Tio v. Washington Hospital Center Corp. ( 2010 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
THIAN LOK TIO et al., :
:
Petitioners, : Civil Action No.: 08-0626 (RMU)
:
v. : Re Document No.: 1
:
WASHINGTON HOSPITAL CENTER et al., :
:
Respondents. :
MEMORANDUM OPINION
DENYING THE PETITION TO VACATE ARBITRATION AWARD
I. INTRODUCTION
This matter arises from an employment dispute between the petitioners, a physician and
his spouse, and the physician’s former employer, respondent Washington Hospital Center (“the
Hospital”). On November 5, 2004, in a prior action before this court, the court dismissed the
petitioners’ claims against the Hospital and its fellow respondents on the grounds that those
claims were subject to a mandatory arbitration provision in the subject employment contract.
The petitioners subsequently submitted their claims to arbitration and a final arbitration award
was entered in favor of the respondents. Dissatisfied with the result of the arbitration
proceedings, the petitioners initiated this action seeking vacatur of the arbitration award.
Because the petitioners have not demonstrated that vacatur is appropriate, the court denies their
petition to vacate the arbitration award.
II. FACTUAL & PROCEDURAL BACKGROUND
Petitioner Thian Lok Tio, M.D. (“Dr. Tio”) is a former employee of the Hospital,1 where
he held the position of Director of Endoscopy in the Section of Gastroenterology. Tio v. Wash.
Hosp. Ctr., 2004 WL 2663149, at *1 (D.D.C. Nov. 5, 2004).2 Prior to commencing his
employment at the Hospital, Dr. Tio and the Hospital entered into a written employment
agreement (the “Agreement”). See id.; Respts’ Opp’n to Petrs’ Mot. to Vacate (“Respts’
Opp’n”) at 2. The Agreement contained an arbitration clause, which provided, in relevant part,
that “any controversy, dispute or disagreement arising out of or relating to this Agreement, or the
breach thereof, shall be settled by binding arbitration.” Compl., Ex. 1 ¶ 12, Tio v. Wash. Hosp.
Ctr., No. 04-701 (D.D.C. Apr. 28, 2004). The Agreement provided for the costs of arbitration to
be divided equally between the parties. See id.On April 18, 2003, the Hospital terminated Dr. Tio’s employment. Tio, 2004 WL
2663149, at *1. Dr. Tio and his wife, petitioner Ting Song S. Tio (“Mrs. Tio”), subsequently
filed suit against the respondents in the D.C. Superior Court, alleging: (1) tortious breach of
contract; (2) tortious interference with an employment contract; (3) denial of common-law good
faith and fair dealing; (4) tortious interference with third-party physician-patient contracts; (5)
defamation/slander; (6) intentional infliction of emotional distress (“IIED”); (7)
fraud/misrepresentation; (8) antitrust violations; (9) wrongful termination; and (10) loss of
1
Respondent Medstar Health, Inc. is the corporate parent of respondent Washington Hospital
Center Corporation. Pet. ¶ 2.
2
The parties in this action were previously before this court in a separate action involving the same
underlying claims. See generally Compl., Tio v. Wash. Hosp. Ctr., No. 04-701 (D.D.C. Apr. 28,
2004). The court draws the background facts of this case, in part, from the description of relevant
facts set forth in its November 5, 2004 memorandum opinion in the prior case.
2
consortium.3 Id. After removing the action to this court, the defendants moved to dismiss the
complaint and compel submission of the claims to arbitration. Id.On November 5, 2004, the court granted the defendants’ motion. Id. at *7. In reaching
its decision, the court held that the Agreement, including the arbitration provision, was valid and
enforceable. Id. at *6. The court also concluded that the arbitration provision encompassed all
of the claims asserted by Dr. Tio and that Mrs. Tio’s claims were entirely derivative of and
dependent on Dr. Tio’s claims and therefore subject to mandatory arbitration as well. Id. at *7.
The petitioners subsequently initiated an arbitration proceeding before Judicial
Arbitration & Mediation Services, Inc. (“JAMS”), asserting all of the claims raised in their
complaint. Pet. ¶ 13; Respts’ Opp’n at 3. During a preliminary hearing, and without objection,
the arbitrator narrowed the parties to those within the scope of the Agreement between Dr. Tio
and the Hospital. Respts’ Opp’n, Ex. E (“Final Award”) at 2. On January 25, 2007, after
briefing and oral argument, the arbitrator granted in part the Hospital’s motion for summary
judgment and dismissed all of the claims except Dr. Tio’s claims for breach of contract and
wrongful termination on the basis of discrimination. Id.
