Court Refuses to Vacate Arbitration Award Over Past Contacts Between Lawyer and Arbitrator

While the New Jersey legal community is quite large, many lawyers and judges develop professional relationships. In a recent decision, Federal District Judge William H. Walls addressed when arbitrators are required to disclose past contacts with attorneys who appear before them.

The Facts of the Case

Campmor, Inc., a retailer of recreational equipment, filed suit against Brulant, LLC, an Internet marketing firm, in 2009. After years of discovery, the two sides agreed to resolve their contract dispute through binding arbitration.

The arbitration agreement provided that the parties would select, by mutual agreChief Judge of the District of New Jersey Garrett E. Brownement, a retired U.S. Magistrate Judge or U.S. District Court Judge of the District of New Jersey to be their sole arbitrator. They ultimately selected former , who issued a detailed decision and final arbitration award on July 1, 2014. When Brulant moved to confirm the award, Campmor objected, arguing that the award should be vacated because Judge Brown did not disclose his past contacts with Brulant’s counsel Dennis Drasco.

In its motion, Campmor emphasized Judge Brown’s contact with Mr. Drasco through the Lawyers’ Advisory Committee, an organization whose membership includes all federal judges in the District of New Jersey and approximately forty-five to fifty attorneys and retired judges. Campmor also highlighted two public events that Judge Brown and Mr. Drasco both attended. They included a 2008 swearing-in ceremony for newly admitted attorneys in which Judge Brown and Mr. Drasco both participated, as well as a 2008 address to the New Jersey State Bar Association, in which Judge Brown recognized Mr. Drasco for having made a recommendation regarding oral argument in the District of New Jersey.

The Legal Background

The New Jersey Arbitration Act provides that “an individual who is requested to serve as an arbitrator, after making a reasonable inquiry, shall disclose to all parties . . . any known facts that a reasonable person would consider likely to affect the impartiality of the arbitrator in the arbitration proceeding, including: . . . (2) an existing or past relationship with any of the parties to the agreement to arbitrate or the arbitration proceeding, their counsel or representatives, a witness, or other arbitrators.” If a party fails to make a required disclosure, the statute provides that a reviewing court may vacate an award.

The Court’s Decision

The court refused to vacate the award, finding the relationship was “administrative and routine.” As highlighted in the opinion, the arbitrator did not share a deep professional relationship with Drasco, but rather all of the contacts derived from his service as chief judge of the District of New Jersey.

“Placed in context, it gives the reasonable person no reason to question Judge Brown’s impartiality in a later, unrelated arbitration in which Mr. Drasco participated as counsel,” the court held.

The court further noted that the “professional familiarity” was to be expected. “When parties agree to select a retired judge from a particular district as their arbitrator, they must anticipate the judge’s professional familiarity with many of the lawyers who practice in that district,” Judge Walls explained.

If you have questions about this case or would like to discuss business arbitration, please contact me or the Scarinci Hollenbeck attorney with whom you work.