Opinion
No. NNH CV 05 4009553
June 24, 2005
MEMORANDUM OF DECISION ON APPLICATIONS REGARDING ARBITRATION
The plaintiff Cox Radio, Inc., applies to vacate an arbitration award in favor of the defendant Brian Smith. The defendant applies to confirm the award. The dispute centers on Smith's termination from employment after his longstanding stint as a personality on Cox Radio's WPLR morning program "Smith Barber." While the plaintiff does not contest the award to the defendant of severance pay, the plaintiff applies to vacate the award of damages for defamation.
FACTS
Brian Smith and Bruce Barber were the co-hosts of a popular morning radio show for nearly eighteen years. When Barber decided to retire from the show, Cox Radio decided not to retain Smith as an employee. On January 30, 2003, Smith was relieved of his on-air duties and placed on paid leave through April 30 of that year, which was the balance of the term of Smith's employment contract with the plaintiff.
Cox Radio and Smith had a written employment agreement which contained an arbitration clause. The defendant sought arbitration on the issues of severance pay, unjust enrichment of the plaintiff, and defamation.
FINDINGS AND CONCLUSIONS OF THE ARBITRATOR
The arbitrator found the issue of severance pay in favor of the defendant and found the issue of unjust enrichment in favor of the plaintiff. The plaintiff and defendant do not contest either of those findings or awards by the arbitrator in this action. The contest in this action centers on the findings and conclusions of the arbitrator in awarding damages against the plaintiff for defaming the defendant.
That issue, as submitted to the arbitrator for resolution, was whether "Cox Radio is liable to Smith under Connecticut law for libel or slander with respect to alleged utterances specified in [defendant's interrogatory response] dated June 22, 2004. If so, what shall the remedy be?" Among the statements attributed to the plaintiff were that Smith and Barber were unable to agree on whether to do a final show, that Smith "planned on pursuing other opportunities" thus creating the impression that Smith desired to abandon his WPLR fan base, and that the history of high ratings of the show were an aberration. The arbitrator found that the plaintiff stated that there was a likelihood of failure were Smith to attempt to host the show on his own, or to host the show without Barber. The arbitrator credited evidence that Ed Sabatino, WPLR Program Director, referring to Smith, equated Smith's future with that of the original actors on the television show "Seinfeld": "when they tried to do spinoffs, they all failed."
The arbitrator found that the "Seinfeld cultural analogy for failure has special negative resonance in the broadcast media," and that "once defamed and stigmatized by the former employer as one who never can succeed again, the damages are palpable and the road ahead for [Smith's] professional future in the radio media is rendered all-the-more bleak by the former employer's defamation saddling [Smith] with the notorious Seinfeld albatross." The arbitrator found that the plaintiff had defamed the defendant and awarded Smith $225,000.
THE SCOPE OF REVIEW
The primary issue in this case is whether the scope of review is the deferential review usually afforded to arbitration matters or whether the arbitration agreement and submission of the parties requires or permits the court to undertake a de novo review.
The arbitration clause in the written contract of the parties reads as follows:
Dispute Resolution . . . Employer and Company agree that any dispute or claim, whether based on contract, tort, discrimination, retaliation or otherwise, relating to, arising from, or connected in any manner with this Agreement exclusively shall be resolved through final and binding arbitration. The arbitration shall proceed in accord with the National Rules for the Resolution of Employment Disputes of the American Arbitration Association ("AAA") in effect at the time the claim or dispute arose, unless other rules are agreed upon by the parties. The arbitration shall be held in the city where Company last employed Employee, or the nearest city where the AAA maintains an office. The arbitration shall be conducted by one arbitrator who is a member of the AAA, unless the parties mutually agree otherwise. The arbitrator shall have jurisdiction to determine any claim, including the arbitrability of any claim, submitted to her or him. The arbitrator may grant any relief authorized by law for any properly established claim. Each party shall bear his or its own arbitration expenses. Prior to the hearing, the AAA exclusively shall have the authority to determine and allocate filing and administrative fees and the arbitrator's hearing and study fees between the parties. The arbitrator may reallocate the pre-hearing fees, costs, and expenses incurred by the parties in any final arbitration award. The interpretation and enforceability of this paragraph of the Agreement exclusively shall be governed and construed in accord with the United States Federal Arbitration Act, 9 U.S.C. § 1, et seq.
