Today's post is not about a maritime or transportation matter but is about an arbitration run amok. Law.com published a post today about a Los Angeles Superior Court Judge affirming a $4.1 billion arbitration award for wrongful termination. (Jaw dropping, isn't it?) The article is essentially an interview with Michael D. Young, a partner at Alston & Bird and blogger who wrote about the extreme award on his firm's labor and employment blog.
It appears that the defendant company in the arbitration did not take the case seriously and did not understand the binding nature of this form of ADR. Their unwillingness to participate fully and their subsequent bizarre behavior apparently indicated to the arbitrator that the defendant was not treating the case with more that a smidgen of gravitas:
The [retired] judge set the hearing for the arbitration, and the defendant wrote a letter to the arbitrator saying, "I'm not going to show up." When there wasn't any information forthcoming from the defendant, what the arbitrator did was look at what information was available about the financial situation of the company and applied adverse inferences against the defendant, essentially filling in the gaps in the story presuming it would come out in favor of the plaintiff. That was really where the numbers started to scale.
It is a sober reminder to attorneys and an educational lesson for clients that alternative dispute resolution is just that, an alternative, and not something to be treated lightly. See the award here.
