Grynberg v. Bp P.L.C.

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

JACK J. GRYNBERG, et al.,

Plaintiffs,

v. Civil Action No. 08-301 (JDB)
BP P.L.C., et al.,

Defendants.

MEMORANDUM OPINION

In 1990, Grynberg Production Company and BP Petroleum Development Ltd. entered a

joint venture to explore and develop oil and natural gas reserves in the Northeastern Caspian Sea

off the shore of Kazakhstan. For most of the intervening twenty-five years, they have been locked

in contentious litigation, both here and abroad. That litigation spilled into this Court in 2008 when

Jack Grynberg and several companies that he controls (collectively “Grynberg”) sued several oil

companies and their executives, alleging violations of the Racketeer Influenced and Corrupt

Organizations Act (RICO) and state law.

Enforcing an arbitration agreement previously executed by the parties, the Court ultimately

dismissed Grynberg’s complaint. See Grynberg v. BP P.L.C., 585 F. Supp. 2d 50 (D.D.C. 2008).

Grynberg subsequently added his RICO claims to an ongoing arbitration between the parties,

where the arbitrator then decided them. Now, eight years after this Court’s decision and six years

after the decision of the arbitrator, Grynberg has moved under Federal Rule of Civil Procedure 60

to vacate this Court’s dismissal of his RICO claims, citing bias by the arbitrator and bad faith by

the defendants. For the reasons below, Grynberg is not entitled to that relief. His Rule 60 motion

will therefore be denied.

1
 BACKGROUND 1

A. The Underlying Transaction

In 1990, a BP subsidiary and one of Grynberg’s companies entered a joint venture to

explore and develop oil and natural gas reserves in the Northeastern Caspian Sea off the shore of

Kazakhstan. Grynberg contributed original and confidential information about the target reserves

to the joint venture; in return, he received an interest in the net profits that BP derived from the

reserves’ development. Separately, BP entered a sub-venture with Statoil, which became privy to

Grynberg’s original information, subject to confidentiality obligations. Then things went south.

In 1993, BP and Statoil joined a consortium of international oil companies hoping to obtain

concessions from the Kazakh government to develop reserves, including those covered by the

Grynberg-BP joint venture. Grynberg calls this consortium the “Giffen Consortium.” Its

namesake, James Giffen, was charged in 2003 with violations of the Foreign Corrupt Practices Act

arising out of the alleged bribery of Kazakh officials. Ultimately the consortium secured its oil

and gas concessions.

Grynberg sued, alleging that BP and Statoil had misappropriated his original, confidential

information for their own benefit. The litigation resolved in 1999 with two substantially identical

settlement agreements—one with BP and another with Statoil. Under the agreements, Grynberg

was entitled to an interest in the net sale proceeds derived from development of the covered

reserves. More important for present purposes, the agreements also contained a broad arbitration

clause requiring that any “dispute or difference arising out of, in relation to or in any way connected

with” the settlement “shall be finally and exclusively referred to and settled by arbitration.” See,

e.g., BP 1999 Settlement Agreement [ECF No. 114-5] § 10.04(a). Stephen Hochman, who had

1
The background on the underlying transaction and the beginning of the arbitration is drawn primarily from
the allegations in Grynberg’s declaration. See Grynberg Decl. [ECF No. 114-2].

2
assisted the parties in their settlement negotiations, was specified in the agreements as the sole

arbitrator. In the event Hochman became “unable or unwilling to serve” in that role, arbitration

would be completed by a three-arbitrator panel. See id. § 10.05(b).

B. The Arbitration Commences

Before long, a dispute arose under the settlement agreements. In 2001, BP and Statoil

announced that they would sell their interests in the covered reserves to Total, another international

oil company. Those sales became the subject of a number of disputes before the arbitrator. First,

Grynberg alleged that BP and Statoil had concealed their intention to sell their interests in the

covered reserves in order to fraudulently induce him into the settlement agreements. Second, he

alleged that BP and Statoil had used a number of side deals to artificially depress the proceeds of

the sale—and to thereby artificially reduce Grynberg’s take. Thus began, in 2002, what Grynberg

calls the “13 year arbitration from hell.” Grynberg Decl. [ECF No. 114-2] at 4. By mid-2007, the

fraudulent inducement claim and side deal claims had been resolved against Grynberg. See 2010

Final Award [ECF No. 114-7] at 7–18. But the arbitration was very contentious. Grynberg plainly

thought the arbitrator was not giving his evidence and arguments a fair hearing. During this phase

of the arbitration, Grynberg sought outside judicial relief three times, filed approximately 100

communications to the arbitrator and auditor, accused the arbitrator of bias, and demanded that the

arbitrator disqualify himself from deciding some remaining claims, which the arbitrator refused to

do. See Grynberg, 585 F. Supp. 2d at 56.

C. The RICO Claims

Grynberg filed suit in this Court in 2008 alleging violations of RICO and state law

(collectively “RICO claims”). His core allegation was that defendants, through their participation

in the “Giffen Consortium,” had bribed Kazakh officials in exchange for oil and gas concessions.

