Prashan Gunasekera v. War Memorial Hosp.

• Court: Court of Appeals for the Sixth Circuit
• Decided: January 12, 2021
• Docket: 20-1340
• Status: Unpublished

Opinion

NOT RECOMMENDED FOR PUBLICATION File Name: 21a0026n.06

No. 20-1340

UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT FILED Jan 12, 2021 PRASHAN GUNASEKERA, ) DEBORAH S. HUNT, Clerk ) Plaintiff-Appellant, ) ) ON APPEAL FROM THE UNITED v. ) STATES DISTRICT COURT FOR ) THE WESTERN DISTRICT OF WAR MEMORIAL HOSPITAL, INC. ) MICHIGAN ) Defendant-Appellee. )

BEFORE: COOK, GRIFFIN, and LARSEN, Circuit Judges.

PER CURIAM. Dr. Prashan Gunasekera appeals the district court’s order denying his

motion for attorney fees, costs, and interest. As set forth below, we AFFIRM the district court’s

order.

Dr. Gunasekera filed a complaint against his former employer, The Chippewa County War

Memorial Hospital, Inc., claiming discrimination and retaliation in violation of Michigan’s Elliott-

Larsen Civil Rights Act, interference with his rights under the Family and Medical Leave Act

(FMLA), fraud in the inducement, breach of contract, and intentional infliction of emotional

distress. The Hospital filed a motion to dismiss Dr. Gunasekera’s claims and to compel arbitration

based on his employment agreement’s arbitration clause. Granting the Hospital’s motion in part,

the district court compelled arbitration but stayed and administratively closed the case until either

party sought confirmation of the arbitration award.

After a hearing and briefing by the parties, the arbitrator issued an award resolving the

claims brought by both parties. With respect to Dr. Gunasekera’s FMLA claim, the arbitrator No. 20-1340, Gunasekera v. War Mem’l Hosp.

determined that the Hospital had violated his rights under the FMLA and that he was entitled to

$18,000 in damages. The arbitrator, however, declined to award any attorney fees for

Dr. Gunasekera’s FMLA claim:

The Family [and] Medical Leave Act states that in addition to any judgment awarded to the employee, reasonable attorney fees may also be awarded. Dr. Gunasekera and the hospital voluntarily chose by contract to have all employment issues resolved by arbitration and the dispute resolution section of the employment contract states that the parties are each obligated to pay their own costs and attorney fees. Since the powers of the arbitrator flow from the powers given to the arbitrator in the contract, attorney fees cannot be awarded in this arbitration case. Even if the contract did not prohibit the awarding of attorney fees, no evidence was submitted at the hearing which could be used as a basis for determining an appropriate amount of attorney fees allocated to the FMLA issue. Consequently, no attorney fees are awarded.

The arbitrator summed up the award with an order for the parties to make various payments to

each other, stating that the “net result” was the Hospital’s payment of $18,019 to Dr. Gunasekera

and that “[n]o costs or attorney fees are ordered.”

Dr. Gunasekera returned to the district court and filed a motion for attorney fees, costs, and

interest under the FMLA. According to Dr. Gunasekera, the arbitrator exceeded his powers and

acted in manifest disregard of the law by failing to award attorney fees and costs as required by

the FMLA. The district court denied Dr. Gunasekera’s motion, concluding that he had failed to

establish a basis for vacating the arbitrator’s award, and notified the parties of its intent to confirm

the award. Dr. Gunasekera filed a notice of appeal. The district court subsequently confirmed the

arbitrator’s award.

In an appeal from a district court’s decision declining to vacate or confirming an

arbitrator’s award, we review the district court’s findings for clear error and its conclusions of law

de novo. Samaan v. Gen. Dynamics Land Sys., Inc., 835 F.3d 593, 599 (6th Cir. 2016). “Review

of an arbitration award ‘is one of the narrowest standards of judicial review in all of American

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Jurisprudence.’” McGee v. Armstrong, 941 F.3d 859, 867 (6th Cir. 2019) (quoting Way Bakery v.

Truck Drivers Local No. 164, 363 F.3d 590, 593 (6th Cir. 2004)). “Courts must refrain from

reversing an arbitrator simply because the court disagrees with the result or believes the arbitrator

made a serious legal or factual error.” Samaan, 835 F.3d at 600 (quoting Solvay Pharms., Inc. v.

Duramed Pharms., Inc., 442 F.3d 471, 476 (6th Cir. 2006)).

Dr. Gunasekera argues that the arbitrator exceeded his powers by failing to award attorney

fees. Under the Federal Arbitration Act, a court may vacate an arbitration award “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). “A party seeking

relief under that provision bears a heavy burden.” Oxford Health Plans LLC v. Sutter, 569 U.S.

