Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-alnd-2_13-cv-01630/USCOURTS-alnd-2_13-cv-01630-1/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1441 Petition For Removal--Other Contract

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

JAKE MENDEL, etc., et al.,

Plaintiffs,

v.

MORGAN KEEGAN & COMPANY,

INC.,

Defendant.

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CIVIL ACTION NO.

13-AR-1630-S

MEMORANDUM OPINION AND ORDER

In his appeal and motion to vacate, plaintiff seeks to set

aside the arbitration award and to refer the controversy to another

panel of arbitrators. The challenge to the award is based on,

among other things, the alleged “evident partiality” of one of the

arbitrators. The “evident partiality” of an arbitrator is one of

the grounds for vacatur listed in the Federal Arbitration Act, 9

U.S.C. § 10(a). Plaintiff alleges that the chairman of the

arbitration panel failed to disclose the attorney-client

relationship between his employer and defendant and that this nondisclosure gives a reasonable impression of partiality. Plaintiff

bears the burden of proving facts that support such a reasonable

impression of partiality. See Middlesex Mutual Ins. Co. v. Levine,

675 F.2d 1197, 1200-01 (11th Cir. 1982). In cases of nondisclosure, such as in the instant case, the movant also must

provide evidence, whether direct or circumstantial, that the

arbitrator had actual knowledge of the undisclosed fact. Gianelli

FILED

 2013 Dec-03 AM 11:08

U.S. DISTRICT COURT

N.D. OF ALABAMA

Case 2:13-cv-01630-AKK Document 17 Filed 12/03/13 Page 1 of 3
Money Purchase Plan & Trust v. ADM Investor Servs., Inc., 146 F.3d

1309, 1312-13 (11th Cir. 1998). 

Plaintiff alleges that the facts give a reasonable impression

of partiality, but he does not allege that the arbitrator had

actual knowledge of the undisclosed attorney-client relationship. 

Although the “‘mere appearance of bias or partiality is not enough

to set aside an arbitration award,’ [] it is enough to require the

district court to grant an evidentiary hearing.” F.D.I.C. v. IIG

Capital LLC, 525 F. App'x 904, 905 (11th Cir. 2013) (quoting Univ.

Commons-Urbana v. Universal Constructors, Inc., 304 F.3d 1331, 1340

(11th Cir. 2002)). Moreover, “[t]he ‘evident partiality’ question

necessarily entails a fact intensive inquiry [as t]his is one area

of the law which is highly dependent on the unique factual settings

of each particular case.”•Univ. Commons-Urbana, Ltd. v. Universal

Constructors Inc., 304 F.3d 1331, 1345 (11th Cir. 2002) (quoting

Lifecare Int'l, Inc. v. CD Med., Inc., 68 F.3d 429, 435 (11th Cir.

1995)) (internal quotation marks omitted). To like effect is

Terminix Int’l Co., L.P. v. Scott, 1111232, 2013 WL 5394441 (Ala.

Sept. 27, 2013). In Terminix, the Supreme Court of Alabama, as

recently as September 27, 2013, reached the following conclusion: 

[W]e conclude that Terminix has presented evidence in

support of its postjudgment motion to vacate the

arbitration award that “raises a threshold inference of

possible bias” necessary “to warrant a hearing for the

purpose of determining whether adequate evidence exists

to grant” Terminix's motion to vacate the arbitration

award [on grounds of evident partiality]. Upon remand as

to this issue, we note that the trial court should

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Case 2:13-cv-01630-AKK Document 17 Filed 12/03/13 Page 2 of 3
“review the offered evidence pursuant to the ‘reasonable

impression of partiality’ standard,” . . . and, in

assessing whether [the arbitrator] was “biased or partial

in his arbitration of the underlying dispute is to

consider whether [Terminix] makes a showing through

admissible evidence that the court finds to be credible,

that gives rise to an impression of bias that is direct,

definite, and capable of demonstration, as distinct from

a ‘mere appearance’ of bias that is remote, uncertain,

and speculative.

Id. at *13 (citations omitted).

In accordance with the foregoing, plaintiff’s appeal and

motion to vacate is hereby SET for evidentiary hearing at 10:30

A.M., February 4, 2014. Given that credibility will be important

to the inquiry, the parties may present witness testimony in the

form of live testimony or video deposition only. This requirement

applies prospectively through the discovery deadline of January 28,

2014, but not to any depositions that have been taken before entry

of this order. 

DONE this 3rd day of December, 2013.

_____________________________

WILLIAM M. ACKER, JR.

UNITED STATES DISTRICT JUDGE

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