JANE MAGNUS-STINSON, District Judge.
Presently pending before the Court is an Application for Confirmation of Arbitration Award filed by Plaintiff Cargill, Incorporated ("
Between 2010 and 2012, Cargill entered into six contracts with Searcy Farms, Inc. ("
[See, e.g., Filing No. 2-1 at 3.]
When Cargill learned that Searcy would not be able to fulfill its obligations under the Contracts, it elected to cancel the Contracts and notified Searcy that unless Searcy paid for outstanding damages for failure to fulfill its obligations, Cargill would seek arbitration with the National Grain and Feed Association ("
Cargill asserts that it and Searcy fully participated in the arbitration proceeding, and stipulated to the procedures and jurisdiction of the NGFA, and Searcy does not dispute that assertion. [Filing No. 2 at 2; Filing No. 14.] On October 16, 2014, the NGFA arbitration panel issued a decision, stating:
[Filing No. 2-2 at 4-5.]
The arbitration panel awarded $116,764.14 to Cargill, with interest at the rate of 3.25% per annum from the date of the decision forward. [Filing No. 2-2 at 5.] The arbitration panel did not award attorneys' fees. [Filing No. 2-2 at 5.]
Cargill initiated this matter on February 26, 2015, through filing the pending Application for Confirmation of Arbitration Award. [Filing No. 1.] Through the Application, Cargill seeks an award and final judgment against Searcy for $116,764.14, with interest and reasonable attorneys' fees and costs. [Filing No. 1 at 2.]
Judicial review of an arbitration award is "extremely limited." Masco Corp. v. Prostyakov, 558 Fed. Appx. 685, 688 (7th Cir. 2014). Indeed, the Seventh Circuit Court of Appeals has "wondered whether `review' might be a misnomer." Id. Section 10 of the Federal Arbitration Act ("
9 U.S.C. § 10.
While courts will set aside arbitration awards for "manifest disregard of the law," the Seventh Circuit Court of Appeals has defined that phrase "so narrowly that it fits comfortably under the first clause of the fourth statutory ground — "where the arbitrators exceeded their powers" . . . [because] we have confined it to cases in which arbitrators `direct the parties to violate the law.'" Wise v. Wachovia Securities, LLC, 450 F.3d 265, 268-69 (7th Cir. 2006) (citing George Watts & Son, Inc. v. Tiffany & Co., 248 F.3d 577, 580 (7th Cir. 2001); IDS Life Ins. Co. v. Royal Alliance Associates, Inc., 266 F.3d 645, 650 (7th Cir. 2001)). The Seventh Circuit Court of Appeals has also explained that:
Wise, 450 F.3d at 269. See also Masco Corp., 558 Fed. Appx. at 688 (A court must uphold an arbitration award "so long as the arbitrator interpreted the parties' agreement at all" (quotations omitted, emphasis in original)).
Searcy agrees with the standard of review set forth above for setting aside an arbitration award, [Filing No. 14 at 4-6], but argues that the arbitrators exceeded their powers, thus acting in manifest disregard of the law, by:
[Filing No. 14 at 6-9.]
None of these grounds warrants setting aside the arbitrators' decision. First, as discussed above, the Seventh Circuit has limited the setting aside of arbitration awards to instances where arbitrators "direct the parties to violate the law." Wise, 450 F.3d at 269. None of the arguments Searcy sets forth in its brief indicate that the arbitrators did so here and, indeed, Searcy does not even argue that this occurred.
Second, Searcy's arguments that the arbitrators failed to properly interpret its arguments regarding the Contracts and which parties were bound by the Contracts, and failed to consider its arguments altogether, are meritless and, in any event, would not warrant setting aside the arbitration award even if they could hold water. The arbitration panel did consider Searcy's arguments and set forth findings regarding whether Searcy was bound by the Contracts and was the proper party to the arbitration. [Filing No. 2-2 at 4-5.] The Court may not, and will not, delve into the arbitrators' decision further. The arbitrators considered Searcy's arguments, and that is all that is required for enforcement of the arbitration award. See Masco Corp., 558 Fed. Appx. at 688 (A court must uphold an arbitration award "so long as the arbitrator interpreted the parties' agreement at all" (quotations omitted, emphasis in original)).
In any event, even if Searcy's arguments had merit, the Court cannot overturn an arbitration award based on errors of law or fact — even clear or gross errors of law or fact. See Halim v. Great Gatsby's Auction Gallery, Inc., 516 F.3d 557, 563 (7th Cir. 2008) ("Factual or legal error, no matter how gross, is insufficient to support overturning an arbitration award"); see also IDS Life Ins. Co., 266 F.3d at 649-50 (party asking for arbitration award to be set aside "point[s] to nothing in the rules that gave them a contractual right to insist on arbitrators abler, swifter, or more articulate than the ones they got. They point to nothing that entitles us to scour the record for signs of arbitral incompetence. The grounds on which the plaintiffs can attack the award are limited to those set forth in the Federal Arbitration Act. (The plaintiffs wisely do not invoke the controversial nonstatutory ground, `manifest disregard of the law,' which we have limited to the situation in which the arbitral award directs the parties to violate the law. . . .)") The Court's role is not to review the arbitrator's decision as an appellate court, and to determine whether it agrees with that decision. Rather, its role is limited to determining whether the arbitrator's decision directs the parties to violate the law. Searcy does not assert that this is the case, let alone present evidence that this occurred.
The arguments Searcy has set forth simply do not implicate the narrow circumstances in which the Court can set aside an arbitration award and, accordingly, the Court declines to do so here.
The Court's review of an arbitration award is exceedingly narrow, and Searcy has not argued, nor has it presented any evidence to indicate, that the arbitration decision here falls into the small category of awards that warrant being set aside. A party's decision to enter into a contract with an arbitration clause "entails a trade-off. A party can gain a quicker, less structured way of resolving disputes; and it may also gain the benefit of submitting its quarrels to a specialized arbiter, which . . . knows the customs and lore of an industry first-hand. . . . Parties lose something, too: the right to seek redress from the courts for all but the most exceptional errors at arbitration." Dean v. Sullivan, 118 F.3d 1170, 1173 (7th Cir. 1997). As the Seventh Circuit has explained, "[i]f courts were to undertake the kind of searching review of arbitral awards that [Searcy] invites here, arbitration would be transformed from a commercially useful alternative method of dispute resolution into a burdensome additional step on the march through the court system." Flexible Mfg. Systems, 86 F.3d at 100. The Court will not engage in such a review here.
Accordingly, the Court
