Virk v. Maple-Gate Anesthesiologists, P.C.

AMARJIT S. VIRK, M.D., Plaintiff, v. MAPLE-GATE ANESTHESIOLOGISTS, P.C. and JON GRANDE, M.D., Defendants.

14-CV-381S

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF NEW YORK

June 8, 2020

DECISION AND ORDER

I. INTRODUCTION

The underlying dispute here concerns Plaintiff Dr. Amarjit S. Virk's claims that Defendants Maple-Gate Anesthesiologists, P.C., and Dr. Jon Grande breached his employment contract and violated his civil rights when they terminated his employment with Maple-Gate on May 17, 2013. The arbitrator engaged by the parties to resolve their dispute ruled largely in Dr. Virk's favor and awarded him $2,686,864.57 in total damages. Dr. Virk now seeks to confirm the arbitrator's award while the defendants seek to vacate it. Because this Court finds that the arbitrator neither exceeded his powers nor manifestly disregarded the law in reaching his decision, Dr. Virk's motion to confirm the award will be granted, and the defendants' cross motion to vacate it will be denied.

II. BACKGROUND

This case involves breach-of-contract and civil rights claims brought by Dr. Virk against the defendants. Dr. Virk originally sued in state court, after which the defendants removed the matter to federal court and immediately sought to compel arbitration. After full briefing, this Court granted the defendants' motion to compel arbitration and dismissed the case. See Virk v. Maple-Gate Anesthesiologists, 80 F. Supp. 3d 469 (W.D.N.Y. 2015). On appeal, the Second Circuit upheld this Court's arbitration ruling, but found that the matter should have been stayed, not dismissed, pending arbitration. See Virk v. Maple-Gate Anesthesiologists, 657 F. App'x. 19 (2d Cir. July 1, 2016). This Court thereafter entered an order staying the case pending arbitration. (Docket No. 25.)

A complete recitation of Dr. Virk's allegations are set forth in this Court's previous decision. See Virk, 80 F. Supp. 3d at 471-473. Essentially, Dr. Virk, a board-certified anesthesiologist and employee and shareholder of Maple-Gate Anesthesiologists, P.C., claimed that Maple-Gate and Dr. Jon Grande (also an employee and shareholder of Maple-Gate) discriminated against him and wrongfully terminated his employment in breach of his employment contract. The defendants denied these allegations and asserted a number of defenses, including that they had cause to terminate Dr. Virk's employment when his hospital privileges were precautionarily suspended after a patient's death. Pursuant to the terms of the employment contract and this Court's decision, the parties submitted their dispute to binding arbitration. See id. at 480 (finding the employment agreement valid and enforceable, and further finding that each of Dr. Virk's claims fell within the scope of the agreement's arbitration provision).

David E. Daniels, Esq., served as arbitrator. He heard testimony and accepted evidence over the course of a 7-day proceeding conducted in Buffalo, New York. (Final Award, Docket No. 36-2, p. 1.) Thereafter, on July 30, 2018, he issued a 42-page decision, largely in Dr. Virk's favor ("the Final Award").

After canvassing the evidence and making factual findings, including credibility determinations, the arbitrator first concluded that Dr. Virk failed to prove that thedefendants discriminated or retaliated against him due to his race, age, disability, or national origin. (Final Award, pp. 32-33.) Rather, the arbitrator found that the actions taken against Dr. Virk were motivated by non-discriminatory, general animosity toward Dr. Virk and a desire to oust him from the Maple-Gate practice. (Id.) But as to Dr. Virk's breach-of-contract claims, the arbitrator found that Dr. Virk sufficiently proved that Maple-Gate terminated his employment in breach of his employment contract. (Id. at pp. 34-36.) To compensate Dr. Virk for that breach and the lost wages associated therewith, the arbitrator awarded him total damages of $2,686,864.57, inclusive of interest. (Id. at pp. 37, 40.)

III. DISCUSSION

The defendants seek vacatur of the Final Award under § 10 of the Federal Arbitration Act ("FAA"). See 9 U.S.C. § 10. They maintain that, in reaching his decision, the arbitrator exceeded his powers and manifestly disregarded the governing law. Dr. Virk, on the other hand, seeks to confirm the Final Award under § 9 of the FAA and argues that no basis for vacatur exists. See 9 U.S.C. § 9. For the reasons set forth below, this Court finds that the Final Award must be confirmed.

Arbitration awards are not self-enforcing; judicial orders are required to give them force and effect. D.H. Blair & Co., Inc. v. Gottdiener, 462 F.3d 95, 104 (2d Cir. 2006). Under the FAA, which was enacted to overcome judicial resistance to arbitration and instill a national policy favoring it, see Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 443, 126 S. Ct. 1204, 163 L. Ed. 2d 1038 (2006), a court may confirm, vacate, modify, or correct an award, see 9 U.S.C. §§ 9-11.

