A federal judge in Oakland has turned back a whistleblower’s bid to toss an arbitration award based in part on the lead defense lawyer’s move to JAMS while the case was pending.
U.S. District Judge Haywood Gilliam Jr. on Tuesday held that the plaintiff had waived any argument related to former Orrick, Herrington & Sutcliffe partner Patricia Gillette joining JAMS by waiting until after the end of a JAMS arbitration in his case to raise any objections. Gilliam also found that the plaintiff, former VMware Inc. employee Dane Smith, and his counsel didn’t have any “smoking-gun facts” to show that there was actual bias in the arbitrator’s decision handed down after Gillette made her move.
“Crucially, this motion is the first time Plaintiff has raised the issue,” Gilliam wrote in his order.
Jeffrey Ryan, Smith’s Redwood City, California-based attorney, didn’t immediately respond to messages Wednesday.
Ryan was asking the judge to vacate a $1.57 million arbitration award—about $310,000 in compensatory damages and interest and $1.26 million in attorneys fees and costs—handed down in July 2017 for his client by retired San Francisco Superior Court Judge William Cahill, now with JAMS. Smith blew the whistle in a case where his former employer and Carahsoft Technology Corp. previously agreed to pay $75.5 million to resolve U.S. Department of Justice allegations that they violated the False Claims Act by overcharging the government on VMware software products and services.
After the government settlement, Smith continued to pursue his individual FCA and state employment law claims, including claims that VMware retaliated against him for investigating its government pricing practices and wrongfully fired him. U.S. District Judge Thelton Henderson granted VMware’s motion to compel arbitration in Smith’s case in early 2016 based on the arbitration agreement Smith signed on his first day of work at the company.
In the arbitration, Smith put forward expert testimony that he was due $35 million, but Cahill of JAMS only awarded $305,421.66 in compensatory damages and $4,546 in interest.
Back at the district court, Smith asked Gilliam, who took over the case after Henderson’s retirement, to set aside the arbitration award. In part, the plaintiff pointed to news of Gillette’s move to JAMS, which arrived in his lawyer’s email inbox in October 2016 as part of a promotional effort from JAMS.
But Gilliam wrote that the argument that Cahill had demonstrated “evident bias” by failing to disclose his relationship with Gillette was “attenuated at best.”
“It is not material whether the notice regarding Gillette was in the form Ryan had come to expect, as in any event, both he and Plaintiff admit to having constructive knowledge of the potential basis for objection,” Gilliam wrote. ”Nowhere does Plaintiff address why he did not object to Judge Cahill as a mediator before the end of arbitration and the filing of this motion,” the judge wrote.
Gilliam also turned back Smith’s arguments that Cahill’s evidentiary decisions had rendered the arbitration unfair, that the arbitrator operated with “manifest disregard of the law,” and that his attorney fee award was improperly low.
Representatives of Orrick and JAMS declined to comment on Tuesday’s decision.
Read the order here: