that filed the cross-claims in the first place, and there is nothing unusual or heterodox about the counterclaims. Even if the arbitrators erred in their application of the law of privilege, such an error would not require that the arbitration award be set aside. See Fairchild & Co., Inc. v. Richmond Fredericksburg & Potomac R.R. Co., 516 F. Supp. 1305, 1314 (D.D.C. 1981); Washington-Baltimore Newspaper Guild, Local 35, v. Washington Post Company, 442 F.2d 1234, 1239, 143 U.S. App. D.C. 210 (D.C. Cir. 1971).
Johnston Lemon goes on to claim that these arbitrators not only erred but "manifestly disregarded" the law. The claim is not supported by the record. If the "manifest disregard" doctrine has any currency in this Circuit, see, Kanuth v. Prescott, Ball & Turben, Inc., 949 F.2d 1175, 1178, 292 U.S. App. D.C. 319 (D.C. Cir. 1991), the party seeking to rely upon it must at least establish that the arbitrators appreciated the existence of a governing legal principle but expressly decided to ignore it. Id. at 1182; Merrill Pierce Fenner & Smith, Inc. v. Bob Kerr, 808 F.2d 930 (2nd Cir. 1986).
The arbitration panel, indeed, did not specify what law they applied -- nor were they required to do so.
Johnston Lemon's second claim is that the arbitration panel exceeded its powers by purporting to require the amendment of certain required NASD reports to the extent the reports contained language of which the panel disapproved. That claim may be moot because it appears that Johnston Lemon did not consider that the order actually required it to do anything. In any event, there appears to be precedent for the issuance of such orders by NASD arbitration panels, and Johnston Lemon does not make a persuasive case that such an order exceeds the powers of an NASD arbitration panel.
Plaintiff's third claim, made belatedly, is that Stanley H. Ragle, the chairman of the arbitration panel, improperly failed to disclose a significant past adversarial relationship between his former employer, Ferris Baker Watts Inc., and Johnston Lemon, thereby violating NASD Code of Arbitration Procedure § 23(a)(2) et seq. Ragle was in fact retired from Ferris Baker Watts prior to his appointment as an arbitrator and prior to the development of the contentious issues between his former employer and Johnston Lemon. It appears only that an NASD form reporting his retirement was filed late. It was not Ragle's responsibility to file the form. In any event, Johnston Lemon's counsel was personally familiar with the dispute between Johnston Lemon and Ferris Baker Watts. The references to Ferris Baker Watts that did appear in Ragle's statement of qualifications put counsel and Johnston Lemon on notice. Any further inquiries should have been made then.
This memorandum repeats in a more formal fashion the reasons announced at the close of oral arguments on April 18, 1995, for the Court's order issued April 19, 1995, denying Johnston Lemon's motion to vacate the challenged arbitration award.
Date: May 3, 1995.
United States District Judge