Wednesday, June 29, 2011
Court of Appeal Rejects Challenge to Arbitration Award
Justices Say Arbitrator’s Heritage ‘Irrelevant’
By a MetNews Staff Writer
A party which received an unfavorable result in arbitration could not seek to vacate the award because the arbitrator did not disclose facts about his religion and heritage, the Fourth District Court of Appeal ruled yesterday.
Div. Three said no reasonable person could entertain a doubt as to the ability of the retired federal magistrate judge who presided over the arbitration between Peter Rohde and Herbert Rebmann to be impartial.
Rohde, principal of Science & Ingredients Inc., and Rebmann had partnered to form a limited liability company to distribute nutritional supplements in North America. After their relationship soured, Rohde initiated arbitration proceedings, contending Rebmann had induced him into their joint venture by intentionally or recklessly misrepresenting various material facts.
Retired Judge Stephen E. Haberfeld, who previously sat on the U.S. District Court for the Central District of California, was selected to conduct the arbitration.
The private arbitration company he worked for provided Rohde and Rebmann a 10-page Arbitrator Disclosure Checklist, covering a lengthy list of items under the Code of Civil Procedure and California Rules of Court Ethics Standards which might affect Haberfeld’s ability to be neutral.
This document also included Haberfeld’s declaration that he had “made a reasonable effort to inform [him]self of any matters that could cause a person aware of the facts to reasonably entertain a doubt that as the proposed arbitrator [he] would be able to be impartial.”
After the hearing was held, Haberfeld returned a decision in favor of Rebmann, who then sought to have the award confirmed. Rohde challenged the award, based on public biographical information about Haberfeld he claimed to have just discovered which he asserted the arbitrator should have disclosed.
Among the information Rohde contended was relevant were the facts that Haberfeld, who was born in 1944 and raised in the United States, had parents who were of German Jewish heritage and had lost family and property in the Holocaust. Rohde also noted that Haberfeld and his parents were members of the “1939 Club,” an organization dedicated to avoiding a repeat of the Holocaust.
Rohde contended that Haberfeld’s decision was intended to “punish me for the harms brought on his family” since Rohde was German, his father had served in the German army during World War II, and his wife’s father was in the Schutzstaffel.
He further stated:
“Had I known about [Haberfeld’s] religious affiliation, his cultural affiliation, and the dedication to keeping the memory of the Holocaust alive, I never would have allowed him to be the arbitrator in my case.”
The proceedings were assigned to retired Orange Superior Court Judge Richard Luesebrink, who found Rohde had not presented any evidence that Haberfeld had knowingly failed to disclose any material facts and granted a protective order preventing Rohde from deposing Haberfeld. Luesebrink also granted the petition to confirm the arbitration award.
Justice Eileen C. Moore agreed with Luesebrink in her decision for the appellate court.
She said there “was nothing at all in Haberfeld’s professional record that indicated bias toward Germans (or anyone else),” and that his “background was entirely irrelevant to the commercial case before him.”
The justice went on to explicitly reject the “tacit assumption” in Rohde’s argument that “a judge who is a member of a minority cannot be fair when a case somehow related to that minority status—no matter how remote or tenuous that relationship might be—comes before that judge.”
Moore insisted a judge or arbitrator’s impartiality “should never be questioned simply because of who they are.”
She further remarked that “if one party harbors such a concern about the background of a group of potential arbitrators, as unmeritorious as it is, they should not sit back and wait before performing even minimal due diligence (such as an Internet search) only to raise the issue when an unfavorable outcome results.”
Justices Richard D. Fybel and Raymond J. Ikola, Moore said, “[u]nsurprisingly, we find the court did not err by confirming the arbitration award” since Rohde’s arguments were “patently without merit.”
The case is Rebmann v. Rohde, G043665.
Copyright 2011, Metropolitan News Company