Opinion ID: 570048
Heading Depth: 2
Heading Rank: 2

Heading: fairness of arbitral procedures

Text: 18 The fumigators raise no charge of bias or improper use of evidence by the arbitrators. The examination that occurred during the qualification of this arbitral panel establishes that the arbitrators were experienced and disinterested individuals. But the fumigators urge that arbitration would have failed to afford them a full and fair opportunity to present their case. They say that the limitations on pretrial discovery and their inability to call witnesses of their choosing, to conduct cross-examination, and to challenge the admissibility of evidence prejudiced them. See Hulbert, supra, at 193-95 (analysis of preclusive effect depends upon the significance attached to procedural differences between arbitration and court adjudication); Restatement (Second) of Judgments, § 57 & cmt. c (1982) [hereinafter section 57] (arbitral award should have the same preclusive effect as a judgment if arbitration afforded [procedural] opportunity ... substantially similar in form and scope to court adjudication). 19 If the first determination of an issue occurred in an arbitration which afforded litigants the basic elements of adjudicatory procedure, a district court may find in a proper case that the arbitral award collaterally estops relitigation of the previously determined issues. Greenblatt, 763 F.2d at 1360. A district court in exercising its discretion must carefully consider whether procedural differences between arbitration and the district court proceeding might prejudice the party challenging the use of offensive collateral estoppel. 20 The district court specifically must determine whether procedural opportunities available to the party in the subsequent action might be likely to cause a different result. Parklane, 439 U.S. at 332, 99 S.Ct. at 652. But a party who chooses not to appear in a proceeding despite having notice and an opportunity to be heard, and who later challenges the preclusive effect of determinations made in the proceeding, must make a particularized showing of harm to establish the prejudicial effect of procedural differences. See SCAC Transport, 845 F.2d at 1163 (opponent of collateral estoppel has burden to demonstrate specific prejudice from arbitral procedures); but see also Carlisle, Getting a Full Bite at the Apple: When Should the Doctrine of Issue Preclusion Make an Administrative or Arbitral Determination Binding in a Court of Law, 55 Fordham L.Rev. 63 (1986) (suggesting burden should rest with the proponent of preclusion). 21 The fumigators argue that some evidence introduced by GASC on liability and damages would have been subject to hearsay objection, and that the fumigators would have cross-examined the witnesses if the proceeding occurred in district court. The fumigators also complain that the parties to the arbitration did not call witnesses favorable to the fumigators' position. But the fumigators do not point to any specific arbitral procedures that would have prevented their making hearsay objections and calling their own witnesses, had they chosen to appear. Their complaints thus result from their rejection of the vouching notice, not from any identified procedural differences between arbitration and district court. 22 The fumigators also argued in a hearing before the district court that their discovery would have been compromised in arbitration, where the arbitral panel controls the scope and extent of discovery, while in district court they would have enjoyed an unfettered right to conduct discovery. In rejecting this contention, the district court noted it has authority to entertain and grant motions to quash, and thus at least as much power as arbitrators to limit discovery. In their briefs on appeal, the fumigators fail to identify any allowable district court discovery that would be denied them under the discovery rules pertaining to arbitration. In fact, the fumigators make only vague allusions to procedural differences in discovery between this arbitration and district court, and we are unable to ascertain from the briefs that such differences even exist. The fumigators have not made a particularized showing of harm.