Henry M. Jackson Foundation for Advancement of Military Medicine, Inc. v. Norwell, Inc. , 596 F. App'x 200 ( 2015 )

UNPUBLISHED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Affirmed by unpublished per curiam opinion.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Unpublished opinions are not binding precedent in this circuit.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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