Court Opinion

ID: 9487642
Source: CourtListenerOpinion
Date Created: 2023-08-05 12:22:51.491926+00
Date Added: 2024-06-11T17:52:24.477975
License: Public Domain

WELLFORD, Circuit Judge,
concurring.
On appeal, NCR challenged the arbitrator’s power to award punitive damages in the first place, asking this court to limit the arbitrator’s power to award punitive damages in contractual settings.
I am certainly sympathetic to NCR’s argument that empowering arbitrators to award punitive damages in a contractual setting is ill-advised. Much of my reservations may derive from a hesitancy to award punitive damages in a contractual setting between two equally sophisticated parties (absent bad faith). I am even more reluctant to allow non-judicial officers to make these decisions, as our ability to review these decisions is *1082greatly circumscribed by the Federal Arbitration Act, 9 U.S.C. § 1, et seq.
As of yet, this circuit has not needed to interpret Rule 43 of the American Arbitration Association, which states that “[t]he arbitrator may grant any remedy or relief that the arbitrator deems just and equitable and within the scope of the agreement of the parties, including but not limited to specific performance of a contract.” And we need not do so in this case, as we have decided to vacate the punitive damages award on other grounds.
Until such a need arises, I would warn potential parties that wish to limit the power of their arbitrators to issue punitive damages to state specifically their intentions. Arbitrators are limited to the powers the parties confer on them. Baravati v. Josephthal, Lyon & Ross, Inc., 28 F.3d 704, 709 (7th Cir.1994) (explaining that the parties could have limited the arbitrator’s power to award punitive damages because “parties can stipulate to whatever procedures they want to govern the arbitration of their disputes”).
I concur in vacating the punitive damages award under the circumstances of this case.