Amicorp Inc. v. General Steel Domestic Sales, LLC

FILED
United States Court of Appeals
Tenth Circuit

July 3, 2008
UNITED STATES COURT OF APPEALS Elisabeth A. Shumaker
Clerk of Court
FOR THE TENTH CIRCUIT

AMICORP INCORPORATED,

Plaintiff-Appellee,
No. 07-1416
v. (D.C. No. 1:07-cv-1105-LTB-BNB)
(D. Colo.)
GENERAL STEEL DOMESTIC
SALES, LLC, d/b/a General Steel
Corporation,

Defendant-Appellant.

ORDER AND JUDGMENT *

Before KELLY, McKAY, and BRISCOE, Circuit Judges.

General Steel Domestic Sales, d/b/a General Steel Corporation (General

Steel) appeals from the district court’s order: (1) confirming in part 1 an arbitral

award in favor of Amicorp, Inc. (Amicorp); (2) denying General Steel’s petition

*
After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist the determination of
this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is
therefore ordered submitted without oral argument. This order and judgment is
not binding precedent, except under the doctrines of law of the case, res judicata,
and collateral estoppel. It may be cited, however, for its persuasive value
consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
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The district court did not award Amicorp attorney’s fees, as requested.
to vacate the arbitrator’s award; and (3) denying General Steel’s related motion

for discovery. We affirm.

BACKGROUND

The parties selected the arbitrator, Edwin S. Kahn of the American

Arbitration Association (AAA), to arbitrate their dispute related to General

Steel’s sale of a steel building to Amicorp. Arbitrator Kahn ruled in Amicorp’s

favor and awarded it damages against General Steel.

In his decision in favor of Amicorp, Arbitrator Kahn relied extensively on a

prior order entered by Judge R. Brooke Jackson, State ex rel. Salazar v. Gen.

Steel Domestic Sales, LLC, No. 04-CV-143 (Colo. Dist. Ct. Jeff. County Dec. 7,

2004). See Aplt. App., Vol. II at 67-108. In that order, Judge Jackson found that

General Steel had made misrepresentations to consumers in violation of the

Colorado Consumer Protection Act, Colo. Rev. Stat. §§ 6-1-101 to 115.

After Arbitrator Kahn entered his award against General Steel, General

Steel hired a private investigator to look into Arbitrator Kahn’s connections with

Judge Jackson. Based on the investigator’s findings, General Steel unsuccessfully

sought to vacate Arbitrator Kahn’s award through a motion filed with the AAA.

It then filed the petition to vacate in this case.

General Steel contends that the arbitration award should be vacated rather

than confirmed, because Arbitrator Kahn failed to disclose, at any time before or

during the arbitration, that both he and Judge Jackson: (1) graduated from

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Harvard Law School; (2) are members of the Harvard Law School Association of

Colorado; (3) were employed by the Denver law firm of Holland & Hart, LLP

during the years 1972 to 1978; and (4) received awards from Holland & Hart on

June 11, 2004–in Judge Jackson’s case, a lifetime achievement award, and in

Arbitrator Kahn’s case, designation as “pro bono attorney of the year.” General

Steel avers that it would never have selected as an arbitrator someone who

disclosed that he had any sort of close social or business relationship with its

“nemesis,” Judge Jackson. Aplt. App., Vol. II at 132-33 (quotation omitted)

(motion to recuse Judge Jackson in Colorado district court case). See Aplt.

Opening Br. at 23.

The district court denied the petition to vacate, ruling that Arbitrator

Kahn’s purported failure to disclose his alleged ties to Judge Jackson did not rise

to the level of “evident partiality” that would require vacation of the award.

See 9 U.S.C. § 10(a)(2) (setting forth standard for vacating arbitral award on basis

of bias). The district court also denied General Steel’s request that discovery be

ordered so that General Steel could further explore the relationship between

Arbitrator Kahn and Judge Jackson, characterizing this request as a “fishing

expedition.” Aplt. App., Vol. IV at 1119.

On appeal, General Steel argues that the district court: (1) erred in

applying an “actual bias” standard instead of an “appearance of bias” standard;

and (2) should have found that an “appearance of bias” existed by taking into

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account General Steel’s subjective impressions of the bias created by Arbitrator

Kahn’s relationship to Judge Jackson.

ANALYSIS

1. Mootness

Amicorp contends that General Steel’s appeal is moot. General Steel

initially sought a stay of the district court’s judgment confirming the award and

attempted to post a supersedeas bond in connection with its appeal. After

Amicorp noticed a deposition of General Steel’s president pursuant to Fed. R.

Civ. P. 69(a)(2), however, General Steel paid the judgment and Amicorp entered a

satisfaction of judgment.

Payment of the judgment under these circumstances did not moot General

Steel’s appeal:

The usual rule in the federal courts is that payment of a judgment
does not foreclose an appeal. Unless there is some contemporaneous
agreement not to appeal, implicit in a compromise of the claim after
judgment, and so long as upon reversal, restitution can be enforced,
payment of the judgment does not make the controversy moot.

Milicevic v. Fletcher Jones Imports, Ltd., 402 F.3d 912, 915 (9th Cir. 2005)

(quotation omitted). See also Hill v. Whitlock Oil Servs., Inc., 450 F.2d 170, 172

(10th Cir. 1971); Leader Clothing Co. v. Fidelity & Cas. Co. of N.Y., 227 F.2d

574, 576 (10th Cir. 1955). There is no evidence here of a settlement or of an

agreement not to appeal. The district court entered judgment against General

Steel, and General Steel satisfied the judgment. Aplt. App., Vol. IV at 1125,

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1170. Amicorp fails to show that if the award of money damages were reversed,

it could not be ordered to restore the funds to General Steel. The appeal is

therefore not moot, and we proceed to the merits.

2. Merits

When a district court confirms an arbitration award, we review its legal

conclusions de novo and its factual findings for clear error. Dominion Video

Satellite, Inc. v. EchoStar Satellite L.L.C., 430 F.3d 1269, 1275 (10th Cir. 2005).

The same standard applies to its decision concerning a motion to vacate the

award. See Bowen v. Amoco Pipeline Co., 254 F.3d 925, 931 (10th Cir. 2001).

Having carefully reviewed the district court’s decision, the briefs on appeal, and

the record, we AFFIRM the challenged decisions of the district court for

substantially the same reasons articulated in its order of September 27, 2007.

Entered for the Court

Monroe G. McKay
Circuit Judge

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