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Archive for the ‘Evident Partiality’ Category

HarrisMartin Reinsurance Conference Postscript

September 28th, 2011 Events, Evident Partiality, Grounds for Vacatur, United States Court of Appeals for the Fifth Circuit, United States Court of Appeals for the Second Circuit No Comments »

On September 22-23, 2011, a number of experienced reinsurance industry executives and  in-house counsel, and a small group of outside counsel (yours truly included), spoke at the HarrisMartin Publishing-sponsored reinsurance conference, “Reinsurance Summit:  Fresh Perspectives on the Reinsurance Front,” which took place at the Loews Philadelphia Hotel.  (Our pre-conference, August 22, 2011 post (here) sets forth the conference program agenda.)

As expected attendance was modest – no doubt the result of the cost-cutting mandated by economic conditions, coupled with reduced reinsurance-dispute frequency and severity — but the conference was nevertheless a great success.  The presentations were thoughtful, interesting and professionally useful, and the smaller group of attendees not only facilitated robust – and sometimes, spirited – discussions during the program, but also provided a relaxed atmosphere conducive to networking during the breaks.  I, for one, returned home with “fresh perspectives” on a number of reinsurance-related issues, and those perspectives have proved to be good fodder for brainstorming.

Conference co-chairs Edward K. Lenci (Partner, Hinshaw & Culbertson LLP, New York, NY), Leslie J. Davis (Vice President & Assistant General Counsel, Gen Re; Senior Vice President & General Counsel, United States Aviation Underwriters, Inc.), and Wendy R. Taylor (Vice President and Associate Counsel, Chubb & Son, a division of Federal Insurance Company), outdid themselves on this one.  All three devoted a great deal of time and effort into organizing and implementing the conference over a several month period.  Ed spearheaded the effort and was the event’s chief moderator, while Wendy did double duty as a co-manager and faculty member.   Wendy also had the honor of introducing the keynote speaker, Commissioner Thomas B. Considine of the New Jersey Department of Banking and Insurance (Commissioner Considine also chairs the National Association of Insurance Commissioners‘ Reinsurance Task Force).  Ed’s, Wendy’s and Leslie’s hard work and devotion paid great dividends to all who attended.

Conference-sponsor HarrisMartin Publishing likewise did a superb job organizing, implementing, and promoting the event, and handling all of the administrative, technical, and CLE-related details.  The three key players were Conference Director Vicki Gilbreath; Reinsurance Report Editor Marcy Kowalchuk, whom I’ve known since she was a Mealey’s Reinsurance Reports editor some years back; and Editorial Director Jeff Andrus.  All three worked diligently and intensely on the project, and demonstrated their impressive editorial, publishing, promotional and event-management skills in the process.  They were quick with an effective solution whenever there was a problem.

Of course, the conference might have been a rather mind-numbing and painful way to earn CLE credit were it not for the superb faculty, all of whom delivered and facilitated interesting and thought provoking discussion and debate on several diverse reinsurance-related topics, and did so with great enthusiasm, skill and aplomb.  Their credentials and reputations speak for themselves:

A. Lindsay Doering Principal, Law Office of A. Lindsay Doering, Philadelphia, PA
Ali E. Rifai General Counsel, Zurich Insurance CMB Division, and former Interim General Counsel, Zurich Insurance Middle East Region
Anthony Vidovich Vice President & Assistant General Counsel, Director of Reinsurance Law, The Hartford, Hartford, CT
Bina T. Dagar Ameya Consulting, LLC, Livingston, NJ
Daniel E. Tranen Partner, Hinshaw & Culbertson LLP, Boston, MA
Daniel Schelp Managing Attorney, National Association of Insurance Commissioners
David A. Silva

Partner, Mound Cotton Wollan & Greengrass, New York, New York, NY
David N. Kragseth Senior Contract Wording Specialist, Munich Reinsurance America, Inc., Princeton, NJ
Fritz K. Huszagh

Partner, Hinshaw & Culbertson, Chicago, IL
Jeanne M. Kohler Partner, Edwards Angell Palmer & Dodge LLP, New York, NY
Matthew T. Wulf Vice President, State Relations and Assistant General Counsel, Reinsurance Association of America, Washington, D.C.
M. Machua Millett Senior Vice President, Senior Advisory Specialist and Global GPL Team Leader, Marsh USA Inc., Boston, MA
Michael Zeller Vice President, Reinsurance Services Division, AIG, Inc., New York, NY
Myra E. Lobel Managing Director, Guy Carpenter & Company LLC, New York, NY
Patrick H. Cantilo Cantilo & Bennett LLP, Austin, TX
Peter W. Ambler Managing Director, Towers Watson (Re)Insurance Brokers Ltd., London, England
Scott P. Birrell Vice President and Associate General Counsel, Travelers Insurance Co., Hartford, CT
Steven Agosta General Counsel, XL Re America, Stamford, CT
Stuart S. Carruthers Stikeman Elliott, Toronto, Canada
Susan Grondine-Dauwer General Counsel, R&Q USA, Boston, MA
Thomas Freudenstein COO, GLOBAL Reinsurance Corporation of America and Director and Attorney at GLOBALE Rückversicherungs-AG, New York, NY and Cologne, Germany

