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Simon J. Frankel, SB # 171552 COVINGTON & BURLING LLP One Front Street San Francisco, CA 94111 Telephone: (415) 591-6000 Facsimile: (415) 591-6091 [email protected] EUGENE D. GULLAND (pro hac vice application pending) DONALD J. RIDINGS JR. (pro hac vice application pending) Covington & Burling LLP 1201 Pennsylvania Avenue, N.W. Washington, DC 20004-2401 Tel: (202) 662-6000 Fax: (202) 662-6291 Attorneys for Defendant KYOCERA CORPORATION
UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA ANTHONY N. LAPINE, Plaintiff, v. KYOCERA CORPORATION, Defendant. Civil Case No.: 3:07-cv-06132-MP DEFENDANT KYOCERA CORPORATION'S NOTICE OF CROSSMOTION AND CROSS-MOTION TO CONFIRM ARBITRAL AWARD; MEMORANDUM OF POINTS AND AUTHORITIES (1) IN SUPPORT OF CROSS-MOTION TO CONFIRM ARBITRAL AWARD, AND (2) IN OPPOSITION TO PLAINTIFF'S MOTION TO VACATE Date: Time: Courtroom: April 7, 2008 2:00 p.m. 15
Hon. Marilyn H. Patel
KYOCERA'S CROSS-MOTION TO CONFIRM ARBITRAL AWARD AND OPPOSITION TO MOTION TO VACATE
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TABLE OF CONTENTS PAGE TABLE OF AUTHORITIES........................................................................................................ iii NOTICE OF MOTION AND MOTION TO CONFIRM ARBITRAL AWARD ........................ 1 STATEMENT OF ISSUES TO BE DECIDED ............................................................................ 1 PRELIMINARY STATEMENT ................................................................................................... 1 I. II. PROCEDURAL BACKGROUND ................................................................................... 3 STATEMENT OF FACTS ................................................................................................ 4 A. B. C. Reorganization Of LTC In The Mid-1980s. .......................................................... 4 LaPine's 1990 Arbitration Request And The Lengthy Delay. .............................. 5 Reactivation Of The LaPine Arbitration Proceedings. .......................................... 6 1. 2. 3. The Arbitral Tribunal................................................................................. 6 Kyocera's Motion For Summary Adjudication ......................................... 7 The Tribunal's Award................................................................................ 8
THE AWARD SHOULD BE CONFIRMED UNDER CHAPTER II OF THE FAA AND THE CONVENTION ON THE RECOGNITION AND ENFORCEMENT OF FOREIGN ARBITRAL AWARDS .............................................. 9 A. B. The Convention Governs This Court's Review of the Award. ............................. 9 The Award Must Be Confirmed In A "Summary Proceeding.".......................... 11 1. 2. Article V Of The Convention Supplies The Only Grounds For Refusing To Confirm The Award............................................................ 11 None Of The Convention's Grounds For Refusing Confirmation Applies Here...................................................................... 12 a) The Award may not be denied confirmation on the ground that the Tribunal's summary adjudication standards were "not in accordance with the agreement of the parties" ................ 13 The Award may not be refused confirmation on the ground that LaPine was "not able to present his case"................ 16
The Court May Not Subject The Award To "Expanded Judicial Review." .............................................................................................................. 18
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IV.
LAPINE'S MOTION TO VACATE MUST BE DENIED EVEN UNDER (1) DOMESTIC FAA REVIEW STANDARDS AND (2) CONTRACTUAL "EXPANDED JUDICIAL REVIEW"............................................................................. 20 A. The Award Should Not Be Vacated Under Chapter I Of The FAA.................... 20 1. The Tribunal Did Not Exceed Its Powers By Applying Summary Judgment Standards That Are Different From California Judicial Procedures................................................................. 21 The Tribunal Did Not "Ignore[] Plaintiff's Claims Of Breach Of The Covenant Of Good Faith And Fair Dealing" In Manifest Disregard Of The Law.............................................................. 21
2.
B.
The Award Must Be Upheld Even Under "Expanded Judicial Review." ........... 23 1. The Tribunal's Legal Conclusions Were Not Erroneous. ....................... 24 a) The Tribunal correctly ruled that, under California substantive law, LaPine lacks standing to bring claims for the "destruction in value" of LTC ............................................... 24 LaPine's claims are also barred by waiver and estoppel ............. 28 The Tribunal correctly ruled that the pendency of a class action lawsuit brought by another former LTC shareholder did not toll the statute of limitations on LaPine's fraud claims........................................................................................... 31
b) c)
2. 16 17 18 19
The Tribunal's Award Was Supported By Substantial Evidence............ 33 a) b) The Tribunal correctly ruled that LaPine failed to establish a prima facie case of fraud........................................................... 34 The Tribunal did not err by deciding Kyocera's motion on the full record before it ................................................................ 35
CONCLUSION............................................................................................................................ 36 20 21 22 23 24 25 26 27 28
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TABLE OF AUTHORITIES PAGE(S) American Pipe & Construction Co. v. Utah, 414 U.S. 538 (1974)...........................................................................................................31, 32 Alexander v. Gardner-Denver Co., 415 U.S. 36 (1974)...................................................................................................................17 Blue Chip Enter., Inc. v. Brentwood Sav. & Loan Ass'n, 139 Cal.Rptr. 651 (Cal Ct. App. 1977)....................................................................................16 Brock v. Kaiser Found. Hosps., 13 Cal.Rptr.2d 678 (Cal. Ct. App. 1992).................................................................................16 Burgess v. Kaiser Found. Hosps., 20 Cal.Rptr.2d 488 (Cal. Ct. App. 1993).................................................................................16 Burton v. Bush, 614 F.2d 389 (4th Cir. 1980) ...................................................................................................17 Byerly v. Sale, 204 Cal.App.3d 1312 (Cal. Ct. App. 1988) .............................................................................16 Carey v. Kerr-McGee Chem. Corp., 999 F. Supp. 1109 (N.D. Ill. 1998)..........................................................................................32 China Nat'l Metal Prod. Import/Export Co. v. Apex Digital, Inc., 379 F.3d 796 (9th Cir. 2004) ...................................................................................................12 Collins v. D.R. Horton, Inc., 505 F.3d 874 (9th Cir. 2007) .............................................................................................21, 22 Common Wealth Ins. Sys., Inc. v. Kersten, 115 Cal.Rptr. 653 (Cal. Ct. App. 1974)...................................................................................29 Compagnie des Bauxites de Guinee v. Hammermills, Inc., 1992 WL 122712 (D.D.C. May 29, 1992)...............................................................................13 Daly v. Yessne, 31 Cal.Rptr.3d 420 (Cal. Ct. App. 2005)...........................................................................25, 28 De la Fuente v. FDIC, 332 F.3d 1208 (9th Cir. 2003) .................................................................................................33 Fireman's Fund Ins. Co. v. Sparks Constr., Inc., 8 Cal.Rptr.3d 446 (Cal. Ct. App. 2004)...................................................................................29
