William A. Anderson v. American General Life Insurance Company

• Court: Court of Appeals for the Eleventh Circuit
• Decided: February 19, 2020
• Docket: 19-11478
• Status: Unpublished

Opinion

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[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT ________________________

No. 19-11478 Non-Argument Calendar ________________________

D.C. Docket Nos. 4:17-cv-00117-LGW-CLR, 4:14-cv-00278-LGW-GRS

WILLIAM A. ANDERSON,

Plaintiff-Appellant,

versus

AMERICAN GENERAL LIFE INSURANCE COMPANY, d.b.a. AIG Life and Retirement,

Defendant-Appellee.

________________________

Appeal from the United States District Court for the Southern District of Georgia ________________________

(February 19, 2020)

Before ED CARNES, Chief Judge, WILSON, and MARCUS, Circuit Judges.

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William Anderson, a plaintiff proceeding pro se, appeals the district court’s

denial of his motion to vacate his arbitration award on his claims of race

discrimination and retaliation under Title VII of the Civil Rights Act and of race

discrimination under 42 U.S.C. § 1981. We affirm.

I.

The American General Life Insurance Company (AIG) hired Anderson as a

sales agent in 2003. In 2012 a “service manager” position opened up and four AIG

employees — including Anderson — wanted it. One of those employees, Roy

Watson, was white while the other three were black. An AIG general manager

named Thomas Gallo was in charge of deciding who would get the promotion, and

he decided to set up a contest for it. Under the terms of that contest, the first

employee to reach certain annual sales and renewal goals was supposed to win the

promotion. But that did not happen. One of the black candidates (not Anderson)

was the first to meet the contest criteria but was not promoted. Instead, Watson

was promoted when he met the goals several months later. And Watson had a lot

of help from Gallo in meeting the goals: Gallo appointed Watson to be the

temporary service manager — which gave Watson the chance to “push through”

extra business to himself — and Gallo used his own position to push through some

business to Watson as well.

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When Anderson discovered that Watson was going to be promoted, he went

to Gallo’s office to complain because he had met the contest criteria too. Gallo

said that it was too late for him to take back Watson’s promotion, but he offered to

recommend to upper management that Anderson be transferred to Watson’s old

position. And he would “make it worth [Anderson’s] while” by letting him

combine his book of business with the one Watson serviced before his promotion.

He also said that he would temporarily appoint Anderson to Watson’s old position

while they waited for upper management to approve the permanent transfer.

But at first, instead of giving Anderson the temporary appointment, Gallo

gave it to a white employee, Rick Pickett. Gallo later explained to Anderson that

Pickett had put in extra work to compensate for Watson being appointed temporary

service manager, and appointing Pickett temporarily to Watson’s old job was a

way to pay him back. Gallo also said that Anderson’s decision to take a two-week

vacation during the temporary appointment period influenced his decision. After

some back-and-forth between Gallo and Anderson, Gallo agreed to give Anderson

the temporary appointment after Anderson’s vacation was over. Gallo kept his

promise, and Anderson worked on a temporary basis in Watson’s old job from

October to December 2012. But in mid-December a higher-up AIG employee who

did not know Anderson’s race denied his request for a permanent transfer based on

objective internal policies.

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In 2014 Anderson, then represented by counsel, sued AIG in federal district

court for employment discrimination under Title VII and § 1981. The district court

dismissed Anderson’s claims on the ground that they were subject to mandatory

arbitration under the terms of his contract with AIG, and we affirmed. See

Anderson v. Am. Gen. Life Ins., 688 F. App’x 667, 668–70 (11th Cir. 2017). In

July 2017 he refiled his complaint in the district court and moved to stay the case

pending arbitration. The court granted his motion.

The same day Anderson refiled his case, he filed a demand for arbitration

with the American Arbitration Association. In that demand, he claimed in relevant

part (1) that AIG violated Title VII by failing to promote him because of his race;

(2) that AIG violated § 1981 by refusing to afford him the same right to make and

enforce his employment contract as was enjoyed by a similarly situated white man;

(3) that AIG retaliated against him in violation of Title VII when he engaged in

protected activity; and (4) that his arbitration agreement with AIG was void and

unenforceable.

The first arbitrator assigned to Anderson’s case was Beverly Baker. She

presided over an initial case management phone conversation during which

Anderson contended that she lacked jurisdiction over the case because the

arbitration agreement was unenforceable. Baker refused to hear any evidence at

that time, but she did order the parties to brief the jurisdictional question. After

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reviewing the briefs she issued an order finding that the arbitration agreement was

valid and that she did have jurisdiction. Anderson prepared a memorandum

detailing the things about the phone conversation that he found troubling —

including Baker’s refusal to hear evidence — and Baker recused herself from the

case a short time later.

