## Facts

- Louise Remmey maintained a brokerage account managed by Arnold Marks and transferred the account to PaineWebber when Marks changed firms.
- Remmey opened a PaineWebber Resource Management Account and signed a client agreement requiring arbitration of controversies under NYSE, AMEX, or NASD rules.
- In 1986, Remmey delivered most of her securities to Marks, who executed trades that shifted her holdings away from bonds and toward real estate limited partnerships.
- After Marks left PaineWebber in 1989, Remmey sued in federal court in 1990 alleging unsuitable recommendations and churning.
- PaineWebber invoked the arbitration clause; Remmey stipulated to arbitrate, and the court stayed the litigation.
- A securities-industry arbitration panel issued an award for PaineWebber and Marks, denying Remmey’s claims.
- Remmey moved to vacate the award; the district court denied vacatur and confirmed the award.

## Issues

1. Whether the award should be vacated under the Federal Arbitration Act for evident partiality, misconduct, or other procedural unfairness by the arbitrators.
2. Whether the award should be vacated because the arbitrators acted in manifest disregard of the law.
3. Whether the asserted defects in the arbitral process justified setting aside a contractually compelled securities arbitration award.

## Decision

- The Fourth Circuit affirmed the judgment confirming the arbitration award.
- The court held Remmey did not establish any statutory basis for vacatur under the FAA, including evident partiality or arbitrator misconduct.
- The court held the record did not support vacatur for manifest disregard of the law.
- The court emphasized the severely limited scope of judicial review and refused to reexamine factfinding or legal conclusions simply because the losing party disagreed with the result.

## Legal Principles

- Judicial review of arbitration awards under the FAA is narrowly limited; courts generally must confirm an award absent a recognized ground for vacatur.
- “Evident partiality” requires concrete proof of bias or disqualifying circumstances; adverse procedural or evidentiary rulings alone do not establish partiality.
- Arbitrators have broad discretion over discovery and evidentiary management; vacatur requires a showing that misconduct denied a fundamentally fair hearing.
- “Manifest disregard of the law” is an exceptional doctrine requiring more than legal error; it applies only when arbitrators understand the governing law and deliberately refuse to apply it.
- Parties who agree to arbitrate disputes are bound by the arbitral forum and the limited post-award judicial review that accompanies that choice.

## Conclusion

The Fourth Circuit upheld confirmation of the securities arbitration award, holding that Remmey’s challenges did not satisfy the FAA’s stringent vacatur standards and that neither alleged procedural defects nor claimed legal error justified setting aside the parties’ contractually required arbitration result.


Remmey v. PaineWebber, Inc., 32 F.3d 143 (4th Cir. 1994)