Prescott v. Northlake Christian School

United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT July 8, 2005

Charles R. Fulbruge III
No. 04-31182 Clerk
Summary Calendar

PAMELA L. PRESCOTT,

Plaintiff - Appellee
versus

NORTHLAKE CHRISTIAN SCHOOL; ET AL,

Defendants

NORTHLAKE CHRISTIAN SCHOOL,

Defendant-Appellant

Appeal from the United States District Court
for the Eastern District of Louisiana
(No. 2:01-CV-475)

Before WIENER, BENAVIDES, and STEWART, Circuit Judges.

PER CURIAM:*

Defendant-Appellant Northlake Christian School (“NCS”) appeals

the district court’s order enforcing an arbitration award against

NCS obtained by its former employee, Plaintiff-Appellee Pamela

Prescott. We affirm the district court’s enforcement order.

I. FACTS AND PROCEEDINGS

NCS’s appeal is the latest chapter in its five-year-old

employment dispute with Prescott; indeed, this is the second time

*
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this opinion should not be published and is not precedent except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.
that these parties have come before us regarding the validity of

the arbitrator’s award.1 As we detailed the facts underlying this

dispute in our Prescott I opinion, we shall not repeat them here.

We shall, however, briefly review the background proceedings for

the sake of clarity.

After being fired from her job as principal at NCS, Prescott

brought suit in the district court, alleging Title VII and various

state law claims, including breach of her employment contract.

After NCS moved successfully to compel arbitration, such

proceedings were conducted according to the Rules of Procedure for

Christian Conciliation (“Rules”) of the Institute for Christian

Conciliation (“ICC”). In arbitration, Prescott prevailed on her

breach of contract claim and was awarded approximately $ 150,000 in

damages for reputational harms and loss of future income. In

reaching his decision, the arbitrator determined that NCS had

wrongfully discharged Prescott by failing to follow Biblical

precepts, as required in her employment contract; specifically, the

conflict resolution process described in Matthew 18.2

NCS immediately returned to federal district court, this time

requesting vacatur of the arbitrator’s award. NCS insisted that,

even though the parties’ arbitration agreement specified that

1
See Prescott v. Northlake Christian Sch. , 369 F.3d 491,
493 (5th Cir. 2004) (hereinafter “Prescott I”).
2
All employment contracts at NCS require individuals to
follow this process, as well as other provisions of scripture in
their every-day dealings with students and other employees.

2
proceedings would be conducted under the Rules of the ICC and the

Montana Uniform Arbitration Act (“MUAA”),3 the parties had actually

contracted for plenary judicial review of the arbitration

proceedings when they struck through language in NCS’s form

arbitration agreement, thereby making communications between the

parties confidential and inadmissible in a court of law. The

parties had also inserted a hand-written provision stating that

“[n]o party waives appeal rights, if any, by signing this

agreement.”4 NCS reasoned that, under this expanded scope of

review, the district court had jurisdiction to address and hold

that the arbitrator misconstrued Prescott’s employment contract as

well as applicable Louisiana law. NCS also argued that the

arbitrator exceeded his authority and was impermissibly biased ——

both grounds for vacatur under the MUAA.

The district court ruled against NCS, holding that the parties

had not expanded the scope of judicial review of the arbitration

3
Mont. Code Ann. § 27-5-101 et seq. The parties agreed to
be bound by the Rules of Procedure for Christian Conciliation of
the ICC. In their arbitration agreement, the parties also agreed
to conduct the arbitration proceedings according to the MUAA,
which provides the relevant standard of review and other
procedural requirements not covered by the ICC rules.
4
Although, generally, the Federal Arbitration Act (“FAA”),
9 U.S.C. § 1 et. seq., governs a federal court’s consideration of
matters involving arbitration, parties are free to contract for
expanded judicial review of their arbitration proceedings.
Action Indus. v. U.S. Fid. & Guar. Co., 358 F.3d 337, 340 (5th
Cir. 2004); Harris v. Parker Coll. of Chiropractic, 286 F.3d 790,
793 (5th Cir. 2002); Gateway Technologies, Inc. v. MCI
Telecommunications, Corp., 64 F.3d 993, 996-97 (5th Cir. 1995).

3
proceedings and that NCS had not shown that it was entitled to

vacatur under the MUAA’s narrow standard of judicial review of

proceedings in arbitration. NCS appealed this ruling to us in

Prescott I.

