Case: 18-11641 Document: 00515153034 Page: 1 Date Filed: 10/09/2019
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
No. 18-11641 FILED
October 9, 2019
Lyle W. Cayce
JEREMY J. WALKER, Clerk
Plaintiff - Appellant
v.
AMERIPRISE FINANCIAL SERVICES, INCORPORATED,
Defendant - Appellee
Appeal from the United States District Court
for the Northern District of Texas
USDC No. 3:18-CV-1675
Before CLEMENT, ELROD, and DUNCAN, Circuit Judges.
PER CURIAM:*
Jeremy Walker appeals the district court’s order denying his petition to
vacate an arbitration ruling and granting Ameriprise’s motion to confirm the
ruling. We affirm.
I.
In 2015, Ameriprise Financial Services (“Ameriprise”) and franchise
owner Scott Miller sought a temporary restraining order against former
* 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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH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.
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No. 18-11641
employee Jeremy Walker to prevent him from utilizing confidential customer
information. Pursuant to the parties’ agreement, Ameriprise and Miller
instituted a Financial Industry Regulatory Authority (“FINRA”) arbitration
proceeding. The 2015 FINRA panel arbitrated Ameriprise’s claims against
Walker for misappropriation of trade secrets, breach of contract, breach of
fiduciary duty, conversion, unfair competition, and unjust enrichment.
During the 2015 arbitration, Walker sought permission to amend his
answer and assert counterclaims against Ameriprise for civil conspiracy,
fraud, and unjust enrichment. Ameriprise opposed Walker’s request, asserting
that Walker was using the amendments as a vehicle to re-litigate issues of
liability dealt with at a prior hearing. The panel denied Walker’s request to
add counterclaims and only allowed him to amend his answer to “assert claims
or defenses … including in bar or in mitigation of Claimants’ claims.” Walker
nonetheless argued his “counterclaims” at an August 2015 hearing when the
panel considered Ameriprise’s request for a permanent injunction. The 2015
arbitration resulted in an award against Walker and in favor of Ameriprise for
injunctive relief, compensatory damages and attorney fees. Walker sought
review of the arbitrator’s authority to award attorney fees in state court. He
did not challenge any other aspects of the 2015 proceedings or final award.
In 2017, Walker filed a FINRA arbitration against Ameriprise, primarily
alleging he was improperly enjoined by the 2015 arbitration. He also sought to
recover for the allegedly “false, fraudulent, and intentional conduct of
Ameriprise.” He set forth fourteen causes of action. A second FINRA
arbitration panel was convened.
Ameriprise moved to dismiss the arbitration under FINRA Code of
Arbitration Procedures for Industry Disputes Rule 13504(a)(6). Rule
13504(a)(6)(C) provides that dismissal may be granted when the arbitrators
find the “non-moving party previously brought a claim regarding the same
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dispute against the same party that was fully and finally adjudicated on the
merits and memorialized in an order, judgment, award, or decision.” Both
parties submitted briefing and evidence, after which the panel held a hearing
on Ameriprise’s motion. The panel found the elements of Rule 13504(a)(6)(C)
met and unanimously dismissed the arbitration. The panel ruling explained
that dismissal was based on Walker’s participation in the 2015 arbitration.
Walker then filed a motion to vacate the 2017 ruling in district court,
arguing that vacatur was required because the 2017 panel was “guilty of
misconduct” under 9 U.S.C. § 10(a)(3) and “exceeded [its] powers” under 9
U.S.C. § 10(a)(4). The district court disagreed, denied Walker’s motion on both
grounds, and granted Ameriprise’s motion to confirm the arbitration ruling.
Walker appeals.
II.
“Appellate review of an order confirming an arbitration award proceeds
de novo, using the same standards that apply to the district court.” 21st Fin.
Servs., L.L.C. v. Manchester Fin. Bank, 747 F.3d 331, 335 (5th Cir. 2014). “We
accept findings of fact that are not clearly erroneous.” Hughes Training Inc. v.
Cook, 254 F.3d 588, 592 (5th Cir. 2001).
Judicial review of an arbitration award is “exceedingly deferential.”
Petrofac, Inc. v. DynMcDermott Petroleum Ops. Co., 687 F.3d 671, 674 (5th Cir.
2012). A party seeking vacatur of an arbitration award “must clear a high
hurdle.” Stolt-Nielsen S.A. v. Animal Feeds Int’l Corp., 559 U.S. 662, 671
(2010). “It is not enough . . . to show that the panel committed an error—or
even a serious error.” Id. “It is only when an arbitrator strays from
interpretation and application of the agreement and effectively dispenses his
own brand of industrial justice that his decision may be unenforceable.” Id.
