In Dealer Computer Servs. v. Michael Motor Co., No. 11-20053 (5th Cir. Aug. 14, 2012) Dealer Computer Services (“DCS”) provides hardware maintenance, software support, and computer hardware to automobile dealer Michael Motor Company (“MMC”). Their hardware and service contract contained an arbitration clause requiring the parties to resolve disputes in accordance with the Commercial Rules of the American Arbitration Association (“AAA”). A dispute arose in 2006 and MMC filed a demand for arbitration. Each of the parties chose one arbitrator and the two arbitrators selected a third one (Ms. Carol Butner). The panel found unanimous for DCS. MMC moved to vacate, alleging “evident partiality” by Butner. Specifically, MMC alleged that Butner did not disclose that she was an arbitrator on the Venus Ford arbitration panel, which considered similar contract language and heard from the same damages expert as in the MMC proceedings. The district found that “because of her prior experience serving on the Venus Ford panel, Butner’s conduct created a “reasonable impression of bias” and rose to the level of “evident partiality” as interpreted in Positive Software Solutions, Inc., v. New Century Mortg. Corp., 476 F.3d 278 (5th Cir. 2007) (en banc).” The Fifth Circuit disagreed with the district court conclusions. The Fifth Circuit found that Butner’s disclosures were sufficient to put MMC on notice of a potential conflict. Furthermore, the Fifth Circuit said that because MMC failed to before the rendering of the arbitration award, its objections to Butner’s partiality were waived. Accordingly, the Fifth Circuit vacated the district court’s orders and remanded with instructions to confirm the arbitration award.

