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Keywords

arbitrationdiscoveryhearingburden of proofarbitrator
arbitrationdocketarbitrator

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Rosenhaus v. Jackson, Not Reported in Fed. Supp., 2016 WL 4592180

Facts

Drew Rosenhaus, a sports agent, filed a Petition to Confirm an Arbitration Award after his client, DeSean Jackson, terminated their agreement and failed to repay a loan. Jackson filed a Cross-Petition to Vacate the Arbitration Award, claiming evident partiality from the arbitrator, Roger Kaplan, who had undisclosed prior dealings with Rosenhaus. The court held hearings and ordered further discovery on issues related to the arbitrator's disclosures. Ultimately, the court found that Kaplan's failure to disclose his financial relationship with Rosenhaus created a reasonable impression of bias.

Issue

Did Arbitrator Kaplan's failure to disclose his prior financial relationship with Rosenhaus create evident partiality under Section 10(a)(2) of the Federal Arbitration Act?

Did Arbitrator Kaplan's failure to disclose his prior financial relationship with Rosenhaus create evident partiality under Section 10(a)(2) of the Federal Arbitration Act?

Rule

Under Section 10(a)(2) of the Federal Arbitration Act, a court may vacate an arbitration award if there is evident partiality in the arbitrators. This standard is met when an arbitrator fails to disclose information that creates a reasonable impression of bias towards one party. The burden of proof lies with the party challenging the arbitration decision.

Analysis

The court analyzed whether Kaplan's undisclosed financial relationship with Rosenhaus constituted evident partiality. It considered the nature of the relationship, the context of the arbitration, and the implications of Kaplan's failure to disclose. The court found that Kaplan's receipt of significant fees from Rosenhaus, combined with the lack of disclosure, created a reasonable impression of bias, thus meeting the standard for evident partiality.

Conclusion

The court concluded that Jackson was entitled to vacatur of the arbitration award due to evident partiality, denying Rosenhaus's Petition and granting Jackson's Cross-Petition.

Rosenhaus' Petition to Confirm the Arbitration Award (Docket No. 1) is DENIED, Jackson's Cross-Petition to Vacate Arbitration Award (Docket No. 19) is GRANTED, and the Arbitration Award is hereby VACATED.

Who won?

DeSean Jackson prevailed in this case as the court found that the arbitrator, Roger Kaplan, exhibited evident partiality by failing to disclose his financial relationship with Rosenhaus. The court emphasized the importance of transparency in arbitration to ensure fairness and impartiality, ultimately leading to the vacatur of the arbitration award in favor of Jackson.

DeSean Jackson prevailed in this case as the court found that the arbitrator, Roger Kaplan, exhibited evident partiality by failing to disclose his financial relationship with Rosenhaus.

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