“The Cost Of Living Has Gone Up Another Dollar A Quart.”– W.C. Fields.

An arbitrator with the American Arbitration Association [AAA], a practicing lawyer, in an action involving alleged fraud in the purchase of condominiums did not disclose his own involvement in the field of litigation financing for investment purposes. AAA denied requests to disqualify him, but a federal district court judge granted a motion to disqualify the arbitrator, after concluding the arbitration involved hundreds of plaintiffs, it was in the early stages and discovery had not yet commenced. The district court reasoned that at the end of the arbitration, the moving party would likely prevail on a motion to vacate any award the arbitrator issued on the ground of “evident partiality” under the Federal Arbitration Act [9 U.S.C. § 10(a)(2)]. The Ninth Circuit granted a writ of mandate, analyzing the situation under Bauman v. U.S. Dist. Court (9th Cir. 1977) 557 F.2d 650. The appeals court stated: “…even if [the arbitrator’s] undisclosed activities did create a reasonable impression of partiality, the district court’s equitable concern that delays and expenses would result if an arbitration award were vacated is manifestly inadequate to justify a mid-arbitration intervention, regardless of the size and early stage of the arbitration.” (Sussex v. United States Dist. Court for the Dist. of Nev. (Turnberry/MGM Grand Towers) (Ninth Cir.; January 27, 2015) 776 F.3d 1092.)