JEFFREY COLE, United States Magistrate Judge.
Having prevailed before a unanimous three-member arbitration panel, Midwest Generation EME, LLC ("Midwest") has moved to confirm the award. Continuum Chemical Corporation ("Continuum") has filed a petition to vacate the award, based on the "evident partiality" of one of the arbitrators, Stanley Sklar. It is Continuum's contention that it must be allowed to take limited discovery of Mr. Sklar because it has compelling evidence that Mr, Sklar intentionally concealed from it and its lawyers "a system of referrals and ongoing economic and professional business relationships between [himself], the Construction Law Group at his [then law] firm [Bell, Boyd & Lloyd, where he was a partner from 1995 to 2008], and lawyers in the Construction Law Group of opposing counsel, Schiff Hardin LLP." (Continuum's Motion for Leave to Take Limited Discovery at 2). (Continuum's Amended Brief in Support of Motion to Take Limited Discovery at 7, 9, 10).
The Reply Brief in support of the Motion To Take Limited Discovery retreats somewhat from this stark position and subtly recasts the claimed relationship, describing it as one that "rise[s] to the level of a de facto marketing relationship, whose purpose was to market the professional services of those involved." Id. at 2. Later in the reply brief, the conclusion is that this informal marketing relationship was designed to bolster "the business credentials and to secure future business" of and for Mr. Sklar and lawyers in the Schiff Hardin Construction Law Group. (Reply at 8). The Reply Brief concludes by saying that the alleged "ongoing professional relationships"—which are never specifically analyzed in the briefs—make it "not unreasonable... to think that there was also a reasonable probability that there may have been business referrals and other pecuniary interests between these parties." (Reply at 8).
According to Continuum, it found the Arbitration Panel's November 2008 award against it so illogical that it "suspected that there must have been some other `driving force' behind the Panel's decision." (Reply Brief at 10). And so Continuum investigated publicly available information, which led it to conclude that Mr. Sklar had willfully and illicitly concealed his "marketing relationship" with Schiff, Hardin lawyers. (Reply Brief at 2; see also id. at 7-8). If Continuum's ultimate conclusions are true, the arbitration process was seriously corrupted. See generally, Commonwealth Coatings Corp. v. Continental Cas. Co., 393 U.S. 145, 147-50,
It is Continuum's contention that Mr. Sklar's failure to disclose certain professional contacts he had with certain lawyers at Schiff Hardin violated his continuing duty to disclose any circumstance or relationship likely to give rise to "justifiable doubt" as to the arbitrator's impartiality and which might "reasonably affect impartiality or lack of independence," Canon II, § A(2) of the AAA Code of Ethics for Arbitrators in Commercial Disputes (emphasis supplied). Continuum contends it is entitled to take limited discovery of Mr. Sklar to prove its claim of "evident partiality" under § 10(a)(2) of the Federal Arbitration Act Evident partiality exists when an arbitrator's bias is "`direct, definite and capable of demonstration rather than remote, uncertain, or speculative'" Harter v. Iowa Grain Co., 220 F.3d 544, 553-54 (7th Cir.2000); Continuum Reply Brief at 3. It is only when a "reasonable person would ... conclude that an arbitrator was partial" that it can be said that evident partiality has been shown, and an arbitration award should be vacated. Commonwealth Coatings Corp. v. Continental Casualty Co., 393 U.S. 145, 151, 89 S.Ct. 337, 21 L.Ed.2d 301 (1968) (White, J., concurring); Merit Insurance Co. v. Leatherby Insurance Co., 714 F.2d 673 (7th Cir. 1983) (Posner, J.).
Post-arbitration discovery is rare, and courts have been extremely reluctant to allow it. It is often a "tactic" employed by disgruntled or suspicious parties who, having lost the arbitration, are anxious for another go at it.
Continuum has struggled with the evidentiary standard that must be met before post-award discovery will be permitted. Initially, it argued that the "clear evidence" standard should not apply. In its first brief, Continuum said:
(Continuum's Brief in Support [# 51], at 2). Continuum's first reply brief, then conceded:
(Continuum's Reply [# 51], at 2).
