## Facts

- CD Medical manufactured dialysis machines and disposables, marketing domestically and abroad through subsidiaries and independent contractors.
- Lifecare, an independent contractor, marketed CD Medical products internationally and claimed exclusive marketing rights in Algeria.
- Lifecare alleged CD Medical breached a series of oral and written agreements that returned Algeria to Lifecare’s exclusive territory and tortiously interfered with Lifecare’s relationship with the Algerian government.
- Lifecare sued in federal court for breach of contract, fraud, and tortious interference; the court compelled arbitration under an agreement and the Federal Arbitration Act (FAA) and stayed the litigation.
- In arbitration, Lifecare sought substantial lost-profit damages for 1988 and 1989, plus prejudgment interest and punitive damages.
- A three-member arbitration panel held a 17-day liability hearing; arbitrator Craig Stein mentioned a prior scheduling dispute with “opposing counsel” but did not initially identify that the dispute involved an attorney from the law firm representing CD Medical (though not the same attorneys).
- After the panel indicated it intended to rule for Lifecare, CD Medical learned the prior dispute involved an attorney from its counsel’s firm and that Stein later became “of counsel” to a firm that previously had limited contacts with CD Medical.
- The panel (by majority) issued a substantial damages award for Lifecare; the district court denied CD Medical’s motion to vacate and confirmed the award.

## Issues

1. Whether the award had to be vacated under the FAA for “evident partiality” based on the arbitrator’s alleged non-disclosure of prior professional disputes and a later affiliation with a firm that had prior contacts with CD Medical.
2. Whether the award was so arbitrary and capricious that vacatur was warranted despite the limited scope of judicial review of arbitration awards.

## Decision

- The Eleventh Circuit affirmed the order confirming the arbitration award.
- The court held CD Medical did not prove “evident partiality” because the asserted relationships and non-disclosures were too remote and insubstantial to create a reasonable impression of bias.
- The court held the award was not arbitrary and capricious because it had a rational basis connected to the parties’ agreements, the record, and the arbitrators’ authority.

## Legal Principles

- Under the FAA, “evident partiality” requires more than speculative, trivial, or attenuated relationships; the question is whether the facts would create a reasonable impression that the arbitrator was partial.
- An arbitrator’s failure to disclose warrants vacatur only when the undisclosed matter is material and sufficiently connected to suggest bias, not when it reflects minor or historical professional contacts without an ongoing stake.
- Judicial review of arbitration awards is highly constrained; courts do not reweigh evidence or reconsider legal conclusions if the award rests on a rational basis and is within the scope of the arbitration agreement.
- An award is not arbitrary and capricious when it draws its essence from the contract and is grounded in some support in the record.

## Conclusion

The Eleventh Circuit upheld confirmation of the arbitration award because the alleged non-disclosures did not establish evident partiality under the FAA and the award had a rational contractual and evidentiary basis, precluding vacatur as arbitrary and capricious.


Lifecare Int’l, Inc. v. CD Med., Inc., 68 F.3d 429 (11th Cir. 1995)