3
Those bribes, Grynberg contends, were then misrepresented by the companies as legitimate

production costs—thereby depriving Grynberg of profits to which he was entitled under the

settlement agreements and implicating him in a scheme of foreign bribery. See Compl. [ECF No.

1] ¶ 24. Enforcing the parties’ arbitration agreement, this Court dismissed Grynberg’s RICO

claims, holding that their arbitrability was a question for the arbitrator. See Grynberg, 585 F. Supp.

2d at 51. No appeal was taken. Grynberg then added his RICO claims to the still pending

arbitration.

The arbitrator divided Grynberg’s new allegations into the “audit claims” and the “DC

Based RICO” claims. The “audit claims” centered on whether $28 million of “signature

bonuses”—characterized by Grynberg as bribes and by the defendants as legitimate business

expenses—could be properly counted as costs in a calculation of BP’s net sale proceeds under the

settlement agreements. 2 See 2010 Final Award at 18–19. The “DC Based RICO” claims were

essentially the same as those brought in this Court. See id. at 21–22. As the arbitration progressed,

Grynberg remained unimpressed with the arbitrator’s handling of his case. In a flurry of

correspondence, Grynberg and various attorneys demanded discovery on the RICO and audit

claims. See, e.g., Dec. 8, 2008, Letter from Grynberg to Hochman [ECF No. 141-4] at 3 (“I want

to depose the Chief Financial Officer of BP, item by item . . . Also, I want to depose everyone who

was associated with producing that fraudulent document of expenditures by BP.”). Grynberg also

made clear his feelings about the arbitrator, the defendants, and their lawyers. See id. (“Is that

arbitration or is that a whitewash? . . . It’s a Kangaroo Court that you have run for the last six (6)

years.”); id. (defendant corporations are run by “criminal[s]”); id. at 2–3 (counsel are “liars not

lawyers” and made “fraudulent presentation[s]”)

2
The “audit claims” dealt only with BP. At this point, the audit of Statoil was still ongoing.

4
 D. A “Final” Decision

Grynberg did not get his discovery. In 2010, the arbitrator issued a final award resolving

all thirteen claims before him. Among them were the audit and RICO claims, which the arbitrator

resolved without determining whether the “signature bonuses” were in fact bribes. As to the audit

claims, the arbitrator concluded that it was irrelevant whether the “signature bonuses” were bribes

or legitimate business expenses; either way, they could be properly deducted as “costs” in any

calculation of the “net proceeds” derived from BP’s development of the covered reserves. See

2010 Final Award at 18–19. The arbitrator also deemed the nature of the “signature bonuses”

irrelevant to the resolution of the RICO claims. Even if the “signature bonuses” were bribes, the

arbitrator reasoned, Grynberg could not establish that payment of the bribes caused him an

injury—without the “signature bonuses,” the consortium may not have obtained its concession;

and without the concession, Grynberg would not have received any payments for development of

the covered reserves. See id. at 21–22. Adding insult to injury, upon defendants’ motion, the

arbitrator also assessed $3 million of sanctions against Grynberg for his conduct during the

arbitration. 3 See id. at 25–28 (citing litigation against defense counsel among Grynberg’s

sanctionable conduct).

From here, the litigation split off into two different fora: the state courts of New York and

the federal courts in Texas. First, to New York. Defendants moved the New York Supreme Court

to confirm the arbitrator’s award. Jack Grynberg cross-moved to vacate the sanctions award; one

of his corporations cross-moved to vacate the arbitrator’s decision as to the audit claims. No one

moved to vacate the arbitrator’s RICO decision. The court vacated the arbitrator’s award of

sanctions, reasoning that the arbitrator had lacked the authority to impose them. It confirmed the

3
The arbitrator denied a motion for sanctions that had been filed by Grynberg. See 2010 Final Award at 28–
29.

5
arbitration award in all other respects. See Dec. 8, 2010, Supreme Court Opinion [ECF No. 114-

8]. On appeal, the Appellate Division affirmed as to the sanctions but reversed as to the audit

claims. According to the Appellate Division, the arbitrator erred when he concluded that it was

irrelevant whether the “signature bonuses” were bribes; rather, treating a bribe like a legitimate

cost in a calculation of “net proceeds” would violate public policy. Thus, the Appellate Division

remanded the case to the arbitrator to “determine the nature” of the “signature bonuses.” See Feb.

21, 2012, Appellate Division Opinion [ECF No. 141-14]. BP sought leave to appeal, but its motion

was denied. See June 28, 2012, Court of Appeals Order [ECF No. 144-32]. Appellate Division

order in hand, Grynberg sought to disqualify the arbitrator for bias. See Mar. 6, 2012, Letter from

Ronald C. Minkoff to Hochman [ECF No. 141-15]. When Hochman refused to step down,

Grynberg sought judicial intervention from the New York courts. By May 2013, two such attempts

had proven unsuccessful. See May 16, 2013, Appellate Division Opinion [ECF No. 144-12].

