IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
____________________
No. 97-30726
Summary Calendar
____________________
RON FOLSE,
Plaintiff-Appellant,
v.
RICHARD WOLF MEDICAL INSTRUMENTS CORPORATION; ET AL,
Defendants,
RICHARD WOLF MEDICAL INSTRUMENTS CORPORATION,
Defendant-Appellee.
_________________________________________________________________
Appeal from the United States District Court
for the Eastern District of Louisiana
(94-CV-1903-R)
_________________________________________________________________
January 14, 1998
Before KING, HIGGINBOTHAM, and DAVIS, Circuit Judges.
PER CURIAM:*
Plaintiff-appellant Ron Folse appeals the district court’s
judgment confirming an arbitrator’s award. He contends that the
arbitrator committed misconduct and that he erred in his
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
application of the law and in his contract interpretation. We
affirm the judgment of the district court.
I. FACTUAL & PROCEDURAL BACKGROUND
From June 1976 until September 1991, plaintiff-appellant Ron
Folse worked for defendant-appellee Richard Wolf Medical
Instruments Corporation (“Wolf”) as a Manufacturer’s
Representative. Pursuant to a Sales Representative Agreement
(“Sales Agreement”), Folse solicited orders for medical equipment
in several Southern states. Wolf compensated Folse on a
commission and bonus basis. The Sales Agreement allowed either
party to terminate the contract without cause on ninety days’
written notice. It limited post-termination compensation to
commissions on orders that were received by Wolf prior to the
termination date, and it also provided that the outstanding
commissions would be paid only after Wolf received payment from
the customer. In addition, the Sales Agreement required
arbitration of all claims arising out of it.
On September 3, 1991, Folse informed Wolf in writing of his
immediate resignation and requested payment of the commissions
and bonuses that he believed Wolf owed him. In a letter dated
September 5, 1991, Wolf accepted Folse’s resignation and demanded
the return of its sample inventory. Thereafter, Wolf did not pay
Folse the money that he claimed was owed to him, and Folse did
not return the sample inventory to Wolf.
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After one unsuccessful arbitration proceeding from which no
final award was issued, Folse filed suit against Wolf, the
American Arbitration Association, and the original arbitrator.
Wolf moved to compel a return to arbitration, and the district
court denied the motion. However, a panel of this circuit
reversed and remanded the matter with instructions to return to
arbitration.
On October 1, 1996, the parties participated in a second
arbitration before Arbitrator Terrell Harris. Harris issued an
award on October 30, 1996 that ordered Folse to return the sample
inventory to Wolf within thirty days or pay Wolf its value and
ordered Wolf to pay Folse $19,752 in commissions if Folse
returned the inventory on time. Folse filed a motion to stay
execution of and to vacate the arbitration award in the United
States District Court for the Eastern District of Louisiana. On
June 13, 1997, the district court denied Folse’s motion and
confirmed the arbitration award. Folse now appeals.
II. STANDARD OF REVIEW
We review a district court’s confirmation of an arbitration
award de novo. Gateway Techs., Inc. v. MCI Telecomms. Corp., 64
F.3d 993, 996 (5th Cir. 1995); Forsythe Int’l, S.A. v. Gibbs Oil
Co., 915 F.2d 1017, 1020 (5th Cir. 1990). However, the “district
court’s ‘review of an arbitration award is extraordinarily
narrow.’” Gateway, 64 F.3d at 996 (quoting Antwine v. Prudential
3
Bache Sec., Inc., 899 F.2d 410, 413 (5th Cir. 1990)). As a
result, the scope of our review is also highly circumscribed;
indeed, this circuit has held that reviewing courts must “defer
to the arbitrator[’s] resolution of the dispute whenever
possible.” Anderman/Smith Operating Co. v. Tennessee Gas
Pipeline Co., 918 F.2d 1215, 1218 (5th Cir. 1990). Pursuant to
the Federal Arbitration Act, 9 U.S.C. § 10, an arbitration award
shall not be vacated unless
(1) the award was procured by corruption, fraud, or
undue means; (2) there is evidence of partiality or
corruption among the arbitrators; (3) the arbitrators
were guilty of misconduct which prejudiced the rights
of one of the parties; or (4) the arbitrators exceeded
their powers.
Gateway, 64 F.3d at 996 (citing Forsythe, 915 F.2d at 1020).
This circuit has consistently confirmed that “section 10 of the
Arbitration Act describes the only grounds upon which a reviewing
court may vacate an arbitration award.” McIlroy v. Painewebber,
Inc., 989 F.2d 817, 820 (5th Cir. 1993).
III. DISCUSSION
On appeal, Folse contends that the arbitration award should
be vacated because the arbitrator committed misconduct in not
explaining the basis for his award and in failing to await the
court reporter’s delivery of the transcript and documentary
evidence before issuing an award. Folse also claims that the
district court erred in finding that the award was rationally
inferable from the contract language and from the facts of the
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case. We address each of these contentions in turn.
A. Arbitrator Misconduct
Folse contends that the award should be vacated because the
arbitrator did not fully explain the award. As the district
court explained, this circuit has consistently held that
arbitrators are generally not “‘required to disclose or explain
the reasons that underlie their decision.’” Houston Lighting &
Power Co. v. International Bhd. of Elec. Workers, Local Union No.
66, 71 F.3d 179, 186 (5th Cir. 1995) (quoting Anderman/Smith, 918
F.2d 1219 n.3), cert. denied, 117 S. Ct. 52 (1996); see also
Valentine Sugars, Inc. v. Donau Corp., 981 F.2d 210, 214 (5th
Cir. 1993) (“Arbitrators need not provide reasons for their
awards.”); Antwine, 899 F.2d at 412 (holding that arbitrators
need not “disclose or explain the reasons underlying an award”).