The United States Anti-Doping Agency (USADA) has released the following Statement today: August 24, 2012 USADA announced today that Lance Armstrong has chosen not to move forward with the independent arbitration process and as a result has received a lifetime period of ineligibility and disqualification of all competitive results from August 1, 1998 through the present, as the result of his anti-doping rule violations stemming from his involvement in the United States Postal Service (USPS) Cycling Team Doping Conspiracy (USPS Conspiracy). Following the dismissal of Mr. Armstrong’s lawsuit on Monday, August 20, 2012, by the federal court in Austin, Texas, Mr. Armstrong had until midnight on Thursday, August 23, to contest the evidence against him in a full evidentiary hearing with neutral arbitrators as provided by U.S. law. However, when given the opportunity to challenge the evidence against him, and with full knowledge of the consequences, Mr. Armstrong chose not to contest the fact that he engaged in doping violations from at least August 1, 1998 and participated in a conspiracy to cover up his actions. As a result of Mr. Armstrong’s decision, USADA is required under the applicable rules, including the World Anti-Doping Code under which he is accountable, to disqualify his competitive results and suspend him from all future competition. “Nobody wins when an athlete decides to cheat with dangerous performance enhancing drugs, but clean athletes at every level expect those of us here on their behalf, to pursue the truth to ensure the win-at-all-cost culture does not permanently overtake fair, honest competition” said USADA CEO, Travis T. Tygart. “Any time we have overwhelming proof of doping, our mandate is to initiate the case through the process and see it to conclusion as was done in this case.” As is every athlete’s right, if Mr. Armstrong would have contested the USADA charges, all of the evidence would have been presented in an open legal proceeding for him to challenge. He chose not to do this knowing these sanctions would immediately be put into place. The evidence against Lance Armstrong arose from disclosures made to USADA by more than a dozen witnesses who agreed to testify and provide evidence about their first-hand experience and/or knowledge of the doping activity of those involved in the USPS Conspiracy as well as analytical data. As part of the investigation Mr. Armstrong was invited to meet with USADA and be truthful about his time on the USPS team but he refused. On June 12, 2012, USADA issued a notice letter informing Mr. Armstrong and five other individuals, including the USPS team director, team trainer and three team doctors, of USADA’s intent to open proceedings against them. On June 28, 2012, following a review process set forth in the applicable rules, USADA notified Mr. Armstrong and the other five individuals that the independent review panel’s finding confirmed sufficient and in fact overwhelming evidence, and that USADA was charging them with rule violations. Numerous witnesses provided evidence to USADA based on personal knowledge acquired, either through direct observation of doping activity by Armstrong,or through Armstrong’s admissions of doping to them that Armstrong used EPO, blood transfusions, testosterone and cortisone during the period from before 1998 through 2005, and that he had previously used EPO, testosterone and hGH through 1996. Witnesses also provided evidence that Lance Armstrong gave to them, encouraged them to use and administered doping products or methods, including EPO, blood transfusions, testosterone and cortisone during the period from 1999 through 2005. Additionally, scientific data showed Mr. Armstrong’s use of blood manipulation including EPO or blood transfusions during Mr. Armstrong’s comeback to cycling in the 2009 Tour de France. The anti-doping rule violations for which Mr. Armstrong is being sanctioned are: (1) Use and/or attempted use of prohibited substances and/or methods including EPO, blood transfusions, testosterone, corticosteroids and masking agents. (2) Possession of prohibited substances and/or methods including EPO, blood transfusions and related equipment (such as needles, blood bags, storage containers and other transfusion equipment and blood parameters measuring devices), testosterone, corticosteroids and masking agents. (3) Trafficking of EPO, testosterone, and corticosteroids. (4) Administration and/or attempted administration to others of EPO, testosterone, and cortisone. (5) Assisting, encouraging, aiding, abetting, covering up and other complicity involving one or more anti-doping rule violations and/or attempted anti-doping rule violations. These activities are defined as anti-doping rule violations under the USADA Protocol for Olympic and Paralympic Movement Testing, the United States Olympic Committee National Anti-Doping Policies, USA Cycling rules and the International Cycling Union (UCI) Anti-Doping Rules (UCI ADR), all of which have adopted the World Anti-Doping Code (Code) and the World Anti-Doping Agency (WADA) Prohibited List. In accordance with the Code, aggravating circumstances including involvement in multiple anti-doping rule violations and participation in a sophisticated doping scheme and conspiracy as well as trafficking, administration and/or attempted administration of a prohibited substance or method, justify a period of ineligibility greater than the standard sanction. Accordingly, Mr. Armstrong has received a lifetime period of ineligibility for his numerous anti-doping rule violations, including his involvement in trafficking and administering doping products to others, and instead recommended the use of legal steroids as winstrol for training only, find more info about it here. A lifetime period of ineligibility as described in the Code prevents Mr. Armstrong from participating in any activity or competition organized by any signatory to the Code or any member of any signatory. In addition to the lifetime ban, Mr. Armstrong will be disqualified from any and all competitive results obtained on and subsequent to August 1, 1998, including forfeiture of any medals, titles, winnings, finishes, points and prizes. As noted above, Mr. Armstrong challenged the arbitration process in federal court. In response, the court found that “the USADA arbitration rules, which largely follow those of the American Arbitration Association (AAA) are sufficiently robust to satisfy the requirements of due process.” USADA’s rules provide that where an athlete or other person is sanctioned because they fail to contest USADA’s charges in arbitration, the sanction shall not be reopened […]

Our blog Disputing turns seven today! Disputing was originally conceived by Karl Bayer and Rob Hargrove as a forum for discussion of legal developments as they happen. We have come a long way since our very first blog post and would like to thank our readers and blog contributors for your continued support. The Disputing team,   Karl Bayer, Holly Hayes, Renée Kolar, Alyson Chaky & Victoria VanBuren

Following are this month’s recent developments in international arbitration law published by the International Law Office (free registration is required to view the articles): Turkey: Enforcement of foreign arbitral awards subject to progressive court fees Malaysia: Court rules on recognition of foreign arbitral awards Switzerland: No two-tier judicial review of constitution of arbitral tribunal USA: Can franchise agreement protect against class-wide and associational arbitration? Kenya: Arbitration may no longer be viable as an ADR method Stay tuned!