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Fortier v. Morgan Stanley DW, Inc., 2006 WL 3020926 (N.D. Cal. Oct. 23, 2006) .........................................................................21 Gallus Investments, L.P. v. Pudgie's Famous Chicken, Ltd., 134 F.3d 231 (4th Cir. 1998) ...................................................................................................15 Generica Ltd. v. Pharmaceutical Basics, Inc., 125 F.3d 1123 (7th Cir. 1997) .................................................................................................17 Goodman v. CIBC Oppenheimer & Co., 131 F. Supp. 2d 1180 (C.D. Cal. 2001) ...................................................................................22 Hall Street Assocs., L.L.C. v. Mattel, Inc., 127 S. Ct. 2875 (2007).......................................................................................................19, 20 Helvering v. Southwest Consol. Corp., 315 U.S. 194 (1942)...........................................................................................................27, 28 Hoopai v. Astrue, 499 F.3d 1071 (9th Cir. 2007) .................................................................................................33 In re: Estate of Anderson, 70 Cal.Rptr.2d 266 (Cal. Ct. App. 1997).................................................................................30 Indus. Risk Ins. v. M.A.N. Gutehoffnungshutte, 141 F.3d 1434 (11th Cir. 1998) .....................................................................................9, 10, 12 Interchem Asia 2000 PTE Ltd. v. Oceana Petrochemicals AG, 373 F. Supp. 2d 340 (S.D.N.Y. 2005) .....................................................................................15 Jain v. de Mere, 51 F.3d 686 (7th Cir. 1995) .....................................................................................................10 Jolly v. Eli Lilly & Co., 44 Cal.3d 1103 (1988) .............................................................................................................32 Jones v. H.F. Ahmanson & Co., 81 Cal.Rptr. 592 (1969) ...........................................................................................................25 Kessler v. General Cable Corp., 155 Cal.Rptr. 94 (Cal. Ct. App. 1979)...............................................................................25, 27 Kidd v. Kopald, 36 Cal. Rptr. 2d 875 (Cal. Ct. App. 1994)...............................................................................16 Kyocera Corp. v. Prudential-Bache Trade Servs., Inc., 341 F.3d 987 (9th Cir. 2003) (en banc) ............................................................................passim M&C Corp. v. Erwin Behr GmbH & Co., 87 F.3d 844 (6th Cir. 1996) .....................................................................................................20
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Management & Technical Consultants S.A. v. Parsons-Jurden Int'l Corp., 820 F.2d 1531 (9th Cir. 1987) .................................................................................................11 Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52 (1995)...................................................................................................................15 Metalclad Corp. v. Ventana Envir. Org'l Ptrshp., 1 Cal.Rptr.3d 328 (Cal. Ct. App. 2003)...................................................................................29 Michigan Mutual Ins. Co. v. Unigard Security Ins. Co., 44 F.3d 826 (9th Cir. 1995) .....................................................................................................21 Ministry of Defense of Islamic Republic v. Gould, Inc., 969 F.2d 764 (9th Cir. 1992) ...................................................................................................12 Nelson v. Anderson, 84 Cal.Rptr.2d 753 (Cal. Ct. App. 1999).................................................................................26 Old Republic Ins. Co. v. FSR Brokerage, Inc., 95 Cal.Rptr.3d 583 (Cal. Ct. App. 2000).................................................................................29 Paladino v. Avnet Computer Technologies, Inc., 134 F.3d 1054 (11th Cir. 1998) ...............................................................................................17 Parsons & Whittemore Overseas Co., Inc. v. Societe Generale De L'Industrie Du Papier, 508 F.2d 969 (2d Cir. 1974) ....................................................................................................17 Port of Seattle v. FERC, 499 F.3d 1016 (9th Cir. 2007) .................................................................................................33 Porterville Citizens for Responsible Hillside Develop. v. City of Porterville, 157 Cal.App. 4th 885 (Cal. Ct. App. 2007).............................................................................33 Preston v. Ferrer, --- S.Ct. ----, 2008 WL 440670 (U.S. February 20, 2008).......................................................15 Salton Comm. Servs. Dist. v. Southard, 64 Cal.Rptr. 246 (Cal. App. 1967)...........................................................................................29 Schuster v. Gardner, 25 Cal.Rptr.3d 468 (Cal. Ct. App. 2005)...........................................................................25, 26 Sheldon v. Vermonty, 269 F.3d 1202 (10th Cir. 2001) ...............................................................................................13 Sphere Drake Ins. Ltd. v. Lincoln Nat. Life Ins. Co., 2006 WL 2699270 (N.D. Ill. Sept. 13, 2006) ..........................................................................13 St. Agnes Medical Center v. Pacificare of Cal., 8 Cal.Rptr.3d 517 (2003) .........................................................................................................29
