United States Court of Appeals

For the Eighth Circuit

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No. 16-1055

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Timothy Owens

lllllllllllllllllllll Plaintiff - Appellant

v.

American Arbitration Association, Inc.

lllllllllllllllllllll Defendant - Appellee

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Appeal from United States District Court 

for the District of Minnesota - Minneapolis

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 Submitted: October 20, 2016

 Filed: November 18, 2016

[Unpublished]

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Before MURPHY, GRUENDER, and SHEPHERD, Circuit Judges.

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PER CURIAM.

Plaintiff Timothy Owens sued the American Arbitration Association (AAA)

for removing an arbitrator from an arbitration panel that had issued him an award. 
The district court dismissed Owens' claims based on arbitral immunity. Owens 1

appeals, and we affirm.

I.

Timothy Owens was the president and CEO of Voyager Bank. After Voyager

terminated him, Owens filed for arbitration against Voyager before the AAA. The

law firm of Anthony Ostlund Baer & Louwagie represented Owens, and the firm of

Lindquist & Vennum represented Voyager. AAA chose a three member arbitration

panel that included Allen Saeks. After the three arbitrators disclosed possible

conflicts of interest, Saeks filed a supplemental disclosure in which he said that he

had been "briefly consulted" by an attorney at his firm about an already resolved

matter in which both Anthony Ostlund and Lindquist & Vennum had been involved. 

No party to the arbitration sought more information about Saeks' disclosures or

objected to the arbitration panel.

The arbitration panel issued an initial award of more than $3 million to Owens. 

Voyager then claimed that Saeks had been more involved in the earlier matter than

he had disclosed. AAA did not have a published procedure governing removal of an

arbitrator. It ordered Owens to respond to Voyager's claims and not contact any of

the arbitrators. AAA did not hold a hearing, consult Saeks, or inform Owens about

the procedure for deciding Voyager's claim before it removed Saeks from the

arbitration panel without explanation. The two remaining arbitrators then issued a

final award in Owens' favor.

Next, Owens and Voyager filed cross motions in Hennepin County District

Court, one to confirm the award and one to vacate it. The district court decided to

The Honorable Paul A. Magnuson, United StatesDistrict Judge for the District 1

of Minnesota.

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vacate the arbitration award, and then Owens sued AAA in state court for breach of

contract, unjust enrichment, tortious interference with contract, and tortious

interference with prospective economic advantage. AAA removed the case to federal

court, where the district court determined that Owens' claims were barred by arbitral

immunity. AAA's motion to dismiss was granted, and Owens now appeals.

II.

We review the district court's grant of a motion to dismiss de novo, assuming

the facts alleged in the complaint are true. Badrawi v. Wells Fargo Home Mortg.,

Inc., 718 F.3d 756, 758 (8th Cir. 2013). To survive a motion to dismiss, a complaint

must "state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly,

550 U.S. 544, 570 (2007). Arbitrators can be entitled to immunity because their role

in deciding disputes is "functionally equivalent" to the role of judges. Olson v. Nat'l

Ass'n of Sec. Dealers, 85 F.3d 381, 382 (8th Cir. 1996). Courts extend immunity to

arbitrators to protect them from "undue influence" and the arbitration process "from

attack by dissatisfied litigants." Id. Arbitral immunity may extend "to organizations

that sponsor arbitrations" and "all acts within the scope of the arbitral process" are

protected. Id. at 382-83.

In Olson, the plaintiffsued an arbitration sponsoring organization for allegedly

appointing a biased arbitrator. 85 F.3d at 382. We affirmed the dismissal of the

plaintiff's claims and concluded that arbitral immunity bars claims against a

sponsoring organization based on the appointment of a biased arbitrator. Id. at 383. 

We also concluded that a sponsoring organization is entitled to immunity even if a

claim arises from the organization's failure to follow its own rules when selecting an

arbitration panel. Id. Such immunity is broad and protects sponsoring organizations

from civil liability at all stages of the arbitration process. Id.; see also Honn v. Nat'l

Ass'n of Sec. Dealers, Inc., 182 F.3d 1014, 1017-18 (8th Cir. 1999). The appointment

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of arbitrators is protected because it is an important part of the arbitral process. 

Olson, 85 F.3d at 383.

We conclude that the removal of arbitrators is similarly protected by arbitral

immunity because it is just as much a part of the arbitration process as the

appointment of arbitrators. Because Owens' claims are barred by arbitral immunity,

the district court did not err in dismissing his action. For these reasons we affirm the

judgment of the district court.

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