United States Court of Appeal Orders District Court To Vacate Order Disqualifying Arbitrator In MGM Signature Suites Lawsuit Brought by Blumenthal, Nordrehaug & Bhowmik

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The U.S. Court of Appeals for the Ninth Circuit reversed the U.S. District Court's order disqualifying Arbitrator Hare as clearly erroneous. The lawsuit was brought by purchasers of condominium units against the seller MGM Resorts and the developer of the Signature Suites.

Employment Law Lawyers Blumenthal NOrdrehaug Bhowmik
We conclude that the district court's ruling was clearly erroneous as to the legal standard for "evident partiality"

On January 27, 2015, the United States Court of Appeals for the Ninth Circuit reversed a previous ruling from a Nevada District Court disqualifying an arbitrator while arbitration was pending in a lawsuit against MGM Resorts International ("MGM"). The Petitioners were seeking a writ of mandamus directing the district court to vacate its grant of a motion, while arbitration was pending, to disqualify an arbitrator for evident partiality under 9 U.S.C. Section 10(a)(2). The case is entitled In re Marry Ann Sussex v. Turnberry/MGM Grand Towers & MGM Resorts International, Case No. 2:08-cv-00773-MMD-PAL. The U.S. Court of Appeals' order can be read here.

The case involves claims made by over 400 purchasers of condo/hotel units at the Signature at MGM for alleged fraud, alleged securities law violations as well as alleged nuisance and trespass claims involving the construction and operation of the “Wet Republic” on their condominium property.

The Ninth Circuit Court of Appeals reversed Las Vegas Federal District Court Judge, Miranda Du, for clear error in her disqualification of an AAA appointed arbitrator for evident partiality. The Court of Appeals found there was no factual basis to disqualify the arbitrator stating the claims were "very attenuated." The Court of Appeals went on to state in its opinion "[t]his case is 'emphatically not' such an extreme case, if one exits, that could cause us to diverge from our practice, consistent with other circuits, of declining to intervene in an ongoing arbitration." As a result, the Court of Appeals reversed Judge Du's decision to disqualify Arbtirator Brendan Hare and directed the district court to vacate its order removing Hare.

When the attorneys representing the allegedly defrauded condo buyers were asked about the Court of Appeals' ruling, founding partner Norman B. Blumenthal stated, "this was the right decision as the condo buyers have spent extensive time and money litigating the case before Arbitrator Hare."

For more information regarding MGM Signature Suites lawsuit please contact Norman B. Blumenthal, the founding partner of Blumenthal, Nordrehaug & Bhowmik at (858) 551-1223.

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Nicholas De Blouw
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