When the briefing concluded, it was discovered that Continuum had erroneously accused a second arbitrator of partiality, and Continuum was ordered to withdraw the allegations and file new briefs.
(Amended Brief [# 80], at 2).
This time, however, Continuum added a footnote:
(Continuum's Amended Brief in Support at 2 n. 1 [# 80]). Continuum proceeded to make the same three-page argument against the "clear evidence" standard it had advanced in its original and withdrawn brief. Then, it abandoned it one final time in its Amended Reply Brief—sort of. While the first argument is captioned, "`Clear Evidence of Impropriety' Should Be The Standard For Allowing Discovery of An Arbitrator," the brief goes on to argue that the standard for "impropriety" should equate to the broader "appearance of bias" standard in Commonwealth Coatings (Reply at 4)—the very standard that the Seventh Circuit rejected decades ago in the context of determining whether an arbitrator's award should be vacated. Health Services Management Corp. v.
While paying lip service to the clear evidence requirement, it is ultimately Continuum's position that it need only establish "clear evidence" of impropriety that might create "an appearance of bias." (Reply at 5). Continuum's formulation would appear to plunge us into what the Supreme Court, in another context, has called the "bog of logomachy," NLRB v. Seven-Up Bottling Co. of Miami, 344 U.S. 344, 348, 73 S.Ct. 287, 97 L.Ed. 377 (1953) and, through an adroit use of words, substitute the appearance of bias standard for the clear evidence standard. In any event, ultimately the test to determine whether there is sufficient evidence of impropriety, no matter how defined, must be objective, as all the courts have held. Continuum's formulation does not satisfy that requirement.
In one sense, judicial recusal under 28 U.S.C. § 455 is instructive, although not, itself, dispositive. Section 455(a) requires that a judge step aside whenever his "impartiality might reasonably be questioned." The question must be answered from the vantage point not of a hypersensitive or unduly suspicious person, but from that of the hypothetical, reasonable, thoughtful observer, fully informed of all of the relevant facts underlying the grounds on which disqualification is sought. The Supreme Court is quite insistent on the "fully informed" component of the inquiry. Sao Paulo State of Federative Republic of Brazil v. American Tobacco Co., Inc. 535 U.S. 229, 232-233, 122 S.Ct. 1290, 152 L.Ed.2d 346 (2002); Cheney v. U.S. Dist. Court for Dist. of Columbia, 541 U.S. 913, 924, 124 S.Ct. 1391, 158 L.Ed.2d 225 (2004) (statement of Justice Scalia). So, too, are the courts of appeals. See In re Sherwin-Williams, 607 F.3d 474 (7th Cir.2010); In re Kensington International Ltd., 368 F.3d 289, 302-303 (3rd Cir.2004).
Section 455(a) asks whether an informed person would perceive a significant risk that the judge will resolve the case on a basis other than the merits. In re Mason, 916 F.2d 384, 385-86 (7th Cir.1990). In In re Sherwin-Williams Co., the court said:
While it is true that arbitrators are not held to the same standard of judicial decorum as Article III judges, Commonwealth Coatings, 393 U.S. at 150, 89 S.Ct. 337, the same sort of objective inquiry is the appropriate one in cases such as this. The question is whether there is clear evidence of impropriety, viewed from the vantage point of such a "reasonable observer."
The "clear evidence" requirement is not as exacting as Continuum suggests. For example, it is textually less onerous than the "clear and unmistakable" standard that must be satisfied before it can be concluded that the parties' arbitration agreement withdrew the question of arbitrability
The function of any standard of proof is to indicate the degree of confidence society thinks a fact finder should have in the correctness of factual conclusions for a particular type of adjudication. By informing the fact finder in this manner, the standard of proof allocates the risk of erroneous judgment between the litigants and indicates the relative importance society attaches to the ultimate decision. Colorado, 467 U.S. at 315-16, 104 S.Ct. 2433. The "clear evidence" standard manifests the courts' judgment that, while a conjurer's circle is not to be drawn around arbitrators, only non-speculative, reasonably certain evidence of impropriety will suffice to allow post-arbitration discovery.