After Baker’s recusal a different arbitrator, Patricia Renovitch, was

appointed. Anderson urged Renovitch to revisit the jurisdictional issue, but she

refused to do so and stood by Baker’s order. She then held a multi-day trial on the

merits of Anderson’s remaining claims. She found the facts as we have described

them in this opinion and ruled that Gallo’s promotion of Watson violated Title VII

and § 1981 because it discriminated against all of the black applicants (including

Anderson) in favor of the one white applicant. But she found that Gallo’s

temporary appointment of Pickett to Watson’s old position did not violate those

laws because Gallo had legitimate, non-discriminatory reasons for his decision.

And she found that Anderson was not entitled to punitive damages because he

failed to prove that upper management knew about the discriminatory nature of

Gallo’s contest. As a result, she issued an interim award granting Anderson

compensatory damages and reasonable attorney’s fees. Anderson requested that

Renovitch reconsider her denial of punitive damages, but she refused to do so and

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entered a final award granting Anderson the same compensatory relief as the

interim award.

At that point his counsel withdrew and Anderson began representing

himself. He filed in the district court a motion to vacate the arbitration award,

contending that the arbitrator refused to hear material evidence, wrongly denied

Anderson’s motions for spoliation sanctions, raised an affirmative defense on

AIG’s behalf, and based her award on a mistake of fact. The district court denied

the motion and Anderson brings this appeal.

II.

When reviewing a district court’s denial of a motion to vacate an arbitration

award, we review the district court’s factual findings for clear error and its legal

conclusions de novo. Frazier v. CitiFinancial Corp., LLC, 604 F.3d 1313, 1321

(11th Cir. 2010). “Because arbitration is an alternative to litigation, judicial review

of arbitration decisions is among the narrowest known to the law.” AIG Baker

Sterling Heights, LLC v. Am. Multi-Cinema, Inc., 508 F.3d 995, 1001 (11th Cir.

2007) (quotation marks omitted). By statute we can only vacate an arbitration

award in four circumstances:

(1) where the award was procured by corruption, fraud, or undue means;

(2) where there was evident partiality or corruption in the arbitrators, or either of them;

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(3) where the arbitrators were guilty of misconduct in refusing to . . . hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced; or

(4) where the arbitrators exceeded their powers . . . .

9 U.S.C. § 10(a); see Frazier, 604 F.3d at 1324.

III.

Anderson’s first contention on appeal is that arbitrator Baker wrongly

refused to hear during the initial case management discussion evidence relating to

his contention that the arbitration agreement was unenforceable and, as a result, the

arbitrator lacked jurisdiction. But an arbitrator “need not consider all the evidence

the parties seek to introduce” and may “reject evidence that is cumulative or

irrelevant.” Scott v. Prudential Sec., Inc., 141 F.3d 1007, 1017 (11th Cir. 1998).

The evidence Anderson wanted to introduce concerned whether AIG’s upper

management knew about the rigged promotion contest or procedure and whether

AIG breached a particular term of the arbitration agreement: the so-called “open-

door policy,” an optional and informal dispute resolution procedure. None of that

evidence was at all relevant to the jurisdictional question the arbitrator was

considering.

Under the Federal Arbitration Act, “arbitration agreements are valid,

irrevocable, and enforceable, save upon such grounds as exist at law or in equity

for the revocation of the contract.” Caley v. Gulfstream Aerospace Corp., 428

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F.3d 1359, 1367 (11th Cir. 2005) (quotation marks omitted). Anderson presented

Baker with three alleged grounds for invalidating his arbitration agreement with

AIG: that AIG had breached the agreement by failing to honor the open-door

policy, that the agreement lacked consideration, and that the agreement by its terms

was not mandatory. Whether AIG’s upper management knew about the rigged

promotion procedure had nothing to do with any of those three grounds. And, as

we held the last time this case was before us, see Anderson, 688 F. App’x at 669–

70, if AIG did breach the open-door policy, that breach did not render the

arbitration agreement unenforceable. So the arbitrator did not refuse to hear

relevant evidence.

Next, Anderson contends that arbitrator Renovitch engaged in misbehavior

when she denied his request for spoliation sanctions.1 Before trial Anderson asked

AIG to produce certain “new business reports,” but AIG had failed to preserve

those reports. Anderson requested a spoliation presumption — that is, a

presumption that the allegedly spoliated evidence would have proved Gallo and

Watson manipulated the contest. The arbitrator did not address that request.

