Opinion ID: 1364007
Heading Depth: 2
Heading Rank: 4

Heading: The July 29, 2009 Decision

Text: On July 29, 2009, the district court granted PSMIC's motion. [2] The court found that PSMIC's ignorance of Sullivan's recovery was justified, because INA had strongly exhorted PSMIC not to contact Sullivan following his resignation, noting that INA cannot have it both ways. Having instructed PSMIC not to contact Sullivan and agreed that PSMIC would not waive any rights by complying with PSMIC's request, INA cannot now claim that PSMIC failed to exercise reasonable diligence to determine the condition of Sullivan's health in November 2008. The court added that if INA knew that Sullivan was healthy it was disingenuous for it to have stressed the seriousness of Sullivan's illness at the oral argument on the petitions. [3] The court next found that evidence of Sullivan's recovery and availability would have been admissible and would have changed the outcome of the [o]rder. The court noted that, in its December 10, 2008 order, it applied cases dealing with the death of an arbitrator, because it [h]a[d] no reason to question the seriousness of Sullivan's diagnosis and treatment, and stated that [h]ad I known that at the time the Order was issued that Sullivan was actively soliciting engagements as an arbitrator, I could have reappointed Sullivan pursuant to my authority under 9 U.S.C. § 5 and thereby eliminated th[e] potential unfairness to INA while also addressing the two policy concerns noted in the Order [regarding the potential for manipulation and waste if a new panel must be convened whenever a party arbitrator resigns]. The court then found that the fact that Sullivan had resigned, but was actively seeking appointment to other panels, qualified as a special circumstance that justified departing from the general rule requiring a new panel be convened upon the death of an arbitrator, which the court observed was premised on  permanent unavailability of an arbitral panelist. (emphasis in original). The court concluded that it had the power under 9 U.S.C. § 5 to reappoint Sullivan, reappointed him, and directed that if he was unwilling or unable to rejoin the panel, then INA would have to appoint a replacement. Sullivan informed the court that he would not accept reappointment to the panel, and INA appointed a replacement arbitrator. INA now appeals.