RAYMOND JAMES AND ASSOCIATES INC v. TERRAN ORBITAL CORPORATION (2021)

MEMORANDUM ***

Terran Orbital Corporation appeals from the district court's order denying its motion to vacate and confirming an arbitration award in favor of Raymond James & Associates, Inc. (RJA). We have jurisdiction under 28 U.S.C. § 1291 and 9 U.S.C. § 16(a)(1)(D). We affirm.

1. The representation of RJA by the former law firm of one of the arbitrators does not establish “evident partiality or corruption in the arbitrators.” 9 U.S.C. § 10(a)(2). The arbitrator left his former law firm five years before the arbitration panel was selected, and there is no evidence that he ever personally represented RJA or that he had any interest in the firm at the time of the arbitration. Under the circumstances, the relationship between RJA and the arbitrator's former firm does not give rise to a “reasonable impression of partiality.” Schmitz v. Zilveti, 20 F.3d 1043, 1047 (9th Cir. 1994). Instead, the connection is “long past, attenuated, or insubstantial.” In re Sussex, 781 F.3d 1065, 1074 (9th Cir. 2015) (quoting New Regency Prods., Inc. v. Nippon Herald Films, Inc., 501 F.3d 1101, 1110 (9th Cir. 2007)).

2. In any event, the arbitrator did not have actual or constructive knowledge of the alleged conflict. The existence of a duty to investigate may establish constructive knowledge. Schmitz, 20 F.3d at 1048–49. But the Federal Arbitration Act does not impose a duty on arbitrators to investigate whether a former law firm represented one of the parties in an unrelated matter in which the arbitrator was not involved. See New Regency, 501 F.3d at 1109 (duty to investigate arises “where an arbitrator has reason to believe that a nontrivial conflict of interest might exist” (quoting Applied Indus. Materials Corp. v. Ovalar Makine Ticaret Ve Sanayi, A.S., 492 F.3d 132, 138 (2d Cir. 2007))).

Nor do the rules of the American Arbitration Association impose such a duty. See New Regency, 501 F.3d at 1106 (independent duty to investigate may be created by “the code of the arbitral body”). Canon II of The Code of Ethics for Arbitrators in Commercial Disputes provides that a duty to “ascertain[ ] by reasonable efforts” information regarding potential conflicts extends to “relationships involving ․ current employers, partners, or professional or business associates,” not past ones (emphasis added). We will not read the rules to eliminate that express limitation. See Liteky v. United States, 510 U.S. 540, 552–53, 114 S.Ct. 1147, 127 L.Ed.2d 474 (1994).

AFFIRMED.