would urge the court to review the record with respect to the damages case that was put on by the apple e's and if you review our briefing what we're telling you is the mistake that was made the miscalculation is based on their experts on math and well and so there you are you stand up and you say wait a minute let's walk through this math that's the that's the responsibility of your client but but the mistake wasn't made until the award was issued their  hell did not have it you have to help the arbitrator to know what the correct math is don't you know judge i mean there are there are damages case was either you could award this or you could award chat yeah and they awarded both we would have no way to predict whether we had an expert or not hey listen panel whatever you do make sure you don't give them a double recovery that that's mistake didn't happen until the award was issued and just very quickly because i want to reserve a little time for a ball the standard of review that you're operating under now i think is clearer as to factual findings and de novo as to legal determinations and my position would be the trial court's view of how to interpret the text of eleven a is to be reviewed to know if oh and it's wrong and the trial court factual finding that this award includes a double recovery should be reviewed for clear error i'd like to reserve for the remainder of my time th fair for a district court in reviewing an arbitration award which the court noted is an extremely narrow review to simply focus on the face of the war when considering a motion to vacate relating to a miscalculation of figures in the award and the reason that m e c c is doing this obviously is because this particular award does not contain an explain decision and in fact m e c c noted that you're only going to have this type of review when by random chance the arbitrator show their work in the u ward itself the problem with this complaint that m e c c is making is that it knew full well before this arbitration process started that the award was not going to contain an explain decision i take it the parties can and can negotiate to get and explains exactly that was going to additionally within the parties agreement under the federal code which is incorporated into the agreement the parties have the opportunity to ask the panel for an explained decision m e c c didn't do that either so again the parties can during the course of the proceeding arbitration they can as you know when you render your decision given explained correct ok and it did not do that so this fairness argument really doesn't provision which enabled the party to address computational errors with the panel after the award is issued and that provision as the court is likely aware provided ten days after service of the award to address narrow topics such as computational errors it's undisputed that m a c c did not make any submissions to the court of to the panel and that clearly results as waiver of the case law is clear well the cases that you cite on that are all cases where the party didn't take advantage of an opportunity during arbitration to correct and ask for correction of an error that was apparent during the arbitration so this case is a little different and the cases that you've cited at least as i view them i agree and this is i think the appropriate way to look at it would be direct what the parties had the right to do during the arbitration process of course this is an unusual situation where you're dealing with alleged computational errors in the award but the point is is that the panel is still there the parties can go to the panel can they go now i mean under rule twelve nine o five and me can can you still go in and say we think there's a that the initial investment losses been counted twice in your award can you clarify i know it can only be done for a period of ten days after service of the award so the point is is when the case law the point to the case lie that is that if a party could have raised an issue or an argument with the arbitrator's and it fails to do that then be issue was waived similar to an argument or an issue being raised with the district court  litigant cannot come to the court of appeals and raise this argument for the very first time so it had the opportunity to do it during the arbitration process it didn't do it and as a result it waives this argument that it's making now in addition to that the parties arbitration agreement noted that all controversies were going to be submitted to the arbitration panel here you have m e c c essentially arguing well even though we said all controversies were going to be submitted to the finra arbitration process on this particular one we just decided that we wanted to submit it to the just record as opposed to the panel that's wrong let me ask you this is there a controversy i mean  both parties seem to be in agreement that there's double counting here is that do you do you have some theory for how this could not be a double counting well yes because i think the award has to be viewed as a whole just to be clear the the appeal his position is not that there is that there was double counting because the award has to be viewed as a whole in of course you have to consider the assignments as the district court noted it's kind of like a it's not that clear now the reason that it's not double counting is because not only do you have to factor in the assignments but  the calculations that were submitted to the panel through the claimants experts at b n and wellman never factored in the assignment in submitting those calculations so it it  it much more difficult but i'd also like to note that that what we're dealing with here the assignment of what what do you i'm sure i'm sorry the part of the award the arbitration panel required that  party had to sign their ownership of the two securities their own ok those securities had value i think the reason that the panel did it this way is because they were highly a liquid investments that essentially didn't trade on exchange s there was a dispute also you're saying because we have that part that those securities involved in this award that sort of causes them actual award a man out to be more in play that is there's more given it i think i think that's a fair way to describe it if if it hadn't included the assignments then yes it would be more dipped but the panel peg value to the right they're very illiquid securities exactly they didn't hundred eighty four dollars that that i won't dispute they're ok and so even if you were to back that out you'd still i mean it's still obvious that you had a windfall of over two hundred thousand least as i good securities that they were valued higher than that obviously because they wanted the damages to be lower naturally but i think it's important to also point out that the district court correctly noted that what we're dealing with here is really not even a math issue we're it's really a legal issue the district court noted because that the arbitrator's they did have calculators where they were coming up with these numbers are doing shorthand math what they did is they picked the numbers that were presented to them based on the various accounts that b n and wellman had individual accounts joint accounts and so they took those numbers and they place them into the award there was no math involved so really what m a c c's complaining about here is that it feels that the arbitration panel didn't understand the correct legal manner by which to award compensatory damages