Beginning in late August 2007, the arbitrator conducted a hearing that spanned eight
days. Id. at 3. At the hearing, the parties presented “diametrically opposed” versions of the
events at issue. Id. at 3 n.1. After considering the cumulative weight of all admissible evidence,
including testimony adduced during the hearings, id., the arbitrator summarized his factual
3
In the petitioners’ initial action, Dr. Tio’s wife was identified as Ting Soan S. Tio. Compl. at 1,
Tio, 2004 WL 2663149. The defendants in that action were the Hospital, Medstar Health, Inc.,
and nine employees and officers of the Hospital (hereinafter referred to collectively as “the
defendants”). See generally id.3
findings, in relevant part, as follows:
At some time in 2001, [Dr. Tio] initiated an employment application process at
the Cedars-Sinai Hospital in California . . . [and continued] to pursue outside
employment opportunities throughout 2002. In addition to seeking alternative
employment, [Dr. Tio] curtailed his work at [the Hospital]. He began to travel
extensively, attending conferences, speaking at engagements, and taking
international trips and vacations. [Dr. Tio’s] productivity, measured in terms of
patient revenues and responsiveness to operational needs, plummeted. On or
about April 23, 2003, [the Hospital] . . . terminated [Dr. Tio’s] employment for
cause, citing primarily [Dr. Tio’s] lack of leadership, decreased attention to his
duties, and decline in productivity.
Id. at 4.
According to the arbitrator, Dr. Tio established at the hearing that he is a member of a
protected class and that he suffered an adverse employment action when he was terminated from
the hospital. Id. Nonetheless, the arbitrator held that to prevail on his claim of discrimination,
which formed the basis of Dr. Tio’s breach of contract and wrongful termination claims,4 Dr. Tio
also needed to establish that he was treated disparately from other employees on the basis of his
race and national origin. Id. at 5. Although Dr. Tio identified various instances in which he
believed he had been treated disparately from other physicians at the Hospital, the arbitrator
ultimately concluded that there was insufficient evidence to establish disparate treatment. See id.
at 5-6. Because the Hospital proffered evidence that Dr. Tio’s employment had been terminated
for cause and because Dr. Tio failed to establish that he suffered discrimination in the course of
his employment with and termination from the Hospital, the arbitrator entered a final arbitration
award in favor of the Hospital with respect to all claims and allegations. Id. at 5-7.
Following the arbitrator’s ruling, the petitioners filed this petition to vacate the arbitration
4
The crux of Dr. Tio’s breach of contract claim appears to have been that his termination was
without cause and motivated by discriminatory animus. See generally Compl., Tio, No. 04-701.
4
award. See generally Pet. The petitioners contend that the arbitration award should be vacated
because their claims were not subject to the Agreement’s mandatory arbitration clause, the
arbitrator displayed bias and acted in manifest disregard of the law and the fee-splitting provision
of the Agreement’s arbitration clause violates public policy. See generally id.; Petrs’ Mem. in
Support of Pet. (“Petrs’ Mem.”). The respondents maintain that the petitioners have presented
no valid justification for vacating the final arbitration award. See generally Respts’ Opp’n. With
this matter ripe for disposition, the court turns to the applicable legal standards and the parties’
arguments.
III. ANALYSIS
A. The Petitioners’ Claims Fell Within the Scope of the Arbitration Agreement
Despite this court’s November 5, 2004 ruling, the petitioners contend that their claims
should not have been submitted to arbitration because (1) the Agreement involves foreign or
interstate commerce and is therefore exempt from the provisions of the Federal Arbitration Act
(“FAA”) under 9 U.S.C. § 1, (2) Dr. Tio’s claim of tortious interference with third-party
physician-patient contracts falls outside the scope of the Agreement as the claim arose after the
termination of his employment with the Hospital and (3) the Hospital waived its right to invoke
the arbitration clause of the Agreement as it did not seek to arbitrate this dispute prior to
terminating Dr. Tio’s employment. Pet. ¶¶ 5, 9-10. The petitioners raised each of these
arguments in the prior proceedings before this court in response to the respondents’ motion to
5
dismiss and compel arbitration.5 See Pls.’ Opp’n to Defs.’ Mot. Dismiss & Compel Arbitration,
Tio, 2004 WL 2663149. In ruling on the respondents’ motion to dismiss, the court considered
and rejected each of these arguments. See Tio, 2004 WL 2663149, at *6-7. Accordingly, for the
reasons set forth in this court’s Memorandum Opinion dated November 5, 2004, the court holds
that the claims at issue in the arbitration proceedings were within the scope of the arbitration
provision of the Agreement and properly submitted to the arbitrator for determination.
The court notes that the petitioners did not challenge the November 5, 2004 order
dismissing their claims or the court’s ruling concerning the scope of the arbitration provision.
Under the FAA, “[a]n appeal may be taken from a final decision with respect to an arbitration
that is subject to this title.” 9 U.S.C.S. § 16(a)(3). A “final decision” is a decision “that ends the
litigation on the merits and leaves nothing more for the court to do but execute the judgment.”
Green Tree Fin. Corp.-Alabama v. Randolph, 531 U.S. 79, 86 (2000) (internal quotations
omitted). The court’s November 5, 2004 order granting the Hospital’s motion to dismiss and
referring the petitioner’s claims to arbitration under the arbitration clause of the Agreement
constituted a final appealable decision. Id. at 89 (holding that district court order dismissing
claims and directing arbitration is final within the meaning of 9 U.S.C. § 16(a)(3), and therefore
5
Although the petitioners did not specifically argue that the tortious interference claim was outside
the scope of the arbitration agreement, they did contest the scope of the agreement generally and
the court concluded that each claim, including Dr. Tio’s tortious interference claim, was within
the scope of the Agreement. See Tio, 2004 WL 2663149, at *6. Nonetheless, Dr. Tio’s tortious
interference claim seems to hinge entirely on whether the respondents interfered with his ability
to take his “book of business” with him after the termination of his employment at the Hospital,
see Pet. ¶ 10, and it therefore is within the scope of the arbitration provision because it relates to
the Agreement and arose in connection with the termination of the agreement, see P&P Indus.,
Inc. v. Sutter Corp., 179 F.3d 861, 871 (10th Cir. 1999) (concluding that a claim for tortious
interference with third-party contracts fell within the scope of an “arising out of or relating to”
arbitration clause when the claim arose in connection with the termination of the parties’
contract).
6
appealable). Therefore, to the extent the petitioners disagree with the court’s prior ruling, they
failed to timely raise their objections on appeal.6 See FED. R. APP. P. 4(a)(1)(A) (stating that a
notice of appeal of a final order must be filed within thirty days after the judgment or order
appealed from is entered).
B. Vacatur of the Arbitration Award Is Not Warranted
1. Legal Standard for Vacatur of an Arbitration Award
Judicial review of arbitration awards is extremely limited. Kurke v. Oscar Gruss & Son,
Inc., 454 F.3d 350, 354 (D.C. Cir. 2006). The court “do[es] not sit to hear claims of factual or
legal error by an arbitrator” in the manner that an appeals court would review a decision of a
lower court. Teamsters Local Union No. 61 v. United Parcel Serv., Inc., 272 F.3d 600, 604
(D.C. Cir. 2001) (quoting Kanuth v. Prescott, Ball & Turben, Inc., 949 F.2d 1175, 1178 (D.C.
Cir. 1991)). Rather, under the FAA, a court may only vacate an arbitration award
(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;
6
A party may also seek relief from a final judgment under Federal Rule of Civil Procedure 60(b).
Rule 60(b)(6) provides that a court may grant relief from a final judgment for any reason that
justifies relief if such relief is requested within a reasonable time. See FED. R. CIV. P. 60(b)-(c).
Such relief is justified only in exceptional or extraordinary circumstances. Ackermann v. United
States, 340 U.S. 193, 199-202 (1950). “What constitutes a ‘reasonable time’ depends upon the
facts of each case, taking into consideration the interests of finality, the reasons for the delay, the
practicability of the litigant to learn earlier of the grounds relied upon, and prejudice to the other
parties.” Bowie v. Maddox, 677 F. Supp. 2d 276, 278 (D.D.C. 2010) (quoting Osborne v.
Homeside Lending, Inc., 379 F.3d 277, 283 (5th Cir. 2004)). Although the petitioners did not
expressly request relief from the final judgment that was entered on November 5, 2004, the court
notes the circumstances of this case are neither exceptional nor extraordinary and thus would not
justify relief from the final judgment. Moreover, the petitioners’ are attempting to relitigate
issues that were previously resolved by the court forty-one months after entry of a final judgment
disposing of their claims. It is apparent that the petitioners have only raised these issues again
because they are dissatisfied with the result of the arbitration. The court therefore concludes that
the petitioners’ delay was not reasonable.
7
(3) where the arbitrators were guilty of misconduct in refusing to postpone the
hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent
and material to the controversy; or of any other misbehavior by which the
rights of any party have been prejudiced; 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). The party challenging an arbitration award bears the burden of demonstrating
that one of the statutory grounds set forth in the FAA exists. See Al-Haribi v. Citibank, N.A., 85
F.3d 680, 682 (D.C. Cir. 1996).
