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THI of New Mexico at Vida Encantada, LLC v. Lovato

United States Court of Appeals, Tenth Circuit

July 25, 2017

MARY LOUISE LOVATO, as personal representative for the wrongful death estate of Guadalupe Duran, deceased, Defendant-Appellee.

         Appeal from the United States District Court for the District of New Mexico (D.C. No. 1:11-CV-00634-MV-KK)

          Lori D. Proctor, Cooper & Scully, P.C., Houston, Texas, for Plaintiff-Appellant.

          Jennifer J. Foote (Dusti D. Harvey with her on the brief), Harvey and Foote Law Firm, LLC, Albuquerque, New Mexico, for Defendant-Appellee.

          Before HOLMES, PHILLIPS, and MORITZ, Circuit Judges.


         Under the Federal Arbitration Act (FAA), we may vacate an arbitrator's decision "only in very unusual circumstances." Oxford Health Plans LLC v. Sutter, 133 S.Ct. 2064, 2068 (2013) (quoting First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 942 (1995)). "That limited judicial review . . . 'maintain[s] arbitration's essential virtue of resolving disputes straightaway.'" Id. (alteration in original) (quoting Hall Street Assocs., L.L.C. v. Mattel, Inc., 552 U.S. 576, 588 (2008)). Section 10(a) of the FAA delineates the four "very unusual circumstances" for vacating arbitration awards. Oxford Health Plans LLC, 133 S.Ct. at 2068; see 9 U.S.C. § 10(a). Here, we consider whether an arbitrator exceeded his authority under § 10(a)(4) and whether he manifestly disregarded the law in awarding certain costs and fees to the prevailing party. Under our restrictive standard of review, we conclude that the arbitrator did not exceed his authority or manifestly disregard the law. So we affirm.


         1. Standard of Review

         In assessing the district court's confirmation of the arbitration award, "we review legal questions de novo and factual findings for clear error." CEEG (Shanghai) Solar Sci. & Tech. Co. v. LUMOS LLC, 829 F.3d 1201, 1205 (10th Cir. 2016). "An error is clear 'if the district court's findings lack factual support in the record or if, after reviewing all the evidence, we have a definite and firm conviction that the district court erred.'" Id. at 1205-06 (quoting Middleton v. Stephenson, 749 F.3d 1197, 1201 (10th Cir. 2014)).

         Though "[w]e do not owe deference to the district court's legal conclusions, " we "afford maximum deference to the arbitrators' decisions." Id. at 1206 (emphasis omitted). Our task is to assess whether the district court correctly followed the restrictive standard that governs judicial review of an arbitrator's award:

"[W]e must give extreme deference to the determination of the [arbitrator] for the standard of review of arbitral awards is among the narrowest known to law." ARW Exploration Corp. v. Aguirre, 45 F.3d 1455, 1462 (10th Cir. 1995) . . . . "By agreeing to arbitrate, a party trades the procedures and opportunity for review of the courtroom for the simplicity, informality, and expedition of arbitration." Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 31, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991).

Brown v. Coleman Co., 220 F.3d 1180, 1182 (10th Cir. 2000) (emphasis added). So our review is extremely limited. Dominion Video Satellite, Inc. v. Echostar Satellite L.L.C., 430 F.3d 1269, 1275 (10th Cir. 2005). In addition, we have emphasized that a court should exercise "great caution" when a party asks for an arbitration award to be set aside. Ormsbee Dev. Co. v. Grace, 668 F.2d 1140, 1147 (10th Cir. 1982).

         The Supreme Court has emphasized that "only . . . extraordinary circumstances" warrant vacatur of an arbitral award. San Juan Coal Co. v. Int'l Union of Operating Eng'rs, Local 953, 672 F.3d 1198, 1201 (10th Cir. 2012) (citing Major League Baseball Players Ass'n v. Garvey, 532 U.S. 504, 509 (2001) (per curiam)).The Court has also said that if "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." United Paperworkers Int'l Union, AFL-CIO v. Misco, Inc., 484 U.S. 29, 38 (1987); Oxford Health Plans LLC, 133 S.Ct. at 2068 (describing "the sole question" for courts as "whether the arbitrator (even arguably) interpreted the parties' contract, not whether he got its meaning right or wrong"). Even so, "[t]he arbitrator may not ignore the plain language of the contract." Misco, 484 U.S. at 38.

         In practice, courts "are 'not authorized to reconsider the merits of an award even though the parties may allege that the award rests on errors of fact or on misinterpretation of the contract.'" CEEG, 829 F.3d at 1206 (quoting Misco, 484 U.S. at 36); see also ARW Expl. Corp., 45 F.3d at 1463 ("Even erroneous interpretations or applications of law will not be disturbed."). "The arbitrator's ...

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