Meanwhile, parallel proceedings took place in Texas. While the parties litigated the

arbitrator’s final award and alleged bias up and down the New York state courts, Grynberg filed a

new suit in the United States District Court for the Southern District of Texas, alleging RICO

violations like those he had alleged in this Court and those resolved by the arbitrator. That suit

was dismissed on grounds of res judicata. See Grynberg v. BP P.L.C., 855 F. Supp. 2d 625, 648–

53 (S.D. Tex. 2012). According to the Texas district court, the arbitrator had rendered a final

decision on the merits of the RICO claims by concluding Grynberg had not been injured by the

underlying criminal activity. See id. at 651–62. The Fifth Circuit affirmed. See Grynberg v. BP,

P.L.C., 527 F. App’x 278, 282–83 (5th Cir. 2013) (per curiam).

6
 E. To the New York Court of Appeals?

By September 2013, things were falling into place. The arbitrator’s award had been

confirmed in most respects. Hochman would remain as the arbitrator. And he had only one BP

claim—the audit claim, on remand from the Appellate Division—along with claims arising out of

the Statoil audit left pending before him. But as it turns out, the relative calm would not last. On

September 11, 2013, the arbitrator held a meeting with the parties. The parties wanted to discuss

scheduling. The arbitrator, however, wanted to discuss why the Appellate Division’s decision was

wrong—as to both the sanctions issue and the audit claims. Both errors, in the arbitrator’s view,

stemmed from the New York courts’ mistaken belief that New York arbitration law, rather than

the Federal Arbitration Act, applied to the proceedings. See Sept. 11, 2013, Arbitration Meeting

Tr. [ECF No. 141-17] at 28:24–29:18 (discussing the Supreme Court decision on sanctions); id. at

67:11–69:13 (discussing the Appellate Division decision on the audit claims). Thus, the arbitrator

reasoned, when the Appellate Division had vacated part of his award on grounds of “public

policy”—a vacatur ground available under New York arbitration law but not under the FAA—it

made a legal error. As support for his position, the arbitrator distributed a copy of a New York

Law Journal article. See id. 61:22–63:16.

The arbitrator proceeded to map out what he saw as next steps. He considered himself duty

bound to act as an “ideal judge” and “do what’s right under the law”—hence, rather than comply

with the Appellate Division’s remand order, which he thought had impermissibly elevated state

over federal law, the arbitrator signaled his intention to reissue his prior findings on the audit

claims. See id. 73:16–74:21. Based on an erroneous view of finality and appellate procedure, he

hoped that by issuing a prompt final decision on remand, he could make the issues ripe for

immediate review by the New York Court of Appeals. See, e.g., id. at 47:23–49:07. Counsel for

7
all parties attempted to correct the arbitrator’s understanding and explain that any appeal of his

decision on remand would have to work through the Supreme Court and Appellate Division before

reaching the Court of Appeals. See, e.g., id. at 49:08–51:12. Despite extensive conversation,

however, the meeting closed without consensus on the appellate procedure issues. And before it

did, the arbitrator asked counsel for defendants whether they were considering seeking sanctions

against Grynberg—this time, for his attempts to remove the arbitrator for bias and his decision to

file RICO claims in Texas during the ongoing arbitration. See id. 141:21–148:23. The arbitrator

said his question was motivated by a desire to “identify issues and indicate which issues are going

to be relevant.” Id. at 148:18–23. Counsel for one of Grynberg’s companies’ immediately

expressed his dismay that the arbitrator was “raising” arguments for one of the parties to the

arbitration. Id. 148:24–149:02.

In late November 2013, the arbitrator issued a 20-page final award after remand. See 2013

Final Award [ECF No. 114-10]. That award presented the arbitrator’s views on the various topics

discussed at the September 2013 meeting: the arbitrator’s duty to follow the law, Grynberg’s prior

attempts to remove the arbitrator for bias, the purported legal errors in the Appellate Division’s

decision, the ability of the Court of Appeals to hear an appeal from the new award, the authority

of an arbitrator to impose sanctions, and the propriety of imposing them against Grynberg in this

case. As to the audit claims, the arbitrator was as good as his word: he effectively reissued his

2010 decision, without determining whether the “signature bonuses” were, in fact, bribes. See id.

at 17–19. By doing so, he understood he was “refus[ing] to comply” with the Appellate Division’s

remand order. Id. at 19. But he was also “urging the Court of Appeals to correct the [Appellate

Division’s] Decision so as to resolve a purely legal issue that has broad State-wide implications.”

Id. at 17. He viewed the fact that his decision might accrue to defendants’ benefit as purely

8
coincidental. See id. at 7 (“[M]y sole motive was to fulfill my ethical duties as an arbitrator to the

arbitration process as well as to the New York courts.”).

