base number thirteen six three nine six five physicians insurance capital and others versus presidium alliance group and others i miss this court's review of an arbitration award is narrow and we understand that as the parties seeking to vacate that we have a heavy burden before us but we believe that even though the manifest disregard standard is deferential one that we have met in this arbitration hearing showed manifest disregard of the law in three ways first they should manifest disregard of the law that required that the claimant mr william cup a stablish justifiable reliance and support of his claims for securities fraud and other common law fraud second the panel should manifest disregard of the law that requires that upon the filing of a motion to dismiss and securities action a mandatory and automatic stay of discovery and all the proceedings be imposed until the pendency or during the pendency of that motion to dismiss and finally the panel should manifest disregard of the law that requires that attachment of personal arning may not occur before a judgment is rendered in a case as to the latter part is that really go to the substance of the panel's decision i mean that sounds like an auxiliary because not only was it a manifest disregard of the law but it demonstrated that the panel showed partiality towards mr cup and positions insurance capital in september of two thousand and eleven several months before the hearing in january and it was partiality because in order to attach the earnings of the c e o and c e o in the order they stated that presidium alliance group could not pay any compensation the panel had to determine before and had even decided that there was a legally sufficient statement of claim that my clients had somehow obtained this money wrongfully and that they should not be entitled to receive their salary until the merits had been decided several months later was a pretty pretty good showing of and because there was a motion to dismiss pending in which my client's argued that mr kopp and positions insurance capital had not met their burden under the p s l array to legally sufficiently state a claim for fraud the panel should five i mean there was a pretty troubling showing that that fraud was going on these guys were raiding the money and they just posed to let that dream down while word sort of fiddling around some you know something we're after if we look at it in the sense that if that is allowed in one case what's to stop every single case where there is abroad where there's an allegation an allegation of fraud there hasn't been a determination that my clients had committed fraud in september two thousand and eleven and to say that because there is an allegation no matter how strong the facts may seem in in the eyes of the panel at that time it was simply not proper that is they're powerless to in effect secure the possible payment of the award what is that based on is it isn't it based on rules having to do with courts not arbitrators your honor the rule against attaching personal our earnings  issue and the stay issue really have to do with can you or must you import certain court legal rules into arbitration proceedings well your honor we would dispute that the the statute highrise code stating that person earnings cannot be attached is a court procedural rule that is a protection designed for defendants so that they are in their earnings their wages their you know their bank account are not attached in order to secure a pot of money for plaintiffs before it's determined that those plaintiffs are actually in title to that money so whether we're in court or whether we're in arbitration i grow right he did they just order you cannot but that's really not an attachment of well they they have issued an order that stated you had been it's something that exists under state law they didn't do an attachment under state law in fact if you want to say they showed such partiality they were asked to do something a little further down the line and the arbitrator said no we won't do that this corporation can continue we're just not going to allow payouts to the principles they could pay out money to hire a lawyer and your honor we don't dispute that though it's not an attachment it may not be an attachment in the sense of the way the were attachment is defined in the statute but the effect of that order was that the of you want the rules under the timing rules under the p f l r a to apply but you didn't opt for those rules in the contract you opted for the rules of the american arbitration association isn't that true your honor we did have a contract that stated that this if this dispute would take place according to aaa arbitration however again we would submit that the p s l or a applies in any matter that is  securities action and it does not distinguish whether that securities action is brought in court or that securities action is brought through arbitration substance might but you're asking about but we're talking about the procedural rules of the p a r l a what makes the procedural rules of the statute apply to an arbitration your honor we brief the issue before the panel and if they determine that the procedural rules did not apply then you know claimants physicians and trans kapil mr kopp was legally insufficient and in their arbitration award the panel set stated that they reviewed the case under the p s l array and their conclusion was that it was legally sufficient and they did deny  they didn't apply the stay was not the procedural necessarily procedural aspect but the consequences that were allowed to occur because they did not impose the stay because they allowed the motion to ask her to move forward before they decided upon  dismiss and because they issued their order their september thirteenth order attaching the wages and all matters in your view because it shows bias on the panels part or act as obviously there's nothing we can do typically with this sort of internees and stuff in an arbitration yes or no and we what we are arguing is that this bias that occurred in september carried through to the