In addition to the statutory grounds for vacatur, this Circuit has also stated that vacatur of
an arbitration award is permitted if the arbitrator acted in “manifest disregard of the law,”7 Al
Haribi v. Citibank, N.A., 85 F.3d 680, 682 (D.C. Cir. 1996) (quoting Kanuth, 949 F.2d at 1178),
or if the award is “contrary to ‘some explicit public policy’ that is ‘well defined and dominant’
and ascertained ‘by reference to the laws or legal precedents,’” LaPrade v. Kidder, Peabody &
Co., 246 F.3d 702, 706 (D.C. Cir. 2001) (quoting Cole v. Burns Int’l Sec. Servs., 105 F.3d 1465,
1486 (D.C. Cir. 1997)). To vacate an arbitration award on the basis of an arbitrator’s manifest
7
The Supreme Court recently held that the provisions set forth in 9 U.S.C. § 10 “provide the
FAA’s exclusive grounds for expedited vacatur.” Hall Street Assocs. v. Mattel, Inc., 552 U.S.
576, 582 (2008). In light of this ruling, it is unclear whether the “manifest disregard” standard
remains a viable basis for relief. Compare, e.g., Citigroup Global Mkts., Inc. v. Bacon, 562 F.3d
349, 358 (5th Cir. 2009) (recognizing that manifest disregard of the law is no longer an
“independent, nonstatutory ground” for setting aside an arbitration award) with Comedy Club,
Inc. v. Improv West Assocs., 553 F.3d 1277, 1281 (9th Cir. 2009) (concluding that manifest
disregard of the law “remains a valid ground for vacatur of an arbitration award under § 10(a)(4)
of the Federal Arbitration Act”). Neither the Supreme Court nor this Circuit has resolved this
issue. See Stolt-Nielson S.A. v. AnimalFeeds Int’l Corp., 130 S. Ct. 1758, 1768 n.3 (2010)
(declining to decide whether the “manifest disregard” doctrine continues to survive as an
independent ground for judicial review of an arbitration award); Regnery Publ’g Inc. v. Miniter,
368 F. App’x 148 (D.C. Cir. 2010) (assuming without deciding that the “manifest disregard”
doctrine survives Hall Street). Because the petitioners in this case have not established the
arbitrator’s “manifest disregard,” see infra Part III.B.3, the court need not decide the viability of
the “manifest disregard” standard to resolve this case.
8
disregard of the law, the court “must find that (1) the arbitrator[] knew of a governing legal
principle yet refused to apply it or ignored it altogether and (2) the law ignored by the arbitrator[]
was well defined, explicit, and clearly applicable to the case.” Id. (quoting DiRussa v. Dean
Witter Reynolds, Inc., 121 F.3d 818, 821 (2d Cir. 1997)).
2. The Petitioners Have Not Established a Statutory Basis
for Vacating the Arbitration Award
The petitioners argue that vacatur is appropriate under the FAA on two grounds: evident
partiality and misconduct.8 Specifically, the petitioners contend that the arbitrator demonstrated
partiality by making various rulings that were adverse to their claims and that the arbitrator
committed misconduct by excluding certain testimony during the arbitration hearing. See
generally Pet.; Petrs’ Mem. at 25-26. The respondents contend that the court should reject the
petitioners’ assertion of evident partiality because they have not produced any evidence to
support their contentions, the purported instances of partiality are belied by the record and the
conduct complained of, even if true, does not rise to the level of evident partiality. See Respts’
Opp’n at 12-15. The respondents further contend that the petitioners have failed to demonstrate
misconduct, as they have not shown that the excluded testimony was material and pertinent or
that they were denied a fair and full hearing as a result of the arbitrator’s conduct. See id. at 15-
17.
The court turns first to the petitioners’ claim of evident partiality. A party challenging an
8
The petitioners also seem to argue that vacatur is appropriate under 9 U.S.C. § 10(a)(4) on the
ground that the arbitrator exceeded his authority, but this argument appears to be grounded in the
petitioners’ contention that some of their claims were outside the scope of the arbitration
provision of the Agreement. Pet. ¶¶ 9-10; Petrs’ Mem. at 22-23. As previously discussed,
however, the court already concluded in its November 5, 2004 ruling that all of the petitioners’
claims were subject to the arbitration provision. See supra Part III.A. Therefore, the arbitrator
did not exceed his authority by resolving all of the petitioners’ claims.