F. The Arbitrator Is Removed

Needless to say, Grynberg did not see things that way. Thus began another attempt to

disqualify the arbitrator—and this time, Grynberg succeeded. He moved in the Supreme Court to

vacate the arbitrator’s 2013 award and to remand the audit claims to a three-arbitrator panel

pursuant to the arbitration agreement. The Supreme Court granted those motions. See Apr. 2,

2014, Supreme Court Opinion [ECF No. 114-11]. The court found that Hochman had exceeded

his authority as arbitrator when he “explicitly failed to follow the unambiguous directive of the

[Appellate Division].” Id. at 5. It also concluded that the arbitrator “would not be able to fairly

make a determination with respect to the issue remanded to him” because doing so “would violate

what he perceives to be his ethical obligations as an arbitrator.” Id. at 7. Finally, in the court’s

view, the arbitrator had “moved beyond the normal role of an arbitrator in the arbitration process

by rendering an award which is in effect a brief to the Court of Appeals requesting that they uphold

his original award.” Id. at 7. For all these reasons, the arbitrator needed to be removed. The same

court later consolidated the ongoing Statoil arbitration with the BP arbitration, and removed the

arbitrator from all disputes between the parties in order to eliminate any “appearance of bias.” See

July 17, 2014, Supreme Court Opinion [ECF No. 141-10] at 8. Defendants appealed, and the

Appellate Division affirmed. See Apr. 16, 2015, Appellate Division Opinion [ECF No. 114-15].

Although defendants sought leave to appeal to the Court of Appeals, that motion was denied. See

Sept. 1, 2015, Court of Appeals Order [ECF No. 114-32].

Meanwhile, outside the courtroom, the arbitrator Hochman was keeping up a steady

correspondence with the parties. The main focus was the arbitrator’s desire to guide the case to

9
the Court of Appeals as soon as possible. On the day that he issued his 2013 award, the arbitrator

expressed his “hope . . . that at least one of the parties will be willing to preserve the right of all

parties to act in the best interest of all parties by filing a notice to the Court of Appeals requesting

leave to appeal the [Appellate Division] Decision.” Nov. 27, 2013, Email from Hochman to

Counsel [ECF No. 141-20]. BP ultimately filed such a motion. Unsurprisingly, it was denied.

Months later, the arbitrator was advised of the Supreme Court’s decision removing him from the

BP arbitration. (The arbitrator had himself submitted a brief in that litigation.) Relying on the

Supreme Court decision, Grynberg asked the arbitrator to withdraw from the ongoing Statoil

arbitration as well. See Apr. 17, 2014, Email from Minkoff to Hochman [ECF No. 141-22].

Hochman refused and, in a long email to the parties, explained that this newest opinion also

incorrectly applied New York law to a case that should be governed by the FAA. See Apr. 21,

2014, Email from Hochman to Counsel [ECF No. 141-23]. Days later, the arbitrator followed up,

unsolicited, with a longer memo articulating his view of an arbitrator’s duty, defending his

impartiality, and reiterating his desire to get the case to the Court of Appeals as soon as possible.

See Apr. 25, 2014, Mem. to the Parties [ECF No. 114-13]. That supplemental memo also raised

the possibility that all the litigation between the parties could be transferred to a new judge, expert

in arbitration and complex commercial litigation, who could be trusted to properly sort out the

legal issues. See id. at 2–3. Four days later, the arbitrator sent the parties another email—this time

focusing on the res judicata impact of the Texas RICO litigation—which he retracted the following

day. See Apr. 29 & 30, 2014, Emails from Hochman to the Parties [ECF Nos. 141-25 & 141-26].

In mid-July 2014, when the arbitrator was removed from the Statoil arbitration, his participation

in this case came to an end.

10
 G. Grynberg’s Rule 60 Motion

And so, at the time that Grynberg filed his Rule 60 motion in this Court on December 29,

2015, here is where things stood: Grynberg’s RICO claims, filed here in 2008, were decided by

the arbitrator in 2010. His attempt to relitigate those claims in Texas federal court has been barred

by principles of preclusion. The broad arbitration agreement between the parties remains in effect,

although the arbitrator specified in that agreement has now been removed. In his absence, the

agreement requires the parties to select a three-arbitrator panel to decide the remaining “signature

bonus” related claims. That effort was well underway when Grynberg filed his motion, which

seeks to vacate this Court’s 2008 decision dismissing his claims, rescind the arbitration agreement,

and revive the previously dismissed RICO claims. As a basis for this extraordinary relief,

Grynberg cites the arbitrator’s bias—which he argues was present from the beginning of the

arbitration but now finally revealed—and defendants’ bad faith during the arbitration process. It

is to those arguments that the Court now turns.

LEGAL STANDARD

Federal Rule of Civil Procedure 60(b) allows a court, upon “motion and just terms,” to

relieve a party from a final judgment, order, or proceeding for specified reasons. “Regardless of

the particular reason for providing such relief, however, under Rule 60(b) the trial judge must

strike a delicate balance between the sanctity of final judgments and the incessant command of a

court’s conscience that justice be done in light of all the facts.” Twelve John Does v. District of

Columbia, 841 F.2d 1133, 1138 (D.C. Cir. 1988) (internal quotation marks and alterations

omitted). District courts are vested with a large measure of discretion in striking that balance. Id.

11
 DISCUSSION

A. Rule 60(b)(5)

Grynberg first seeks relief under Rule 60(b)(5), which allows the Court to relieve Grynberg

from its 2008 order if “applying it prospectively is no longer equitable.” “Rule 60(b)(5) may not

be used to challenge the legal conclusions on which a prior judgment or order rests, but the Rule

provides a means by which a party can ask a court to modify or vacate a judgment or order if a

significant change either in factual conditions or in law renders continued enforcement detrimental

to the public interest.” Horne v. Flores, 557 U.S. 433, 447 (2009) (internal quotation marks

omitted). Grynberg believes the arbitrator’s bias—concealed at the time of this Court’s decision

but now in the open—constitutes a changed circumstance sufficient to justify relief under Rule

60(b)(5).