A more relaxed standard would be incompatible with, and would undercut, the long standing, national policy favoring arbitration of claims that parties contract to settle in that manner, Vaden v. Discover Bank, ___ U.S. ___, 129 S.Ct. 1262, 1271, 173 L.Ed.2d 206 (2009), "`with just the limited review needed to maintain arbitration's essential virtue of resolving disputes straightaway.'" Stolt-Nielsen S.A. v. AnimalFeeds International Corp., ___ U.S. ___, 130 S.Ct. 1758, 1779, 176 L.Ed.2d 605 (2010). See Dean v. Sullivan, 118 F.3d 1170, 1173 (7th Cir.1997); O.R. Securities, Inc., 857 F.2d at 747-748. In O.R. Securities Inc., the court, in refusing to allow discovery, stressed that "[arbitration proceedings are summary in nature to effectuate the national policy of favoring arbitration, and they require `expeditious and summary hearing, with only restricted inquiry into factual issues.'" A less exacting standard would render informal arbitration merely a prelude to a more cumbersome and time-consuming judicial review process by subjecting arbitrators to discovery —"the bane of modern litigation." Rossetto v. Pabst Brewing Co., Inc., 217 F.3d 539, 542 (7th Cir.2000) (Posner, J.). That would, as the Court said in another context, "bring arbitration theory to grief in post-arbitration process." Hall Street Associates, L.L.C. v. Mattel, Inc. 552 U.S. 576, 588, 128 S.Ct. 1396, 170 L.Ed.2d 254 (2008).
In the last analysis, it does not matter what evidentiary formulation is employed because, under any standard, Continuum has not presented sufficient evidence that would justify requiring Mr. Sklar to be subjected to discovery. All that it has shown are a series of public, almost exclusively parallel, professional contacts involving lecturing and writing on construction related matters. These endeavors were "no secret," and their existence, as Continuum's Motion concedes,
These purely professional involvements are emblems of professional achievement about which lawyers, their publishers, and event organizers publically (and rightfully) boast on their websites and through advertisements to interested members of the bar. Cf, In re EquiMed, Inc., 2005 WL 2850373 at *2 ("Apparently this evidence is not a matter of public record. Any evidence which is not a matter of public record should also be considered in determining whether a [post-arbitration] deposition is necessary or appropriate."). Even "[t]he securities laws do not require firms to `disclose' information that is already in the public domain." Higginbotham v. Baxter Intern., Inc., 495 F.3d 753, 759 (7th Cir.2007).
Significantly, Continuum has not cited a single case in its opening or reply brief that would support the conclusions it draws from the professional involvements of Mr. Sklar, Paul Lurie and Mark Friedlander, who are members of the Schiff Hardin Construction Law Group. Nor has it responded in its reply brief to the cases cited by Midwest in its response brief. The most Continuum's briefs do is to refer the court to the allegations in the Petition to Vacate, as though their mere recitation were enough to decide the case and to argue why Continuum believes a less onerous standard than the "clear evidence" standard should be applied. The purely professional, parallel endeavors set forth in the Amended Petition to Vacate cannot reasonably support Continuum's thesis that there is clear evidence of impropriety by Mr. Sklar, let alone that he was part of a "system of referrals and ongoing economic and professional business relationships" with Schiff Hardin lawyers.