Holding that the parties’ handwritten strike-outs and their

insertion to their arbitration agreement were ambiguous, we vacated

the district court’s order and remanded with instructions for the

district court to hold an evidentiary hearing. In so doing, we

directed the district court to “take evidence on and contractually

interpret the circumstances surrounding the making of the

provision.”5 On remand, the district court held an evidentiary

hearing as instructed, after which it again concluded that the

parties had not contractually expanded the scope of review and

again ordered enforcement of the arbitrator’s award for the reasons

given in its previous opinion.

In the instant appeal, NCS challenges the district court’s

determination that the arbitration agreement did not expand the

parties’ right to judicial review on appeal. In addition, NCS now

contends that it was entitled to a jury trial on the question of

interpretation of the arbitration agreement, not just the making of

that agreement, reiterating the contention that the district court

erred in its earlier order enforcing the arbitration award in favor

of Prescott.

5
369 F.3d at 497-98 (emphasis added).

4
 II. DISCUSSION

A. The Ambiguous “Appeal Rights” Clause

1. Standard of Review

We review the district court’s findings of facts for clear

error.6 “The burden of showing that the findings of the district

court are clearly erroneous is heavier if the credibility of

witnesses is a factor in the trial court's decision.”7 “A factual

finding is not clearly erroneous if it is plausible in light of the

record read as a whole.”8

2. The Evidentiary Hearing

On remand from Prescott I, the district court heard testimony

from the parties as to whether, in amending their arbitration

6
Prescott I, 369 F.3d at 494. We erroneously stated in
Prescott I that this provision and any ambiguities therein must
be construed against Prescott, as she had added the language.
Id. at 497 n.10. It is undisputed at this time that NCS added
the language, “if any” to the contract, thus this language should
be construed against NCS. See La. Civ. Code Ann. § 2056 (“In
case of doubt that cannot be otherwise resolved, a provision in a
contract must be interpreted against the party who furnished its
text.”); Lifemark Hosp., Inc. v. Liljeberg Enters., 304 F.3d 410,
440 (5th Cir. 2002)(construing contract language against drafting
party pursuant to Louisiana law). The parties’ employment
contract contained a clause providing that the contract’s
language should be construed according to Louisiana law; although
the arbitration agreement did not contain such a provision, it is
a contract entered into in Louisiana by two Louisiana parties,
and therefore we employ Louisiana law in our analysis of the
contractual language. Prescott I, 369 F.3d at 496.
7
Coury v. Prot, 85 F.3d 244, 254 (5th Cir. 1996)(citation
omitted).
8
United States v. Valencia, 44 F.3d 269, 272 (5th Cir.
1995).

5
agreement, they had intended to expand the scope of any subsequent

judicial review. Prescott testified that she understood at the

time that she had only a limited right of appeal but that she

wanted to confirm in writing that, by signing the arbitration

agreement, she was not waiving or curtailing even this limited

right of review. To that end, she requested that the parties

include a clause stating that “No party waives appeal rights by

signing this agreement.” Prescott testified further that NCS twice

rejected her suggestion but finally agreed to accept her

modification on the condition that the words “if any” be inserted

after “appeal rights.”

Boyd Leahy testified on behalf of NCS that the clause was

added to preserve all appeal rights in the event that there was no

successful mediation. He claimed that the words “if any” were

added to the clause because, if the mediation had been successful,

there would have been no appeal.9

NCS also argued to the district court that the conduct of the

parties demonstrated their belief that they had contracted for

appeal rights beyond those guaranteed by the MUAA. NCS emphasized

that (1) Prescott had hired a court reporter to transcribe the

entire arbitration hearing, (2) during the arbitration proceeding,

the parties discussed possible appeal to the Fifth Circuit, (3)

9
Leahy added, however, that he understood that he agreed to
arbitration with a right of appeal in the case of mistake or
unfair decision, the same right of appeal guaranteed under the
MUAA.

6
Prescott proffered evidence for consideration on appeal, and (4)

she agreed to the arbitrator’s retaining custody of disputed

evidence pending final appeal.

The district court ruled in favor of Prescott, holding that

the phrase “if any” was inserted to preserve appeal rights normally

guaranteed by the MUAA. He interpreted “if any” to mean “if there

are any,” a phrase that implies the possibility of none. “In other

words,” ruled the district court, “the parties agreed to not waive

appeal rights if there are any.” NCS’s insistence on adding the

words “if any” to the contract, the court concluded, demonstrated

its own concern that, without these words, Prescott might be

allowed to appeal the arbitrator’s decision on grounds not

permitted by the MUAA. The court stated that NCS’s explanation that

“if any” referred to the possibility that there would be no appeal

rights if mediation was successful “makes no sense because it is

obvious that a successful mediation would mean there would be no

need for an appeal.” The only reason for including language

regarding appeal rights under these circumstances, reasoned the

court, “was to clarify the parties’ intention in the event there

was an arbitration hearing and decision.”