But there is a fundamental problem with Grynberg’s argument. Under Rule 60(b)(5), an

order may be modified “only to the extent that it has ‘prospective application.’” Twelve John

Does, 841 F.2d at 1138. For an order to have “prospective application,” it must be “executory or

involve[] the supervision of changing conduct or conditions.” Id. at 1139 (internal quotation marks

omitted). The Court’s 2008 dismissal order involved no such thing. This Court was not obligated

to supervise the parties’ ensuing arbitration. Once Grynberg’s complaint was dismissed, the Court

properly put Caspian Sea oil and gas development out of its mind. The order was an unconditiona l

dismissal of Grynberg’s suit, and “it is difficult to see how an unconditional dismissal could ever

have prospective application within the meaning of Rule 60(b)(5).” Id.

Of course, the order did require something of Grynberg: to the extent he wanted resolution

of his RICO claims, he would have to arbitrate them. “That a court’s action has continuing

consequences, however, does not necessarily mean that it has ‘prospective application’ for the

12
purposes of Rule 60(b)(5).” Id. at 1138. In other words, the 2008 order does not have “prospective

application” merely because it influenced, or even caused, some future events. Other cases from

this district provide ample illustration of that principle. See, e.g., Keepseagle v. Vilsack, 118 F.

Supp. 3d 98, 123–25 (D.D.C. 2015) (cy pres provision in a settlement agreement did not apply

prospectively even though it required class counsel to perform administrative responsibilities in

the future); Conservation Force v. Salazar, 915 F. Supp. 2d 1, 4–5 (D.D.C. 2013) (order remanding

case to agency did not have prospective application even though the agency was required to

reconsider a permit application in the future). Because this Court’s 2008 order does not (and never

did) apply prospectively, Grynberg is not entitled to relief under Rule 60(b)(5). 4

B. Rule 60(b)(6)

Alternatively, Grynberg invokes Rule 60(b)(6), which permits a district court to relieve a

party from a final judgment for “any other reason that justifies relief.” But, as the D.C. Circuit has

cautioned, Rule 60(b)(6) is to be “only sparingly used.” Twelve John Does, 841 F.2d at 1140

(internal quotation marks omitted). “This catchall provision has been interpreted to apply when a

party demonstrates ‘extraordinary circumstances.’” Marino v. DEA, 685 F.3d 1076, 1079 (D.C.

Cir. 2012) (quoting Pioneer Inv. Servs. Co. v. Brunswick Assocs. L.P., 507 U.S. 380, 393 (1993)).

“[P]laintiffs must clear a very high bar to obtain relief under Rule 60(b)(6).” Kramer v. Gates, 481

F.3d 788, 792 (D.C. Cir. 2007). At the very least, “a more compelling showing of inequity or

hardship is necessary to warrant relief under subsection (6) than under subsection (5).” Salazar

ex. rel. Salazar v. District of Columbia, 633 F.3d 1110, 1120 (D.C. Cir. 2011). In an attempt to

make such a compelling showing of inequity, Grynberg points to the arbitrator’s alleged bias and

the defendant’s alleged bad faith in exploiting that bias throughout the arbitration.

4
Even if the 2008 order did apply prospectively, for the reasons contained in the remainder of this
Memorandum Opinion, the Court would not grant Grynberg relief under Rule 60(b)(5).

13
 Unfortunately for Grynberg, his motion struggles against several currents in the D.C.

Circuit’s Rule 60(b)(6) jurisprudence. First, “a party who has not pursued an appeal may obtain

relief under Rule 60(b)(6) only if there are circumstances so extraordinary as to . . . essentially

[make] the decision not to appeal an involuntary one.” Twelve John Does, 841 F.2d at 1141

(internal quotation marks and alteration omitted). Grynberg has forgone several opportunities to

challenge this Court’s 2008 decision and the arbitrator’s 2010 RICO award. Most obviously, he

failed to appeal this Court’s 2008 decision dismissing his RICO claims. In 2010, when the

arbitrator also dismissed Grynberg’s RICO claims, Grynberg again sat on his hands, declining to

challenge that portion of the arbitrator’s award in New York state court. See Dec. 8, 2010,

Supreme Court Opinion. The arbitrator’s RICO award was confirmed by the New York courts,

and from then then until now, Grynberg has not (to this Court’s knowledge) attempted to disturb

it.

Although Grynberg tries, he cannot adequately explain these omissions. He protests that

he did not realize he needed to challenge the arbitrator’s decision on the RICO claims, because he

thought the arbitrator had refused to decide their merits. See Pls.’ Reply [ECF No. 141] at 2. But

this makes little sense. The arbitrator plainly “dismissed” Grynberg’s “DC Based RICO claim.”

2010 Final Award at 22. If Grynberg wanted to keep those claims alive, the need to appeal should

have been apparent. His only previous attempt to revive them was his effort to relitigate them in

a Texas federal court, which ended with a dismissal on grounds of res judicata. See Grynberg v.

BP P.L.C., 855 F. Supp. 2d 625, 653 (S.D. Tex. 2012), aff’d, 527 F. App’x 278, 283 (5th Cir.

2013) (per curiam). Perhaps Grynberg now regrets these litigation decisions, but he has not

pointed to circumstances “so extraordinary” as to make them essentially “involuntary.” Twelve

John Does, 841 F.2d at 1141. And Rule 60(b)(6) “may not be employed simply to rescue a litigant

14
from strategic choices that later turn out to be improvident,” Salazar, 633 F.3d at 1120, or as “an

opportunity for unsuccessful litigants to take a mulligan,” Kramer, 481 F.3d at 792. Grynberg’s

failure to pursue various avenues of appeal thus constitutes one reason to deny his Rule 60(b)(6)

motion.

A party seeking relief under Rule 60(b)(6) must also show that he “has a meritorious claim

or defense to the motion upon which the district court dismissed the complaint.” Marino, 685 F.3d

at 1080 (internal quotation marks omitted). Although this is not a high bar, id., Grynberg does not

clear it. The Court’s 2008 order granted defendants’ motion to dismiss. The arbitration agreement

that served as the foundation for the Court’s decision remains in effect—and the RICO claims

remain within its ambit. Assuming the Court agreed to vacate the 2008 order, on what grounds

could it then deny a renewed motion to dismiss? Grynberg offers a couple—although neither

provides steady footing. The first ground he provides is the alleged bias of the arbitrator. But the

arbitrator has now been removed. Any revived claims sent back to the arbitration would be heard

by a three arbitrator panel, selected pursuant to the settlement agreement. The arbitrator’s past

conduct therefore says little about the propriety of future arbitration. Grynberg also argues that

the Court may simply set aside the arbitration provision itself. See Pls.’ Rule 60 Mot. [ECF No.

114-1] at 33–39. But he has not cited any authority convincing the Court it can use Rule 60(b) to

set aside a final judgment and an arbitration clause in one fell swoop. The arbitration clause

remains in place, and as long as it does, Grynberg does not have a potentially meritorious defense

to the motion upon which the Court dismissed his complaint. See Marino, 685 F.3d at 1080. That

provides an independent reason to deny Grynberg’s Rule 60 motion.

Relatedly, Grynberg has cited no cases where Rule 60 has been used to vacate a court order

compelling arbitration. Perhaps that is unsurprising because his requested relief is in some tension

15
with the “liberal federal policy favoring arbitration agreements.” Gilmer v. Interstate/Johnson

Lane Corp., 500 U.S. 20, 25 (1991) (internal quotation marks omitted). Under the Federal

Arbitration Act, “judicial review of arbitral awards is extremely limited.” Kanuth v. Prescott, Ball

& Turben, Inc., 949 F.2d 1175, 1178 (D.C. Cir. 1991). In the event his Rule 60 motion is granted,

Grynberg seeks to amend his complaint to add claims akin to the audit claims still pending in the

arbitration. See Pls.’ Mem. in Supp. of Mot. to Amend [ECF No. 126-1] at 2 (discussion of

proposed Count VII). In its entirety, then, Grynberg’s motions seeks under Rule 60 what is

generally limited under the FAA: a federal forum to litigate (or, in the case of the RICO claims,

relitigate) claims that the parties have agreed to arbitrate. The Court thus hesitates to grant him

that relief.

Finally, one more obstacle stands in Grynberg’s path to Rule 60 relief: res judicata. Even

if the Court were willing to vacate the 2008 order and Grynberg was able to escape the reach of

the arbitration clause, Grynberg’s RICO claims are likely still precluded. Two federal courts—a

district court in Texas and the Court of Appeals for the Fifth Circuit—have already concluded that

the arbitrator’s dismissal of Grynberg’s RICO claims is entitled to preclusive effect. Grynberg

now argues primarily that preclusion based on the arbitration award would be “inequitable,” but

he barely disputes that the formal requirements for res judicata are satisfied. 5 See Pls.’ Reply at

19–23. As long as the 2010 award remains in effect, Grynberg faces long odds in attempting to

relitigate his RICO claims.

Grynberg has one response to all these arguments: the arbitrator’s “extraordinary” bias and

defendants’ bad faith in exploiting it. In his view, the arbitrator’s removal demonstrates that he

5
Grynberg does argue that the arbitrator’s 2010 award did not dismiss his RICO claims on the merits and
that, therefore, the arbitral award lacks preclusive effect. This argument has already been squarely rejected in the
Texas litigation. See Grynberg v. BP P.L.C., 527 F. App’x 278, 282 (5th Cir. 2013) (per curiam); Grynberg v. BP
P.L.C., 855 F. Supp. 2d 625, 651–52 (S.D. Tex. 2012). This Court agrees with that analysis.

16
had been biased against Grynberg all along—including in 2008, when this Court dismissed the

RICO claims, and in 2010, when the arbitrator dismissed them. Defendants knew it, and wielded

the arbitrator’s bias to thwart Grynberg whenever possible. These recent revelations, Grynberg

contends, now justify forgiving his failure to challenge the dismissal of his RICO claims,

rescinding the arbitration agreement, denying preclusive effect to both the arbitration award and

the Texas decision, and, ultimately, vacating this Court’s 2008 dismissing his claims. As discussed

above, there are already a number of reasons to deny Grynberg’s Rule 60 motion. For the sake of

argument, however, the Court will assume that Grynberg could prevail if he could prove his

allegations of bias. In the Court’s view, however, he has failed to do so.

