United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
Johnson Coleman Judge
Roe, the plaintiff in the underlying action, petitions this
court to vacate the arbitration award entered against him.
Nano Gas Technologies (“Nano Gas”), the defendant
in the underlying action, separately filed a case against Roe
in this district to enforce the arbitration award. For the
reasons set forth herein, Roe's petition to vacate the
arbitration award [17-cv-2241, 65] is denied.
invented a nozzle capable of dissolving and dispersing gasses
into liquids in a manner previously believed to be
unattainable. Nano Gas and Roe entered into a collaboration
to commercialize the technology, the terms of which were set
forth in a “Collaboration and Non-Compete
Agreement” (“the Agreement”). The Agreement
contained a dispute resolution clause providing, in pertinent
part, for the arbitration of all disputes. Roe worked in Nano
Gas' Michigan facility alongside Nano Gas employees to
develop a machine utilizing his invention and related
intellectual property. However, the working relationship
between Roe and Nano Gas began to deteriorate after the
collaboration was slow to produce the desired results.
Ultimately, Roe removed the machine and related intellectual
property from Nano Gas' facility and began independently
using the machine and collaborating with others.
subsequently filed a civil action against Nano Gas in the
United States District Court for the Eastern District of
Michigan. The court held that the parties' claims were
subject to arbitration pursuant to the Agreement, and
accordingly dismissed the case without prejudice. Roe
subsequently initiated an arbitration proceeding against Nano
Gas, which filed a counter-complaint against Roe.
arbitration was conducted in Chicago, Illinois over
approximately fourteen days. The arbitrator concluded that
Roe had assigned the rights to the machine and related
intellectual property to Nano Gas, and that Roe therefore had
no right to remove the machine or related intellectual
property from Nano Gas' facility or share it with others.
The arbitrator also found that Roe improperly removed a box
of papers prepared by Nano Gas employee Jeff Hardin
containing intellectual property related to the machine, and
accordingly ordered that Roe return the box of “Hardin
papers” or pay Nano Gas $150, 000 in damages. The
arbitrator issued a permanent injunction against Roe,
prohibiting him from directly or indirectly engaging in any
commercial activity relating to the technology without
express consent from Nano Gas. In response to Nano Gas'
subsequent Rule 50 petition for correction and clarification,
the arbitrator corrected several typographical errors and
clarified the interpretation of the Decision and Final Award.
filed a petition to vacate the arbitration award in the
underlying case. Soon afterwards, Nano Gas filed a separate
action in this court to enforce the arbitration award. The
Eastern District of Michigan transferred the underlying case
to this district, where it was consolidated with Nano
Gas' action to enforce the arbitration award. The
petition to vacate the arbitration award is now before this
well established that courts must give “great
deference” to an arbitrator's decision. Cremin
v. Merrill Lynch, Pierce, Fenner, & Smith, Inc., 434
F.Supp.2d 554, 559 (N.D. Ill. 2006) (Castillo, J.) (quoting
Wallace v. Buttar, 378 F.3d 182, 189 (2d Cir.
2004)). Judicial review of arbitration awards is narrowly
limited in order to “maintain arbitration's
essential virtue of resolving disputes straightaway.”
Hall Street Assocs., L.L.C. v. Mattel, Inc., 552
U.S. 576, 588, 128 S.Ct. 1396, 170 L.Ed.2d 254 (2008).
Accordingly, the party petitioning to vacate an arbitration
award “bears the heavy burden of showing that the award
falls within a very narrow set of circumstances delineated by
statute and case law.” Cremin, 434 F.Supp.2d
at 559 (quoting Wallace, 378 F.3d at 189).
U.S.C. § 10(a), there are four instances in which a
district court may vacate an arbitration award. As is
relevant here, an arbitration award may be vacated
“where the arbitrators exceeded their powers, or so
imperfectly executed them that a mutual, final, and definite
award upon the subject matter submitted was not made.”
9 U.S.C. § 10(a)(4). The requirements of finality and
definiteness are ones of form rather than substance and must
not be confused with whether the arbitrators' award was
correct or reasonable, because “neither error nor clear
error nor even gross error” is a ground for vacating an
award. IDS Life Ins. Co v. Royal Alliance Assocs.,
Inc., 266 F.3d 645, 650 (7th Cir. 2001). Similarly, in
assessing whether arbitrators exceeded their powers, courts
consider only whether the arbitrators arguably interpreted
the parties' contract and not the accuracy of that
interpretation. See Oxford Health Plans L.L.C. v.
Sutter, 569 U.S. 564, 133 S.Ct. 2064, 2068, 186 L.Ed.2d
113 (2013); Prostyakov v. Masco Corp., 513 F.3d 716,
723 (7th Cir. 2008).
contends that the arbitrator exceeded his authority when he
determined that Roe took the box of “Hardin papers,
” and must return the box or pay Nano Gas $150, 000.
Roe asserts that this is the case because the box was not
described in Nano Gas' counter complaint, the arbitrator
never specifically identified the box's contents, and the
arbitrator made no specific finding that the box of
“Hardin papers” contained intellectual property,
technology, or trade secrets. Roe therefore argues that the
Hardin papers were never at issue in the arbitration, and
that the arbitrator's decision therefore went beyond the
scope of the dispute subject to arbitration.
mischaracterizations aside, the arbitrator clearly found that
the “Hardin papers” constituted a box of notes
produced by Nano Gas employee Jeff Hardin concerning his work
on the machine and that Roe took that box when he also took
possession of the machine. Although Roe is correct that the
“Hardin papers” were not addressed in Nano
Gas' counterclaim, they contained notes regarding the
parties' work on the machine and their removal therefore
constituted part of the dispute subject to arbitration.
Accordingly, the fact that the arbitrator addressed the
“Hardin papers” is not a basis for vacating the
arbitration decision. See Johnson Controls, Inc., v.
Edman Controls, Inc., 712 F.3d 1021, 1025 (7th Cir.
2013) (quoting Local 15, Int'l Bhd. Of Elec. Workers
v. Exelon Corp., 495 F.3d 779, 782 (7th Cir. 2007))
(holding that courts must uphold an arbitration award
“so long as an arbitrator is even arguably
construing or applying the contract and acting within the
scope of this authority”).
also argues that the arbitration award should be vacated
because the arbitrator failed to make a final and definite
award. This argument is based on the fact that the arbitrator
never specifically described the content of the box, which
Roe asserts leaves open the door to further litigation
regarding the box's contents. The only authority Roe cites
in support of this proposition, however, is an unrelated
half-century old decision from the Wisconsin Supreme Court.
See Goldmann Trust v. Goldmann, 131 N.W.2d 902, 907,
26 Wis.2d 141 (1965) (holding that a contract did not require
arbitration of a particular dispute based, in part, on the
fact it was devoid of a mechanism by which the arbitration
decision could be implemented once reached). To the contrary,
an arbitrator's decision is incomplete only if the award
itself “in the sense of judgment, order, bottom line,
is incomplete in the sense of having left unresolved a
portion of the parties' dispute.” IDS Life Ins.
Co., 266 F.3d 645, 651 (7th Cir. 2001). If a district
judge is satisfied that an arbitrator resolved the entire