Although the allegations of impropriety against Schiff Hardin and Mr. Sklar could scarcely be more damning, involving as they do claimed deliberate concealment in order to promote a system of business referrals, Continuum's Amended Brief rests largely on tendentious conclusions. Here is a sampling:
Other than this, there is only a reference to ¶ 40 of the Amended Petition to Vacate. But all ¶ 40 says is:
(Amended Brief, Ex. A, ¶ 40)
Of course, none of this is evidence of any sort, let alone evidence of impropriety on Mr. Sklar's part. It is merely a conclusory list of disagreements that Continuum has with the Panel's decision. But conclusions and allegations in briefs are not evidence and do not count See Ho v. Donovan, 569 F.3d 677, 682 (7* Cir.2009); United States v. Stevens, 500 F.3d 625, 628-629 (7th Cir.2007); Tibbs v. City of Chicago, 469 F.3d 661, 663 n. 2 (7th Cir. 2006); Nisenbaum v. Milwaukee County, 333 F.3d 804, 810 (7th Cir.2003); Campania Mgmt. Co. v. Rooks, Pitts & Poust, 290 F.3d 843, 853 (7th Cir.2002).
What "evidence" Continuum unearthed appears not in ¶ 40 of the Petition, but in ¶ 36-as pointed out in Midwest's response brief. Paragraph 36, as quoted in that brief, alleges that "Mr. Sklar and members of Schiff Hardin's Construction Law Group":
Paragraph 36 of the actual Petition to Vacate gives the particulars of the above adumbration. These particulars reveal nothing beyond the kind of professional interactions that one would expect of successful lawyers active in the specialized area in which Mr. Sklar and the lawyers at Schiff Hardin's Construction Law Group functioned. They do not support the claim that "there is a system of referrals and ongoing economic and professional business relationships between [Mr.] Sklar, the Construction Law Group at his law firm [Bell, Boyd & Lloyd] and the Construction Law Group of opposing counsel, Schiff Hardin LLP." In fact, they demonstrate the untenability of the conclusion.
With three exceptions, the events about which Continuum complains occurred after Mr. Sklar's June 1, 2006 pre-arbitration disclosure and thus could not have been disclosed in that statement.
Mr. Sklar, Mr. Leavitt, Mr. Kolton of Schiff Hardin and Mr. Lurie are also alleged to have presented at What to Do When Construction Projects Go Bad in Illinois, a seminar that Continuum states was held on September 18, 2008, at the Holiday Inn in Itasca, Illinois, while the Arbitrators were deliberating the case. While the observations discussed above apply here with equal force, there is another aspect to this allegation. It appears to be untrue. According to the affidavits of Mr. Kolton and Mr. Lurie, the Lorman seminar was canceled. See Exs. E and F to Midwest's Response to Amended Counter-Petition
Mr. Sklar, Josh Leavitt, and Paul Laurie also spoke at the Condominiums Opportunity and Pitfalls seminar, which was held on February 15, 2007. Mr. Sklar was the program's Co-Chair. Similarly inconsequential is the claimed participation by Messrs. Sklar and Lurie as presenters at the College of Commercial Arbitrators' 7th Annual Meeting in New York on October 26, 2008, which, ¶ 36 alleges, was during the course of the hearing. Mr. Sklar and Mr. Lurie also participated in the Navigating the Arbitration Roadmap seminar, hosted by the American Arbitration Association University, on November 6, 2008 in Chicago, Illinois. Mr. Sklar and Paul Lurie were presenters at the Real Estate Law Conference Making Mediation & Arbitration Work in Real Estate Disputes seminar on November 11, 2008 at the Westin Chicago River North. Mr. Sklar, Josh Leavitt and Paul Lurie presented at the ABA Telephone Seminar Live Telephone/Audio Webcast, Construction Defects in a Time of Financial Crisis, on October 23, 2007, which was during the course of the hearing.
The Amended Brief does not claim that there were no other speakers or presenters at these professional events or that Mr. Sklar et al. collaborated on their presentations. It makes no attempt to explain what significance these separate, simultaneous participations in professional seminars has or how it supports the conclusion that there was a system of referrals and ongoing economic and professional business relationships between Mr. Sklar and the Schiff Hardin lawyers. It simply contents itself with noting what occurred.