In contrast, the district court found credible Prescott’s

explanation that she was concerned that the arbitration agreement

stated that “arbitration will be the exclusive remedy for this

dispute and...we may not later litigate these matters in civil

court” without reference to the appeal rights available under the

7
MUAA. And, the court disagreed with NCS’s characterization of the

parties’ conduct, finding that it indicated only that they were

aware that some ground for appeal was available, not necessarily

that they would be entitled to plenary judicial review.

NCS also cites Prescott’s communications with the ICC prior to

the mediation as evidence of her intent to gain plenary appeal

rights, noting that she stated in a letter protesting the ICC’s

jurisdiction that she intended to participate, “reserving every

right to exhaust every appeal.” This proves nothing, however; a

reading of the entire letter shows that Prescott’s primary concern

was her perception that the ICC was biased in favor of NCS. Her

letter makes clear that she felt herself cheated out of a fair

trial and considered the ICC a willing party in “this evil attempt

to permanently damage my professional and personal integrity...

thus becoming a biased party supporting NCS in this action.”

Prescott also referred to the ICC as “a biased party to this

conspiracy to effectively strip away my guaranteed Constitutional

rights....” The MUAA provides for vacatur of awards granted by a

biased arbitrator.10

The district court committed no error in determining that the

parties did not intend to expand the scope of judicial review. The

court’s conclusion —— that Prescott intended only to preserve what

rights she thought she had and that NCS intended to ensure that she

10
Mont Code Ann. § 27-5-312(1)(b).

8
did not gain any appeal rights to which she was not already

entitled —— is plausible. Even if the court had not credited

Prescott’s explanation that she wished only to preserve her rights

under the MUAA and instead had credited NCS’s explanation that

Prescott wanted plenary appeal rights, NCS’s insertion of the words

“if any” effectively nullified any such effort on her part. Thus,

when the words furnished by each party are construed against the

writer,11 and after noting that NCS made the final change to the

language, it is logical to assume that, in the final revised draft

of the arbitration agreement, the parties intended nothing more

than to reiterate that the appeal rights enumerated in the MUAA ——

and only such appeal rights —— would be available to them. We

affirm the district court’s ruling that the parties did not expand

the scope of review available to them under the MUAA.

B. Jury Trial

After we remanded this case in Prescott I for an evidentiary

hearing on the meaning of the contract’s wording, NCS requested a

jury trial on the interpretation of the contract. The district

court denied this request, noting that motions to enforce or vacate

an arbitration award carry no right to a trial by jury. On appeal,

NCS asserts that the FAA permits parties to demand a jury trial to

resolve factual issues surrounding the making of an arbitration

11
See La. Civ. Code Ann. § 2056.

9
agreement,12 and that this right should also apply to interpretation

of an arbitration agreement as well.

Neither the FAA nor the MUAA provide for a jury trial under

these circumstances. Unlike the FAA, the MUAA makes no explicit

guarantee of a trial by jury at any stage of arbitration-related

litigation.13 As for the FAA, its § 4 allows for a jury trial only

to resolve fact issues surrounding “the making of an arbitration

agreement”14 and applies in proceedings to compel arbitration.

Although the “making of an arbitration of an agreement” could be

broadly construed to include any factual issue surrounding the

writing of the arbitration agreement, we have not done so. In

fact, we have explicitly interpreted § 4 to require that a party

make “at least some showing that under prevailing law, he would be

relieved of his contractual obligation to arbitrate if his

allegations proved to be true.”15 The party must put the existence

12
9 U.S.C. § 4.
13
Compare Mont. Code Ann 27-5-115(1), (2) (directing courts
to proceed summarily to the determination whether there is an
agreement to arbitrate as “[s]uch an issue, when in substantial
and bona fide dispute, shall be immediately and summarily
tried.”) with 9 U.S.C. § 4 (“If no jury trial be demanded by the
party alleged to be in default, or if the matter in dispute is
within admiralty jurisdiction, the court shall hear and determine
such issue.”).
14
9 U.S.C. § 4 (emphasis added).
15
Dillard v. Merrill Lynch, Pierce, Fenner & Smith, Inc.,
961 F.2d 1148, 1154 (5th Cir. 1992). “While Section 4, by its
terms, applies to proceedings to compel arbitration, its
provisions have been deemed applicable also in instances when the
proceeding is initiated by the party seeking to avoid

10
of the agreement to arbitrate itself at issue to create a jury-

triable issue.16 NCS is not seeking a jury determination whether

the parties contracted to arbitrate disputes; they clearly did.