final hearing in january in two thousand and twelve and the result of that was as we saw in the a war that the panel issued an award in favor of both positions insurance capital and mr kopp on based on several theories of fraud and each of those claims each of those legal theories requires pro justifiable reliance and it's undisputed even without a transcript that mr kopp never testified so the panel found in favor of mr cupp despite the fact that he never provided any testimony let's back up and i mean  you're now arguing the panel decision was biased and aberrational but you're doing so without a transcript and i mean i'm not saying you personally but you you know your side didn't ask for a chance your side didn't ask for a reasoned decision you got a somewhat reason one but you didn't ask for any of these things and now you come here with our extremely limited standard of review and you want us to sort it in for you know based on some pleading feeling really in the case that this was a road panel and i was standing the b m w and all the apparent improprieties that went on with your clients that this was a biased proceeding i mean how do we do that if we're going to we're not asking you to infer because we do understand that you don't have the transcript before you of what actually occurred at the hearing but we do have proof in the form of the arbitration award and they'll though it is not a detailed findings of fact in conclusions of law does state several laws of the panel determined that mr koppel and the physicians insurance capital had met in order to awarded damages and it lists all of those laws out and the elements of proof for each of those laws contains a requirement of justifiable reliance and even though we don't have a transcript it's  kopp who is an individual claimant in the arbitration did not testify and if you didn't testify that he didn't provide the panel with any evidence of his justifiable reliance or no is there no law there by quarter  years can make a decision that a material omission allows a presumption a reasonable reliance not under this the facts of this case there wasn't there is not a fraud on the market theory here and mr riley who testified on behalf of positions insurance capital could not also testify for the individual claims of another person and that is exactly what they've argued is that he was sufficient to testify for everybody and again because we don't have a transcript they also cannot argue you know one person reasonably real laws that's and there is a material omission there's no that's no evidence that someone else would justifiably rely on we can't say that that one individual can speak for every single person that has an individual claim but ok you've looked at our opinion and shot and stained socks and done reuben versus shot and steam socks and done which at least there's a your i am your honor but we submit that in this case we have an individual claimant who invested one million dollars of his own money separate and apart from the other individuals in the case the other entity in the case ohio securities laws and the common law claims of fraud and deceit what is clear here today is determine not whether the arbitration decision was actually correct we are here to determine whether the district court was correct or found that there was insufficient evidence to up hold their motion to vacate and because there was no record there was no there was no findings of fact conclusions of law the district people were held that even if she had reviewed watched the disregard of submissions there was not sufficient evidence for them to meet that narrow standard and what is apparent even in their address meant of what occurred at the hearing regarding the securities laws and that the arbitrator's refused to heed they have to make a conscious decision not to apply that law it can't be a motion to vacate based on mistake you can't look at errors of interpretation of fact or the apple  law but that is what they're asking you to do it is clear from the award that they looked at the federal securities law they looked at the ohio securities law and they looked at ohio common law and they found findings and they did make some findings and conclusions that the p m the circular affirmatively stated there was fifty million dollars in capital surplus gold i mean it says that and then where they say and as well as the p p m saying that mr gary schneider miller told mr ryan reilly that and he told them a lot of other things and dr felter told him a lot of other things and contrary to appellants position these are not inconsistent statements they are actually consistent with the p p m and another reason that we cannot use the affidavits and they're not appropriate as they're not complete and they are disputed for a good example is gary schneider's affidavit i don't know how many pages it's two hundred paragraphs and he tells you in great do you tell all the  m not once does he mention that the p p m said the model five business architecture was completed it was acquired the fifty million dollars in gold was our biggest achievement of our so tame amount to a determination and emotion  affidavit as requested here would provide a roadmap for all arbitration participants to figure out how to vacate the award later we simply don't decide we're not going to engage a court reporter are not going to have a transcript we're not going to request decision based on findings of fact and conclusions of law we're going to wait see what the result is and then submit a bunch about the day but that takes finality of arbitrations completely away and subject t district court and this court to battling affidavits later on as far as the p s l are a you know i think that's sort of a non sequitur and the motion escrows not even governed by the p s all right all it says is a fun motion to dismiss this discovery shall be state in this matter there was a defective state because the appellant never ever ever submitted one document produced anything not even exhibit lists witness list nothing until the first day of hearing so they never had to