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A1 Team USA Holdings, LLC v. Bingham Mccutchen LLP

July 1, 2010

A1 TEAM USA HOLDINGS, LLC, APPELLANT,
v.
BINGHAM MCCUTCHEN LLP, APPELLEE.



Appeal from the Superior Court of the District of Columbia. (CAB3260-09) (Hon. Anita M. Josey-Herring, Trial Judge).

The opinion of the court was delivered by: Reid, Associate Judge

Argued June 9, 2010

Before REID, GLICKMAN and OBERLY, Associate Judges.

This is a case of first impression involving amendments to the District of Columbia Uniform Arbitration Act. Appellant, A1 Team USA Holdings, LLC ("A1"), claims that the amendments "provide[] a substantial new basis for vacating arbitral awards," and that the trial court committed reversible error by failing to recognize the "substantial expansion of [the] court's authority to vacate arbitral awards compared to the repealed statute." We conclude that D.C. Code § 16-4423 (b),*fn1 one of the new statutory provisions under which "[t]he court may vacate an award made in the arbitration proceeding on other reasonable ground," does not authorize de novo review of an arbitrator's award. Rather, this court's review of an arbitration award is still extremely limited. We affirm the judgment of the trial court.

FACTUAL SUMMARY

The record reveals that A1 entered into an attorney/client relationship with appellee, Bingham McCutchen LLP ("Bingham") on January 9, 2008; A1 asked Bingham to assist in the resolution of certain franchise matters with A1 Holdings Limited. The engagement letter between the parties specified a billable hourly rate ranging from $335.00 to $750.00 an hour, with a non-binding estimate of $75,000.00 for Phase I of the legal representation. A1 and Bingham agreed to resolve all disputes "by binding arbitration under the auspices and applicable rules of JAMS or the American Arbitration Association (AAA), whichever [A1] prefers, in Washington, D.C."

Subsequently, A1 protested the amount of the fees charged by Bingham. The parties attempted to resolve their disagreement through settlement negotiations, but the parties dispute whether they ultimately reached an agreement. In any event, A1 paid only $75,000.00 of the $190,000.00 Bingham originally billed, and filed an arbitration claim on November 10, 2008, seeking the return of fees paid to Bingham. A1 contended that Bingham had a conflict of interest due to the law firm's prior representation of A1 Holdings Limited, beginning in 2006; and hence, Bingham should not have agreed to represent A1. A1 further argued that Bingham's computerized research billings were excessive.

The AAA arbitrator issued her award on April 16, 2009, finding that:

(1) there was not a conflict of interest that would have barred [Bingham] from representing [A1], and (2) the amount of $9,542.76 charged by [Bingham] for computerized legal research, which was calculated at a rate of over $1,100.00 per hour, is in excess of the actual charges by the service provider to [Bingham] and is beyond what a reasonable client would expect absent clear disclosure in advance of billing.

Following adjustments, the arbitrator determined that A1 owed Bingham $48,869.31.

On April 29, 2009, Bingham filed in the trial court a motion for confirmation of the arbitration award and entry of judgment. A1 filed an answer on May 27, and on July 13, lodged a motion to vacate the arbitration award on the ground that it "is unreasonable," and also "on public policy grounds." The trial judge concluded that the "other reasonable ground[s]" statutory language could not be interpreted "as a grant of de novo review to trial courts in vacating arbitral awards"; hence, the court declined to review the merits of the conflict of interest allegation and the reasonableness of the legal fees. In addition, the court rejected A1's public policy argument, and entered judgment in favor of Bingham in the amount of $48,869.31. A1 noted a timely appeal.

ANALYSIS

A1 argues that "the trial court improperly applied the revised Uniform Arbitration Act by conducting its evaluation of this matter under an 'extremely limited' standard of review, and not under the revised statute's reasonableness standard." A1 maintains that "a court can now vacate an arbitral award on any 'reasonable' basis." Furthermore, A1 claims that "[t]he available legislative history signals a public policy of protecting plaintiffs by providing for broader judicial review of arbitral awards," and that "[t]he ...


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