NCS seeks a jury determination only as to the meaning of particular

words of the agreement that the parties acknowledge having made.

In contrast, neither § 10 of the FAA (the portion governing

judicial review of an arbitration award) nor any other part of the

FAA explicitly authorizes jury trials on issues of interpretation

of other aspects of an arbitration agreement. Obviously, NCS’s

argument relates to the enforceability of the contract, an issue

that we have expressly held not to be encompassed within § 4's jury

trial provision.17

NCS also contends that it is entitled to trial by jury by

virtue of Federal Rule of Civil Procedure 38. But of course, Rule

38 only preserves the parties’ right to jury trial in cases in

arbitration.” 8 James Wm. Moore et al., Moore's Federal Practice
§ 38.33 (3d ed. 1999).

16
Id. “[I]t is well-established that ‘[a] party to an
arbitration agreement cannot obtain a jury trial merely by
demanding one.’” Am. Heritage Life Ins. Co. v. Orr, 294 F.3d
702, 710 (5th Cir. 2002) (quoting Dillard, 961 F.2d at 1154).
17
See Am. Heritage Life, 294 F.3d at 710 (holding that
party’s argument that an arbitration agreement was
unconscionable, lacked mutuality, and failed to result from a
meeting of the minds did not impact the “making” of the
arbitration agreement, as required by statute, because a party
contesting the “making” of an agreement for purposes of § 4 must
put the very existence of the contractual agreement to arbitrate
at issue).

11
which the right is guaranteed by the Seventh Amendment or is

provided by statute.18 In determining whether a party enjoys a

right to a trial by jury when the statute does not expressly grant

one, we examine (1) the nature of the issues involved, comparing

them to actions brought in 18th century England before the merger

of law and equity, and (2) the nature of the remedy sought, whether

legal or equitable.19 “In the 18th century, an action to set aside

an arbitration award was considered equitable.”20 And, even though

NCS ultimately seeks vacatur of the arbitrator’s award for damages,

it seeks a jury trial only on the issue whether it contracted to

expand the scope of review of the award, not the award itself. NCS

thus seeks only a declaration of its rights, not a legal award of

damages. NCS enjoys neither a Seventh Amendment nor a statutory

right to a trial by jury under these circumstances.

Finally, in our Prescott I remand for an evidentiary hearing,

we only ordered the district court “to take evidence on and

contractually interpret the circumstances surrounding the making of

the [review] provision.”21 We did not order the district court to

conduct a jury trial. The district court did not abuse its

18
Rachal v. Ingram Corp., 795 F.2d 1210, 1214 (5th Cir.
1986); 8 James Wm. Moore et al., Moore’s Federal Practice § 38
(3d ed. 1999).
19
Tull v. United States, 481 U.S. 412, 417-18 (1987).
20
Teamsters v. Terry, 494 U.S. 558, 566 (1990)(citations
omitted).
21
Prescott, 369 F.3d at 498 (emphasis added).

12
discretion by declining NCS’s request for a jury trial.22

C. Motion to Vacate Award

As the district court did not clearly err in its determination

that the parties did not intend to expand their right of judicial

review, we must consider whether the district court properly denied

NCS’s motion to vacate the arbitration award under the narrow

standard of review applicable to such an issue. NCS insists that

the arbitrator’s award must be vacated because (1) he erroneously

concluded that NCS had breached its employment contract with

Prescott and that she was entitled to damages —— conclusions that

NCS contends are in conflict with Louisiana law —— (2) the

arbitrator exceeded his authority, and (3) the arbitrator was

biased against NCS.

1. Standard of Review

We review a district court’s confirmation or vacatur of an

arbitration award de novo.23 The district court’s scope of review

of an award by the arbitrator, however, is extremely limited.

Although the FAA would normally provide the grounds for vacatur, in

this case the parties’ arbitration agreement specifies that “[t]his

22
Becker v. Tidewater, Inc., No. 04-30243, 2005 U.S. App.
LEXIS 5124 at * 4 (5th Cir. Mar. 30, 2005)(holding that district
court did not abuse its discretion by denying party’s request for
jury trial when party had no independent right to jury trial and
court of appeals had remanded case without instructions that
district court provide such a trial).
23
Gateway Technologies, Inc. v. MCI Telecommunications
Corp., 64 F.3d 993, 996 (5th Cir. 1995).