Then there is the contention that Mr. Sklar, Josh Leavitt and Paul Laurie were members of the 2007 Real Estate Conference Advisory Board, and that Mr. Sklar is the Treasurer and Paul Lurie is currently on the Amicus of the Committee for the College of Commercial Arbitrators Board & Officers. No attempt is made to explain how mere concurrent membership in a professional association can justify the kind of relief that courts in for more compelling circumstances have repeatedly denied. These involvements certainly cannot be classified as business relationships, and even "some prior business relationship between [a lawyer] ... and arbitrators ... is not in and of itself sufficient to disqualify them as arbitrators." Merit Insurance Co., 714 F.2d at 680. To be a disqualifier, the relationship must be "`so intimate-personally, socially, professionally, or financially-as to cast serious doubt' on the arbitrator's impartiality." Id. Concurrent participation in a professional seminar or on a board or committee is patently insufficient
Paragraph 36 goes on to allege that Mr. Sklar, Mark Friedlander (Co-Chair of the Schiff Hardin Construction Law Group), and Josh Leavitt (a member of the Bell Boyd Construction Law Group), participated in writing articles for the Practicing Law Institute—Drafting and Negotiating Construction Contracts, in 2008 (an internet based program), which was during the course of the arbitration. The PLI website is informative. It reveals that the course handbook came out in early 2008 and contained 11 separate chapters. Mr. Sklar's did not have a co-author, nor did Mr. Friedlander's. Josh Leavitt does not appear as an author in 2008. http;//www. pli.edu/product/book_detail.asp?id=38513. The 2009 edition contains 16 chapters. Mr. Leavitt, Mr. Sklar and Mr. Friedlander each authored separate chapters. http://www.pli.edu/product/book_detail. asp?id=47631. The fortuity that these individuals wrote articles/chapters that appeared in the same publication is analytically irrelevant.
The same is true of the fact that Mr. Friedlander and Mr. Sklar were both Past Presidents of the Society of Illinois Construction Attorneys Steering Committee at different times. Kevin Kolton (counsel for Midwest in the current arbitration and member of Schiff Hardin Construction Law Group) was elected a Society Member on June 19, 2007. The members of the SOICA meet on a monthly basis. As Judge Easterbrook has said in another context, "So What? ... Who cares? ... True, but irrelevant" Israel Travel Advis. Serv. v. Israel Iden. Tours, 61 F.3d 1250, 1259 (7th Cir.1995). See also Tunis v. Gonzales, 447 F.3d 547, 551 (7th Cir.2006) (Posner, J.).
Not surprisingly, other than stating the fact that Mr. Sklar and a few Schiff Hardin lawyers are members of the same professional associations, have presented papers at a professional gathering, and wrote separate chapters for a multi-chapter course book in the area in which both practiced, Continuum's briefs make no attempt to explain how these parallel, professional involvements suffice to warrant the kind of discovery that all the courts have said should occur only under the most compelling of circumstances or how they would lead a "reasonable person" to have concerns about Mr. Sklar's impartiality.
We come then to the claimed collaborative effort of Mr. Sklar and Messrs. Lurie and Friedlander in having "co-authored a book" published by Lorman Education Services in 2008. "What to Do When Construction Projects Go Bad In Illinois" I have reviewed a copy of the "book," which is in fact a 324-page manual, consisting of multiple chapters authored by 11 authors. The claim of co-authorship of a "book" is untrue. Mr. Sklar authored a chapter entitled, "Risk Factors and Contractual Risk Allocation" and a chapter entitled, "Termination." Mr. Friedlander authored "Roll
Paragraph 36 of the Amended Petition to Vacate charges that Mr. Sklar and Mr. Lurie co-authored the AAA Handbook on Construction Arbitration and ADR, which was published in August 2007, a year after Mr. Sklar's disclosure statement, but before the arbitration. This allegation appears to be untrue. I have examined a copy of the actual book obtained from the D'Angelo Law Library of the University of Chicago. The book contains 44 articles. Mr. Sklar was the sole author of "Dangers in Drafting the Arbitration Clause," which appeared in Chapter 5 under the heading "Arbitration." Mr. Lurie was the sole author of the fourth article in that chapter, "Removing Roadblocks to Arbitration," and he was the sole author of the third article in Chapter 6, "Mediation," entitled "The Importance of Process Design to a Successful Mediation." All this is shown on Mr. Lurie's website and was easily accessible to Continuum before it filed its briefs in this case.