9
arbitration award because of evident partiality bears a “heavy” burden to establish “specific facts
that indicate improper motives on the part of an arbitrator.” Al-Haribi, 85 F.3d at 683 (quoting
Peoples Sec. Life Ins. Co. v. Monumental Life Ins. Co., 991 F.2d 141, 146 (4th Cir. 1993)). “The
alleged partiality must be direct, definite, and capable of demonstration rather than remote,
uncertain or speculative.” Id. (quoting Peoples Sec. Life Ins., 991 F.2d at 146). “[A] mere
appearance of bias is insufficient to demonstrate evident partiality.” Alston v. UBS Fin. Servs.,
Inc., 2006 WL 20516, at *3 (D.D.C. Jan. 2, 2006).
The petitioners contend that the arbitrator exhibited evident partiality in numerous
procedural, substantive and evidentiary rulings during the course of the arbitration proceedings.
See generally Pet. But rather than identifying specific facts that indicate improper motives on
the part of the arbitrator, the petitioners rely primarily on speculative and conclusory allegations
to support their claim. The petitioners do not support their assertion of evident partiality with a
single citation to the record of the arbitration proceedings or any other evidence setting forth the
specific facts necessary to support their position. See generally Pet.; Petrs’ Mem. Indeed, the
petitioners’ claim of evident partiality rests almost exclusively on their dissatisfaction with the
arbitrator’s rulings that “eliminate[d] and restrict[ed] the claims, the parties, the number of
witness [sic], [and] the timing and order of presentation of Petitioner’s case in chief.” Pet. ¶ 15.
These rulings, however, do not demonstrate evident partiality.9 See Alston, 2006 WL 20516, at
*3-4 (rejecting the petitioners’ contention that unfavorable procedural and evidentiary rulings by
9
At any rate, on the record before the court, there does not seem to be anything unusual or
inappropriate about the arbitrator’s rulings on these issues. See Fairchild & Co. v. Richmond, F.
& P. R. Co., 516 F. Supp. 1305, 1313 (D.D.C. 1981) (recognizing that “since the advantages of
arbitration are speed and informality, an arbitrator should be expected to act affirmatively to
simplify and expedite the proceedings before him”).
10
an arbitrator amounted to evident partiality). Although a series of unfavorable rulings by the
arbitrator may produce an appearance of bias in the eyes of the unsuccessful party, it does not
justify vacating the arbitration award.
The petitioners also contend that the arbitrator’s ultimate conclusion and decision to enter
the final arbitration award in favor of the respondents demonstrates his evident partiality. See
Pet. ¶ 12; Petrs’ Mem. at 24-25. It would appear that the petitioners base this contention on their
belief that the arbitrator inappropriately credited the testimony of witnesses offered by the
respondents, even though “[t]hey were contradicted on cross-examination.” Petrs’ Mem. at 25.
The petitioners, however, have not identified specific testimony that they believe was unworthy
of credence and point to no specific facts that indicate improper motives on the part of the
arbitrator in concluding that the weight of the evidence favored the defendant. See generally
Pet.; Petrs’ Mem. Indeed, the arbitrator specifically noted in the final arbitration award that the
parties had offered conflicting versions of the circumstances. Final Award at 3. The arbitrator
further observed that “[w]hile the credibility of witnesses was taken into account . . . a finding
that does not comport with a particular party’s testimony should not necessarily be deemed a
finding that the party lacked credibility. All findings were based upon the cumulative weight of
all admissible evidence.” Id. At any rate, the court is “not authorized to reconsider the merits of
an award even though the parties may allege that the award rests on errors of fact.” Teamsters
Local Union No. 61, 272 F.3d at 604 (quoting United Paperworkers Int’l Union, AFL-CIO v.
Misco, Inc., 484 U.S. 29, 36 (1987)). The court will not second-guess the arbitrator’s award
simply because the petitioners disagree with his factual conclusions.
Equally unavailing is the petitioners’ argument that the arbitration award should be
vacated because the arbitrator was guilty of misconduct in failing to hear certain evidence. See
11
Pet. ¶ 14; Petrs’ Mem. at 25-26. An arbitrator has the broad discretion to control the evidence in
an arbitration proceeding, including the authority to refuse to hear evidence that is cumulative or
of little relevance. Lessin v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 481 F.3d 813, 817-18
(D.C. Cir. 2007); see also Fairchild, 516 F. Supp. at 1314 (noting that “arbitrators are charged
with the duty of determining what evidence is relevant and what is irrelevant”). To justify
vacatur on the ground of misconduct, the petitioners must demonstrate that the excluded
evidence was pertinent and material to the controversy, 9 U.S.C. § 10(a)(3), and that the
exclusion of the evidence deprived the petitioners of a fundamentally fair hearing, Lessin, 481
F.3d at 816; see also Fairchild, 516 F. Supp. at 1314 (recognizing that evidentiary mistakes do
not provide grounds for vacating an arbitration award unless they undermine the fundamental
fairness of the proceedings). Thus, “every failure to receive relevant evidence does not
constitute misconduct under the [FAA] so as to require vacation of the award.” Fairchild, 516 F.
