Opinion ID: 200402
Heading Depth: 2
Heading Rank: 2

Heading: Whether the arbitrators demonstrated evident partiality

Text: 32 Under the FAA, an arbitral award may be vacated on grounds of evident partiality of the arbitrators. 9 U.S.C. § 10(a)(2). Evident partiality is more than just the appearance of possible bias. Rather, evident partiality means a situation in which a reasonable person would have to conclude that an arbitrator was partial to one party to an arbitration. Nationwide Mut. Ins. Co. v. Home Ins. Co., 278 F.3d 621, 626 (6th Cir.2002) (internal quotations omitted); accord ANR Coal Co. v. Cogentrix of N. C., Inc., 173 F.3d 493, 500-501 (4th Cir.1999); Morelite Constr. Corp. v. N.Y. City Dist. Council Carpenters Benefit Funds, 748 F.2d 79, 84 (2d Cir.1984); see also Al Harbi v. Citibank, N.A., 85 F.3d 680, 683 (D.C.Cir.1996) ([T]he claimant must establish specific facts that indicate improper motives on the part of an arbitrator.). See generally Montez v. Prudential Secs., Inc., 260 F.3d 980, 983 (8th Cir.2001) (collecting cases on evident partiality standard). The burden is on JCI to establish evident partiality. See Andersons, Inc. v. Horton Farms, Inc., 166 F.3d 308, 328-29 (6th Cir.1998); Al Harbi, 85 F.3d at 683; Consolidated Coal Co. v. Local 1643, United Mine Workers, 48 F.3d 125, 129 (4th Cir.1995); Health Servs. Mgmt. Corp. v. Hughes, 975 F.2d 1253, 1258 n. 3 (7th Cir.1992); Sheet Metal Workers Int'l Ass'n, Local 162 v. Jason Mfg., Inc., 900 F.2d 1392, 1398 (9th Cir.1990); Middlesex Mut. Ins. Co. v. Levine, 675 F.2d 1197, 1201 (11th Cir.1982) (per curiam). The purported bias here is that the three arbitrators from the management side came from JCI's business competitors. 33 Absent exceptional circumstances, a court will not entertain a claim of personal bias where it could have been raised at the arbitration proceedings but was not. Fort Hill Builders, Inc. v. Nat'l Grange Mut. Ins. Co., 866 F.2d 11, 13 (1st Cir.1989) (per curiam); see Early v. E. Transfer, 699 F.2d 552, 558 (1st Cir.1983). It is undisputed that the issue of bias was not raised before the arbitrators. JCI attempts to excuse this by saying it did not know the company affiliations of these industry arbitrators until after the hearing. 34 JCI did know that the three employer representatives on the Committee would come from Boston Chapter companies, that is, from its industry and related industries, and so potentially from its competitors. The Telecommunications Labor Agreement quite reasonably called specifically for arbitrators from relevant industries, whose expertise would be a considerable benefit. See Merit Ins. Co. v. Leatherby Ins. Co., 714 F.2d 673, 679 (7th Cir.1983); In re Andros Compania Maritima, SA, 579 F.2d 691, 701 (2d Cir.1978). That the arbitrators came from the same industry does not in itself approach evident partiality. See Delta Mine Holding Co. v. AFC Coal Props., Inc., 280 F.3d 815, 821 (8th Cir.2001) (partisan arbitrators are generally permissible if that is what the parties' arbitration clause contemplated); accord ATSA of Cal., Inc. v. Cont'l Ins. Co., 754 F.2d 1394, 1395 (9th Cir.1985) (order); Nationwide Mut. Ins. Co. v. First State Ins. Co., 213 F.Supp.2d 10, 17 (D.Mass.2002). This claim is a far cry from Commonwealth Coatings Corp. v. Continental Casualty Co., 393 U.S. 145, 89 S.Ct. 337, 21 L.Ed.2d 301 (1968), where at the time of the arbitration hearing the party that subsequently challenged the award lacked even an intimation of the source of the alleged bias. Id. at 147-48, 89 S.Ct. 337; see Sheet Metal Workers Int'l Ass'n Local 420 v. Kinney Air Conditioning Co., 756 F.2d 742, 746 (9th Cir. 1985) (Kennedy, J.) (cases in which courts have faulted arbitrators for their failure to disclose potential sources of bias are inapposite where the CBA contemplated that management representatives on an arbitral panel might be a party's competitors) (citation omitted). The mere fact that the panel included business rivals of one party does not rise to the level of evident partiality. Id. 35 In practice, that risk of bias could nonetheless materialize in specific instances. But JCI, which was put on notice of the risk when it signed the contract, chose not to inquire about the backgrounds of the Committee members either before or during the hearing. JCI needed to act before the Committee rendered its decision. It would undermine the arbitral process to permit an employer with an industry-represented panel to await the outcome of an arbitration before deciding to cry bias. See Early, 699 F.2d at 558 ([W]e cannot accept that parties have a right to keep two strings to their bow — to seek victory before the tribunal and then, having lost, seek to overturn it for bias never before claimed.). JCI has waived the claim. 9 36 We affirm entry of summary judgment for Local 103 enforcing the arbitral award. Costs are awarded to Local 103.