Source: https://loreelawfirm.com/blog/category/united-states-court-of-appeals-for-the-fifth-circuit/
Timestamp: 2019-04-22 16:18:26+00:00

Document:
Part I (here) briefly discussed Chief Judge Frank H. Easterbrook’s decision in Trustmark Ins. Co. v. John Hancock Life Ins. Co. (U.S.A.), No. 09-3682, slip op. (7th Cir. Jan. 31, 2011), and its implications on the pending Second and Fifth Circuit appeals in Scandinavian Reinsurance Co. v. Saint Paul Fire & Marine Ins. Co, No. 09 Civ. 9531(SAS), 2010 WL 653481 (S.D.N.Y. Feb. 23, 2010), and Dealer Computer Svcs., Inc. v. Michael Motor Co., No. H-10-2132, slip op. (S.D. Tex. December 29, 2010). This Part II examines in some detail Trustmark’s background and rationale, and Part III will focus on Trustmark’s implications on the Scandinavian Re and Dealer Computer appeals.
An arbitration panel acting under a broad, unrestricted arbitration agreement can generally impose sanctions on a party. But if a federal district court compels arbitration, and retains jurisdiction, can it impose sanctions on counsel who allegedly misbehave during the arbitration proceedings? On September 13, 2010 the United States Court of Appeals for the Fifth Circuit held 3-0 that the answer is “no,” unless the conduct was in direct defiance or disobedience of the district court’s orders or otherwise threatened the district court’s own judicial authority or proceedings. See Positive Software Solutions Inc. v. New Century Mtg. Corp., No. 09-10355, slip op. (5th Cir. September 13, 2010).
Positive Software Solutions arose out of arbitration between Positive Software Solutions, Inc. and New Century Mortgage Corp. A district court in Texas compelled arbitration and retained jurisdiction. Positive Software lost, and sought to vacate the award on evident partiality grounds, which were ultimately rejected by the Fifth Circuit en banc. See Positive Software Solutions Inc. v. New Century Mtg. Corp., 476 F.3d 278 (5th Cir. 2007) (en banc). After the Fifth Circuit remanded the award for confirmation, New Century declared bankruptcy, the parties settled, and the American Arbitration Association administratively closed the proceedings.
As part of the settlement, New Century waived the attorney-client privilege, and turned over to Positive Software its arbitration files, which Positive Software would use in support of a motion in the district court for sanctions against New Century’s arbitration counsel, Ophelia Camiña, a partner at Susman, Godfrey, LLP (“Susman Godfrey”); Susman Godfrey; and Barry Barnett (apparently another lawyer who represented New Century). On March 2008 Positive Software filed its motion for sanctions pursuant to Fed. R. Civ. P. 37, 28 U.S.C. § 1927, and the court’s inherent power.
Today we are honored and delighted to feature “Hall Street Meets S. Maestri Place: What Standards of Review will the Fifth Circuit Apply to Arbitration Awards Under FAA Section 10(a)(4) after Citigroup?”, a guest-blog post submitted by Victoria VanBuren, the blogmaster of Disputing, an excellent ADR blog. We look forward to featuring more of her posts in the future.

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