Patent Law

Arbitration's "Down" Side: Two Years of Proceedings; $20 Million in Punitives; and, No Appeal

By Les Weinstein, Michael Young, John Leo Wagner, Eric van Ginkel, and Victoria Pynchon

This just in from the Ninth Circuit -- In re Bosack -- an opinion affirming the trial court's refusal to vacate an arbitration award totaling nearly $20 million after proceedings that "lasted two years, during which more than sixty days of hearings were held, more than twenty witnesses testified, and over five hundred exhibits were entered into evidence."

The contested award?

The arbitration panel's finding that Respondents Bosack and Lerner "had 'acted with malice and oppression,' and that [Petitioner] Soward was entitled to punitive damages of $10,999,494 against Bosack, and $8,555,162 against Lerner."

Doctrines discussed:  functus officio; manifest disregard of the law; the scope of review ("whether or not the panel's findings are supported by the evidence in the record is beyond the scope of our review";) and, whether the Court can vacate an award based upon the argument that a punitive damages award is unconstitutional (no).

Not quite an arbitral Bleak House but no cost-efficient proceeding either.

Full post as published by IP ADR Blog on October 27, 2009 (boomark / email).