Thus, we find no error in the arbitrator’s failure to detail the
reasons underlying his award.
Folse also contends that the award should be vacated because
the arbitrator issued it without waiting for the court reporter
to deliver the hearing transcript or the documentary evidence
presented at the hearing. It is well-settled that “[a]bsent
agreement of the parties, a written transcript of the
[arbitration] proceedings is unnecessary.” Bernhardt v.
Polygraphic Co. of Am., 350 U.S. 198, 204 n.4 (1955); see also
Glass v. Kidder Peabody & Co., 114 F.3d 446, 454 (4th Cir. 1997)
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(citing the same language from Bernhardt, 350 U.S. at 204 n.4).
The Sales Agreement’s arbitration clause makes no mention of the
production of a written transcript of the arbitration
proceedings, and Folse has pointed to no evidence indicating that
such an agreement was ever made. The arbitrator was present
throughout the hearing, and he heard all of the testimony. As
there is no requirement that a transcript even be made, we cannot
say that it constitutes misconduct for the arbitrator to issue an
award prior to the production of the written transcript of the
hearing.
Finally, Folse claims that the award must be vacated because
the court reporter took the documentary exhibits and did not
return them. He therefore argues that the award was “arbitrary
and capricious,” and was, on its face, “issued without benefit
and consideration of the documentary evidence and of the hearing
record.”2 Folse failed to raise this argument before the
district court, and “‘[i]t is an unwavering rule in this Circuit
that issues raised for the first time on appeal are reviewed only
for plain error.’” Riley Stoker Corp. v. Fidelity & Guar. Ins.
Underwriters, Inc., 26 F.3d 581, 589 (5th Cir. 1994) (quoting
McCann v. Texas City Ref., Inc., 984 F.2d 667, 673 (5th Cir.
2
We note that Wolf disputes Folse’s claim that the court
reporter took the exhibits, and it is not possible to determine
what happened from the record before this court. Nevertheless,
for purposes of this appeal, we assume that the arbitrator did
not have the exhibits when he issued his award.
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1993)). In order for an appellant to prevail under this level of
scrutiny, he must show the following: “(1) that an error
occurred; (2) that the error was plain, which means clear or
obvious; (3) the plain error must affect substantial rights; and
(4) not correcting the error would ‘seriously affect the
fairness, integrity, or public reputation of judicial
proceedings.’” Highlands Ins. Co. v. National Union Fire Ins.
Co., 27 F.3d 1027, 1032 (5th Cir. 1994) (quoting United States v.
Olano, 507 U.S. 725, 736 (1993), and holding that “‘[t]he
principles and decision enunciated in Olano apply a fortiori in
the civil context’” (quoting Smith v. Gulf Oil Co., 995 F.2d 638,
646 (6th Cir. 1993))).
It is undisputed that the arbitrator was present throughout
the hearing at which the documentary evidence was introduced. As
he had the opportunity to consider the relevance of each piece of
evidence at the hearing, we cannot say that his decision to issue
an award without further review of the evidence constituted plain
error.
B. Substantive Claims
Folse raised four substantive claims before the district
court, each of which he reiterates before this court. First,
Folse argues that the arbitrator misinterpreted the Illinois
Sales Representative Act (“Sales Act”), 820 ILL. COMP. STAT. 120/3
(West 1990), which he claims “provides for mandatory penalties
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under these circumstances.”3 However, Illinois courts have held
that in order to recover such damages under the Sales Act, a
complainant must show “culpability that exceeds bad faith.”
Maher & Assocs., Inc. v. Quality Cabinets, 640 N.E.2d 1000, 1008
(Ill. App. Ct. 1994). As the district court correctly
determined, the arbitrator reasonably could have found, from the
evidence presented at the arbitration hearing, that the Sales Act
was not applicable because Wolf’s conduct was not sufficiently
culpable to trigger it.
Folse’s second, third, and fourth arguments about the
substance of the award all relate to the arbitrator’s
interpretation of the Sales Agreement. It is well settled that
courts may not vacate arbitration awards based on alleged errors
in contract interpretation. See, e.g., United Paperworkers Int’l
Union v. Misco, Inc., 484 U.S. 29, 38 (1987) (“The arbitrator may
not ignore the plain language of the contract; but the parties
3
The statute reads as follows:
A principal who fails to comply with the
provisions of Section 2 concerning timely payment or
with any contractual provision concerning timely
payment of commissions due upon the termination of the
contract with the sales representative, shall be liable
in a civil action for exemplary damages in an amount
which does not exceed 3 times the amount of the
commissions owed to the sales representative.
Additionally, such principal shall pay the sales
representative’s reasonable attorney’s fees and court
costs.
820 ILL. COMP. STAT. 120/3 (West 1990).
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having authorized the arbitrator to give meaning to the language
of the agreement, a court should not reject an award on the
ground that the arbitrator misread the contract.”); United Food &
Commercial Workers v. National Tea Co., 899 F.2d 386, 389 (5th
Cir. 1990) (“It is not for the courts to agree or disagree with
[the arbitrator’s] interpretation. That it was a contract
interpretation is clear, and we have no authority to disturb
it.”). In addition, where the basis for the award can be
inferred from the underlying contract, the reviewing court must
affirm the award “even if it does not agree with the
arbitrator[’s] interpretation of the contract.” Anderman/Smith,
918 F.2d at 1218. We agree with the district court that the
testimony and evidence introduced at the hearing was sufficient
to render the arbitrator’s award rationally inferable from the
contract language and the facts of the case.
IV. CONCLUSION
For the foregoing reasons, we AFFIRM the judgment of the
district court.
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