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Halim v. Great Gatsby's Auction Gallery

February 14, 2008


Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 03 C 8414-Charles P. Kocoras, Judge.

The opinion of the court was delivered by: Bauer, Circuit Judge


Before BAUER, RIPPLE, and KANNE, Circuit Judges.

Plaintiff-Appellant Cameel A. Halim appeals various actions taken by the district court in his civil lawsuit against Defendant-Appellee Great Gatsby's Auction Gallery, Incorporated ("Gatsby"). For the reasons herein, we affirm the rulings of the district court, but decline to review its imposition of sanctions on Halim's counsel at the district court on jurisdictional grounds.

I. Background

On October 9, 2003, Halim, an Illinois resident and antique timepiece collector, initially filed a complaint against Gatsby in Illinois state court, alleging that items he purchased at a Gatsby auction did not match the descriptions in the auction item catalog. Halim participated in the auction via telephone and did not see or inspect any of the items before bidding on them. Halim sued for breach of warranty, misrepresentation, novation, and rescission. Gatsby removed the case to federal court under diversity jurisdiction on November 21, 2003, and filed a motion to dismiss the complaint on December 19, 2003 on the grounds that a binding arbitration clause existed in the auction agreement.*fn1 On March 5, 2004, the district court ruled that Gatsby had successfully invoked the contract's binding arbitration clause. Pursuant to that holding, the district court stayed the case and ordered the parties to arbitration.

Halim filed an arbitration demand with the American Arbitration Association ("AAA") in March of 2005. At the start of the arbitration, the arbitrator sent both parties a letter that confirmed various dates and deadlines. The letter also stated that at the conclusion of the arbitration, the arbitrator would issue an award including "findings of fact and conclusions of law."

During extensive and contentious discovery, Halim requested copies of invoices for all other purchases from the same Gatsby auction, claiming they were relevant to prove that Gatsby's auction was not "without reserve" as he claimed it had been advertised. Gatsby refused to produce these records on the basis that they were irrelevant to the claims brought by Halim because the items Halim bid on were not without reserve. Halim requested a formal ruling on the discovery dispute from the arbitrator. Having already admonished the parties for their failure to cooperate with each other's discovery requests in a written order dated January 23, 2006, the arbitrator declined to issue a formal ruling. Instead, the arbitrator directed the parties to abide by his January 23, 2006 order instructing the parties to immediately review discovery requests and make a good faith effort to satisfy those requests so that the evidentiary hearing could go forward as scheduled. The evidentiary hearing had already been continued, and as the arbitrator wrote in his January 23, 2006 order: "[B]oth sides have lost sight of the fact that this is an arbitration and meant to be a cost effective and efficient process to be completed in an expeditious manner. It is inappropriate for me to micromanage a laborious and tedious discovery process as if this were a litigated case in court."

The case proceeded to a final arbitration hearing, and on September 15, 2006, the arbitrator issued a ruling denying Halim's claims in their entirety. In his ruling, the arbitrator explained the factual circumstances giving rise to Halim's claims, and then proceeded to address Halim's claims in turn. The arbitrator made the following statements in his analysis of Halim's claims:

* "[T]hese disclaimer documents are valid, enforceable, and applicable in this case."

* "The burden was on claimant to overcome the obligations he imposed on himself by participating in the auction under the terms and conditions of this sale."

* "[Halim] is bound by the conditions of his participation and has shown no legal or factual basis for recovery in this proceedings."

* "[P]roven fraud could overcome these disclaimer bars to recovery. However, there was no credible evidence of fraud, antecedent or otherwise, that would afford claimant any relief in this case."

* "[C]laimant's failure to conduct any due diligence is fatal to a recovery by him on any applicable theory ...

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