(alterations and internal quotation marks omitted) (quoting Major League
Baseball Players Ass’n v. Garvey, 532 U.S. 504, 509 (2001)). “[A] court may not
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decline to enforce an award simply because it disagrees with the arbitrator’s
legal reasoning.” Reed v. Fla. Metro. Univ., Inc., 681 F.3d 630, 637 (5th Cir.
2012), abrogated on other grounds by Oxford Health Plans LLC v. Sutter, 569
U.S. 564 (2013).
A court may vacate an arbitration award only for the reasons set out in
9 U.S.C. § 10(a). Citigroup Glob. Mkts., Inc. v. Bacon, 562 F.3d 349, 350 (5th
Cir. 2009). Under 9 U.S.C. § 10(a), vacatur is proper
(1) where the award was procured by corruption, fraud, or undue
means;
(2) where there was evident partiality or corruption in the
arbitrators, or either of them;
(3) where the arbitrators were guilty of misconduct in refusing to
postpone the hearing, upon sufficient cause shown, or in
refusing to hear evidence pertinent and material to the
controversy; or of any other misbehavior by which the rights of
any party have been prejudiced; or
(4) where the arbitrators exceeded their powers, or so imperfectly
executed them that a mutual, final, and definite award upon
the subject matter submitted was not made.
Walker seeks vacatur under § 10(a)(3) and (4) only. First, he argues that
vacatur is appropriate under § 10(a)(3) because the panel was guilty of
misconduct for failing to allow him to present evidence and testimony. We
disagree. Walker asserts that “[i]t was incumbent on the 2017 Panel to
schedule and then conduct a hearing to receive evidence and witness testimony
on the merits of Ameriprise’s Motion to Dismiss.” And he claims to be aggrieved
because he “reasonably expected the 2017 Panel to deny the Motion to
Dismiss.” But rather than point to specific instances of misconduct, Walker
makes a cursory assertion that “the casual approach taken by the 2017 Panel
. . . creates the impression that the universal sense of justice was violated.”
Contrary to Walker’s argument, the record shows that Walker was not
prevented from presenting evidence or testimony. All parties and the three
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arbitrators attended an Initial Prehearing Conference where discovery
deadlines, Rule 13504 briefing rules, and hearing dates were set. After
Ameriprise filed for dismissal, Walker filed both a preliminary and a
supplemental response. Ameriprise’s motion was heard via telephone
conference attended by the full arbitration panel and all parties and counsel,
who presented evidence for approximately one hour. We see no indication that
the panel refused to hear material evidence, engaged in any other misconduct,
or otherwise deprived Walker of a fair hearing. “To constitute misconduct
requiring vacation of an award, an error in the arbitrator’s determination must
be one that is not simply an error of law, but which so affects the rights of a
party that it may be said he was deprived of a fair hearing.” Laws v. Morgan
Stanley Dean Witter, 452 F.3d 398, 399 (5th Cir. 2006). Walker has not met his
burden for vacatur under § 10(a)(3).
Second, Walker argues vacatur is appropriate under § 10(a)(4) because
the 2017 panel “exceeded its powers” by dismissing his claims under Rule
13504(a)(6) as fully adjudicated by the 2015 panel. We again disagree. Walker’s
challenge rests on his assertion that the 2017 panel erred in determining that
the elements of Rule 13504(a)(6) were met. But Walker’s argument fails to
implicate the standard for vacatur under section 10(a)(4). “An arbitrator
exceeds his powers [under § 10(a)(4)] if he acts contrary to express contractual
provisions.” YPF S.A. v. Apache Overseas, Inc., 924 F.3d 815, 818 (5th Cir.
2019) (internal quotation marks omitted). Walker does not argue that the
panel violated any express provisions of the arbitration agreement, but only
that it incorrectly applied Rule 13504. Even if that were true, however, “[s]uch
[alleged] legal errors lie far outside the category of conduct embraced by
§ 10(a)(4).” Cooper v. WestEnd Capital Mgmt., L.L.C., 832 F.3d 534, 547 (5th
Cir. 2016) (internal quotation marks omitted) (quoting Beaird Indus., Inc. v.
Local 2297, Int’l Union, 404 F.3d 942, 946 (5th Cir. 2005)). Because Walker
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fails even to argue that the panel violated the agreement to arbitrate, see
Petrofac, 687 F.3d at 674-75, he fails to meet his burden for vacatur under §
10(a)(4).
In sum, Walker has not identified any reason why the district court erred
in denying his motion to vacate and in confirming the arbitration ruling.
AFFIRMED
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