Supp. at 1314 .
The “pertinent and material” evidence that the petitioners contend was erroneously
excluded includes testimony by the wife of a hospitalized patient, testimony of “other patients
. . . to show total revenue generated due to high income for specialized procedures,” “testimony
of other physicians and fellows as to Dr. Tio’s leadership in running the unit,” and “rebuttal
testimony of witness to refute testimony of respondents[’] witnesses.” Pet. ¶ 14. It is not clear
what value this testimony would have added to the proceeding and the petitioners have not
attempted to explain how this testimony is pertinent and material to Dr. Tio’s claims of breach of
contract and discrimination. See generally Pet.; Petrs’ Mem. But assuming arguendo that this
testimony would have been relevant to the claims at issue in the hearing, the petitioners’
argument fails because they have not established that the excluded evidence was critical to their
12
case or that the exclusion of the testimony deprived them of a fundamentally fair hearing. See
Howard Univ. v. Metro. Campus Police Officer's Union, 512 F.3d 716 (D.C. Cir. 2008)
(deferring to the arbitrator’s discretion in making evidentiary rulings and noting that the
excluded evidence was not critical to the proponent’s case).
Accordingly, although the petitioners have demonstrated their dissatisfaction with the
result of the arbitration proceeding, they have not established that vacatur is appropriate under 9
U.S.C. § 10(a). Because the petitioners failed to meet their burden, the court declines to vacate
the arbitration award on statutory grounds.
3. The Petitioners Have Not Shown the Arbitrator’s Manifest Disregard of the Law
As an alternate ground for vacatur, the petitioners contend that the arbitrator acted in
manifest disregard of the law. Pet. ¶ 14; Petrs’ Mem. at 20-21. Although the petitioners’
arguments are not entirely clear, their primary contention appears to be that the arbitrator
demonstrated manifest disregard of the law by denying the respondents’ motion for summary
judgment as to the breach of contract claim, but granting the motion as to Dr. Tio’s claims of
tortious interference, IIED and discrimination.10 Petrs’ Mem. at 21. According to the
petitioners, these claims are “so inextricably linked” with the breach of contract claim that it was
error to dismiss them. Id. In addition, the petitioners contend that the arbitrator acted in
manifest disregard of the law when he granted in part the respondents’ motion for summary
judgment and dismissed “nearly all [of the] petitioners’ major claims and all key individual
10
As discussed more fully below, contrary to the petitioners’ contention, the arbitrator did not grant
the respondents’ motion for summary judgment on Dr. Tio’s discrimination claim. See infra Part
III.B.3.
13
parties, without oral argument or other hearing,”11 Pet. ¶ 14, and by failing to set forth his ruling
in a detailed written opinion, id.The respondents contend that their motion for summary judgment was “amply supported
by record evidence demonstrating that [they were] entitled to summary judgment,” Respts’
Opp’n at 21, and have identified portions of the record indicating that the arbitrator made a
reasoned and deliberate ruling on the motion for summary judgment, id. at 21-22; see also Pre-
Hearing Order No. 1 (setting forth the arbitrator’s ruling on the Hospital’s motion for summary
judgment and noting that the ruling was made “[o]n the basis of the written motions and all
responses filed thereto, as well as oral argument”); H’rg Tr. at 81:2-3 (stating that the basis of his
ruling on the Hospital’s motion for summary judgment “is in Respondent’ s 43-page brief
[where] they thoroughly briefed these issues”).
To demonstrate that the arbitrator acted in manifest disregard of the law, the petitioners
must show that the arbitrator knew of a governing legal principle, yet refused to apply it in ruling
on their claims. LaPrade, 246 F.3d at 706. Because the parties briefed and argued the matters at
issue in the respondents’ motion for summary judgment, the court assumes arguendo that the
arbitrator knew the legal principles that govern the petitioners’ substantive claims. The
11
To the extent the petitioners take issue with the dismissal of individual parties and the arbitrator’s
alleged failure to hold a hearing, Pet. ¶ 14, their contentions are refuted by the record. The record
indicates that “the arbitrator narrowed the parties to those who were within the scope of the
operable agreement to arbitrate contained in [the Agreement].” Final Award at 2. This ruling
occurred, without objection by Dr. Tio or the Hospital, during the preliminary hearing. Id.Moreover, the arbitrator indicated during the arbitration proceedings that his summary judgment
order “was made on the basis of written motions, all the responses filed thereto, and oral
arguments.” Respts’ Opp’n, Ex. K (“Hearing Tr.”) at 29:5-7 (emphasis added); see also Respts’
Opp’n, Ex. I (“Pre-Hearing Order No. 1”) (noting that the arbitrator’s ruling concerning the
motion for summary judgment was made “[o]n the basis of the written motions and all responses
filed thereto, as well as oral argument made by the parties”). Thus, the record clearly indicates
that the arbitrator did conduct a hearing.
