Microsystems Corp., 103 F.3d 9, 12 (2d Cir. 1997).
Section 10 of the FAA sets forth the limited grounds available
to vacate an arbitration award, including "where the arbitrator
[was] guilty of misconduct in refusing to postpone the hearing,
upon sufficient cause shown, or in refusing to hear evidence
pertinent and material to the controversy." 9 U.S.C. § 10(a)(3).
"Misconduct typically arises where there is proof of either bad
faith or gross error on the part of the arbitrator." Agarwal v.
Agrawal, 775 F. Supp. 588, 589 (S.D.N.Y. 1991) (citing United
Paperworkers Int'l v. Misco, Inc., 484 U.S. 29, 40, 108 S.Ct.
364, 98 L.Ed.2d 286 (1987)). If, however, there exists "a
reasonable basis for the arbitrators' considered decision not to
grant a postponement," a court should be reluctant to interfere
with the award. Roche v. Local 32B-32J Service Employees Int'l
Union, 755 F. Supp. 622, 625 (S.D.N.Y. 1991); see also Storey v.
Searle Blatt Ltd., 685 F. Supp. 80, 82 (S.D.N.Y. 1988).
Application of the "reasonable basis" test
Courts have found a "reasonable basis" for denying an
adjournment of an arbitration hearing in circumstances similar to
these. For example, in Storey, the respondent requested an
adjournment on the morning of the hearing due to a death in the
family of a primary witness. The arbitrators denied the request
because the hearing had already been adjourned twice before, the
matter had been pending for more than a year, one of the
petitioner's witnesses had to travel from the Virgin Islands to
attend the hearing, and the respondent had failed to explain why
another representative of the company could not be present. The
district court found that the arbitrators had a "reasonable
basis" for denying an adjournment. Storey, 685 F. Supp. at 82.
See also Roche, 755 F. Supp. at 624-25; C.T. Shipping, Ltd. v.
DMI, Ltd., 774 F. Supp. 146, 149-50 (S.D.N.Y. 1991) (finding
arbitrators' denial of adjournment reasonable when panel had
already granted a two-month adjournment for this particular
witness and respondent's request was for an unspecified amount of
time); Agarwal, 775 F. Supp. at 590-91.
In this case, the arbitrator had a "reasonable basis" for
denying FTF and Burke's request to adjourn the hearing due to
Burke's alleged, but unsubstantiated, ill health. As in Storey,
the hearing had already been adjourned twice before and Ottawa's
witnesses had to travel from Canada to attend the hearing in New
York. The request was also for an unspecified amount of time, as
in C.T. Shipping. In addition, the arbitrator had already
granted an adjournment on account of Burke's purported ill
health, even though Burke had been ill — but presumably
functioning in his business — since 1995 and the initial request
came just one week before the scheduled hearing.
The arbitrator had good reason to require credible medical
evidence before granting another adjournment requested one day
before the hearing because Ottawa had learned that Burke had been
conducting business discussions over the telephone, which implied
that Burke was not as sick as he claimed to be. It is well
settled that a party waives his doctor-patient privilege when he
puts his medical condition into issue. See In re Agent Orange
Product Liability Litigation, 91 F.R.D. 616, 618 (E.D.N Y
1981); Crawford v. Manion, 1997 WL 148066, at *3 (S.D.N Y
March 31, 1997). An arbitrator can formulate such procedures as
he sees fit as long as the proceedings are not "fundamentally
unfair." See Tempo Shain Corp. v. Bertek, Inc., 120 F.3d 16, 19
(2d Cir. 1997) ("Federal Courts do not superintend arbitration
proceedings. Our review is restricted to determining whether the
procedure was fundamentally unfair."); National Broadcasting
Co., Inc. v. Bear Stearns & Co., Inc., 165 F.3d 184, 186.
Moreover, the arbitrator was willing to accept post-hearing
submissions from Burke and hold another day of live testimony,
even after learning from defendants' own witness that Burke was
able to go to the office just "a couple of weeks" before the
hearing and that Burke had conducted business with the witness
over the telephone on the very day of the hearing. Given the
repeated refusal of defendants to comply with the arbitrator's
directives, the arbitrator could reasonably conclude that
defendants' request for an adjournment was not based on Burke's
poor health but rather was an attempt to "to delay the hearings
unnecessarily." C.T. Shipping, 774 F. Supp. at 149. The issue is
not whether this Court would have acted in the same manner, but
rather whether the arbitrator had a "reasonable basis" for
denying the requested adjournment. He did.
FTF and Burke's reliance on Tempo Shain Corp. v. Bertek,
Inc., 120 F.3d 16 (2d Cir. 1997) for the proposition that the
arbitrator did not have a "reasonable basis" to deny the
adjournment is misplaced. In that case, the former president of
the defendant's company suddenly become temporarily unavailable
to testify because his wife had been diagnosed with cancer. The
arbitration panel concluded the hearings without waiting for his
testimony because they believed it would be cumulative. In its
motion to vacate, the defendant included an affidavit stating
what the witness would have testified to, if permitted. The
Second Circuit found that "there was no reasonable basis for the
arbitration panel to determine that [the witness's] omitted
testimony would be cumulative." Id. at 20.
Here Burke's ill health was not an unexpected occurrence. After
granting one adjournment, the arbitrator set out a procedure for
Burke to follow in order to justify another adjournment. Burke
failed to comply with any aspect of that procedure. The
arbitrator specifically stated he would accept into the record an
affidavit stating what Burke would have testified to, if Burke
had only substantiated his alleged medical condition. Finally,
the arbitrator did not deny the adjournment based on an erroneous
conclusion concerning the significance of Burke's testimony, but
rather for his failure to demonstrate the reason he could not
attend the hearing.*fn2
FTF and Burke's other claim for misconduct based on the denial
of an adjournment for defendants to produce witnesses other than
Burke is without merit. The parties had ample notice of the dates
of the hearing, and FTF and Burke did not offer any reason why
these other witnesses could not attend the hearing on those
dates. The arbitrator had a reasonable basis for his decision.
See, e.g., Dan River, Inc. v. Cal-Togs, Inc., 451 F. Supp. 497,
503 (S.D.N.Y. 1978).
Because the arbitrator had a "reasonable basis" for denying FTF
and Burke's requests for an additional adjournment, plaintiff's
motion to confirm the arbitration award and supplemental award is
granted and defendants' motion to vacate the awards is denied.