To prove misbehavior Anderson must show, as a preliminary matter, that his

rights have been prejudiced. See 9 U.S.C. § 10(a)(3) (stating that an award can be

1 In his opening brief Anderson also asserted that Renovitch’s failure to consider his request for spoliation sanctions showed bias or prejudice, see 9 U.S.C. § 10(a)(2). But in his reply brief he expressly abandoned that position. 8 Case: 19-11478 Date Filed: 02/19/2020 Page: 9 of 12

vacated “where the arbitrators were guilty of misconduct in . . . any other

misbehavior by which the rights of any party have been prejudiced”); Scott v.

Prudential Sec., Inc., 141 F.3d 1007, 1017 (11th Cir. 1998) (stating that under

§ 10(a)(3) a party challenging an arbitration award based on the arbitrator’s

“misbehavior” must show prejudice), overruled in part on other grounds, Hall

Street Assocs., LLC v. Mattel, Inc., 552 U.S. 576, 584–89 (2008). Before the

arbitrator issued her initial award, Anderson argued the spoliated evidence would

have shown that Gallo and Watson manipulated the promotion contest. But the

arbitrator found in Anderson’s favor on that question. That means her failure to

address Anderson’s request for spoliation sanctions did not prejudice Anderson.

After arbitrator Renovitch entered her interim award, Anderson changed his

tune about what the allegedly spoliated evidence would show. He submitted a

request for reconsideration of the denial of punitive damages, arguing that the

missing evidence would have shown that AIG’s upper management knew about the

rigged contest. The arbitrator did not consider Anderson’s new argument on

spoliation, but her failure to do so was not “misbehavior” in any sense. In federal

litigation, courts enforce a number of rules and principles that prevent parties from

raising arguments too late. See, e.g., In re Egidi, 571 F.3d 1156, 1163 (11th Cir.

2009) (“Arguments not properly presented in a party’s initial brief or raised for the

first time in the reply brief are deemed waived.”); Wilchombe v. TeeVee Toons,

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Inc., 555 F.3d 949, 957 (11th Cir. 2009) (“A motion for reconsideration cannot be

used to . . . raise argument or present evidence that could have been raised prior to

the entry of judgment.”). Those same principles may be properly applied in an

arbitration proceeding where there are fewer procedural protections than in federal

court. See Rosensweig v. Morgan Stanley & Co., Inc., 494 F.3d 1328, 1333 (11th

Cir. 2007). The refusal to consider Anderson’s belated argument was not

misbehavior.

Anderson next contends that arbitrator Renovitch exceeded her powers,

showed bias, and engaged in misconduct by asserting an affirmative defense to

punitive damages on behalf of AIG when AIG itself had failed to do so. The

factual premise of his contention is belied by the record. The arbitrator never

asserted an affirmative defense to punitive damages on behalf of AIG. The denial

of punitive damages was expressly based on Anderson’s failure to prove that he

was entitled to them, not on any affirmative defense.

Anderson further contends that arbitrator Renovitch “violated her

contractual agreement” by applying the wrong burden of persuasion. AIG had

argued that once Anderson made out a prima facie case AIG faced only an

“exceedingly light” burden of producing a non-discriminatory reason for its action.

The arbitrator rejected that AIG argument on the first day of trial. That rejection,

according to Anderson, amounted to an agreement that AIG had to meet more than

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an “exceedingly light” burden. He complains that the arbitrator violated the

agreement by permitting AIG to prove a non-discriminatory reason by less than a

preponderance of the evidence and making fact findings accordingly. Those

findings, Anderson says, caused him to lose on his retaliation claim and on his

claim that AIG discriminated against him by appointing Pickett to the temporary

position that Anderson had been promised.

Contrary to Anderson’s theory, the rulings of factfinders and decision

makers do not amount to contractual agreements. Not only that, but his theory

finds no place in the statutory grounds for vacating an arbitration award. See

9 U.S.C. § 10(a). A court cannot vacate an arbitration award on grounds not set

out in § 10. See Frazier, 604 F.3d at 1324

Finally, Anderson challenges one of Renovitch’s fact findings: that Pickett

put in extra work after Watson was transferred to the temporary service manager

position. Anderson has waived that argument because he did not raise it in the

district court. Cf. Bryant v. Jones, 575 F.3d 1281, 1308 (11th Cir. 2009) (“It is

well established in this circuit that, absent extraordinary circumstances, legal

theories and arguments not raised squarely before the district court cannot be

broached for the first time on appeal.”). And even if Anderson had not waived the

argument, an “arbitrator’s improvident, even silly, factfinding does not provide a

basis for a reviewing court to refuse to enforce the award.” Cat Charter, LLC v.

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Schurtenberger, 646 F.3d 836, 840 n.4 (11th Cir. 2011) (quoting Major League

Baseball Players Ass’n v. Garvey, 532 U.S. 504, 509 (2001)).

AFFIRMED.