While Mr. Sklar had a continuing duty under the AAA rules to disclose to Continuum and to Midwest any interest or relationship, whether financial, business, professional or personal, "which might reasonably affect impartiality or lack of independence," the professional activities of Mr. Sklar discussed above simply did not trigger that obligation.
Moreover, it is significant that Continuum does not deny that at least one of the firms involved in the case on Continuum's side, Stein, Ray & Harris, had precisely the same kinds of professional involvements with Mr. Sklar as Mr. Lurie and Mr. Friedlander had. (Reply Brief at 8, n. 5). See Midwest's Response to Amended Petition to Vacate, at 11-12, and Exs. F-I [# 101].
The cases do not begin to support the central thesis of Continuum's briefs that the professional involvements listed in the
In Lucent Technologies, Inc., 379 F.3d 24 (2nd Cir.2004), the defendant accused Lucent and the arbitrator of intentionally hiding his service as an expert witness for Lucent in another case. The defendant pointed out that the same lawyers had represented plaintiff in that case and in the current arbitration. The defendant argued that although judgment had been entered in the case in which the arbitrator had served as an expert, his testimony was implicated in a new trial motion that had not been decided until six months after his appointment as an arbitrator in the current controversy, and an appeal was pending long after that. The Second Circuit held that even if it were to consider the defendant's belated claim that discovery should have been allowed, it would reject the claim because the above circumstances did not constitute "clear evidence of impropriety." Id. at 32.
In Uhl, the arbitrator and counsel for one of the parties had appeared in the same lawsuits together on several occasions, representing different parties, and on two occasions had jointly represented the same party. The district court found this all rather "pedestrian" and concluded that there was not clear evidence of any impropriety in the non-disclosure of these facts, and that there was no evidence that they enjoyed a business relationship. It simply was not unusual for lawyers in the area in which they jointly specialized to appear with "some degree of frequency." 466 F.supp.2d at 906. The court refused to allow discovery based upon the claim that "past professional associations could imply a current financial arrangement" between the arbitrator and counsel for plaintiff. Id. at 910, The court held that the requests for discovery rested solely on speculation. Id.
Precisely the same set of circumstances exist here. Continuum's own evidence shows how common it is for construction lawyers to appear as arbitrators—who better to judge controversies involving construction related issues, Merit Insurance Co., 714 F.2d at 679; Matter of Andros Compania Maritima, S.A., 579 F.2d at 701—and for them to appear as panelists at bar association and continuing legal education seminars and to write articles in their field.
Mutual Insurance Co. is the kind of case in which there was clear evidence of impropriety. It stands in rather stark contrast to the instant case. There, the arbitrator failed to disclose that his family's insurance company had been entangled in a dispute with two of the parties of the arbitration, and that the arbitrator was under investigation concerning the alleged trust account violations involving the insurers. The court held that the arbitrator had a duty to disclose that relationship and emphasized that the non-disclosed dealings could not be "considered part of the ordinary course of an arbitrator's private business." Middlesex Mutual Insurance Co. v. Levine, 675 F.2d 1197, 1200 (11th Cir. 1982). In the instant case, the opposite is true.
Both Mr. Sklar's biography, which was submitted to the parties before he was selected (See Ex. B, Midwest's Response to the Amended Petition to Vacate) [# 101], and his actual disclosure statement —to say nothing of his publicly available website—revealed the breadth of his professional involvements. Continuum's lawyers, who engaged in the same sorts of professional activities, could not have been under any illusions about the possibility that Mr. Sklar and the lawyers of Schiff Hardin's Construction Law Group would repeatedly continue to intersect professionally. Cf. Uhl, 466 F.Supp.2d at 906 (the arbitrator "qualified as having substantial experience as a products liability lawyer. Given [his and the plaintiffs] areas of concentration, it is reasonable to anticipate that their paths would cross frequently.").