13
agreement is subject to arbitration pursuant to the Montana

Arbitration Act, Title 27, Montana Code Annotated,” which statement

expresses the parties’ binding agreement that Montana’s procedural

rules will govern the entire arbitration process, including the

review of the award.24 And, the Rules of the ICC do not purport to

change the scope of judicial review of its arbitration decisions,

stating that “[t]he arbitration decision is final and cannot be

reconsidered or appealed except as provided by Rule 41 and/or civil

law.”25 As we noted in Prescott I, the MUAA provides substantially

identical grounds to the FAA for vacatur by the district court:26

to wit,

(a) the award was procured by corruption,
fraud, or other undue means;
(b) there was evident partiality by an
arbitrator appointed as a neutral or
corruption in any of the arbitrators or
misconduct prejudicing the rights of any
party;

24
See Hughes Training Inc. v. Cook, 254 F.3d 588, 593 (5th
Cir. 2001)(concluding that, despite provision in arbitration
agreement stating that FAA governed motions to compel or enforce
arbitration, the agreement’s specific provision stating that “the
arbitration process shall be conducted in accordance with the
Employment Problem Resolution Procedures” meant that “[t]he
procedural rules pertained to the entire arbitration process,
which included the review of arbitration awards.”).
25
ICC Rule 42 (emphasis added).
26
369 F.3d at 494-95. The FAA permits only strictly
limited review —— it has been called “the narrowest known to the
law.” ARW Exploration Corp. v. Aguirre, 45 F.3d 1455, 1462 (10th
Cir. 1995)(quoting Litvak Packing Co. v. United Food & Commercial
Workers, 886 F.2d 275, 276 (10th Cir. 1989)).

14
 (c) the arbitrators exceeded their powers;27

The MUAA does not allow for judicial review of arbitration awards

on the merits of the controversy.28 (As NCS has not argued that the

arbitrator manifestly disregarded the law, we do not consider this

27
Mont. Code Ann. § 27-5-312. An award may also be vacated
if the arbitrators refused to postpone a hearing despite
sufficient cause being shown or if there was no arbitration
agreement and the party participating in the hearing objected on
this basis. Id.
28
Geissler v. Sanem, 949 P.2d 234, 238 (Mont. 1997)(holding
party unentitled to vacatur of arbitration award as it had not
demonstrated that arbitrator had exceeded his power, “[i]nstead
of presenting evidence to the District Court that the panel
exceeded its power, Geisslers' appeal alleged only that the panel
had arrived at the wrong result.”); May v. First Nat’l Pawn
Brokers, 887 P.2d 185, 187 (Mont. 1994)(“The MUAA clearly does
not authorize judicial review of arbitration awards on the merits
of the controversy.”). The standard is the same under the FAA.
See United Paperworkers Int'l Union v. Misco, Inc., 484 U.S. 29,
38, 98 L. Ed. 2d 286, 108 S. Ct. 364 (1987)(“Courts . . . do not
sit to hear claims of factual or legal error by an arbitrator as
an appellate court does in reviewing decisions of lower
courts.”); Six Flags Over Tex. v. IBEW, 143 F.3d 213, 214 (5th
Cir. 1998)(“The courts have no authority to reconsider the merits
of an award even though the parties may allege that the award
rests on errors of fact or on misinterpretation of the
contract.”); Int’l Bhd of Elec. Workers v. Green Corp., 725 F.2d
264, 268-269 (5th Cir. 1984)(“We refrain from commenting on the
correctness or incorrectness of the arbitrator's factual findings
and legal conclusions. That is not our function. Nor shall we
impress the law of corporations, contracts, evidence, or other
legal rules and concepts upon this situation and then measure the
arbitrator's actions against them. We consider that to be
inconsistent with the national arbitration policy and the many
decisions limiting judicial oversight. What we might have done to
resolve the factual and legal issues were we the deciding body
is of no moment. We are not the trier of fact nor the elucidator
of the bargaining agreement. The arbitrator, by active choice of
the parties, exclusively performs those functions.”).