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T-Mobile USA, Inc. v. Quest Communications Corp., 2007 WL 3171428 (W.D. Wash. Oct. 26, 2007).....................................................................22 Titan/Value Equities Group, Inc. v. Superior Court, 35 Cal.Rptr.2d 4 (Cal. Ct. App. 1994).....................................................................................16 Tricome v. Success Trade Secs., 2006 WL 1451502 (E.D. Pa. May 25, 2006)...........................................................................13 Vittal v. Long Beach Unified Sch. Dist., 8 Cal.App.3d 112 (1970) .........................................................................................................30 Warren v. Tacher, 114 F. Supp. 2d 600 (W.D. Ky. 2000).....................................................................................13 Woodchem Europe, S.A. v. D.B. Western, Inc., 2001 U.S. Dist. LEXIS 25290 (D. Or. Nov. 2, 2001)..............................................................12 Woods v. Saturn Dist. Co., 1994 U.S. Dist. LEXIS 21471 (C.D. Cal. May 31, 1994), aff'd 78 F. 3d 424 (9th Cir. 1996) ........................................................................................................................................12 Young v. Ross-Loos Med. Group, 135 Cal.App.3d 669 (Cal. Ct. App. 1982) ...............................................................................16
STATUTES 5 U.S.C. § 706(2)(E)......................................................................................................................33 9 U.S.C. § 10(a) .............................................................................................................................21 9 U.S.C. § 201.........................................................................................................................passim 9 U.S.C. § 202................................................................................................................................10 9 U.S.C. § 203................................................................................................................................10 9 U.S.C. § 207..........................................................................................................................11, 12 Cal. Civ. Proc. Code § 583.310 .....................................................................................................16 Cal. Civ. Proc. Code § 583.340 .....................................................................................................16
25 26 27 28
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Cal. Civ. Proc. Code § 583.410(a).................................................................................................16 Cal. Rules of Court, Rule 3.1340...................................................................................................16
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NOTICE OF MOTION AND MOTION TO CONFIRM ARBITRAL AWARD PLEASE TAKE NOTICE that, on April 7, 2008 at 2:00 p.m., this Court will hear the cross-motion of Kyocera Corporation to confirm the unanimous award of the Tribunal of the ICC International Court of Arbitration in Anthony N. LaPine v. Kyocera Corporation, No. 7099 (the "Award"). For the reasons described below, the Award must be confirmed under the standards set forth in Chapter II of the Federal Arbitration Act, 9 U.S.C. § 201 et seq. ("FAA"), and the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 21 U.S.T. 2517, T.I.A.S. No. 6997, 300 U.N. 38 (the "Convention"). We also show herein that plaintiff Anthony LaPine's motion to vacate the Award must be denied because it is without basis in fact or law. STATEMENT OF ISSUES TO BE DECIDED 1. Whether the Award must be recognized and enforced as provided in the Convention and the Federal Arbitration Act, 9 U.S.C. §§ 201, et seq. 2. Whether plaintiff has demonstrated any valid ground for vacating the Award. PRELIMINARY STATEMENT In a 1986 business transaction, Anthony LaPine, Kyocera and Prudential agreed to submit any future dispute to binding arbitration before the ICC International Court of Arbitration, which is widely regarded as the leading international arbitration organization. LaPine delayed the prosecution of his claims against Kyocera for nearly 20 years, in hopes of benefiting from an ICC arbitration award for Prudential and against Kyocera in a related arbitration that is well known to this Court and to the Ninth Circuit. See Kyocera Corp. v. Prudential-Bache Trade Servs., Inc., 341 F.3d 987 (9th Cir. 2003) (en banc) ("Prudential"). LaPine's effort to bootstrap the Prudential award failed completely. In August 2007, an exceptionally distinguished ICC arbitral Tribunal unanimously ruled that none of his claims has any merit. Two members of the Tribunal are leading U.S. lawyers and arbitrators who also sat on the Prudential Tribunal. The third is the former Secretary-General of the ICC International Court of Arbitration, who serves as a full-time arbitrator of major international disputes. The record, and the Tribunal's 31-page single-spaced Award, amply shows that the Tribunal gave
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full and fair consideration to all of LaPine's factual and legal arguments, and rejected them for sound reasons. LaPine has brought this case to vacate the Award, challenging virtually every one of the Tribunal's rulings. This Court should not hesitate in denying LaPine's motion to vacate -- and should grant Kyocera's cross-motion to confirm -- for the following reasons: First, the Convention and the FAA require U.S. courts to confirm international arbitration awards unless the party opposing confirmation demonstrates one of several enumerated defects -- incapacity of a party, invalidity of the agreement to arbitrate, lack of notice or denial of the right to be heard, ultra vires rulings by the arbitrators, improper composition of the Tribunal, breach of public policy, or existence of a judgment setting aside the Award. LaPine has not presented a plausible case for denying confirmation of the Award on any of these narrow grounds, including any basis for entry of a judgment setting aside the Award. Second, in attacking the Award, LaPine entirely ignores that it is an international arbitration Award governed by the Convention, to which the U.S. and Japan are signatories. As reflected in the many cases applying Chapter II of the FAA, 9 U.S.C. §§ 201, et seq., the scope of judicial review of an international Award is exceedingly narrow and does not allow the courts to conduct the merits review sought by LaPine. LaPine's reliance on the broader scope of review allowed by the arbitration agreement -- whether the Award is clearly erroneous or unsupported by "substantial evidence" -- fails because such a standard (i) is inconsistent with the Convention and the FAA; (ii) is contrary to the Ninth Circuit's en banc ruling as to the same contract provision in the Prudential case; and (iii) is not permitted by the governing ICC Rules, which require the parties to waive all objections to the Award to the fullest extent such waiver is lawful, and do not allow the parties to agree upon procedures that are inconsistent with that Rule. Third, even under the expanded scope of review sought by LaPine, there would be no basis for vacating the Award. In most instances, the supposed legal errors in the Award consist of the Tribunal's refusal to follow California judicial and discovery procedural rules, which are
