Evidence Must Be Newly Discovered to Vacate Arbitration Award
Nilssen v. MagneTek, Inc., No. 05 C 2933, 2008 WL 1774984 (N.D. Ill. Apr. 16, 2008) (Der-Yeghiayan, J.).
Judge Der-Yeghiayan confirmed an arbitration award and denied plaintiff's motion to vacate it. The arbitrator awarded plaintiffs (collectively "Nilssen") approximately $23M for defendant Magnetek's patent infringement. MagneTek argued that the Court lacked jurisdiction because the arbitration agreement did not expressly confer the right to confirm the arbitration award. But the Court held that the Seventh Circuit only required that the right to confirm be inferred from the arbitration agreement. While the arbitration agreement did not explicitly allow confirmation, the parties evidenced their intent to allow confirmation:
- The parties' American Arbitration Association ("AAA") submission provided for confirmation;
- The parties agreed to be bound by the AAA's Commercial Arbitration Rules which provide for court confirmation; and
- MagneTek's post-arbitration press release said that the parties conducted binding arbitration which was not subject to appeal.
MagneTek also argued that certain prior art patents were new evidence which required vacating the award. But the Court held that MagneTek was aware of the patents during the arbitration. In fact, at least one patent was marked as an exhibit in the arbitration. Furthermore, MagneTek's post-arbitration prior art search could have been performed before the arbitration. And the Court would not reward MagneTek's late search with a second shot at invalidity.