The only contacts that antedated Mr. Sklar's 2006 initial disclosure to which the Amended Petition refers, occurred in 2004. The first involved Mr. Sklar and Mr. Lurie having co-developed continuing education programs for non-lawyer AAA construction panelists; the second, the claimed co-authorship of a book. As to the education programs, the Petition does not explain what they consisted of and does not provide the source from which the allegation is drawn. But even assuming it were true, Mr. Sklar's non-disclosure was inconsequential, and Continuum has not cited a single case remotely suggesting otherwise. "Nondisclosure alone" is not
Finally, Continuum alleges that Mr. Sklar and Mark Friedlander "co-authored" Construction Law in Illinois, 2004 Edition, for the Illinois Institute for Continuing Legal Education. This claim of cooperative activity was obviously designed to suggest a relationship of some intimacy or at least the possibility that one might have existed (from which Continuum argues that there was "also a reasonable probability that there may have been business referrals and other pecuniary interests between these parties." (Reply at 8)). Quite apart from the illogic of the conclusion, the allegation of co-authorship appears not to be true. I have reviewed a copy of the 2004 edition of Construction Law in Illinois (as Amended in 2007), obtained for me by the Seventh Circuit's librarian. The volume, like all IICLE publications, consists of multiple chapters, with multiple authors. This particular one contains 19 chapters with 28 authors. Mr. Sklar was the General Editor and the sole author of "Bidding Construction Projects" (Chapter 1) and "Contractors/Subcontractor Contracts and Risk Allocation" (Chapter 5). He co-authored Chapter 11, "An Overview of the Illinois Mechanics Lien Act" with Ms. Domagala-Pierga. Mr. Friedlander co-authored chapter 19, "Construction Defects" with James D. Weier, Jr. However one may describe the participation of Mr. Sklar and Mr. Lurie, it is simply inaccurate to say he co-authored the book.
Any argument that simultaneous authorship in a professional publication by Mr. Sklar and Schiff Hardin lawyers reasonably called Mr. Sklar's impartiality into question is a non-starter. The same is true of their participation in ABA and other seminars. This is not "the sort of information an arbitrator would reasonably regard as creating an impression of possible bias," Matter of Andros, 579 F.2d at 701, nor did it reflect the kind of "significant compromising connection to the parties," Positive Software Solutions, Inc. v. New Century Mortgage Corporation, 476 F.3d 278 (5th Cir.2007) (En Banc), which can be deemed to reflect on an arbitrator's impartiality.
Under the paragraph of Mr. Sklar's 2006 disclosure form captioned, "Disclosure Paragraphs Regarding Specific Participants or Issues in the Case," Mr. Sklar disclosed, as he did in his biography previously submitted to the parties, that: he was a member of various professional organizations, which he enumerated, that he had lectured in construction seminars, he knew certain of the Schiff Hardin lawyers, he had been in the past adverse to members of Schiff's Construction Practice Group, including Mr. Lurie and Mr. Friedlander, neither of whom was involved in the case. (Reply at 8; Amended Counter-Petition to Vacate Arbitration Award, Ex.
What we have said is enough to decide the issue. Nonetheless, it is informative to review Mr. Sklar's June 2006 disclosure document, which was submitted pursuant to AAA rules for the express purpose of disclosing "any known facts that are likely to give rise to a justifiable doubt about, or that a reasonable person would consider likely to affect [Mr. Sklar's] impartiality or independence as an arbitrator" in the case. (See Amended Counter-Petition to Vacate Arbitration Award, Ex. A) [#98]. Mr. Sklar disclosed that he was a lawyer since 1964, concentrating in construction law since 1975. He noted that he had served on "numerous committees in local and national bar associations in the construction and real estate area," and that he had spoken at "many conferences and seminars" and that he had also personally attended many construction conferences and seminars and that "[c]ounsel and/or the parties and/or any witnesses may have attended such conference or seminars and even had personal contact with me at that time...." Id. at page 3. However, Mr. Sklar noted that he had no "independent recollection of personal contact with them or their attendance or participation" in any particular conference or seminar. Id. Moreover, the disclosure form stated that neither Mr. Sklar nor his firm maintained a database of past professional contacts and that the disclosures were "drawn from [his] existing personal knowledge within the limits of my present recollection."