The arbitration clause provides for a submission that is voluntary and unrestricted. In such a case the award is not subject to de novo review even for errors of law so long as the award conforms to the submission. See Saturn Construction Co. v. Premier Roofing Co., 238 Conn. 293, 303-04 (1996) (erroneous interpretation of statute regarding an award of interest not sufficient to permit de novo review; award upheld); see also Hodgson and Parley, Alternative Dispute Resolution in Connecticut's Courts, § 6.6.2.1 (1998).
Neither party has cited further to the FAA in the briefs submitted to this court. Both sides have used the case law of Connecticut, with occasional references to analogous cases from the federal courts, in analyzing the legal issues here. Accordingly this court does likewise.
The plaintiff contends that if the arbitration clause of the employment agreement itself did not create a restricted submission, the stipulated issues submitted to the arbitrator transformed the submission into a restricted one. There the plaintiff points to the following language on the "Issues" page, drafted by the plaintiff and assented to by the defendant on the day of the arbitration:
3. Whether Cox Radio is liable to Smith under Connecticut law for libel or slander with respect to the alleged utterances specified in Claimant's [claim] dated June 22, 2004[;] [i]f so, what shall the remedy be?
The plaintiff argues that the reference to Connecticut law in the framing of the issues restricts the arbitrator in such a way that an incorrect interpretation of Connecticut law by the arbitrator permits this court to find error and overturn the arbitrator's award. But the plaintiff misapprehends what it means to submit specific questions to the arbitrator.
Such a submission frames the dispute but, unless specifically agreed otherwise, does not affect the fact that the submission is otherwise unrestricted. Here the issue that was submitted to the arbitrator was whether there had been libel or slander. True enough, the source for the definition of libel and slander and the remedies to be applied must be found in some understandable source, such as in the common law of a state. But by defining the terms in the issue's submission, the parties have not changed the nature of the submission from unrestricted to restricted. When the issues are defined for the arbitrator in an unrestricted submission such as this, only an award that is entirely outside the submission is void and subject to an order that it be vacated. Bodner v. USAA, 222 Conn. 480, 489-90 (1992). Were it otherwise, a reference such as "under Connecticut law" or "according to law" which is common in arbitration submissions would invite the Superior Court to "search the record for specific issues and then to adjudicate those issues in accordance with the law," such that the finality of arbitration decisions and the legislative policy of encouraging the final resolution of disputes through arbitration would be destroyed. Id.
To be sure, our case law lacks some clarity on the question of whether a phrase such as "according to law" creates a restriction. In Chase Brass Conner Co. v. Chase Brass Conner Workers Union, 139 Conn. 591 (1953), the Supreme Court was called upon to decide whether the following clause created a restricted or unrestricted submission: "the parties agree to accept the arbitrator's award as final and binding, providing it is not contrary to law." The court held that such a clause, phrased in the negative, did create a restricted submission, entitling a court to examine whether there were errors of law in the arbitrator's interpretation. But the court distinguished such a restriction from any that might be imposed from the use of an affirmative phrase such as "[the arbitrator] must decide according to law." Id., 596. Looking to sister states, our Supreme Court was informed by cases such as Mickles v. Thayer, 96 Mass. 114, 119, that held that the following was an unrestricted submission: "to determine all questions according to the rules of law and equity, the same as though the matter was to be tried in a court of law or equity." Nor in the instant case did the "Issues" stipulation expressly reserve an issue for later court determination in the event that the arbitrator's finding of fact was not dispositive. See, e.g., Board of Trustees v. Federation of Technical College Teachers, 179 Conn. 184, 187; 192-93 (1979).
Finally there is nothing within the award itself that indicates that the arbitrator treated the case as though it were a restricted, as opposed to an unrestricted, submission, although the arbitrator's impression or statement about his mandate would not be binding upon this court. It is enough to say that to all involved the submission appeared to be unrestricted, such that the award would be both final and binding. Nothing in the arbitration clause in the parties' contract or in the written submission of issues to the arbitrator created a restricted submission here.
The review of this court is thus limited; "the courts will not review the evidence considered by the arbitrators nor will they review the award for errors of law or fact . . ." Blakeslee Arpaia Chapman, Inc. v. Dept. of Transportation, 273 Conn. 746, 755 (2005), citing Industrial Risk Insurers v. Hartford Steam Boiler Inspection Insurance Co., 273 Conn. 86, 92-93, 868 A.2d 47 (2005).
