Alternative Dispute Resolution

9th Circuit tosses arbitration decision because panel chair lied about being a lawyer

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9th Circuit

The 9th U.S. Circuit Court of Appeals in San Francisco.

A federal appeals court has overturned an arbitration decision because the person who headed the arbitration panel had falsely claimed to be a California lawyer.

The San Francisco-based 9th U.S. Circuit Court of Appeals ruled (PDF) on Nov. 4 that Move Inc. was denied a fundamentally fair hearing because of misrepresentations by the panel chair, James Hamilton Hardy Frank, report the San Francisco Chronicle and Bloomberg News.

Frank falsely claimed to be retired California lawyer James Hamilton Frank, and said he was licensed in California, New York and Florida, according to the 9th Circuit opinion. Frank took part in 38 arbitrations for the Financial Industry Regulatory Authority, according to the San Francisco Chronicle, which cites past coverage by Reuters.

The 9th Circuit ruling is the first to consider the impact of Frank’s misrepresentations, according to the Chronicle.

Frank headed the three-person FINRA arbitration panel that considered Move Inc.’s claim that Citigroup Global Markets had mismanaged $131 million of its funds by investing in speculative securities. The panel ruled for Citigroup in December 2009.

Move Inc. had made clear that it wanted an experienced lawyer to chair the arbitration panel, the appeals court said. Move also quickly moved to vacate the arbitration decision after learning that Frank had lied from a March 2014 article in the Am Law Litigation Daily. As a result, Move was entitled to equitable tolling of the three-month deadline for appealing an arbitration award, the appeals court said.

The appeals court noted conflicting case law among the federal circuits on whether equitable tolling applies to the Federal Arbitration Act. The case is Move Inc. v. Citigroup Global Markets Inc.

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