to an injured party in the context of the securities fraud case and i think the district court got that right and i think the reason that  e c c of course is arguing more in terms of math as opposed to this was a legal error is because as we all know legal error is not a ground to vacate or modify an award i also like to talk a little bit more about another waiver issue that m e c c has with this statutory construction argument if the court has the opportunity to go back and look at the  case before the district court the court will see that nowhere in the opening brief or the reply or even oral argument did m e c c make this argument about statutory construction antecedent phrases and things of that nature and of course as we all know you don't get to bring up brand new arguments on appeal in fact if the court goes back and looks at those pleadings and that's what these motions to vacate are based on the pleading it didn't really even talk about this face of the award argument it's kind of jumping that first it was the panel exceeded its powers and then there was manifest disregard of the law and now it's moved on to you know it shouldn't be just on the face of the you work so again there's many waiver problems so if the court order excuse all of these waivers look at this is a math issue and not a legal error which would be you know the face of the award adopted that position the elgar case that m e c c is talking about it appears that the parties never even discussed whether the court should look beyond the face of the you ward and the court's opinion certainly doesn't talk about the face of the award i would submit to the court that leaving it on this type of review is not only supported by other circuits but that standard is entirely consistent with the extremely well settled principle of very limited review of arbitration awards and deference to the arbitrator's because  otherwise you're basically opening up arbitrations they don't end the litigation it makes it so easy for parties of the why i'm going to come in because there was a miscalculation of figures and if you don't make it in the award on the face of the award you could challenge come in and challenge all types of thing you could challenge the claimants expert made a miscalculation we need to come in and have the district court vacate this award so that the act but it's as the court noted the time to be doing that is during the arbitration hearing m e c c can't just sit back and not explain these issues to the panel and hope that and then just come in later  drag on this litigation which has been going on now for four plus years you want to talk about your issues i do feel yes i'm sorry on the on the cross appeal there are three issues i have to move through those for slate the the parties agreement states very clearly that if a party losing party files a motion to vacate which is denied the award shout approval interest from the date of the  so the district court only gave interest on the compensatory components of the award as in not the attorneys fees and costs awards that were given and as noted in the pleadings that's a very specific provision of the other one subsection three which talks about as specified by the panel is me more of a catch all type of provision which should not be applied here and awarding interest is not only consistent with the award but it's consistent with the principle that m e c c should not benefit from the time value of this money it's not disputing that it has to pay my clients the attorneys fees and cost portions of the award why should it get the time value of that money in my client's not have the time value of that money especially when the award specifically states that deal ward shall accrue interest when a losing party federal rate of two point one percent in the reason for that is the the the the the parties agreed even in the submissions that both parties made to the district court both parties  ed that the post judgment interest rate should be eight percent in addition to that the contract says that it should be the state legal rate which is colorado's eight percent essentially what's happening is by changing the it to the federal rate the just report modified the award the arbitration panel said eight percent until it's paid in full to change it to two point one percent modifies the warden i don't think that the court wants to do that finally with regard to the assignment i believe the district court erred because the language in the award stated that they assigned their ownership of but have these securities been sold and isn't that the problem today well they are now you're just talking about the value are some other way to compensate you right well what happened is there was a distribution which ultimately was a liquidating distribution so what does the district court added to the panels order was that in addition to transferring the ownership of the securities they also had to transfer any dividends distributions and interest and what they were asking for is obviously that the judgment reflect the plain language because because the option would be if you just said transfer the securities that's nothing there's nothing left that's true that at this point are you all you have is the past a value which is the accrual of the distribution rights and a or it may seem unfair but again we're i think the judgement should reflect what the award says not additional phrases that the district court added to the judgement thank you thank you very much  waiver first the finra rule applies when awards are final you may submit a calculation error to the director of finra who may submit it to the panel who may decline to  we filed a motion to vacate the award and in the alternative to modify it there is no fin rule that allows you to seek take a tour and so and as your honor noted the case law is not on all fours the only case that comes close to being like this one is a trial court opinion that was vacated so there is no waiver based upon the failure to follow a permissive finra rule that didn't tell the time to pay it i mean when rules say you mang i mean that that another way of letting people know this is is a remedy that's available to you and you chose not to take advantage of that remedy by asking an arbitration panel to clarify its own war correct your honor because as we stand here today the relief that was sought at the district court has been pared down to a single sub issue out of three broader issues that were presented in the initial motion to vacate ninety percent of which cannot be presented to the finra panel pursuant to that rule and so we would have we were going to be in district court anyway and there is nothing in the terms of the f a a that would say you have to seek permissive calculation fixes from an arbitration panel before you proceed under section eleven a there and the cases don't support that problem certainly one chair jurisdictional but you know one body might be able to help you in another body might have their hands tied right i mean we had a serious question and i didn't try the underlying case but there was a serious question as to whether to raise the bias of the panel itself as a ground for vacating the award and that it simply was not viewed as a plausible path given that there was only a very narrow possible thing that that panel could have considered under the federal rule and a much broader argument to be made under the f a a really quickly we're out of time you're out of time i'm sorry thank you ana thank you our next phase