In re Sussex

Summarized by:

  • Court: 9th Circuit Court of Appeals Archives
  • Area(s) of Law: Arbitration
  • Date Filed: 01-27-2015
  • Case #: 14-70158
  • Judge(s)/Court Below: Circuit Judge Ikuta for the Court; Circuit Judge Fernandez and Senior District Judge Albritton
  • Full Text Opinion

An arbitrator’s professional relationships must create a reasonable impression of partiality in order to rise to a claim of bias sufficient to require a remedy.

Luxury condominium purchasers (“Sussex”) and the developer and purchaser (“Turnberry”) agreed to arbitrate any dispute arising from the purchase and sale of the condominium units. Disputes arose between several purchasers and Turnberry. The disputes were submitted to arbitration. Brendan Hare was appointed as arbitrator. Several civil suits were brought against Turnberry and consolidated into this action. Hare served as arbitrator in three of the suits. After learning of Hare’s litigation finance ventures, Turnberry requested to stay the arbitration and disqualify Hare. Turnberry also made the same motions in district court. The district court granted a stay and disqualified Hare. Sussex then filed for a writ of mandamus. The Ninth Circuit held that a writ of mandamus will only be issued in the most extraordinary circumstances. The panel applied the five Bauman v. U.S. Dist. Court factors, and found that the district court erred in disqualifying Hare. The panel held that an arbitrator’s professional relationships must create a reasonable impression of partiality in order to rise to a claim of bias sufficient to require a remedy. The questioned relationship must be more than speculation and the potential damage must be more than financial harm. Hare’s business ventures were merely speculative and did not create a reasonable impression of partiality. Additionally, arbitrators, by the nature of their work, likely will have multiple and potentially conflicting, ongoing relationships within the legal community. PETITION GRANTED.

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