February 10, 2012
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
Sixth Circuit Upholds Manifest Disregard of the Law Standard
Since the United States Supreme Court's decision in Hall Street Associates, LLC v
Mattel, Inc., which limited the bases under which an arbitration award can be challenged
to those expressly contained in the Federal Arbitration Act, there has been a split
among the circuit courts as to whether the judicially created manifest disregard
of the law standard is still a valid basis to challenge an arbitration award. In
Ozormoor v. T-
The parties engaged in an arbitration hearing and ultimately the arbitrator ruled
against the plaintiff on each of his claims. The plaintiff then went back to court
to vacate the arbitration agreement. The district court confirmed the award and
the plaintiff appealed. One of the plaintiff's assertions on appeal was that the
arbitrator acted in manifest disregard of the law. The Court acknowledged that there
is some doubt as to whether this remains a cognizable basis to vacate an arbitration
award after the Hall Street decision, but noted that the Supreme Court did not expressly
reject the theory in its subsequent decision of Stolt-
According to Sixth Circuit jurisprudence, under the manifest disregard of the law standard, a court can set aside an arbitrator's decision only if, after applying clearly established legal precedent, no judge could conceivably come to the same determination. The plaintiff asserted that the arbitrator manifestly disregarded the law in two ways. He first contended that the arbitrator misapplied the statute of limitations for his Michigan Consumer Protection Act claim by applying the one year limitations period contained in the contract instead of the six year period contained in the statute. The court rejected this argument because Michigan law allows parties to agree to a shorter limitations period by contract. Second, the plaintiff argued that the arbitrator erred by dismissing his emotional distress and defamation claims. The arbitrator concluded that because these claims arose out of and were premised on the breach of contract claim, they violated Michigan law which requires tort claims alleged in a "contractual setting" to "rest on a breach of duty distinct from [the] contract." The court disagreed with this argument, holding that much of the plaintiff's tort claims were based directly on the contract, while it was "debatable" whether the remainder arose from the service agreement or not. Regardless, the court held that the plaintiff had not shown that the arbitrator consciously ignored "clearly defined" legal authority in reaching his decision, as he must to establish a manifest disregard of the law.
For more information on this topic, please contact Scott Hanfling,
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January 27, 2012
Data Breach Legislation for 2012
In anticipation of Data Privacy Day on January 28, 2012, KFP provides these highlights on the federal effort to enact a uniform standard for data breach notification, updates on newly enacted state laws and information on the Privacy Rights Clearinghouse new online complaint center.
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January 26, 2012
New York Court Applies Follow-
$420 Million Judgment in Reinsurance Asbestos Dispute
By David Argay
This week, in one of the longest-
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January 24, 2012
United States District Court of Massachusetts Determines Zip Code Constitutes “Personal Identification Information,”
But Claim Is Still Dismissed
On January 6, 2012, the United States District Court of Massachusetts decided, Tyler v. Michaels Stores, Inc., a case of first impression regarding interpretation of Chapter 93, Section 105(a) of the Massachusetts General Laws. Section 105(a) provides:
No person, firm, partnership, corporation or other business entity that accepts a credit card for a business transaction shall write, cause to be written or require that a credit card holder write personal identification information, not required by the credit card issuer, on the credit card transaction form. Personal identification information shall include, but shall not be limited to, a credit card holder’s address or telephone number. The provisions of this section shall apply to all credit card transactions; provided, however that the provisions of this section shall not be construed to prevent a person, firm, partnership, corporation or other business entity from requesting information that is necessary for shipping, delivery or installation of purchased merchandise or services or for a warranty when such information is provided voluntarily by a credit card holder.
The Plaintiff and putative class in the case alleged that Michaels (a chain craft
store) requested ZIP code information at the point-
