Patent holder barred from reopening malpractice arbitration

Theis Research v. Brown & Bain (Now Perkins Coie) (9th Cir. 2004).

B&B was Theis’s attorney in patent litigation that turned out badly. Theis demanded arbitration of claims against B&B for legal malpractice, breach of fiduciary duty, fraud and breach of contract. In commenting on the litigation that spawned the arbitration, the arbitrator stated:

Viewed as a whole, the litigation that is the subject of this arbitration was an almost unmitigated disaster both for [Theis] and for B&B. The hopes of [Theis] and its investors were dashed; years of work by Mr. Theis and others went unrequited; B&B got no return on millions of dollars of invested time, and had to chalk up a major loss on its results chart.

The arbitrator awarded no compensation for Theis.  Theis then filed a lawsuit for damages and to vacate the arbitration award.

On appeal, the Ninth Circuit first determined that the amount in controversy was sufficient for federal jurisdiction even though the arbitration award had been zero.  The Appellate Panel then Affirmed, finding that Theis could not re-open arbitration as he had not shown that the “arbitral result … was a manifest disregard of the law, an implausible interpretation of the contract, the award was procured by corruption, fraud, or undue means, or the arbitrator exceeded his powers.”

2004 U.S. App. LEXIS 21753