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Cartwright v. Fidelity Bank

United States District Court, W.D. Pennsylvania

September 24, 2014

KAREN W. CARTWRIGHT, Plaintiff,
v.
FIDELITY BANK, et al., Defendants.

OPINION

MARK R. HORNAK, District Judge.

This case, filed in this Court on October 17, 2012, involves claims brought by Plaintiff Karen Cartwright ("Ms. Cartwright") under the Fair Labor Standards Act ("FLSA"), the Pennsylvania Minimum Wage Act ("PMWA"), Title VII of the Civil Rights Act of 1964 ("Title VII"), and under Pennsylvania common law for conversion, against Fidelity Bank ("Fidelity"), her former employer, and several Fidelity executives ("Defendants"). Fidelity has since become part of WesBanco, Inc. pursuant to a merger agreement ("WesBanco"). ECF No. 27 at 2-3. Defendants filed a Motion to Compel Arbitration, which the Court, after a hearing, granted under the terms of Ms. Cartwright's employment contract with Fidelity. ECF No. 24 at 99-116. From February 24, 2014 to February 26, 2014, the parties presented their cases at a three-day arbitration hearing before a three-person Financial Industry Regulatory Authority ("FINRA") panel. On March 10, 2014, the arbitration panel issued a final award to Ms. Cartwright in the amount of $10, 096.79 for breach of contract and dismissed all of her other claims with prejudice.

Ms. Cartwright has now filed a Motion to vacate the arbitration award, alleging that the arbitrators committed misconduct, imperfectly executed their powers, and manifestly disregarded the law. ECF No, 26. In response, WesBanco has filed a Motion to confirm the arbitration award and for attorney's fees as a sanction for what it claims is a baseless attempt by Plaintiff to reopen the arbitration panel's final and binding decision. ECF No. 31. After reviewing the papers and hearing argument on the Motions, the Court will deny Ms. Cartwright's Motion and grant WesBanco's Motion to the extent that it confirms the award handed down by the arbitration panel.

Vacation of an arbitration award is "an extraordinary remedy." Tate Orchards v. Rain and Hail, LLC, 2013 WL 1833713, at *3 (M.D. Pa. May 1, 2013). Section 10(a) of the Federal Arbitration Act ("FAA")[1] identifies the limited circumstances under which a district court may 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;
(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. ยง 10(a).

When reviewing arbitration awards, "courts... have no business weighing the merits of the grievance [or] considering whether there is equity in a particular claim." United Paperworkers Int'l Union, AFL-CIO v. Misco, Inc., 484 U.S. 29, 37 (1987). It is not enough to show that the arbitrator committed an error - "even a serious error." See Stolt-Nielsen S.A. v. AnimalFeeds Int'l Corp., 559 U.S. 662, 671 (2010). Absent an allegation of dishonesty, "improvident, even silly, factfinding" does not provide a basis to vacate an award. Misco, 484 U.S. at 39. "It is irrelevant whether the courts agree with the arbitrator's application and interpretation of the agreement." Arco-Polymers, Inc. v. Local 8-74, 671 F.2d 752, 755 (3d Cir. 1982) (per curiam). As long as an arbitrator's decision can in any rational way be derived from the language and context of the agreement, it must not be disturbed. See Roberts & Schaefer Co. v. Local 1846, United Mine Workers, 812 F.2d 883, 885 (3d Cir. 1987). "It is only when [an] arbitrator strays from interpretation and application of the agreement and effectively dispenses[s] his own brand of industrial justice' that his decision may be unenforceable." Major League Baseball Players Ass'n v. Garvey, 532 U.S. 504, 509 (2001) (quoting United Steelworkers of Am. v. Enterprise Wheel & Car Corp., 363 U.S. 593, 597 (1960)).

Ms. Cartwright advances a number of theories as to why the Court should award her the exceptional relief she seeks.[2] She first contends that the arbitration panel engaged in misconduct warranting vacatur under Section 10(a)(3) when it considered (and denied) her motion for leave to file FINRA Rule 2010 sanctions only at the conclusion of her case, rather than postponing the hearing, after receiving notice from Shelly Todd ("Ms. Todd"), her attorney at the time, [3] that she had received "thousands of documents" from Defendants pursuant to a motion to compel only days prior to the hearing. That argument contains several fatal flaws. The first paragraph of Ms. Cartwright's own motion for leave concludes with the following sentence: "Claimant request[s] leave to file a Motion for Sanctions at the conclusion of Claimant's presentation of evidence in support of Claims brought before this panel at the Evidentiary Hearing beginning on February 24, 2014" (emphasis added). ECF No. 33-15 at 2. Additionally, the sanctions requested by the Plaintiff in that motion equate to a default judgment in excess of $5 million in compensatory damages - a continuance of the hearing is not requested anywhere. Id. at 6.

Finally, at the hearing, when opposing counsel suggested that Ms. Todd may have "some doubt in [her mind] as to whether she had a chance to fully evaluate" the documents she had received, Ms. Todd responded: "There is but not a serious doubt, because I had other than just myself. I was blessed with a paralegal and other counsel, and we went through all those documents." ECF No. 33-5 at 10. Ms. Todd did not request a continuance at that time either. Because Plaintiff specifically requested that her motion be taken up at the conclusion of her case and never asked for the hearing to be postponed despite multiple opportunities to do so, the Court cannot conclude that the arbitration panel committed any misconduct or prejudiced her rights in proceeding with the hearing as scheduled and considering her motion after she presented her evidence.

Ms. Cartwright also contends that the arbitration panel's award was based on a committed manifest disregard of the law. Although not explicitly listed in Section 10(a), courts created a ground for vacating an arbitration award where the panel's decision "evidence[s] a manifest disregard for the law rather than an erroneous interpretation of the law." Local 863 Int Bhd. of Teamsters v. Jersey Coast Egg Producers, Inc., 773 F.2d 530, 534 (3d Cir. 1985). Then came Hall St. Assocs., LLC v. Matel, 552 U.S. 576, 584 (2008), where the Supreme Court held that Section 10(a)'s enumerated grounds for vacatur were exclusive. Since then, the Supreme Court and our Court of Appeals have declined to enter the current Circuit-split fray as to whether the manifest disregard standard is viable post-Hall St. See Bellantuono v. ICAP Sec. USA, LLC, 557 F.Appx. 168, 173-74 (3d Cir. Jan, 30, 2014). Following the Third Circuit's pragmatic approach in Bellantuono, the Court believes it appropriate to consider Ms. Cartwright's arguments in the context of the "manifest disregard" doctrine[4]

An arbitration panel commits a manifest disregard of law when it acknowledges and then disregards an explicit, well-settled, and clearly applicable rule in making its decision. Paul Green Sch. of Rock Music Franchising, LLC v. Smith, 389 F.Appx. 172, 177 (3d Cir. Aug. 2, 2010). Courts have also vacated awards where an arbitration panel manifestly disregarded the agreement providing the basis for the award. See News Am. Publ'ns, Inc. Daily Racing Form Div. v. Newark Typographical Union Local 103, 921 F.2d 40, 41 (3d Cir. 1990). ...


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