Finally, I’d like to thank Richard D. Faulkner, a name partner at the Richardson, Texas-based firm of Blume, Faulkner, Skeen & Northam, who traveled all the way from the Dallas, Texas area to join me as a co-panelist on “The Judicial Scrutiny of Arbitration Awards” panel.   Rick — who was recently appointed Fifth Circuit appellate counsel for Michael Motor Company, Inc. in Dealer Computer Svcs., Inc. v. Michael Motor Co., No. H-10-2132, slip op. (S.D. Tex. December 29, 2010), appeal pending No. 11-20053 (5th Cir.) — is an experienced commercial litigator who handles commercial and insurance arbitrations here and abroad, a Chartered Institute of Arbitrators certified arbitrator in commercial and insurance cases, a frequently sought-after mediator, a member of the Texas House of Representatives Judiciary & Civil Jurisprudence Committee’s Arbitration Advisory Group, and a member of the International Institute for Conflict Prevention and Resolution (“CPR”)’s Arbitration Committee.  He was a contributing author to the American Bar Association publication, Elkouri & Elkouri, How Arbitration Works (6th Ed.), served as a trial judge in Louisiana, and is a former professor of Alternative Dispute Resolution law who has taught in Texas, England and Asia.

At the conference Rick and I discussed, among other things, some of the key differences between Scandinavian Reinsurance Co. v. Saint Paul Fire & Marine Ins. Co., 732 F. Supp.2d 293 (S.D.N.Y. 2010), appeal pending No. 10-910-cv (2d Cir.), and Dealer Computer, both of which concern arbitrator nondisclosure of alleged conflicts of interest (Dealer Computer also raises arbitrator qualification issues governed by Section 10(a)(4) of the Federal Arbitration Act.)

We were very happy with the presentation, which was well-received by attendees and other faculty members.  It was quite an honor to share the podium with Rick, and I hope we’ll collaborate on future projects.

New York Law Journal Article: “Arbitrator Evident Partiality Standard Under Scrutiny in ‘Scandinavian Re’”

May 20th, 2011 Appellate Practice, Arbitration Practice and Procedure, Ethics, Evident Partiality, Grounds for Vacatur, Practice and Procedure, Reinsurance Arbitration, United States Court of Appeals for the Second Circuit, United States Court of Appeals for the Seventh Circuit, United States District Court for the Southern District of New York, United States Supreme Court No Comments »

On May 18, 2011 the New York Law Journal published in its Outside Counsel section an article I wrote, which argues that the United States Court of Appeals for the Second Circuit should reverse the district court’s judgment in Scandinavian Reinsurance Co. v. Saint Paul Fire & Marine Ins. Co.,  No. 09 Civ. 9531(SAS), 2010 WL 653481, at *8 (S.D.N.Y. Feb. 23, 2010), appeal pending No. 10-910-cv (2d Cir.). 

The article is reprinted below with permission, and I would like to thank Elaine Song, a member of the New York Law Journal’s editorial staff, for her assistance and work in getting this published in New York’s leading legal trade publication.   Continue Reading »

The Seventh Circuit Issues a Landmark Reinsurance Arbitration Opinion in Trustmark Ins. Co. v. John Hancock Life Ins. Co. (U.S.A.): Part III.A

March 9th, 2011 Arbitration Practice and Procedure, Awards, Ethics, Evident Partiality, Practice and Procedure, Reinsurance Arbitration, United States Court of Appeals for the Second Circuit, United States Court of Appeals for the Seventh Circuit, United States District Court for the Southern District of New York No Comments »

Should the Second Circuit Reverse the District Court’s Judgment in Scandinavian Reinsurance Co. v. Saint Paul Fire & Marine Ins. Co.?

I.       Introduction

Parts I and II of this three-part post discussed Chief Judge Frank H. Easterbrook’s decision in Trustmark Ins. Co. v. John Hancock Life Ins. Co. (U.S.A.), No. 09-3682, 2011 WL 285156 (7th Cir. Jan. 31, 2011), and said that Trustmark, in conjunction with  Sphere Drake Ins. Co. v. All American Life Ins. Co., 307 F.3d 617, 622 (7th Cir. 2002) (Easterbrook, J.),  demonstrates that the district court should not have vacated on evident partiality grounds the arbitration award in Scandinavian Reinsurance Co. v. Saint Paul Fire & Marine Ins. Co, No. 09 Civ. 9531(SAS), 2010 WL 653481 (S.D.N.Y. Feb. 23, 2010).     This Part III.A explains some of the reasons why that is so.  Continue Reading »

The Seventh Circuit Issues a Landmark Reinsurance Arbitration Opinion in Trustmark Ins. Co. v. John Hancock Life Ins. Co. (U.S.A.): Part II

February 24th, 2011 Arbitrability, Arbitration Agreements, Arbitration Practice and Procedure, Authority of Arbitrators, Evident Partiality, Practice and Procedure, United States Court of Appeals for the Fifth Circuit, United States Court of Appeals for the Second Circuit, United States Court of Appeals for the Seventh Circuit 1 Comment »

