Fifth Circuit Affirms Arbitration Award
The United States Court of Appeals for the Fifth Circuit recently upheld an award decided by an arbitrator that gave a Texas-based law firm $1.45 million in unpaid legal and expert witness expenses. The original agreement outlines how future disputes would be resolved in binding arbitration under the Federal Arbitration Act and that the process would be governed by Texas law. The original case was in regard to a patent claim.
The attorney involved argued the legal invoices were reasonable and expert witnesses were brought in at the approval of both sides. The arbitrator eventually awarded $1.45 million. The firm sought to confirm the award in the Northern District of Texas, and in response, the other side asked the federal court to vacate the award because it was contrary to public policy, powers were exceeding by the arbitrator, and the arbitrator exhibited disregard for the law. The district court confirmed the original award, so an appeal was filed with the Fifth Circuit.
The Fifth Circuit stated there was “strong federal policy favoring arbitration” and that its review would be deferential. It also said there was no evidence the award should be vacated, nor was there any evidence that the arbitrator disregarded the law.
The court then examined the claim the award violated public policy and found that there was no evidence this was the case either. Though it was claimed consent was not given concerning fees, no proof existed that consent was not given. The court believed the request to vacate was actually an argument against the arbitrator’s findings, as opposed to a procedural argument.
In the end, the Fifth Circuit Court of Appeals affirmed the arbitration award of $1.45 million