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simply inapplicable to an international arbitration conducted according to ICC rules and procedures. Where the Tribunal applied California substantive law, it did so correctly and without committing any error. Finally, the Award was supported not only by "substantial evidence" -- which is actually a very narrow standard of review -- but by the overwhelming evidence of record that was carefully considered by the Tribunal. I. PROCEDURAL BACKGROUND The Award arises out of events that occurred more than 20 years ago. Kyocera and Prudential acquired a small California disk drive company in 1986 called LaPine Technology Corporation ("LTC") in a transaction in which plaintiff LaPine was also a participant. LTC never earned a profit and soon ceased operations. Kyocera and Prudential blamed one another for LTC's failure, and Prudential and LTC (which Prudential controlled) commenced arbitration proceedings against Kyocera (the "Prudential Arbitration"). The ICC appointed a three-member tribunal to hear the dispute. In 1994, the panel ruled in favor of Prudential and LTC, and directed Kyocera to pay damages to LTC equal to 100% of LTC's value. After years of litigation over that award, the Ninth Circuit confirmed the award in the Prudential Arbitration. See Kyocera Corp. v. Prudential-Bache Trade Servs., Inc., 341 F.3d 987 (9th Cir. 2003) (en banc). Plaintiff LaPine is a former CEO and shareholder in LTC. In the 1986 transaction, LaPine sold his interest in LTC to Prudential and Kyocera in exchange for a $2 million package. In 1990 -- more than three years after LTC failed -- LaPine filed this arbitration proceeding (the "LaPine Arbitration") against both Kyocera and Prudential, accusing them of destroying the value of LTC. In his arbitration demand, LaPine acknowledged his intent to "take advantage of" whatever award resulted from the separate Prudential Arbitration that was already underway. The ICC appointed the same arbitrators in the LaPine Arbitration as had been seated in the Prudential Arbitration. The Tribunal granted a stay of the LaPine Arbitration pending issuance of an award in the Prudential Arbitration. But even after the Prudential award issued in 1994, LaPine sought and obtained further extensions from the ICC. Only after Kyocera sought
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discontinuance of the LaPine Arbitration in 2005 did LaPine advise the ICC that he was ready to move forward with his case. By that point, eleven years had passed since the Prudential Arbitration award had issued; fifteen years had elapsed since LaPine filed this proceeding; and almost two decades had run since the disputed events had occurred. In the meantime, one of the arbitrators had passed away. In 2006, the ICC appointed (without objection) a former ICC Secretary General to fill that seat. With agreement of both parties, the re-constituted Tribunal agreed to entertain a summary adjudication motion by Kyocera. After receiving extensive briefing and evidentiary submissions from both parties, and hearing oral argument, the Tribunal issued a unanimous 31-page Award in favor of Kyocera. In December 2007, LaPine petitioned to vacate the Award. motion and cross-moves to confirm the Award. II. STATEMENT OF FACTS Except as otherwise noted, this Statement of Facts is drawn from LaPine's Updated Request for Arbitration, attached as Exhibit 16 to LaPine's Motion to Vacate Arbitration Award, and other related exhibits attached to LaPine's Motion to Vacate Arbitration Award. A. Reorganization Of LTC In The Mid-1980s. Kyocera opposes that
LaPine established LTC in the early 1980s to design and sell computer disk drives. (See Ex. 16, ¶¶ 3, 9.) LaPine was LTC's President, CEO and Chairman. In 1985, Prudential, Kyocera and LaPine formed a three-way business relationship to manufacture, finance and market LTC's disk drives. (Id. ¶¶ 10-11.) But Prudential and
Kyocera quickly began to be concerned about LaPine's management. (Id. ¶ 12.) Prudential complained that LTC "was not meeting its [partnership] obligations" and asserted that Prudential "was no longer obligated to provide financing to [LTC]." (Id.) LTC "was not meeting its minimum purchase obligations." (Id.) By mid-1986, all "production and sales activity" at LTC had ceased, as Kyocera, Prudential, and LaPine "attempted to negotiate a resolution." (Id. ¶ 13.) Those negotiations ultimately resulted in a buyout of LaPine and LTC's other shareholders by Prudential and Kyocera, and reorganization of LTC. (Id. ¶¶ 14-15.) The
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relevant terms were embodied in a "Definitive Agreement" dated November 10, 1986. (Ex. 3.) The parties to the Definitive Agreement (LTC, Kyocera, Prudential and LaPine) agreed to arbitrate "[a]ll questions, disputes or differences in any way arising out of or relating to this Agreement" under ICC Rules. (Id. at ¶ 8.10.) The Definitive Agreement was governed by California substantive law. LaPine received more than $2 million from the reorganization and buyout, including an initial cash payment exceeding $197,000 (Ex. A to the accompanying Declaration of Shannon M. Nestor ("Nestor Decl.")); notes and interest in an escrow account worth in excess of $1,168,000 (Ex. B, Nestor Decl.), and $220,000 (Ex. C, Nestor Decl.), respectively; and a fiveyear "Consulting Agreement" that paid him $500,000. (Ex. D, Nestor Decl.) LaPine never provided any services under the Consulting Agreement. (Ex. 16, ¶ 37.) Shortly before the reorganization was scheduled to close, a disagreement arose between Kyocera and Prudential over the terms of one of the subsidiary agreements among the parties, the Amended Trading Agreement (the "ATA"). (See Ex. 16, ¶ 22.) Efforts to reorganize LTC proceeded despite the disagreement and, in the first half of 1987, Kyocera and Prudential negotiated over the terms of the ATA. (Id. ¶¶ 24, 26.) The negotiations failed and, in May 1987, Prudential caused LTC to file suit against Kyocera in this Court. (Id. ¶ 25.) LTC ceased operations shortly thereafter. (Id. ¶¶ 26, 28.) In October 1987, Prudential and LTC commenced the Prudential Arbitration against Kyocera. (Id. ¶ 49.) LaPine took no action. B. LaPine's 1990 Arbitration Request And The Lengthy Delay.
On December 14, 1990, LaPine filed the LaPine Arbitration, expressly stating his intention to "take advantage of any decision in the [Prudential] arbitration" that had been pending for three years. (Ex. 7, "Introduction" (unnumbered page).) He asked that his
arbitration be stayed and "not be commenced until after there ha[d] been a preliminary award or awards in the [Prudential Arbitration]." (Id.) The ICC ordered that the LaPine Arbitration be held in abeyance "until after the final award" in the Prudential Arbitration. (Ex. 8.)