First, Grynberg has failed to show that defendants and their counsel acted in bad faith

during the arbitration. Grynberg’s motion is full of allegations about defendants’ evil deeds. See,

e.g., Pls.’ Rule 60 Mot. at 25 (“wielding [the arbitrator’s] bias,” defendants “stonewalled” and

“obstructed” discovery); id. at 26 (defendants “unreasonabl[y]” opposed removal of the arbitrator

in order to “procure[] unnecessary delay”); id. (“[d]efendants . . . have taken advantage of [the

arbitrator’s] bias to frustrate the very purpose of arbitration” and to “delay any resolution of the

case” until after Grynberg’s death); id. at 30 (defendants sought to “twist [the arbitrator’s] bias to

their advantage”). Once the colorful language is stripped away, however, there is little left to these

allegations. They essentially boil down to the following: defendants resisted discovery into certain

claims, and opposed each step in Grynberg’s final attempt to remove the arbitrator. Grynberg has

not convincingly shown that these positions were adopted for nefarious purposes. Even assuming

that some positions crossed the line from zealous into somewhat misguided advocacy, Grynberg

still would not be entitled to a finding of bad faith. Cf. District of Columbia v. Straus, 705 F. Supp.

2d 14, 17 (D.D.C. 2010). Defendants’ litigation conduct, moreover, cannot be evaluated in total

17
isolation from Grynberg’s—which has been, to put it mildly, less than exemplary. The record

assembled in connection with this motion paints a picture of a highly contentious arbitration.

Viewed in that context, none of defendants’ litigation behavior makes a “compelling showing of

inequity” sufficient to justify relief under Rule 60(b)(6). Salazar, 633 F.3d at 1120.

That leaves Grynberg only the alleged bias of the arbitrator as a basis for Rule 60 relief.

But this Court is not convinced that the arbitrator’s 2010 award, the decision that dismissed the

claim Grynberg now seeks to revive, was infected by an anti-Grynberg bias. Grynberg has spent

the better part of a decade arguing that the arbitrator was biased against him. And for the better

part of a decade, state and federal courts have concluded otherwise. In 2008, looking back over

the first phase of the arbitration, this Court concluded there were no facts suggesting bias by the

arbitrator. Grynberg, 585 F. Supp. 2d at 56. Other judicial decisions examined the period between

this Court’s order in November 2008 and the resumption of arbitration in September 2013, during

which the arbitrator’s 2010 award was issued. In August 2012, the New York Supreme Court

concluded that Grynberg had “failed to establish bias on the part of the arbitrator.” Aug. 17, 2012,

Supreme Court Opinion [ECF No. 144-10] at 4. Grynberg subsequently sought to renew his

motion, but was rebuffed again by the same Supreme Court judge. See Dec. 1, 2012, Supreme

Court Opinion [ECF No. 144-11]. In May 2013, a panel of the Appellate Division similarly found

Grynberg’s bias argument to be “without merit.” May 16, 2013, Appellate Division Opinion.

Courts have also been asked to assess the arbitrator’s decision to dismiss Grynberg’s RICO claims.

Without opposition from Grynberg, the New York Supreme Court confirmed the decision. Dec.

8, 2010, Supreme Court Opinion at 12. A federal district court and court of appeals subsequently

concluded that the decision was entitled to preclusive effect. See Grynberg, 855 F. Supp. 2d at

18
653, aff’d, 527 F. App’x at 283. In short, the period in which the 2010 award was issued has been

closely scrutinized, by multiple courts, for arbitral bias. No court found any.

Grynberg now argues that all those decisions have been undermined by the arbitrator’s

subsequent refusal to comply with the Appellate Division’s mandate, his correspondence with the

parties, and his decision to “assum[e] the role of [d]efendants’ counsel” by raising arguments on

their behalf and filing briefs before the New York courts. See, e.g., Pls.’ Rule 60 Mot. at 23–24.

These transgressions, Grynberg contends, culminated in the arbitrator’s subsequent removal for

“misconduct and blatant bias,” thus conclusively demonstrating that he was biased all along, that

the 2010 award is infected by that bias, and that each of the decisions discussed above is in error.

See, e.g., Pls.’ Reply at 23–24.

But Grynberg misreads the record. Fairly construed, neither of the New York courts that

required the arbitrator’s removal concluded that he was actually biased—either in 2014 or in the

years before. The Supreme Court opinions removing the arbitrator from the BP and Statoil

arbitrations focused primarily on his professed disagreement with the Appellate Division and his

notion of an arbitrator’s duty. In its first decision, after a lengthy discussion of these topics, the

Supreme Court concluded that the arbitrator would be unable to “fairly make a determination” on

the audit claims because “to do so would violate what he perceives to be his ethical obligations as

an arbitrator.” Apr. 2, 2014, Supreme Court Opinion at 7. In a second opinion, which covered

much of the same terrain, the same judge removed the arbitrator from the Statoil arbitration in

order to eliminate the “appearance of bias.” July 17, 2014, Supreme Court Opinion at 8 (emphasis

added). The Appellate Division affirmed, citing only the “arbitrator’s explicit failure to follow the

clear directive of this Court.” Apr. 16, 2015, Appellate Division Opinion at 2. None of these

19
courts focused on the arbitrator’s relationship with Grynberg, and none concluded that the

arbitrator had been out to get him.