15
ground for vacatur.29)

2. Mis-interpretation of Louisiana Law

NCS dedicates the bulk of its appellate brief to demonstrating

that the arbitrator misconstrued both Louisiana law and the contract

between the parties. NCS contends that, under Louisiana law, it did

not breach its contract with Prescott and therefore cannot be

liable for damages. Arbitrators have the power to decide issues of

fact and law under the MUAA30 and, as should be obvious, neither the

MUAA nor the FAA permits either the district court or this court to

review the merits of the controversy underlying this arbitration

award.31 We decline to consider NCS’s attacks on the arbitrator’s

interpretation of law or fact.

3. Exceeding the Powers of the Arbitrator

An arbitrator exceeds his powers when he acts outside the

limits of the authority granted to him by the arbitration agreement,

29
Courts reviewing arbitration awards pursuant to the MUAA
or the FAA may also vacate awards if an arbitrator has
demonstrated “manifest disregard” for the law, a non-statutory
court-approved exception to these statutes. Geissler, 949 P.2d
at 237-38 (holding that district courts may vacate arbitration
awards if the arbitrator “is aware of a clearly governing
principle of Montana law, and blatantly refuses to follow it. .
.”); Prestige Ford v. Ford Dealer Computer Servs., 324 F.3d 391,
397 (5th Cir. 2003)(same).
30
Paulson v. Flathead Conservation Dist., 91 P.3d 569, 574
(Mont. 2004).
31
See infra at n. 27.

16
such as deciding issues that have not been submitted to him32 or

acting contrary to express provisions of that agreement.33 As a

general rule, the fact that the remedy ordered by an arbitrator is

inconsistent with state law is not grounds for vacating an award.34

NCS argues that § 27-5-113 of the MUAA exempts employment

agreements from the automatic application of many other portions of

the code, including § 27-5-312(2), which states that the fact that

an arbitrator has awarded damages that a court could or would not

is not grounds for vacatur. Prescott responds that § 27-5-113 of

the Montana Code refers only to labor agreements, as it is titled

“Application to Labor Agreements.”35 Neither party cites any case

law in support of their arguments or stating the converse, that an

arbitrator’s award of damages inconsistent with state law is grounds

for vacatur. As NCS’s argument appears to be in conflict with

32
Nelson v. Livingston Rebuild Ctr., Inc., 981 P.2d 1185,
1187 (Mont. 1999).
33
Paulson, 91 P.3d at 574; Terra W. Townhomes, L.L.C. v.
Stu Henkel Realty, 996 P.2d 866, 871 (Mont. 2000).
34
See Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S.
52, 58 (1995)(holding that, as parties had incorporated
arbitration rules permitting arbitrator to award punitive
damages, such damages were permissible despite New York law
prohibiting award of such damages in arbitration proceedings);
Nelson, 981 P.2d at 1188 (Mont. 1999)(“Without reaching the
merits of whether the damages were correctly awarded in the first
instance, we agree that the arbitrator did not exceed his powers
by awarding them. The fact that the damages might not have been
awarded by a court of law is not grounds for vacating the
award.”)(citing Mont. Code Ann. § 27-5-312(2)).
35
Mont. Code Ann. § 27-5-113.

17
established law, we decline to adopt this expansive construction of

Montana’s statute.36

NCS argues that the arbitrator also exceeded his powers by

awarding on a matter not submitted for resolution and by awarding

damages inconsistent with Louisiana law, despite the employment

contract’s provision requiring that Louisiana law govern the

employment relationship. An award is sustainable against a

challenge that the arbitrator has exceeded his power if the award

can be “rationally inferred” from the contract.37 That we may

disagree with the arbitrator’s interpretation of both law and fact,

including his determination of the kinds of damages allowed by the

contract, is not a grounds for vacatur.38 “To draw its essence from

the contract, an arbitrator's award must have a basis that is at

least rationally inferable, if not obviously drawn, from the letter

and purpose of the agreement. The award must, in some logical way,

be derived from the wording or purpose of the contract.”39

36
See Paulson, 91 P.3d at 574 (holding that awards will be
vacated only if not rationally related to the parties’
agreement); Nelson, 981 P.2d at 1188 (stating that fact that
court could not have awarded same damages as arbitrator was not
grounds for vacatur in employment dispute between individual
employee and company).
37
Terra W. Townhomes, 996 P.2d at 871; Glover v. IBP, Inc.,
334 F.3d 471, 475 (5th Cir. 2003).
38
See id.
39
Glover, 334 F.3d at 475 (quoting Anderman/Smith Operating
Co. v. Tenn. Gas Pipeline Co., 918 F.2d 1215, 1218 (5th Cir.
1990) (internal quotation marks and citations omitted)).