Continuum's counsel were themselves accomplished professionals, who practiced in the same area as Mr. Sklar and Schiff Hardin's lawyers and were admittedly participants in the same sorts of professional endeavors as those generically described to in the disclosure document and in Mr. Sklar's biography, which they also had. As sophisticated specialists themselves, they knew that an arbitrator's disclosure need not be "a complete and unexpurgated business biography." Commonwealth Coatings, 393 U.S. at 152, 89 S.Ct. 337. Disclosure requirements "are intended to be applied realistically so that the burden of detailed disclosure does not become so great that it is impractical for persons in the business world to be arbitrators, thereby depriving the parties of the services of those who might be the best informed and qualified to decide particular types of cases." Merit Insurance Co. at 679. Hence, the fact that Mr. Sklar's disclosure statement did not itemize the three events in 2004 about which they now complain could not have come as a surprise to Continuum's lawyers.
While conceding that Mr. Sklar was not required to disclose his "entire unexpurgated business biography" (Reply at 9), Continuum nonetheless insists that by revealing that he had been adverse to one of the Schiff lawyers in an earlier matter, see supra at 955, Mr. Sklar's June 2006 disclosure statement failed to "even alert Continuum to the fact that there could be any sort of potential, personal or professional relationship between him and Schiff Hardin's" Construction Law Group. Id. Butto specify that one had been adverse prior to 2006, could not possibly have connoted to any reasonable lawyer that there could not have been any sort of past professional relationship. It is even more idle to insist that the disclosure of prior adversity could not have alerted Continuum to the fact that "there could be any sort of potential, personal or professional relationship" between Mr. Sklar and any lawyer in the Schiff Hardin Construction Law Group. (Emphasis supplied). It is obviously impossible to forecast "events still in the womb of time" Dennis v. United States,
The cases make clear that where the evidence of claimed impropriety is speculative, attenuated, uncertain, or indirect, discovery will not be allowed. The Amended Petition to Vacate rests on such equivocal evidence, for it openly avers that its claim of impropriety (and evident partiality, itself) is, in part, based on "facts that are insinuated and implied in th[e] allegations" of professional involvement of Mr. Sklar and Messrs. Lurie and Friedlander. (Amended Brief at 2) (Emphasis supplied). And the "allegations" from which those insinuations are drawn, involving as they do parallel, professional involvement in publicly disclosed seminars and contributions to legal publications, are insufficient to justify post-arbitration discovery. And they most assuredly do not support Continuum's ultimate conclusion that they evidence "a system of referrals and ongoing economic and professional business relationships between Mr. Sklar, the Construction Law Group at his firm, and lawyers in the Construction Law Group of...Schiff Hardin."
The Sixth Circuit's caution in Uhl bears repeating:
512 F.3d at 308. See also Merit Insurance Co., 714 F.2d at 678 ("Notwithstanding the broad language of section 18, no one supposes that either the Commercial Arbitration Rules or the Code of Ethics for Arbitrators requires disclosure of every former social or financial relationship with a party or a party's principals.").
This is not to say that arbitrators should not err on the side of disclosure. They should, Merit Insurance Co., 714 F.2d at 678-679; U.S. Wrestling Federation, 605 F.2d at 319—especially where a challenged contact occurs during the arbitration, as Continuum alleges occurred on a few occasions here. But, even then, what is not disclosed must have significance apart from the mere fact of non disclosure. What was not disclosed in this case cannot be said to constitute clear evidence of impropriety warranting post-arbitration discovery. There being no evidence, let alone clear evidence, that would warrant a departure from the deeply held sentiment that post-arbitration discovery should be allowed only in exceptional circumstances, Continuum's Motion for Leave to Take Limited Discovery [# 79] is DENIED.
714 F.2d at 679.