In that respect, their views are consistent with this Court’s assessment of the arbitrator’s

conduct. The Court will not endorse the arbitrator’s take on arbitral duty, his decision to defy the

mandate of an appellate court, or his purposeful attempts to steer the case to the New York Court

of Appeals. But it does not need to. To resolve Grynberg’s motion, the Court need only determine

whether the arbitrator’s conduct was motivated by bias. And the Court is not persuaded that it

was. The arbitrator explained, time and again, the motivation for his actions. See, e.g., 2013 Final

Award at 7 (“My reason for referring the parties to the [New York Law Journal] Article was to

increase the likelihood that the Court of Appeals would, at the appropriate time, correct what I

believe was an erroneous [Appellate Division] Decision . . . . [M]y sole motive was to fulfill my

ethical duties as an arbitrator to the arbitration process as well as to the New York courts.”); id. at

14 (expressing the arbitrator’s view that “it is important that the international community know

that they can rely on the New York courts to follow the FAA’s pro arbitration policy when they

review arbitral awards”); Nov. 27, 2013, Email from Hochman to Counsel (“My only interest is

that the Court of Appeals correct the errors of the [Appellate Division] sooner rather than later.”);

Apr. 25, 2014, Mem. to the Parties at 1 (“I am writing this memorandum in the hope that it will

convince whichever court or courts hear the appeal of the [Supreme Court decision] that vacated

the [2013 Final Award], and the motions of the [defendants] to confirm the [2013 Final Award],

to decide the [audit claims] and Sanctions issues correctly in accordance with the applicable law.”).

The Court does not consider these professions of purpose to be elaborate window-dressing for bias

against Grynberg. Quite simply, it seems that the arbitrator decided the case, was reversed on what

he considered to be a faulty premise, and was driven to distraction trying to make it “right.”

20
 The arbitrator’s most inflammatory comments, regarding the imposition of sanctions

against Grynberg, must be viewed in this context. At least part of the arbitrator’s interest in

sanctions after remand was due to his belief that the Appellate Division had improperly curtailed

his ability to impose sanctions and his desire to push the issue to the Court of Appeals. See, e.g.,

2013 Final Award at 20 (“The Court of Appeals should correct the erroneous vacatur of the

Sanctions Award because it also presents a purely legal question that is unsettled and has broad

State-wide implications.”); Dec. 9, 2013, Email from Hochman to Parties [ECF No. 141-21] at 3

(“It is in the interest of all parties as well as the public interest that the Court of Appeals finally

determine the issue of whether arbitrators have the same authority as judges to award sanctions in

appropriate cases sooner rather than later.”). Of course, the arbitrator’s interest in sanctions was

not purely academic. He plainly thought that Grynberg’s attempts to remove him for bias and his

decision to file RICO claims in Texas following the 2010 award could warrant sanctions—and he

made those observations to the parties sua sponte. Sept. 11, 2013, Arbitration Meeting Tr. at

141:21–157:13. The Court cannot pretend to be untroubled by this aspect of the arbitrator’s

conduct. But ultimately, viewed in light of the entire record, these 2013 comments regarding

Grynberg’s conduct in 2011 and 2012 do not convince the Court that the arbitrator was biased in

2010, when he dismissed the RICO claims that Grynberg now seeks to revive.

CONCLUSION

Grynberg’s Rule 60 motion—filed at the end of 2015—asks for extraordinary relief: to

revive RICO claims dismissed by this Court in 2008 and decided by an arbitrator in 2010. He

seeks this relief notwithstanding his decision not to appeal this Court’s 2008 order dismissing his

claims, his failure to challenge or seek to vacate the arbitrator’s 2010 award, serious issues of

preclusion, the continued existence of an arbitration agreement between the parties, and the federal

21
policy in favor of arbitration. In an attempt to overcome these significant hurdles to Rule 60 relief,

Grynberg alleges that the arbitrator who decided his RICO claims was biased at the time of

decision—and that therefore he is entitled to revive those claims in this Court and add some others

still pending in the ongoing arbitration. But ultimately the hurdles are too high and Grynberg’s

evidence too equivocal. Like those courts to have examined the question before, this Court is not

convinced that the arbitrator was biased against Grynberg in 2010 when he decided the RICO

claims. For all the foregoing reasons, the Court concludes that Grynberg has failed to establish

extraordinary circumstances warranting the requested Rule 60 relief. Grynberg’s Rule 60 motion

must therefore be denied. Because this case will remain closed, Grynberg’s motion to amend his

complaint will be denied as moot.

A separate Order has issued on this date.

/s/
JOHN D. BATES
United States District Judge
Dated: September 8, 2016

22