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The ICC issued its final award in the Prudential Arbitration in August 1994. LaPine obtained a further stay in the proceedings. (Ex. 33, ¶ 11.) Over the ensuing years, the ICC repeatedly extended procedural deadlines. (Ex. E, Nestor Decl.) The Ninth Circuit, sitting en banc, confirmed the Prudential Arbitration award against Kyocera in December 2003. At that point the LaPine Arbitration had been languishing on the ICC's docket for more than thirteen years, and Kyocera and Prudential both wrote to the ICC asking that the case be closed. (Ex. 33, ¶ 15.) In August 2004, LaPine responded that he intended to prosecute the proceedings (Exs. 12-13), but nothing happened for another year. In mid-2005, and over Kyocera's objection, new counsel for LaPine entered an appearance and indicated that LaPine was ready to move forward with his claims. (Ex. 15.) C. Reactivation Of The LaPine Arbitration Proceedings. 1. The Arbitral Tribunal
The ICC had appointed the same three arbitrators to preside over both the Prudential and LaPine arbitrations in 1991. Because the chairperson had died, the ICC appointed a
replacement in February 2006. The Tribunal that issued the Award thus consisted of the following three arbitrators: · Dr. Horacio A. Grigera Naón, Chairman. From 1996-2001, Dr. Naón served as the Secretary General of the ICC International Court of Arbitration. He has practiced in the field of international commercial arbitration and international business law for over 25 years. 1 Gerald Aksen, Esq. Mr. Aksen is a retired partner of the firm Thelen Reid Brown Raysman & Steiner LLP. He served for sixteen years as the General Counsel of the American Arbitration Association. From 20002002, Mr. Aksen was the Vice Chairman of the ICC International Court of Arbitration. He was recognized as the leading international arbitration attorney in New York in the 2003-2004 editions of Chambers Global: The World's Leading Lawyers and Chambers USA Guide to America's Leading Business Lawyers. 2
·
Dr. Naón's biography may be found at
1
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·
Graydon S. Staring, Esq. Mr. Staring practiced at the law firms of Lillick & Charles and its successor, Nixon Peabody LLP. He is a Fellow of the American College of Trial Lawyers, and past President of the Maritime Law Association of the United States. Mr. Staring previously held positions at the U.S. Department of Justice and served as an Adjunct Professor at Boalt Hall School of Law, University of California, Berkley and Hastings College of the Law. 3 2. Kyocera's Motion For Summary Adjudication
LaPine filed an Updated Request for Arbitration ("Updated Request") in June 2006, asserting ten claims alleging fraud, breach of fiduciary duty, breach of contract, and unjust enrichment. (Ex. 16.) LaPine dropped his claims against Prudential. Kyocera filed an Updated Answer and Counterclaim on June 30, 2006, and simultaneously moved for summary adjudication on all of LaPine's Claims. (Ex. 17.) The motion argued that LaPine's claims should be rejected on several grounds: · Unreasonable Delay: LaPine's extraordinary delay in prosecuting his claims violated California's strong public policy, embodied in statute, against unreasonable litigation delays; Standing: LaPine lacked standing to pursue the claims; Waiver / Estoppel: LaPine waived his claims and was estopped from asserting them by voluntarily exchanging his right to acquire shares in the hypothetical IPO for cash; Statute of Limitations: LaPine's fraud claims are barred by the statute of limitations; and Release: LaPine released all of his claims under the broad release contained in the Definitive Agreement.
· ·
· ·
The parties jointly submitted a proposed procedural schedule to the Tribunal on August 18, 2006. (Ex. 20.) The joint schedule called for the Tribunal to address Kyocera's dispositive motion in a threshold summary adjudication phase. On September 18, 2006, the Tribunal issued Procedural Order No. 1 adopting the parties' proposal and establishing a briefing schedule. (Ex. A complete listing of Mr. Staring's publications can be found at
3
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19.)
Both parties filed extensive briefs and evidentiary submissions in support of their
respective arguments. On January 23, 2007, the Arbitral Tribunal heard oral argument in San Francisco. After the hearing, both parties made additional submissions in response to questions that had arisen during the argument. On April 11, 2007, the Tribunal advised the parties of the specific summary judgment standards it would apply and offered the parties a further opportunity to submit any additional evidence in support of their respective positions. (Ex. 26.) Contrary to the joint schedule, LaPine then filed a new 29-page brief, as well as several new exhibits and declarations. LaPine's post-argument submissions included a declaration by one of LaPine's attorneys identifying -- for the first time -- 34 additional documents that LaPine's attorneys wanted in order to defend against Kyocera's motion. Kyocera was granted leave to respond. On June 22, 2007, Kyocera submitted copies of 28 of the 34 documents. In an
accompanying declaration, Kyocera's attorneys confirmed that following an extensive search of Kyocera's files the remaining six documents either never existed or could not be located. LaPine did not respond to Kyocera's June 22 submission. The Tribunal declared the arbitral proceedings closed on July 17, 2007. 3. The Tribunal's Award
On August 29, 2007, the Tribunal issued a unanimous 31-page Award. (Certified copy attached as Ex. F, Nestor Decl.) First, the Tribunal declined to dismiss LaPine's claims for his delays of prosecution. The Tribunal acknowledged California's procedural rules favoring dismissal in such circumstances, but declined to apply California procedural law. Instead, it ruled -- as LaPine had argued -- that "although California law governs the dispute on the merits, it does not control procedural matters or matters concerning the conduct of this arbitration." (Award ¶ 71.) The Tribunal stressed that ICC procedural rules "isolat[e] ICC arbitral proceedings from the local laws of procedure of the arbitral seat." (Id. ¶ 83.) Since ICC rules do not call for dismissal of cases for delayed prosecution, the Tribunal ruled that LaPine could present his claims.
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Second, turning to the merits, the Tribunal ruled that LaPine's fraud claims were barred by the statute of limitations applicable to such claims. The Tribunal rejected LaPine's argument that a class action filed by another former shareholder had tolled the statute on LaPine's obligation to commence his Arbitration, and ruled that the authority cited by LaPine did not apply. As an alternative ground for dismissal, the Tribunal also ruled that LaPine failed to make out a prima facie case of fraud. The Tribunal considered the entire record in reaching that ruling, including the 28 documents that Kyocera had submitted after LaPine belatedly identified them as potentially relevant. Third, the Tribunal dismissed LaPine's contract-based and corporate mismanagement claims for lack of standing. Applying settled California substantive law, the Tribunal ruled that warrant holders lack standing to bring generalized damages claims based on the diminution in value or destruction of the company that issued the warrant. The Tribunal also ruled that LaPine's claims were derivative, not individual; that they could only be asserted by LTC; and that LTC had already asserted and recovered damages for them in the Prudential Arbitration. As an additional basis for dismissal, the Tribunal ruled that LaPine's claims were barred by the doctrines of waiver and estoppel, based on LaPine's decision to accept, without any reservation of rights, $1.1 million in lieu of exchanging his warrants for shares; his failure to escrow those monies or otherwise segregate and secure them; his failure to tender those monies back; and his use of those monies during the past 18 years to fund other ventures. Having dismissed all of LaPine's claims on these grounds, the Tribunal found it unnecessary to resolve Kyocera's release and other defenses. III. THE AWARD SHOULD BE CONFIRMED UNDER CHAPTER II OF THE FAA AND THE CONVENTION ON THE RECOGNITION AND ENFORCEMENT OF FOREIGN ARBITRAL AWARDS A. The Convention Governs This Court's Review Of The Award.