18
 First, the statement of issues that the parties submitted to

the ICC for resolution through conciliation included determinations

of, inter alia, (1) whether NCS wrongfully terminated Prescott; (2)

what damages, if any, does NCS owe Prescott; and (3) how and when

should damages be paid. The issues whether NCS breached Prescott’s

employment contract by wrongfully discharging her, as the arbitrator

ultimately found, and what damages should be awarded for that

reason, were plainly placed before the arbitrator by the parties.

Second, the arbitrator’s award of damages is not contrary to

express contractual provisions. In contending that the award is

contrary to the contract, NCS argues that, because the parties

included a Louisiana choice-of-law provision in the employment

contract, they agreed to have their employment relationship governed

by Louisiana law. Therefore, reasons NCS, the arbitrator was

limited to awarding damages that would be available under Louisiana

law.40 The narrow scope of our review limits us to inquiring

40
The Supreme Court has rejected a similar argument in
Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52 (1995).
In Mastrobuono, the parties’ contract included a New York choice
of law provision in addition to an arbitration provision, stating
that arbitration proceedings would be governed by the rules of
the National Association of Securities Dealers (“NASD”). 514 U.S.
at 58-59. Although the NASD rules allowed arbitrators to award
“damages” without reference to punitive damages, New York case
law forbade arbitrators from awarding punitive damages, even
though punitive damages might be awarded by a New York state
court, and the parties’ contract itself was silent on the
subject. Id. at 61. The Court based its decision on an inquiry
into whether the parties intended to exclude or include punitive
damages from arbitration proceedings, eventually concluding that
punitive damages were permissible —— stating that “if contracting
parties agree to include claims for punitive damages within the

19
whether an award is rationally derived from the parties’ contract,

or whether it is contrary to express contractual provisions.41

Thus, we must examine first whether the parties contracted to

restrict arbitration awards to damages ordered by a court of law

applying the substantive law of Louisiana. Neither the employment

contract nor the arbitration agreement specifically mention, or

limit, the kind of damages that may be awarded in the arbitration

proceedings. Both agreements do, however, express the parties’

intention to abide by the Rules of the ICC, which specify that

arbitrators may award

any remedy or relief that they deem scriptural,
just and equitable, and within the scope of the
agreement of the parties, including, but not
limited to, specific performance of a contract.
In making their decisions, the arbitrators
shall consider, but are not limited by, the
remedies requested by the parties.42

issues to be arbitrated, the FAA ensures that their agreement
will be enforced according to its terms even if a rule of state
law would otherwise exclude such claims from arbitration.” Id. at
59, 64. Although this case differs slightly, in that NCS does
not argue that Louisiana law purports to limit the kinds of
damages available in arbitration proceedings, the Court made
clear that the relevant inquiry was whether the parties intended
to exclude punitive damages from consideration in arbitration
proceedings, not whether such damages were available under state
law.
41
Terra W. Townhomes, 996 P.2d at 871.
42
ICC Rule 40(b). Moreover, ICC rule 42 states that
“[s]hould these Rules vary from state or federal arbitration
statutes, these Rules shall control except where the state or
federal rules specifically indicate that they may not be
superseded.” The MUAA contains no restrictions on the amount or
kinds of awards available in arbitration.

20
We hold that the contract’s silence on limitations of damages, when

contrasted with the Rules’ express, broad provision for any manner

of damages the arbitrator deems acceptable, demonstrates that the

arbitrator’s award of damages, even if not available under

substantive Louisiana state law, was not expressly contrary to the

parties’ contract.

The arbitrator’s award is also rationally derived from the

employment agreement. That contract does not state broadly that

Louisiana law will govern every aspect of the employment

relationship between the parties, only that “[t]his contract shall

be interpreted under the laws of the state of Louisiana as if

jointly authored by the parties.”43

More importantly, the employment contract states the

overarching principle that the parties will be governed by biblical

provisions, both in the substantive terms of their employment

relationship and in their arbitration and mediation proceedings.

Specifically, employees are required to affirm that (1) they are

“Born Again” Christians, (2) they have a sense of God’s will and

that their presence at NCS is at God’s direction, (3) they will

43
NCS appears to rely on our language in Prescott I to the
effect that Louisiana law applies to this dispute as support for
its argument that the arbitrator exceeded his powers when he
awarded of damages inconsistent with Louisiana law. See 369 F.3d
at 496. This argument is specious: In Prescott I, we inquired
only “which state’s law governs the interpretation of the
arbitration contract” and decided that, consistent with the
above-cited contractual language, Louisiana law governed the
interpretation of the contract’s language. Id. (emphasis added).

