Court Opinion

ID: 2767619
Source: CourtListenerOpinion
Date Created: 2015-01-08 20:00:55.179105+00
Date Added: 2024-06-11T11:27:31.490959
License: Public Domain

UNPUBLISHED

                   UNITED STATES COURT OF APPEALS
                       FOR THE FOURTH CIRCUIT

                             No. 14-1580

THE HENRY M. JACKSON FOUNDATION      FOR   THE   ADVANCEMENT   OF
MILITARY MEDICINE, INC.,

                 Plaintiff - Appellant,

          v.

NORWELL, INC.,

                 Defendant - Appellee.

Appeal from the United States District Court for the District of
Maryland, at Greenbelt. Roger W. Titus, Senior District Judge.
(8:14-cv-01067-RWT)

Submitted:   November 26, 2014             Decided:   January 8, 2015

Before NIEMEYER, SHEDD, and THACKER, Circuit Judges.

Affirmed by unpublished per curiam opinion.

Michael J. Schaengold, Melissa P. Prusock, GREENBERG TRAURIG,
LLP, Washington, D.C., for Appellant.      Marc S. Hines, HINES
CARDER, Costa Mesa, California, for Appellee.

Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:

               The Henry M. Jackson Foundation for the Advancement of

Military       Medicine,      Inc.       (“Foundation”),          appeals       the     district

court’s order denying its request to partially vacate or modify

a     March    2014     arbitral         award,       granting        summary       judgment    to

Norwell, Inc., and confirming the award.                         We affirm.

               On appeal from the district court’s evaluation of an

arbitral       award,    we     review       the      district        court’s       decision    to

confirm the award de novo.                   Raymond James Fin. Servs., Inc. v.

Bishop, 596 F.3d 183, 190 (4th Cir. 2010).                             “Judicial review of

an     arbitration        award        in     federal          court     is     substantially

circumscribed.”           Three S Del., Inc. v. DataQuick Info. Sys.,

Inc.,    492    F.3d     520,    527      (4th      Cir.      2007)    (internal       quotation

marks omitted).          In fact, “the scope of judicial review for an

arbitrator’s       decision         is      among      the     narrowest       known    at     law

because to allow full scrutiny of such awards would frustrate

the purpose of having arbitration at all—the quick resolution of

disputes and the avoidance of the expense and delay associated

with litigation.”             MCI Constructors, LLC v. City Of Greensboro,

610    F.3d    849,     857   (4th       Cir.     2010)       (internal       quotation      marks

omitted).         “In     order      for      a     reviewing         court    to    vacate     an

arbitration       award,      the    moving           party    must     sustain       the    heavy

burden of showing one of the grounds specified in the Federal

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Arbitration Act (the “FAA”) or one of certain limited common law

grounds.”       Id.

            The grounds specified in the FAA are: “(1) where the

award     was    procured     by   corruption,        fraud,    or     undue   means;

(2) where       there   was   evident    partiality      or    corruption      in   the

arbitrators, or either of them; (3) where the arbitrators were

guilty     of    misconduct . . . ;       or    (4)     where       the   arbitrators

exceeded their powers, or so imperfectly executed them that a

mutual,    final,       and   definite   award     upon       the    subject   matter

submitted was not made.”           9 U.S.C. § 10(a) (2012).

            “The permissible common law grounds for vacating such

an award include those circumstances where an award fails to

draw its essence from the contract, or the award evidences a

manifest disregard of the law.”                MCI Constructors, 610 F.3d at

857 (internal quotation marks             omitted). *          Under this court’s

precedent, “a manifest disregard of the law is established only

where the “arbitrator understands and correctly states the law,

     *
       In the wake of the Supreme Court’s decision in Hall Street
Assocs., LLC v. Mattel, Inc., 552 U.S. 576 (2008), this court
has recognized that considerable uncertainty exists “as to the
continuing viability of extra-statutory grounds for vacating
arbitration awards.”     Raymond James, 596 F.3d at 193 n.13.
Nevertheless, this court has recognized that “manifest disregard
continues to exist” as a basis for vacating an arbitration
award, either as “an independent ground for review or as a
judicial gloss” on the enumerated grounds for vacatur set forth
in the FAA.    Wachovia Secs., LLC v. Brand, 671 F.3d 472, 483
(4th Cir. 2012).

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but proceeds to disregard the same.”                     Patten v. Signator Ins.

Agency,    Inc.,     441   F.3d      230,    235    (4th    Cir.    2006)    (internal

quotation          marks      and          alterations        omitted).         Merely

misinterpreting contract language does not constitute a manifest

disregard of the law.               Id.      An arbitrator may not, however,

disregard     or     modify     unambiguous        contract     provisions.          Id.

“Moreover, an award fails to draw its essence from the agreement

if an arbitrator has based his award on his own personal notions

of right and wrong.”             Id. (internal quotation marks omitted).