I.  Introduction

Part I (here) briefly discussed Chief Judge Frank H. Easterbrook’s decision in Trustmark Ins. Co. v. John Hancock Life Ins. Co. (U.S.A.), No. 09-3682, slip op. (7th Cir. Jan. 31, 2011), and its implications on the pending Second and Fifth Circuit appeals in  Scandinavian Reinsurance Co. v. Saint Paul Fire & Marine Ins. Co, No. 09 Civ. 9531(SAS), 2010 WL 653481 (S.D.N.Y. Feb. 23, 2010), and Dealer Computer Svcs., Inc. v. Michael Motor Co., No. H-10-2132, slip op. (S.D. Tex. December 29, 2010).  This Part II examines in some detail Trustmark’s background and rationale, and Part III will focus on Trustmark’s implications on the Scandinavian Re and Dealer Computer appeals.

II.  Trustmark Background

The following facts were gleaned from both the district court and Seventh Circuit opinions (the district court opinion is reported at 680 F. Supp. 2d 944 and can be found here): Continue Reading »

The Seventh Circuit Issues a Landmark Reinsurance Arbitration Opinion in Trustmark Ins. Co. v. John Hancock Life Ins. Co. (U.S.A.)

February 23rd, 2011 Arbitration Practice and Procedure, Authority of Arbitrators, Evident Partiality, Grounds for Vacatur, Practice and Procedure, United States Court of Appeals for the Fifth Circuit, United States Court of Appeals for the Second Circuit, United States Court of Appeals for the Seventh Circuit 3 Comments »

Chief Judge Frank H. Easterbrook of the United States Court of Appeals for the Seventh Circuit is not only a brilliant judge, writer and law professor, but a master of (among many other things) arbitration law.  He understands better than most judges how commercial arbitration is supposed to work, what the Federal Arbitration Act is supposed to achieve, and how to implement the Act to ensure the parties get not only what they bargained for, but also the potential to realize the benefits that private, voluntary dispute resolution can offer.  His arbitration-law opinions are clearly written, imbued with common and commercial sense, and seem purposely designed to make sometimes elusive concepts readily understandable to courts, arbitrators, parties and counsel.  They tend to ensure that the objective, reasonable expectations of the parties are enforced, not frustrated.  Continue Reading »

Arbitration Nuts & Bolts: Vacating Arbitration Awards – Part III.B: Evident Partiality (Enforcing the Parties’ Expectations of Neutrality)

January 12th, 2010 Awards, Evident Partiality, Nuts & Bolts, Nuts & Bolts: Arbitration, Practice and Procedure 3 Comments »

Introduction

Part III.A of the evident partiality segment of this series discussed the parties’ reasonable expectations of neutrality.  Today we consider how those expectations are enforced. 

“Evident partiality” challenges typically arise out of one of two scenarios.  First, there are “presumed bias” cases in which the arbitrator’s relationship to the parties or the controversy would lead a reasonable person to conclude that the arbitrator was biased, even though the challenger cannot prove actual bias.    Second, there are evident partiality challenges based on allegations of actual bias.  For example, suppose a neutral said on the record during the proceedings prior to deliberations:  ”Party A, frankly I have distrusted your company’s business motives for many years, but hearing your witnesses’ testimony has simply confirmed what I’ve suspected all along.”  While the chances of an arbitrator making such a statement (let alone on the record) are exceedingly slim to non-existent, it would provide the basis for an evident partiality challenge (which would probably succeed) based on proof of actual bias. 

The difference between “presumed” and “actual” bias is simply one of proof.  One is based on circumstantial evidence and the other on direct evidence.  Our focus will be on “presumed bias” cases, because they arise with greater frequency.  Actual bias is very difficult to prove, and if it or something approaching it can be established, then that proof would in any (or most any) event meet the standards necessary to establish evident partiality.    Continue Reading »

Arbitration Nuts & Bolts: Vacating Arbitration Awards – Part III.A: Evident Partiality (Expectations of the Parties)

January 4th, 2010 Awards, Evident Partiality, Grounds for Vacatur, Nuts & Bolts, Nuts & Bolts: Arbitration, Practice and Procedure 5 Comments »

Introduction

In this Part III of our Nuts & Bolts feature on vacating arbitration awards (Parts I and II  here and here) we consider the second statutory ground for vacating an award under the Federal Arbitration Act:  “where there was evident partiality…in the arbitrators…” 9 U.S.C. 10(a)(2).  What constitutes “evident partiality” or arbitral bias has been the subject of numerous judicial decisions setting forth various standards and applying them to a wide range of fact patterns.  The decisions are not easy to reconcile (some may, indeed, be irreconciliable) and generally the standards are of limited utility in practice.  Matters are complicated by judicially-created rules concerning disclosure of potential conflicts of interest and the consequences that may or may not flow from a breach of those rules.  To say “evident partiality” is an elusive subject understates the case.        Continue Reading »



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