It is common to hear that arbitration can be just as costly and expensive as litigation. A recent court opinion shows how acrimonious, expensive, time-consuming, and burdensome arbitration can be. Also, arbitration is often valued for its confidentiality, but when a party seeks to confirm or vacate an award, confidentiality can easily become a myth. The parties in this case may have been better off litigating in court.
The case of Weiner v. Original Talk Radio Network, No. 10–CV–05785 (N.D. Cal. May 2, 2013), involved a contract dispute between Michael Savage, a popular talk-radio host, and a radio network. Ultimately, a panel of arbitrators found that the radio network had materially breached its contract with Savage. In addition to damages for the breach of contract and termination of the contract, the arbitrator’s award required the radio network to pay $33,500 in administrative filing and case service fees as well as the fees and expenses of the arbitrators, which totaled almost $130,000. These amounts did not appear to include attorney’s fees, and the arbitration lasted for about a year and a half.
The radio station asked a federal district court in California to vacate the arbitration award, arguing that the talk show host harassed and intimated the panel and that the arbitrators exceeded their power in awarding damages for breach of contract. In a very detailed, thorough decision, the court rejected all the arguments to vacate. The court found that there was no clear and convincing evidence of improper conduct, and the radio station was just trying to re-hash the arguments on the merits, which is not an acceptable basis for vacating an award. The court confirmed the arbitrator’s award. (For a copy of the decision, click here.)