“In such circumstances, a federal court has no choice but to

refuse enforcement of the award.”                  Id. (internal quotation marks

omitted).

             After review of the record and the parties’ briefs, we

conclude that the Foundation fails to establish reversible error

in   the   district    court’s       confirmation      ruling.       We     reject   the

Foundation’s       claim   of     error,     raised    for    the    first    time    on

appeal,    concerning      the      district     court’s     construction      of    its

motion to partially vacate or modify as a motion for summary

judgment.      See Karpel v. Inova Health Sys. Servs., 134 F.3d

1222, 1227 (4th Cir. 1998).                  We reject as without merit the

Foundation’s       contention       that    vacatur    is    required     because    the

arbitration panel strayed from the essence of a 2009 agreement

in awarding consequential damages to Norwell prohibited by that

agreement.     See Burson v. Simard, 35 A.3d 1154, 1159 (Md. 2012).

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We also reject the Foundation’s contention that, even assuming

that the arbitration panel awarded direct damages, the award

still must be vacated because the panel exceeded its authority

and   manifestly        disregarded       controlling             law     by    ignoring      and

failing to apply properly the causation requirement of Maryland

contract      law.      Contrary     to    the       Foundation’s          suggestions,        an

arbitrator need not explain his or her award, Raymond James,

596 F.3d at 191 (citing United Steelworkers of Am. v. Enterprise

Wheel    &    Car    Corp.,    363      U.S.       593,       597-98     (1960)),      and    its

argument      that    the    panel    reached            an   erroneous         conclusion    on

proximate      cause    amounts      at   best       to       a   claim    that      the    panel

committed      error    in    construing           the    2009     agreement.          Such    an

error,       however,       even   if     extant,             provides         no   basis     for

overturning the panel’s decision.                         Long John Silver’s Rests.,

Inc. v. Cole, 514 F.3d 345, 349 (4th Cir. 2008) (“As long as the

arbitrator is even arguably construing or applying the contract

and acting within the scope of his authority, that a court is

convinced      he    committed       serious         error        does    not       suffice   to

overturn his decision.” (internal quotation marks and alteration

omitted)).

              We further reject as without merit the Foundation’s

challenge to the arbitral award premised on the contentions that

the panel erred in construing an integration clause in the 2009

agreement in holding enforceable against the parties the terms

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of   a    May        2009    email     exchange,          id.,     and      that    the    award’s

conclusions in this regard fail to draw their essence from the

agreement.            We     reject       the     Foundation’s        contention          that    the

arbitration panel disregarded the essence of the agreement by

“fashioning an entirely novel remedy—including imposing contract

terms     upon       which     the    parties       had    never       agreed—based         on    the

arbitrators’                notions          of         right         and          wrong         that

violates . . . specific contract provisions” as unexplained.

                We    also        reject    the    Foundation’s            manifest    disregard

challenge to the arbitration panel’s award to Norwell of both

damages    and        specific       performance          as    breach      remedies       in    this

case.        The       Foundation          does    not     identify         any    provision      of

Maryland     law       preventing          the    concurrent         award    of     damages      and

specific performance that the panel ordered here.

                We    further        reject       the    Foundation’s         contention         that

vactur of the panel’s award is required because the panel so

imperfectly          executed        its    powers       that    a    “mutual,       final,       and

definite award” was not made in this case.                                   Cases addressing

this provision have vacated arbitration awards on this ground

only     when    the        arbitrator       either       failed      to    resolve       an    issue

presented to him or issued an award that was so unclear and

ambiguous that a reviewing court could not engage in meaningful

review of the award.                 Bell Aerospace Co. Div. of Textron, Inc.

v.   Local      516,        500    F.2d     921,    923    (2d       Cir.    1974)    (ambiguous

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award); Galt v. Libbey-Owens-Ford Glass Co., 397 F.2d 439, 442

(7th     Cir.    1968)    (arbitrators              failed   to      mention      a    defense

presented to them).             The Foundation has not suggested that the

panel failed to consider an issue put before it and further does

not claim that the award is so unclear and ambiguous that this

court cannot meaningfully review it.                     We also reject as lacking

in record support the Foundation’s contention that the award is

“unworkable”      in     view       of    the    parties’       conflicting           positions

relative    to    its     obligations           regarding       an    existing        clinical

trial.     Nothing in the arbitral award requires the Foundation to

continue the trial as it claims.                     Finally, we reject as without

merit     the    Foundation’s            remaining      extraneous         arguments       for

overturning the award.

            Accordingly, because the Foundation fails to establish

reversible error in the district court’s confirmation of the

arbitral    award,       we    affirm      its      judgment.        We    deny       Norwell’s

request and motion for the award of attorney’s fees, costs, and

damages and dispense with oral argument because the facts and

legal    contentions          are   adequately        presented       in   the        materials

before    this    court       and   argument        would    not     aid   the    decisional

process.

                                                                                       AFFIRMED

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