21
manifest the highest Christian virtue and personal decorum in and

out of school, and (4) they will attend and financially support a

local church with fundamental beliefs that are in agreement with the

doctrinal statement of Northlake Christian School. Furthermore,

each employee promised to abide by the precepts of Matthew 18: 15-17

and Galatians 6:1, and to resolve all differences, including those

not submitted to arbitration, according to biblical principles.

This is the provision of the contract that the arbitrator held NCS

to have violated, and this is the violation for which the arbitrator

assessed damages against NCS.44

The parties thus evinced a clear desire to incorporate biblical

provisions into their everyday employment dealings. Whether such

a contract is sustainable under Louisiana law is not a question for

this court: The parties freely and knowingly contracted to have

their relationship governed by specified provisions of the Bible and

the Rules of the ICC, and the arbitrator’s determination that NCS

had not acted according to the dictates of Matthew 18 relates to

that contract. Further, the Rules of the ICC indisputably

contemplate that an arbitrator will have extremely broad discretion

44
Although dicta in Prescott I stated that the arbitrator’s
decision was based on “prefatory language” in the employment
agreement that applied only to the parties’ choice of arbitration
and mediation rules, in fact, such language is also included
within the substantive terms and conditions of employment in the
employment contract. See 369 F.3d at 494 n.2. As that dicta was
not necessary to our decision in Prescott I, it has no binding
effect on our instant review of the district court’s decision on
remand.

22
to fashion an appropriate remedy; and no language in the parties’

contracts expresses their intent to depart from the Rules of the

ICC. We hold that the arbitrator’s award of damages is rationally

derived from Prescott’s employment contract with NCS and not

contrary to any express contractual provisions, either biblical or

secular. Consequently, NCS is not entitled to vacatur of the

arbitrator’s decision on this ground and the district court’s order

enforcing the arbitration award cannot be vacated for the reasons

asserted by NCS.

4. Misconduct by Arbitrator

Finally, NCS asserts that the arbitrator’s award should be

vacated because he participated in ex parte communications with

Prescott’s counsel, neglected to hear material evidence pertinent

to the controversy, and refused to disclose circumstances likely to

affect partiality. NCS contends further that, under either the FAA

or the MUAA, the district court had the power and duty to vacate the

arbitration award because of the arbitrator’s apparent bias.

NCS includes only two sentences on this argument in its brief,

electing instead to direct our attention to documents that it filed

in the district court, which documents NCS purports to adopt by

reference in its brief. But, an appellant must include the

substance of its arguments in the body of its brief: We will not

consider arguments presented only in earlier filings.45 As we do

45
See Yohey v. Collins, 985 F.2d 222, 224-25 (5th Cir.
1993)(holding that appellant had abandoned arguments as “[h]e

23
not consider arguments that are not adequately briefed to us,46 we

decline to entertain NCS’s assertions on this point.

III. CONCLUSION

The district court did not clearly err in deciding to credit

Prescott’s version of events over that of NCS and, accordingly, to

hold that the parties did not expand the scope of judicial review

over the arbitration award. Neither did the district court abuse

its discretion in refusing to order a jury trial to ascertain the

meaning of the party’s hand-written addenda to their arbitration

agreement, because, as a matter of law, NCS was not entitled to

demand a jury trial on this or any other issue, save only the making

of the contract which was not questioned. The district court

correctly determined that NCS had not demonstrated entitlement to

vacatur of the arbitration award on any of the narrow grounds on

which a court of law may vacate such an award. The district court’s

requests, in part, the adoption of previously filed legal and
factual arguments in his objections to the magistrate judge's
report and in various state court pleadings. He specifically
states that he will not repeat such claims. Yohey has abandoned
these arguments by failing to argue them in the body of his
brief.”). In Yohey, we also noted that to permit the appellant
to incorporate arguments from other briefs would lengthen a brief
already at the 50-page limit. Id. NCS’s brief, likewise, is
already quite lengthy at 62 pages.
46
L&A Contracting Co. v. S. Concrete Servs., 17 F.3d 106,
113 (5th Cir. 1994)(holding appeal to be abandoned because
appellant cited no authority in a one-page argument); Fed. R.
App. P. 28(a)(9)(A)(requiring argument to contain “appellant’s
contentions and the reasons for them, with citations to the
authorities and parts of the record on which the appellant
relies”).

24
order enforcing Prescott’s arbitration award is, in all respects,

AFFIRMED.

25