Jason v. Amer Arb Assn ( 2003 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
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No. 02-30615
Summary Calendar
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ANDREW JASON; IRVIN ROSS, SR.;
ARMAND DINET, II; RUDOLPH WILLIAMS,
Plaintiffs-Appellants,
versus
AMERICAN ARBITRATION ASSOCIATION, INC.;
UNIDENTIFIED PARTY,
Defendants-Appellees.
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Appeal from the United States District Court
for the Eastern District of Louisiana
USDC No. 02-0474
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March 7, 2003
Before BARKSDALE, DEMOSS, and BENAVIDES, Circuit Judges.
PER CURIAM:*
Appellants claims that the district court improperly
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be
published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
dismissed their breach of contract and negligence claims against
appellee for their alleged failure to state a claim upon which
relief can be granted. See Fed. R. Civ. P. 12(b)(6). Appellants
averred that the appellee failed to administer an arbitration in
which they were the non-prevailing party in a fair and equitable
manner. The district court held that appellee was entitled to
arbitral immunity, and appellants’ claims were therefore barred.
We agree.**
We review the district court's dismissal of a complaint for
failure to state a claim upon which relief can be granted de
novo. Beanal v. Freeport-McMoran, Inc., 197 F.3d 161, 164 (5th
Cir. 1999). We must determine whether the district court
correctly held that when viewed in the light most favorable to
the plaintiff and with every doubt resolved in his behalf, the
complaint nonetheless failed to state any valid claim for relief.
Id.Judicial immunity has been adapted to protect the arbiter in
the dispute resolution process in this Circuit, as well as in all
other federal courts of appeal that have considered the
**
Appellants’ argument regarding the constitutionality of the Federal Arbitration Act was
not raised in the district court, and is therefore not considered on appeal. Nissho-Iwai Am. Corp.
V. Kline, 845 F.2d 1300, 1307 (5th Cir. 1988); Little v. Liquid Air Corp., 37 F.3d 1069, 1071 n.1
(5th Cir. 1994).
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question.*** Hawkins v. Nat’l Ass’n of Sec. Dealers, Inc., 149
F.3d 330 (5th Cir. 1998)(per curiam). Arbitral immunity “is
essential to protect decision-makers from undue influence and the
process from reprisals by dissatisfied litigants.” New England
Cleaning Serv., Inc. v. Am. Arbitration Ass'n, 199 F.3d 542, 545
(1st Cir. 1999). The organizations that sponsor arbitrations are
entitled to immunity from civil liability as well with regard to
the tasks that they perform that are integrally related to the
arbitration. Id. See also Hawkins, 149 F.3d at 332 (granting
the NASD arbitral immunity from civil liability for the acts of
its arbitrators). Appellee’s refusal to disqualify the
arbitrator in appellants’ arbitration falls within the scope of
the immunity. See New England Cleaning Serv., Inc., 199 F.3d at
545 (holding that arbitrator selection is sufficiently related to
the arbitration process to qualify for arbitral immunity); Olson
v. National Ass'n of Securities Dealers, 85 F.3d 381, 383 (8th
Cir. 1996)(same). That appellee may have violated its internal
rules in denying appellants’ motion for recusal is immaterial.
See Olson, 85 F.3d at 383. The district court properly held that
***
New England Cleaning Servs., Inc. v. AAA, 199 F.3d 542, 545 (1st Cir. 1999); Honn v.
Nat’l Ass’n of Sec. Dealers, 182 F.3d 1014, 1018 (8th Cir. 1999); Shrader v. NASD, Inc., 855
F.Supp. 122, 123-24 (E.D.N.C. 1994), aff'd, 54 F.3d 774 (4th Cir.1995) (unpublished per
curiam); Austern v. Chicago Bd. Options Exch., Inc., 898 F.2d 882, 886 (2d. Cir. 1990); Wasyl,
Inc. v. First Boston Corp., 813 F.2d 1579, 1582 (9th Cir.1987); Corey v. New York Stock
Exchange, 691 F.2d 1205, 1208-11 (6th Cir. 1982); Tamari v. Conrad, 552 F.2d 778, 780 (7th
Cir. 1977).
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appellants’ suit is barred under the doctrine of arbitral immunity.
Accordingly, the judgment of the district court is AFFIRMED.
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