## Facts

- Superadio Limited Partnership and Walt “Baby” Love Productions, Inc. entered a 1995 radio network agreement making Superadio the exclusive advertising sales agent for specified programs, with net ad revenues split equally.
- The agreement required Massachusetts law and AAA arbitration in Boston for any dispute arising under the agreement, including payment disputes.
- After the agreement ended (effective December 31, 1998), Superadio demanded AAA arbitration alleging Baby Love withheld about $150,000 in shared advertising revenues for ads booked during the contract term but aired after termination.
- Baby Love counterclaimed that Superadio withheld advertising revenues for ads that aired before termination.
- Baby Love was represented in the Boston arbitration by a New York-licensed attorney not admitted in Massachusetts; Superadio objected on unauthorized-practice grounds, and the panel allowed the representation.
- The panel ordered Superadio to produce documents relevant to damages; Superadio failed to comply.
- The panel granted partial summary judgment on liability for Baby Love, found damages could not be calculated due to missing documents, and imposed monetary sanctions for discovery noncompliance.
- The arbitration award included damages and monetary sanctions against Superadio.
- Superadio sought vacatur in Superior Court under the Massachusetts Arbitration Act; the judge confirmed the award. The Appeals Court reversed; the Supreme Judicial Court granted further review.

## Issues

1. Whether an arbitration award must be vacated as “procured by corruption, fraud or other undue means” because the prevailing party was represented in a Massachusetts-seated private AAA arbitration by an attorney not admitted in Massachusetts.
2. Whether arbitrators “exceeded their powers” by imposing monetary discovery sanctions when the AAA rules incorporated by contract did not expressly authorize such sanctions.

## Decision

- The Supreme Judicial Court affirmed the Superior Court’s judgment confirming the arbitration award and reversed the Appeals Court.
- The court held that representation by a New York-licensed attorney in a private AAA arbitration seated in Massachusetts, without a court appearance, did not constitute unauthorized practice that rendered the award procured by “undue means.”
- The court held the arbitrators did not exceed their powers by imposing monetary sanctions to enforce discovery orders under the parties’ arbitration clause and incorporated AAA rules.

## Legal Principles

- Vacatur for “corruption, fraud or other undue means” requires a showing that the award was improperly procured in a manner that undermines the integrity of the arbitration; lawful licensure in another jurisdiction and the absence of deception or bad faith weigh against finding “undue means.”
- Private arbitration is contractual and not a court proceeding; absent a clear prohibition in Massachusetts law extending unauthorized-practice restrictions to private arbitration advocacy, out-of-state counsel participation in such arbitration does not, by itself, warrant vacatur.
- Incorporation of AAA rules and a broad arbitration clause confer substantial procedural discretion on arbitrators, including authority to manage discovery and enforce compliance.
- Arbitrators may impose reasonable sanctions for discovery violations, including monetary sanctions, as an implied and ancillary power to ensure a fair process and effective administration, even if not expressly listed in the rules.
- A court may vacate an award only if arbitrators exceed the authority granted by the parties’ agreement and the adopted arbitration rules; procedural and remedial choices within that framework are generally upheld.

## Conclusion

The Massachusetts Supreme Judicial Court upheld an AAA arbitration award, ruling that use of out-of-state counsel in a Massachusetts-seated private arbitration was not “undue means” justifying vacatur and that arbitrators acting under a broad arbitration clause and incorporated AAA rules may impose monetary discovery sanctions without exceeding their powers.


Superadio Ltd. P'ship v. Winstar Radio Prods., LLC, 446 Mass. 330, 844 N.E.2d 246 (Mass. 2006)