The Convention's principal purpose is to "encourage the recognition and enforcement of international arbitral awards." Indus. Risk Ins. v. M.A.N. Gutehoffnungshutte, 141 F.3d 1434, 1440 (11th Cir. 1998), quoting Bergesen v. Joseph Muller Corp., 710 F.2d 928, 932 (2d Cir. 1983). It was "drafted in 1958 under the auspices of the United Nations. The United States
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acceded to the treaty in 1970, and Chapter II of the FAA [implementing the Convention] was passed that same year." Indus. Risk Ins., 141 F.3d at 1440 (citations omitted); see also 9 U.S.C. § 201 ("[t]he [Convention] shall be enforced in United States Courts in accordance with this chapter"). The Convention is codified as a note following the text of 9 U.S.C. § 201. An arbitral award "falls under" the Convention if it (i) arises out of a legal relationship that is (ii) commercial in nature and (iii) is not entirely between citizens of the United States. See 9 U.S.C. § 202. The first two requirements are plainly met here: the Definitive Agreement from which the arbitration arose embodies a "legal relationship," and the subject of that agreement the reorganization of LTC and the buyout of LTC's shareholders is "commercial in nature." The third requirement is also met, because the arbitration under review was not "entirely between citizens of the United States." A corporation is deemed to be a "citizen of the United States" under Chapter II of the FAA "if it is incorporated or has its principal place of business in the United States." 9 U.S.C. § 202. Neither applies to Kyocera: "Kyocera Corp. is a corporation organized and existing under the laws of Japan" (Mot. at 3) with its principal place of business in Kyoto, Japan. (Ex. 18 ¶ 1.2.) Because the arbitration was not entirely between citizens of the United States, and because the proceeding arose out of a legal relationship that was commercial in nature, the Convention governs the Court's review of the Award. See Jain v. de Mere, 51 F.3d 686, 689 (7th Cir. 1995); Indus. Risk Ins., 141 F.3d at 1441. Furthermore, the FAA vests district courts with subject matter jurisdiction over "an action or proceeding falling under the Convention," irrespective of the amount of controversy. 9 U.S.C. § 203. This Court accordingly has jurisdiction to review the Award under the
standards set forth in the Convention.
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B.
The Award Must Be Confirmed In A "Summary Proceeding." 1. Article V Of The Convention Supplies The Only Grounds For Refusing To Confirm The Award
When an arbitration award "falls under" the New York Convention, a district court "shall confirm the award unless it finds one of the grounds for refusal or deferral of recognition or enforcement of the award specified in the said Convention." 9 U.S.C. § 207 (emphasis added); see also Management & Technical Consultants S.A. v. Parsons-Jurden Int'l Corp., 820 F.2d 1531, 1533-34 (9th Cir. 1987) ("Under the Convention, an arbiter's award can be vacated only on the grounds specified in the Convention."). Article V of the Convention lists the only seven grounds on which the recognition and enforcement of an award "may be refused." Those seven grounds are: (1)(a) "The parties to the agreement . . . were, under the law applicable to them, under some incapacity, or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was made;" (1)(b) "The party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present his case;" (1)(c) "The award deals with a difference not contemplated or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration, provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, that part of the award which contains decisions on matters submitted to arbitration may be recognized and enforced;" (1)(d) "The composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties, or, failing such agreement, was not in accordance with the law of the country where the arbitration took place." (1)(e) "The award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made;" (2)(a) "The subject matter of the difference is not capable of settlement by arbitration under the law of that country;" or (2)(b) "The recognition or enforcement of the award would be contrary to the public policy of that country."
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Section 207 of the FAA "incorporates by reference the Convention's seven enumerated exceptions or defenses to the mandatory recognition or enforcement of a foreign arbitral award." China Nat'l Metal Prod. Import/Export Co. v. Apex Digital, Inc., 379 F.3d 796, 799 (9th Cir. 2004). These seven grounds "should be construed narrowly" to promote the "general proenforcement bias [that] inform[ed] the Convention." Ministry of Defense of Islamic Republic v. Gould, Inc., 969 F.2d 764, 770 (9th Cir. 1992) (citation omitted). Confirmation of an arbitral award is a "summary proceeding" that calls for virtually automatic issuance of a judgment on the award. Woods v. Saturn Dist. Co., 1994 U.S. Dist. LEXIS 21471, at *22 (C.D. Cal. May 31, 1994), aff'd 78 F. 3d 424 (9th Cir. 1996), quoting Florasynth, Inc. v. Pickholz, 750 F.2d 171, 176 (2d Cir. 1984). Thus, "no defense against enforcement of an international arbitral award is available on the ground that the award is `arbitrary and capricious,' or on any other grounds not specified by the Convention". Indus. Risk Ins., 141 F.3d at 1441; see also Woodchem Europe, S.A. v. D.B. Western, Inc., 2001 U.S. Dist. LEXIS 25290 (D. Or. Nov. 2, 2001) (reviewing ICC award rendered in New York, and declining to apply the standard of "manifest disregard for the law" because it was not among the seven grounds specified in the Convention). 2. None Of The Convention's Grounds For Refusing Confirmation Applies Here
LaPine's moving papers do not mention the Convention. However, LaPine's motion does argue that the Tribunal "exceeded and applied the wrong standard when it ignored the choice-of-law provision stipulated by the parties" (Mot. at 9), and that the summary adjudication standards that the Tribunal employed were "contrary to the procedural order, Terms of Reference and the Arbitration Agreement." (Id. at 10.) This argument might fairly be read as objecting to the Award on the ground that "the composition of the arbitral authority or procedure was not in accordance with the agreement of the parties," a defense to confirmation recognized under Convention Article V(1)(d). LaPine also asserts that "the Tribunal never allowed the parties to exchange, review or comment on discovery before it decided Defendant's Motion for Summary Adjudication" (Mot.
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at 10), and that the Tribunal "grant[ed] Defendant's motion based on evidence never submitted by the parties" (id.). This argument might be read as objecting that LaPine "was . . . not able to present his case." Convention Article V(1)(b). Neither argument has merit and the Award should be confirmed. a) The Award may not be denied confirmation on the ground that the Tribunal's summary adjudication standards were "not in accordance with the agreement of the parties"
Article V(1)(d) of the Convention authorizes courts to vacate an award if "the composition of the arbitral authority or procedure was not in accordance with the agreement of the parties." This standard does not "permit reviewing courts to police every procedural ruling made by the Arbitrator and to set aside the award if any violation of ICC procedures is found." Compagnie des Bauxites de Guinee v. Hammermills, Inc., 1992 WL 122712, at *5 (D.D.C. May 29, 1992) (emphasis in original). Rather, a court may "set aside an award based on a procedural violation only if such violation worked substantial prejudice to the complaining party." Id. LaPine does not come close to showing any procedural violation, much less a serious one. He does not contend that it was improper for the Tribunal to consider and rule on Kyocera's summary adjudication motion, nor could he reasonably do so. Courts routinely uphold arbitral awards that reject claims on dispositive threshold motion, regardless of whether the governing arbitration rules provide for such a procedure. 4 Furthermore, in this case the parties affirmatively agreed to a motion for summary adjudication in advance of an evidentiary hearing. The Award correctly reflects that "the Parties have expressly accepted the Arbitral Tribunal's jurisdiction" to entertain Kyocera's summary adjudication motion, and observes that
See, e.g., Sheldon v. Vermonty, 269 F.3d 1202, 1206 (10th Cir. 2001) (declining to vacate award on the ground that it was rendered based on a dispositive motion, and in advance of a full evidentiary hearing); Tricome v. Success Trade Secs., 2006 WL 1451502, at *3 (E.D. Pa. May 25, 2006) ("arbitrators may grant a motion to dismiss without holding a full evidentiary hearing"); Warren v. Tacher, 114 F. Supp. 2d 600, 602 (W.D. Ky. 2000) ("Petitioners are not entitled to costly full-blown discovery when it would not change the outcome and the claim could be decided on a pre-hearing motion."); Sphere Drake Ins. Ltd. v. Lincoln Nat. Life Ins. Co., 2006 WL 2699270, at * 5 (N.D. Ill. Sept. 13, 2006) ("Hearing evidence is not pertinent and material to a controversy if the pertinent facts or issues can be resolved on other methods of resolution, such as...a ruling on the pleadings.").