produce anything they didn't even show up at their depositions and november after the motion just miss was granted and again the arbitration panel did not ignore the there is evidence that on july twenty ninth there was a telephone call and it was discussed surely there after they denied the motion to dismiss they reiterated in their award that the s a s see the statement of claims they were complaining about w sufficiently pled i think notably missing from this record before the district court is their motion to dismiss and the second amended statement of claims so there is no way for this district court to even f what happened it was their burden to produce this and they didn't and i ask you something about the reason toward issue a heard this before about request and i looked at the aaa rules and forty six b says the arbitrator need to render a reason toward a less the parties plural request such an award does that mean that if they had requested it you would have had to agree to it before one could be rendered i think that rules all are held that both parties have to agree however there was no disagreement and that's not in the record so i'm not even sure if i'm permitted to tell you but at the hearing which i did attend and they did not  arbitrators asked us do you want one and we basically said whatever you want to give us is fine mr mori said i don't care so this is your statement of what happened that would be on a transcript of the trip you had a transcript but they didn't ask for it we know that for you know no and neither party did and whether it is or whether it isn't and because i mean if you really look at this stuff nobody really knows what when yes i mean sort of strange but i want to because now you've said something about what he decided not to consider them or not to give them any weight i'm not exactly sure what he did because he said he wasn't striking them but he's going to use them and that seems to me a reasonable thing to do because he has no transcript to compare them  to but i'm just wondering about what it is we're supposed to do when there is no transcript if if the dispute is about things that happened at the hearing and there's no transcript requested what are we supposed to do well i don't think it's any the award is issued to be so wrong that even the young usual case the court couldn't say this decision shows manifest disregard without knowing what went on at the hear yeah that could happen if you have something in your war that let's say the facts say that i don't know the statute should apply and they said we were going we're not going to disregard that i mean could be very blatant and that didn't happen here and as far as what happened at in every case they had findings of fact conclusions of law or a transcript or something in the award that took care of that and as far as what happened at the the hearing i mean you take a risk going to arbitration you balance whether you're going to get you get finality and you use less expensive and short circuited and you give up some of those rights to have a go on and on and on through the process and if you want to make sure you're going to have a record just in case then you have asked for one and said actually there is a scheduling order that said let the panel know by december something who your court reporter is going to be if in fact there was all this bias all this partiality that started with a motion to dismiss under the pillow that you had the motion us grow they should have been on notice that if they had an unfair payable a rogue panel that they needed a transcript as opposed to a reasoned award you can get a transcript or in your own book you don't have accurately no no it's either party can have their own neither party had one so  address really quickly the motion astro again i agree with you judge are saying it's not an attachment presidium kept the money they could have done several things with it they could have paid their attorneys they could have kept it in the bank and paid the schneid millar's after this was over i think it wasn't prohibited by the appeals are ok at all the peel surreally talks about discovery i just don't see where that is even relevant to this there was no harm not imposing the stay under the  peel star i was not necessarily harm since they never had to produce discovery what that supposed to avoid is the expense of somebody filing a motion or a complaint for securities fraud and let's say against libby pharmaceutical and asking for expensive discovery of all their shareholders all their stock all of this as a comment that down is no let me let me make sure that the complaint is sufficiently pled sort of like a twamley analysis and then ok we've got everything in order now you can proceed with discovery interesting lee what they what they failed to talk to tell the court in and what we brought up in our briefs was they themselves conducted discovery they sent out requests for production we  everything out and then when we tried to do discovery that's when we got slapped with a motion to dismiss so there's a little bit of unclean hands going on here i'd like to address a statement that judge boggs made which is that can there be a situation where an award is so wrong on its face that we can find manifest disregard of the law in the absence of a transcript and that is exactly what we are arguing here because the one gentleman didn't testify and the panel apparently found reason to draw the inference from their testimony your honor the panel stated on the facts are on the common law fraud and every one of those legal theories requires reliance but then mr kopp to testify as require his testimony people can prove things older all kinds of ways documents other witnesses testimony when the fact that he didn't apparently testify to this pacific point doesn't i don't see how that makes this the you know the conclusion follows that this was a is improperly before this court because there is no transcript but we don't need a transcript to know that one party whose whose claim was half of the damages award did not show up to prove his case