564, 569 (2013). “It is not enough for [the party] to show that the [arbitrator] committed an error—

or even a serious error.” Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662, 671 (2010).

“Only if ‘the arbitrator acts outside the scope of his contractually delegated authority’—issuing an

award that ‘simply reflects his own notions of economic justice’ rather than ‘drawing its essence

from the contract’—may a court overturn his determination.” Oxford Health Plans LLC, 569 U.S.

at 569 (brackets omitted) (quoting E. Associated Coal Corp. v. United Mine Works of Am., Dist.

17, 531 U.S. 57, 62 (2000)). “Because the parties ‘bargained for the arbitrator’s construction of

their agreement,’ an arbitral decision ‘even arguably construing or applying the contract’ must

stand, regardless of a court’s view of its (de)merits.” Id. (quoting E. Associated Coal Corp., 531

U.S. at 62).

In support of his argument that the arbitrator exceeded his powers in failing to award

attorney fees, Dr. Gunasekera asserts that the FMLA mandates an award of attorney fees to a

prevailing plaintiff, see 29 U.S.C. § 2617(a)(3), and that an employee cannot waive his prospective

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right to attorney fees under the FMLA, see 29 C.F.R. § 825.220(d). Although Dr. Gunasekera

raises a legal error purportedly committed by the arbitrator, such an error does not establish that

the arbitrator acted outside the scope of his authority under the parties’ agreement. See DiRussa

v. Dean Witter Reynolds Inc., 121 F.3d 818, 824 (2d Cir. 1997). Dr. Gunasekera’s employment

agreement with the Hospital provided that any dispute arising under the agreement or in the course

of the employment relationship would be submitted to arbitration and that the parties would be

obligated to pay their own costs, including attorney fees. The arbitrator resolved the parties’

employment dispute in accordance with their agreement and relied on the terms of that agreement

to decline to award any attorney fees. Dr. Gunasekera has failed to demonstrate that the arbitrator

exceeded his powers under the parties’ agreement.

Dr. Gunasekera also argues that the arbitrator acted in manifest disregard of the law in

failing to award attorney fees. This court has previously recognized “a separate judicially created

basis” for vacating an arbitration award where the “award was made ‘in manifest disregard of the

law.’” Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Jaros, 70 F.3d 418, 421 (6th Cir. 1995)

(quoting Wilko v. Swan, 346 U.S. 427 (1953)). But the continued viability of the manifest-

disregard standard is “an open question.” Samaan, 835 F.3d at 600. Even if the standard still

applies, Dr. Gunasekera has failed to establish that the arbitrator acted in manifest disregard of the

law in denying attorney fees. An arbitrator “does not act in manifest disregard of the law unless

(1) the applicable legal principle is clearly defined and not subject to reasonable debate; and (2) the

arbitrator[] refused to heed that legal principle.” Merrill Lynch, 70 F.3d at 421. An arbitrator’s

“mere error in interpretation or application of the law is insufficient” to satisfy this “very narrow

standard of review.” Id.

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Dr. Gunasekera has failed to demonstrate that the arbitrator was aware of any clearly

defined legal precedent and consciously chose not to apply it. See Dawahare v. Spencer, 210 F.3d

666, 669–70 (6th Cir. 2000); DiRussa, 121 F.3d at 823. In his post-hearing brief to the arbitrator,

Dr. Gunasekera merely asserted that, “[p]ursuant to the [FMLA], he is entitled to recover all of his

monetary losses, including attorney fees.” Dr. Gunasekera did not argue, let alone cite any statute

or case law in support of such an argument, that the arbitrator was required to award attorney fees

on the FMLA claim despite a provision in the agreement stating that the parties were obligated to

pay their own attorney fees.

Regardless of whether the arbitrator exceeded his powers or acted in manifest disregard of

the law by relying on the terms of the parties’ agreement to deny attorney fees, the arbitrator

provided an alternative basis for denying attorney fees—Dr. Gunasekera’s failure to submit any

evidence to allow the arbitrator to determine an appropriate amount of attorney fees attributable to

the FMLA claim. Dr. Gunasekera argues on appeal that he submitted evidence of his attorney fees

in his post-hearing brief to the arbitrator. In that brief, Dr. Gunasekera merely asserted that he was

entitled to receive “all of his legal fees,” which exceeded $35,000. Although Dr. Gunasekera

claims that he could not provide a specific value for those fees because he continued to retain

counsel, we find it dubious that he could not have submitted evidence of the amount of fees that

had accrued to that date. Without any evidence of attorney fees, the arbitrator did not err by

concluding that he had no basis for making an award of attorney fees.

For these reasons, we AFFIRM the district court’s order denying Dr. Gunasekera’s motion

for attorney fees, costs, and interest.

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