Opinion ID: 787300
Heading Depth: 3
Heading Rank: 2

Heading: Luening and Smith's prior co-ownership of an airplane

Text: 22 Tatung next argues that Luening and Smith's co-ownership of an airplane from 1974 to 1990, which was never disclosed to the parties, requires vacatur of the award under Commonwealth Coatings. Tatung cites no case where the Commonwealth Coatings rule has been applied to an undisclosed relationship between arbitrators rather than between an arbitrator and a party. Furthermore, Commonwealth Coatings does not establish a per se rule requiring vacatur of an award whenever an undisclosed relationship is discovered. Rather, the Court observed that some undisclosed relationships ... are too insubstantial to warrant vacating the award. Commonwealth Coatings, 393 U.S. at 152, 89 S.Ct. 337 (White, J., concurring). The Court explained that an arbitrator's business relationships may be diverse indeed, involving more or less remote commercial connections with great numbers of people. He cannot be expected to provide the parties with his complete and unexpurgated business biography. Id. at 151, 89 S.Ct. 337. We have further explained that a principal attraction of arbitration is the expertise of those who decide the controversy, Andros, 579 F.2d at 701, and that [f]amiliarity with a discipline often comes at the expense of complete impartiality, Morelite Constr. Corp., 748 F.2d at 83. Moreover, specific areas tend to breed tightly knit professional communities. Key members are known to one another, and in fact may work with, or for, one another, from time to time. Id. 23 Luening and Smith's co-ownership of an airplane ended more than a decade ago. As Judge Rakoff found, Tatung was on notice that both Luening and Smith (along with Fiorito) had previously worked at IBM. Tatung did not object to that fact prior to arbitration, nor did it choose to investigate that relationship more deeply at that time. Even if an undisclosed relationship between arbitrators could be cause for vacatur under certain circumstances, an issue we do not resolve here, Luening and Smith's co-ownership of an airplane more than a decade ago is simply too insubstantial to require vacatur. 24 B. Does Luening's Relationship with Lucent Require Vacatur of the Arbitration Award even though Luening Disclosed it to the AAA? 25 Relying on our opinion in Morelite, Tatung claims that Luening's relationship with Lucent is so strongly suggestive of bias that it warrants vacatur of the award even though it was disclosed by Luening to the AAA. Tatung argues that the district court thus erred by refusing to vacate the award. 26 In Morelite, after carefully weighing all the various interests at stake, we rejected both appearance of bias and proof of actual bias tests of evident partiality. 748 F.2d at 84. Instead we held that `evident partiality' within the meaning of 9 U.S.C. § 10 will be found where a reasonable person would have to conclude that an arbitrator was partial to one party to the arbitration. Id. We added that [i]n assessing a given relationship, courts must remain cognizant of peculiar commercial practices and factual variances. Id. In this way, we explained, the courts may refrain from threatening the valuable role of private arbitration in the settlement of commercial disputes, and at the same time uphold their responsibility to ensure that fair treatment is afforded to those who come before them. Id. 27 In this case, Judge Rakoff found that Luening had completed his service as an expert witness for Lucent by November 1999 and had submitted his final invoice by January 2000. The judge thus found that Luening's prior relationship with Lucent had terminated in all material respects before Lucent's counsel solicited his services as an arbitrator in this matter. Lucent Techs., Inc., 269 F.Supp.2d at 405-06. Moreover, the court found that Luening had no interest in the outcome of the arbitration. Id. at 406. Accordingly, the court held that [n]othing about the relationship `provides strong evidence of partiality by the arbitrator' that would justify vacating the award. Id. at 406 (quoting Morelite, 748 F.2d at 85). 28 Although Tatung argues that motions were still pending in the Delaware case at the time the arbitration began and that Luening was thus still serving as an expert witness for Lucent while also acting as arbitrator in this case, the district court's findings of fact are not clearly erroneous. Moreover, accepting the court's finding that Luening's relationship with Lucent materially ended before Lucent appointed him as an arbitrator in this matter, we cannot say that a reasonable person would have to conclude that an arbitrator was partial to one party to the arbitration. Morelite, 748 F.2d at 84. As we explained in International Produce, Inc. v. A/S Rosshavet, 638 F.2d 548, 552 (2d Cir. 1981), a shipping arbitration case in which we found no evident partiality, arbitrators in important shipping arbitrations have typically participated in [many] prior maritime disputes, not only as arbitrators but also as parties and witnesses. They have therefore almost inevitably come into contact with a significant proportion of the relatively few lawyers who make up the New York admiralty bar. 29 C. Should this Court Grant Discovery Regarding the Contested Relationships? 30 [A]n appellate court will not consider an issue raised for the first time on appeal. Banco de Seguros del Estado v. Mutual Marine Office, Inc., 344 F.3d 255, 264 (2d Cir.2003) (quoting O'Hara v. Weeks Marine, Inc., 294 F.3d 55, 67 n. 5 (2d Cir.2002)). Tatung did not ask the district court for discovery regarding the relationships between Luening and Lucent and Luening and Smith, and we will not now consider Tatung's belated request to us for discovery. Moreover, even if we were to consider Tatung's request, Tatung has not presented the clear evidence of impropriety we have held necessary before granting post-award discovery into potential arbitrator bias. Andros, 579 F.2d at 702.