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"providing for summary disposal on the merits of claims when the conditions to do so are met is fully compatible with both the letter and spirit of the ICC Rules . . . ." (Award ¶ 86.) Instead, LaPine objects to the procedural standard that the Tribunal used to decide Kyocera's motion. Specifically, he contends that "[h]ad the Tribunal applied California law, Defendant would have failed to meet its burden, and the parties would have had an opportunity to enter into discovery to fully develop the record." (Mot. at 10.) This argument confuses the procedural rules to be applied by the Tribunal -- which are governed by the ICC Rules -- with the substantive law governing the Definitive Agreement, which is California law. The Tribunal was well within its authority under ICC Rules to select and apply appropriate summary adjudication standards that do not involve the full panoply of discovery allowed in California courts. Section 8.10 of the Definitive Agreement directs that arbitration "shall be conducted in accordance with the Rules of Conciliation and Arbitration of the International Chamber of Commerce ("ICC") and the Federal Arbitration Act." As the Tribunal observed, the ICC Rules provide that the Tribunal should select procedures where ICC Rules are silent: "The rules governing the proceedings before the arbitrator shall be those rules resulting from these Rules and, where these Rules are silent, any rules which the parties or, failing them, the arbitrator may settle, and whether or not reference is thereby made to the rules of procedure of a national law to be applied to the arbitration." (Italics added.) The Tribunal provided early notice, by letter dated April 11, 2007, that it would apply a summary judgment standard patterned on FRCP 56. (Award ¶ 85.) In choosing that standard, the Tribunal acted precisely according to the ICC Rules. As the Tribunal observed, "this arbitration is international in nature, and although venued in California, is not subject to Californian procedural law not standing for core Californian public policy." (Award ¶ 95.) The Tribunal reasoned that because the lex arbitri governing the arbitration is the FAA, "[s]hould the Arbitral Tribunal seek guidance in the lex arbitri to determine standards regarding summary judgment, it would naturally look to the Federal Rules of Procedure (Rule 56)." (Id.) The Court accordingly should reject LaPine's assertion that the Definitive Agreement's choice-of-law provision specifying California substantive law required the Tribunal to apply
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California procedural law. (Mot. at 2, 10.) LaPine cites no supporting authority. By contrast, many cases confirm the correctness of the Tribunal's ruling. See, e.g., Gallus Investments, L.P. v. Pudgie's Famous Chicken, Ltd., 134 F.3d 231, 233 (4th Cir. 1998) (ruling that the law specified in a choice-of law provision "governs the parties' contractual rights and duties," but that evidentiary procedures are governed by the rules of the arbitral authority selected by the parties: this "gives effect to the arbitration clause while in no way undermining the choice-oflaw provision"); Interchem Asia 2000 PTE Ltd. v. Oceana Petrochemicals AG, 373 F. Supp. 2d 340, 346 (S.D.N.Y. 2005) ( "in deciding matters relating to the substantive merits of the action, the Court will apply New York State law, and in deciding matters of procedure or the authority of the Arbitrator, the Court will look to the AAA Commercial Rules."). 5 Furthermore, LaPine's argument squarely contradicts the position he advocated in successfully opposing Kyocera's motion to dismiss the arbitration under California procedural rules requiring dismissal for unreasonably delayed prosecution. LaPine's counsel argued that California substantive law governs the contract itself, but the choice-of-law provision does not govern the conduct of the arbitration: "MR. GERGOSIAN: My position is that you are not [bound by California law], because the only area of California law you're bound to apply is as it applies to the contract itself. The -- there is not a choice-of-law provision. MR. GULLAND: I'm sorry, I didn't hear that. MR. GERGOSIAN: There's not a choice-of-law provision in the definitive agreement governing the conduct of the arbitration." (Hearing Tr. 128-29, (emphasis added) (Ex. 23).)
See also Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52, 63-64 (1995) (interpreting a New York choice-of-law provision to "encompass substantive principles that New York courts would apply, but not to include special rules limiting the authority of arbitrators"; and holding that the rules of arbitral authority selected by the parties, not New York law, governed the availability of punitive damages); Preston v. Ferrer, --- S.Ct. ----, 2008 WL 440670 (U.S. February 20, 2008) (rejecting argument that choice-of-law provision requires use of state procedural law when parties have selected rules of a governing arbitral authority; and highlighting "the import of the contract's incorporation by reference of privately promulgated arbitration rules").