EXCEPTIONS TO DEFERENTIAL REVIEW
Where an arbitration award conforms to the submission, and the submission is unrestricted, a party seeking to vacate the award must prove (1) that the award rules on the constitutionality of a statute, (2) that the award violates clear public policy, or (3) that the award contravenes one or more of the statutory proscriptions of Conn. Gen. Stat. § 52-418, such as 52-418(a)(4): that the arbitrator exceeded his powers to such an extent that he can be said to have manifestly disregarded the law. Blakeslee Arpaia, supra, at 756-57. The plaintiff argues that the award violates public policy and that the arbitrator's decision is in manifest disregard of the law.
The Public Policy Exception
The public policy that the plaintiff claims is violated by the award is the policy of preserving freedom of speech embodied by the First Amendment to the United States Constitution and Article First, §§ 4-5 of the Connecticut Constitution. The plaintiff claims that the arbitrator violated this public policy in finding that the plaintiff defamed the defendant. But the definition of defamation has been sufficiently limited in modern law so as to withstand a challenge that an award of damages for defamatory speech violates the Constitution. See New York Times v. Sullivan, 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 6896 (1964). When the subject of the speech is a public official, he can recover damages for defamation, consistent with the First Amendment, if he can prove among the other and usual elements of defamation "that the statement was made with `actual malice' — that is, with knowledge that it was false or with reckless disregard of whether it was false or not." Id., 279-80. A public figure who is not a public official can recover damages in the event that the speaker, even one who is a member of the press, uttered a defamatory falsehood,
. . . whose substance makes substantial danger to reputation apparent, on a showing of highly unreasonable conduct constituting an extreme departure from the standards of investigation and reporting ordinarily adhered to by responsible publishers.
Curtis Publishing Co. v. Butts and Associated Press v. Walker, 388 U.S. 130, 155, 87 S.Ct. 1975, 18 L.Ed.2d 1094 (1967). The Supreme Court acknowledged that there was tension between the public interests involved: that of writing and speaking free from governmental interference, and that of compensating those injured by libelous statements.
"Newspapers, magazines, and broadcasting companies are businesses conducted for profit and often make very large ones. Like other enterprises that inflict damage in the course of performing a service highly useful to the public . . . they must pay the freight; and injured persons should not be relegated [to remedies which] make collection of their claims difficult or impossible unless strong policy considerations demand." Buckley v. New York Post Corp., 373 F.2d 175, 182. We fully recognize the force of these competing considerations and the fact that an accommodation between them is necessary not only in these cases, but in all libel actions arising from a publication concerning public issues.
Id., 147. The fact that the arbitrator in the case at bar resolved the issues in favor of Brian Smith and against Cox Radio does not transform this case into one of Constitutional magnitude, implicating the public policy of freedom of expression. Nor does it convert the scope of review from one of deference to the facts and law as found by the arbitrator into one in which the court undertakes to substitute its own view of the facts and the law for that of the arbitrator. The decision of the arbitrator does not implicate public policy.
The "Manifest Disregard of the Law" Exception
As for the plaintiff's argument that the arbitrator exceeded his authority, that argument too must fail. The plaintiff argues that the arbitrator could only have found that Cox Radio defamed the defendant if the arbitrator chose to completely disregard the established law of defamation, deciding to rule in the defendant's favor notwithstanding the law. The attempt by the plaintiff to characterize any findings or legal interpretations of the arbitrator as egregious enough to rise to a "manifest disregard of the law" is unavailing. See Garrity v. McCaskey, 223 Conn. 1 (1992). "Manifest disregard" says our Supreme Court, "clearly means more than error or misunderstanding with respect to the law." Id., 9, quoting Merrill Lynch, Pierce, Fenner Smith, Inc. v. Bobker, 808 F.2d 930 (2d Cir. 1986).
Although a different fact-finder might have determined that the statements of the plaintiff were only statements of opinion, or might have determined that the statements carried no negative connotation at all, the plaintiff has not demonstrated a manifest disregard of the law by the arbitrator, but only that the plaintiff disagrees with the arbitrator's interpretation of the facts and application of the legal principles involved. See Garrity v. McCaskey, supra. "Such a contention is a far cry from the egregious or patently irrational misperformance of duty that must be shown in order to prove a manifest disregard of the law under § 52-418(a)(4)." Id., 13
CONCLUSION
The plaintiff has not demonstrated any legal basis for this court to interfere with the final and binding arbitration award for which the plaintiff bargained in its contract with the defendant. Accordingly the court denies the application of the plaintiff to vacate the award and grants the defendant's application to confirm the award.
Patty Jenkins Pittman, Judge