14
petitioners, however, still must demonstrate that the arbitrator refused to apply these governing
legal principles to their claims when he ruled on the respondents’ motion for summary judgment.
The petitioners suggest that because there was a genuine issue of material fact related to
their breach of contract claim, there must have also been a genuine issue of material fact related
to their other claims. Petrs’ Mem. at 21. This argument assumes that the petitioners’ claims are
comprised of overlapping or identical elements, such that they must all survive summary
judgment or all be dismissed. Such an assumption is not justified. Indeed, it should be self-
evident that the elements of a claim of IIED or tortious interference with a business relationship
are not the same as the elements of a claim for breach of contract. Compare, e.g., Pitt v. Dist. of
Columbia, 491 F.3d 494, 505-06 (D.C. Cir. 2007) (setting forth the elements of an IIED claim
under District of Columbia law) with Sturdza v. United Arab Emirates, 281 F.3d 1287, 1305
(D.C. Cir. 2002) (setting forth the elements of a tortious interference claim under District of
Columbia law) and Ihebereme v. Capital One, N.A., 2010 WL 3118815, at *3 (D.D.C. Aug. 9,
2010) (setting forth the elements of a breach of contract claim). Because the petitioners have
offered no evidence to demonstrate that the arbitrator refused to apply or ignored the legal
principles governing claims of tortious interference or IIED or any other claim at issue in the
proceedings, they have not demonstrated that the arbitrator acted in manifest disregard of the law
by granting in part and denying in part the respondents’ motion for summary judgment. See
generally Pet.; Petrs’ Mem.
The petitioners also contend that the arbitrator acted in manifest disregard of the law by
granting the respondents’ motion for summary judgment on Dr. Tio’s discrimination claim. See
Pet. ¶ 14 (contending that “this partial finding [on the motion for summary judgment] is wrong
with regard to claims of discrimination where the breach of contract could be based on such
15
grounds”); Petrs’ Mem. at 27 (arguing that the “Petitioners’ discrimination claims should not
have been cut off by way of Summary Judgment granted to the Respondents”). The record
plainly indicates, however, that the arbitrator denied the respondents’ motion for summary
judgment on this claim. See Pre-Hearing Order No. 1 (granting summary judgment to the
Hospital and dismissing all claims except Dr. Tio’s claims of breach of contract and wrongful
termination of employment on the basis of discrimination) (emphasis added); Final Award at 2
(stating that “the claims remaining to be heard were Claimant’s allegations that Respondent . . .
illegally terminated his employment on the basis of discrimination”) (emphasis added); id. at 4-6
(analyzing the merits of Dr. Tio’s discrimination claim). Instead, the arbitrator conducted an
evidentiary hearing spanning eight days and concluded, based on the evidence presented during
the hearing, that the petitioner had not proven his claim of discrimination. Final Award at 6
(stating that the “matter was noteworthy for the complete absence of any evidence of racial bias
or other impermissible intent to discriminate against [Dr. Tio]”).
The petitioners also suggest that the arbitrator acted in manifest disregard of the law by
ruling on the respondents’ motion for summary judgment “with a single sentence.” Pet. ¶ 14.
Although the arbitrator did not render a detailed opinion as to the basis of his rulings on the
motion for summary judgment, he was under no obligation to do so. See Sargent v. Paine
Webber Jackson & Curtis, Inc., 882 F.2d 529, 532 (D.C. Cir. 1989) (holding that arbitrators are
not required to explain the basis for their awards); cf. Kurke, 454 F.3d at 354-55 (noting that
“[e]ven where an explanation for an award is deficient or non-existent, [the court] will confirm it
if a justifiable ground for the decision can be inferred from the facts of the case” (quoting
Duferco Int'l Steel Trading v. T. Klaveness Shipping A/S, 333 F.3d 383, 390 (2d Cir. 2003))).
In this case, the arbitrator indicated during the hearing that the basis of his ruling was the
16
Hospital’s forty-three page summary judgment brief. Hearing Tr. at 81:1-7. In their motion for
summary judgment, the respondents set forth the material facts as to which there was no genuine
dispute and produced deposition testimony and documentary evidence to establish those facts.