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Kyocera had urged dismissal under California procedural rules mandating dismissal for unreasonable delays in prosecution. 6 California arbitrators have often applied these rules to dismiss domestic arbitrations, and courts have upheld those dismissals. 7 The Tribunal expressly noted Mr. LaPine's argument that California procedures do not govern an international arbitration (Award ¶ 71), and ruled that the Tribunal should not apply California's procedural rules governing dismissal for delay. (Award ¶¶ 71-84.) Thus, the Tribunal consistently adhered to ICC rules when it refused to apply California law to procedural issues, both in relation to summary judgment standards and dismissal for delay. LaPine cannot reasonably argue for California procedural law governing summary adjudication standards, while simultaneously avoiding the burden of California procedural law governing dismissal for delay. The Award may not be refused confirmation under Article V(1)(d) of the Convention. b) The Award may not be refused confirmation on the ground that LaPine was "not able to present his case"
Article V(1)(b) of the Convention permits a court to refuse confirmation of an award if "the party against whom the award was made was not given proper notice of the proceedings or
6
See Cal. Civ. Proc. Code § 583.410(a) (courts have broad discretion to "dismiss an action for delay in prosecution...on its own motion or on motion of the defendant if to do so appears to the court appropriate under the circumstances of the case."); Kidd v. Kopald, 36 Cal. Rptr. 2d 875, 884 (Cal. Ct. App. 1994); Cal. Rules of Court, Rule 3.1340; Blue Chip Enter., Inc. v. Brentwood Sav. & Loan Ass'n, 139 Cal. Rptr. 651, 654 (Cal Ct. App. 1977) (courts may "dismiss an action where there has been inexcusable delay in bringing it to trial."); Cal. Civ. Proc. Code § 583.310 (an action "shall be brought to trial within five years after the action is commenced"); id. § 583.340 (any action not brought to trial within five years "shall be dismissed" and the requirements of the section "are mandatory and are not subject to extension, excuse, or exemption except as expressly provided by statute"). 7 See, e.g., Titan/Value Equities Group, Inc. v. Superior Court, 35 Cal.Rptr.2d 4, 7 (Cal. Ct. App. 1994) (collecting cases); Burgess v. Kaiser Found. Hosps., 20 Cal.Rptr.2d 488, 490 (Cal. Ct. App. 1993) ("An arbitrator has discretion to dismiss a proceeding due to unreasonable delay by the claimant in bringing the matter to a hearing"); Byerly v. Sale, 204 Cal.App.3d 1312, 1315-16 (Cal. Ct. App. 1988) (explaining that "the arbitrator should determine whether there has been an unreasonable delay in prosecution which would justify dismissal [of the arbitration]"); Young v. Ross-Loos Med. Group, 135 Cal.App.3d 669, 673 (Cal. Ct. App. 1982) (upholding "the arbitrator's decision that [claimants] take nothing on their claims by reason of their dilatory prosecution"); Brock v. Kaiser Found. Hosps., 13 Cal.Rptr.2d 678, 688 (Cal. Ct. App. 1992) ("the arbitrator . . . has authority to determine whether a party should take nothing because of that party's unwarranted delay in prosecuting the arbitration proceedings") (emphasis omitted).
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was otherwise not able to present his case." This ground embodies the basic standards of procedural due process. Parsons & Whittemore Overseas Co., Inc. v. Societe Generale De L'Industrie Du Papier, 508 F.2d 969, 975 (2d Cir. 1974) (confirming ICC award, and rejecting a challenge under Article V(1)(b)). It recognizes that a party who chooses arbitration
"relinquishes his courtroom rights . . . in favor of arbitration with all of its well known advantages and drawbacks." Id. (citation and quotation omitted); see also Generica Ltd. v. Pharmaceutical Basics, Inc., 125 F.3d 1123, 1131 (7th Cir. 1997) (party was not denied due process where the ICC arbitrator halted cross-examination of a witness). LaPine contends that he was deprived of a fair opportunity to present his case because the Tribunal decided Kyocera's motion based on the submissions of the parties and did not provide for additional discovery and evidentiary hearings. (Mot. at 10, 24.) This argument is without merit. First, the Tribunal followed the parties' joint schedule calling for a decision on Kyocera's summary adjudication motion -- which had already been filed -- as the first order of business and in advance of any document exchange. (Ex. 20.) The parties' agreement was embodied in Procedural Order No. 1. (Ex. 19.) Second, LaPine's asserted entitlement to discovery cannot overcome black-letter law holding that parties enjoy no right to discovery in arbitration: "the factfinding process in arbitration usually is not equivalent to judicial factfinding. The record of the arbitration proceedings is not as complete; the usual rules of evidence do not apply; and rights and procedures common to civil trials, such as discovery, compulsory process, cross-examination, and testimony under oath, are often severely limited or unavailable." Alexander v. GardnerDenver Co., 415 U.S. 36, 57-58 (1974). When parties agree to arbitrate, "they relinquish the right to certain procedural niceties which
24 are normally associated with a formal trial. One of these accoutrements is the right to pre-trial 25 discovery." Burton v. Bush, 614 F.2d 389, 390 (4th Cir. 1980) (internal citations omitted); see 26 also Paladino v. Avnet Computer Technologies, Inc., 134 F.3d 1054, 1062 (11th Cir. 1998) 27 (noting that "[a]rbitral litigants often lack discovery"). 28
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Third, there is not even a factual basis for LaPine's objection that the "the Tribunal erred in holding Defendant was excused from providing material documents as requested by Plaintiff." (Mot. at 24.) And there is equally no merit to LaPine's claim that he was denied the opportunity to "comment on" documents that Kyocera submitted to the Tribunal. After
Kyocera's motion had been briefed; after the parties had submitted evidence in support of their respective positions; after the motion was argued; and after the parties filed post-hearing submissions, LaPine asserted in May 2007 -- for the first time -- that he wanted 34 additional documents. 8 Kyocera voluntarily searched its files; found 28 of the 34 documents; submitted copies; and certified that the others did not exist or could not be found. 9 LaPine did not even respond to this submission. Having heard nothing from LaPine, the Tribunal announced on July 17, 2007 that it intended to close the proceedings and decide Kyocera's motion on the record before it. (Ex. 32.) LaPine's counsel acknowledged receipt of this notification (Ex. G, Nestor Decl.) and did not object to the closure of the proceedings. The Tribunal issued its Award six weeks later. The Tribunal thus afforded LaPine every opportunity to present the merits of his position. LaPine's assertion that he was deprived of "the opportunity to present his case" is without merit. C. The Court May Not Subject The Award To "Expanded Judicial Review."
LaPine spends only a few pages arguing that the Award should be vacated under the narrow standards of Chapter I of the FAA, which govern domestic arbitrations. (Mot. at 8-12.) His real argument is that this Court should engage in "Expanded Judicial Review" in order to decide whether (i) the Tribunal committed legal error and (ii) the Tribunal's findings are
The Declaration of Brooke E. West ("West Decl."), Exhibit 29 to LaPine's motion, lists 35 documents in a table; however, the first and last entries in that table refer to the same letter dated June 6, 1986, from M. Forrest to K. Inamori (see West Decl. pp. 2, 5), leaving 34 documents identified by LaPine. Kyocera submitted a declaration stating that after thorough search, Kyocera was unable to locate the remaining six documents, and that it appeared that at least three of
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