Confirmation of an arbitration award is usually "'a summary proceeding that merely makes what is already a final arbitration award a judgment of the court,' and the court 'must grant' the [motion to confirm] unless the award is vacated, modified, or corrected." D.H. Blair, 462 F.3d at 110 (citing Florasynth, Inc. v. Pickholz, 750 F.2d 171, 176 (2d Cir. 1984)). "[A]n extremely deferential standard of review" applies "[t]o encourage and support the use of arbitration by consenting parties." Porzig v. Dresdner, Kleinwort, Benson, N. Am. LLC, 497 F.3d 133, 139 (2d Cir. 2007); see also Landau v. Eisenberg, 922 F.3d 495, 498 (2d Cir. 2019) (per curiam) ("The FAA creates a strong presumption in favor of enforcing arbitration awards and courts have an extremely limited role in reviewing such awards.") (citations and quotation marks omitted); Folkways Music Publishers, Inc. v. Weiss, 989 F.2d 108, 111 (2d Cir. 1993) ("Arbitration awards are subject to very limited review in order to avoid undermining the twin goals of arbitration, namely, settling disputes efficiently and avoiding long and expensive litigation.").

The burden of proof required to avoid confirmation of an arbitration is therefore very high, since courts afford great deference to arbitration decisions. See Ottley v. Schwartzberg, 819 F.2d 373, 376 (2d Cir. 1987); Duferco Int'l Steel Trading v. T. Klaveness Shipping A/S, 333 F.3d 383, 388 (2d Cir. 2003) ("A party petitioning a federal court to vacate an arbitral award bears the heavy burden of showing that the award falls within a very narrow set of circumstances delineated by statute and case law."). Indeed, "an arbitration award should be enforced, despite a court's disagreement with it on the merits, if there is 'a barely colorable justification for the outcome reached.'" Landy Michaels Realty Corp. v. Local 32B-32J, Serv. Emps. Int'l Union, AFL-CIO, 954 F.2d 794,797 (2d Cir. 1992) (quoting Andros Compania Maritima, S.A. v. Marc Rich & Co., 579 F.2d 691, 704 (2d Cir. 1978)). Consequently, "[v]acatur of arbitral awards is extremely rare." Hamerslough v. Hipple, No. 10 Civ. 3056 (NRB), 2012 WL 5290318, at *3 (S.D.N.Y. Oct. 25, 2012).

Nonetheless, four statutory grounds exist to vacate, modify, or correct an arbitration award. See 9 U.S.C. § 10 (a); Weiss v. Sallie Mae, Inc., 939 F.3d 105, 108-109 (2d Cir. 2019). A court may also vacate an arbitration award if it is rendered in "manifest disregard of the law."¹ Id. at 109 (citing Schwartz v. Merrill Lynch & Co., Inc., 665 F.3d 444, 451 (2d Cir. 2011) (internal quotation marks omitted)).

1. There are no statutory grounds to vacate the Final Award

Section 10 (a) of the FAA sets forth four statutory grounds for vacatur of an arbitration award:

(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.

The only one of these grounds that the defendants raise is the fourth: that the arbitrator exceeded his powers. Whether an arbitrator exceeded his or her powers turns on a "limited inquiry . . . [into] 'whether the arbitrator[ ] had the power, based on the parties' submissions or the arbitration agreement, to reach a certain issue, not whether the arbitrator[ ] correctly decided that issue.'" T.Co Metals, LLC v. Dempsey Pipe & Supply, Inc., 592 F.3d 329, 346 (2d Cir. 2010) (quoting Westerbeke Corp. v. Daihatsu Motor Co., 304 F.3d 200, 220 (2d Cir. 2002)) (alterations added). "In other words, once [the court] determine[s] that the parties intended for the arbitration panel to decide a given issue, it follows that 'the arbitration panel did not exceed its authority in deciding that issue—irrespective of whether it decided the issue correctly.'" Id. (quoting Stolt-Nielsen SA v. AnimalFeeds Int'l Corp., 548 F.3d 85, 101 (2d Cir. 2008)) (alteration added); see also Oxford Health Plans LLC v. Sutter, 569 U.S. 564, 569, 133 S. Ct. 2064, 186 L. Ed. 2d 113 (2013) ("[T]he sole question . . . is whether the arbitrator (even arguably) interpreted the parties' contract, not whether he got it right or wrong.").

An arbitrator therefore exceeds his authority "only by (1) considering issues beyond those the parties have submitted for consideration, or (2) reaching issues clearly prohibited by law or by the terms of the parties' agreement." Laidlaw & Co. v. Marinaccio, No. 19-CV-5246 (RA), 2020 WL 1151323, at *7 (S.D.N.Y. Mar. 10, 2020) (quotation marks and citation omitted). As a result, "[b]ecause the parties bargained for the arbitrator's construction of their agreement, an...