See generally Respts’ Opp’n, Ex. Q. For each of the petitioners’ claims, the respondents
addressed the governing legal standard and identified essential elements that they believed to be
unsupported by the record. Id. In contrast, the petitioners’ opposition to the respondents’ motion
for summary judgment consisted primarily of conclusory arguments about why summary
judgment was not appropriate. See generally Respts’ Opp’n, Ex. M. The only evidence offered
in support of the petitioners’ opposition was an affidavit of Dr. Tio. Id. This record amply
justifies the arbitrator’s decision to grant summary judgment to the respondents on some of the
petitioners claims, and vacatur is not appropriate simply because the arbitrator ruled on the
Hospital’s motion for summary judgment without providing a detailed explanation for his ruling.
In sum, even after a liberal reading of the petitioners’ arguments, it is clear they have not
established that the arbitrator acted in manifest disregard of the law by refusing to apply
governing legal principles to their claims. Accordingly, the court declines to vacate the
arbitrator’s ruling on this basis.
4. The Parties’ Agreement to Split Arbitration Costs Does Not Justify Vacatur
The petitioners also argue that the arbitration award should be vacated because it is
against public policy to require a claimant who is advancing a discrimination claim in an
17
arbitration proceeding to pay half the cost of the arbitration.12 Pet. ¶ 14. Noting that the
petitioners seem to be challenging whether the discrimination claim was properly submitted to
arbitration in light of the fee-splitting provision, the respondents contend that the petitioners
waived any arguments they may have had concerning the fee-splitting provision by failing to
raise the issue until this late stage in the proceedings. See Respts’ Opp’n at 9.
In an action to vindicate a public right, this Circuit disfavors placing the financial burden
of arbitral proceedings on the party pursuing a claim. See Cole, 105 F.3d at 1485 (holding that
employee could not be required to arbitrate discrimination claim as a condition of employment
“if the arbitration agreement required him to pay all or part of the arbitrator’s fees and
expenses”). Nonetheless, a fee-splitting provision does not impede the remedial and deterrent
functions of the statutory right “so long as the prospective litigant effectively may vindicate his
or her statutory cause of action in the arbitral forum.” Gilmer v. Interstate/Johnson Lane Corp.,
500 U.S. 20, 28 (1991) (alteration in original) (citing Mitsubishi Motors Corp. v. Soler Chrysler-
Plymouth, Inc., 473 U.S. 614, 637 (1985)).
The petitioners have no basis to challenge the fee-splitting requirement at this stage in the
proceeding because there is no evidence that the requirement limited their ability to effectively
vindicate Dr. Tio’s statutory cause of action. LaPrade, 246 F.3d at 708 (rejecting an employee’s
challenge to a fee-splitting provision in an arbitration agreement because the employee did not
claim “that the possibility of a large assessment arising from arbitration of her claims prevented
12
In addition to challenging the fee-splitting provision on public policy grounds, the petitioners also
contend that it was against public policy for the arbitrator to grant the Hospital’s motion for
summary judgment as to Dr. Tio’s discrimination claim. See Petrs’ Mem. at 26-27. This
argument lacks merit because, as explained above, the arbitrator did not grant summary judgment
on Dr. Tio’s discrimination claim. See supra Part III.B.3.
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her from attempting to vindicate her rights” or that “the arbitration panel failed to consider the
evidence that she submitted to show she was financially unable to pay any assessment”). Indeed,
there is nothing in the record to suggest that the petitioners objected to sharing the burden of the
arbitration costs until after the arbitrator entered a final arbitration award in favor of the
respondents.13 Because the petitioners have not demonstrated that the fee-splitting requirement
set forth in the arbitration provision of the Agreement violates public policy, their effort to have
the arbitration award vacated on this ground fails.
IV. CONCLUSION
For the foregoing reasons, the court denies the petition to vacate the arbitration award.
An Order consistent with this Memorandum Opinion is separately and contemporaneously issued
this 30th day of November, 2010.
RICARDO M. URBINA
United States District Judge
13
The petitioners had an opportunity to challenge the fee-splitting provision when their claims were
before this court in 2004, yet they failed to object to enforcement of the arbitration provision on
this ground. See generally Pls.’ Opp’n to Defs.’ Mot. Dismiss & Compel Arbitration, Tio, 2004
WL 2663149. In addition, the petitioners have not argued that they unsuccessfully challenged the
fee-splitting provision during the course of the arbitration proceedings. See generally Pet.; Petrs’
Mem.
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