Tamari v. Conrad, 77-1003

Citation552 F.2d 778
Decision Date12 April 1977
Docket NumberNo. 77-1003,77-1003
PartiesAbdallah W. TAMARI et al., Plaintiffs-Appellants, v. William P. CONRAD, Jr., et al., Defendants-Appellees, and Bache Halsey Stuart, Inc. (formerly Bache & Co. Incorporated), Intervenor-Appellee.
CourtUnited States Courts of Appeals. United States Court of Appeals (7th Circuit)

Robert P. Howington, Jr., Donald C. Shine, Chicago, Ill., for plaintiffs-appellants.

N. A. Giambalvo, Gary M. Elden, Chicago, Ill., for defendants-appellees.

Before SWYGERT and WOOD, Circuit Judges, and CHRISTENSEN, Senior District Judge. 1

SWYGERT, Circuit Judge.

In this case plaintiffs are suing the eight members of the panel of arbitrators who were assigned the task of resolving a dispute between plaintiffs and Bache Halsey Stuart, Inc. Plaintiffs challenge the selection and composition of the panel of arbitrators. We hold that the district court correctly dismissed the action because arbitrators are immune from suit with respect to questions involving their authority to resolve a dispute.

I.

Plaintiffs Abdallah W. Tamari, Ludwig W. Tamari, Farah W. Tamari, and Wahbe Tamari & Sons, Co. (hereinafter "Tamari") are a Lebanese partnership and its partners. This case is the third of four lawsuits that Tamari has instituted in an effort to obtain relief for alleged fraud in violation of the Commodity Exchange Act, 7 U.S.C. §§ 1 et seq., by Bache Halsey Stuart, Inc. (hereinafter "Bache"). On May 20, 1972 Tamari opened the first of two accounts with Bache for the purpose of trading in commodity futures. A dispute arose between the parties by the end of 1973. Bache contended that Tamari owed approximately $376,000 in debt on the accounts that it had opened. Tamari claimed that it had suffered damages of $2,150,000 because of false representations and misstatements by Bache in connection with the opening and management of the accounts.

In early 1974 the parties began preparation for the arbitration of their dispute by a panel of arbitrators chosen by the Chicago Board of Trade, in accordance with the agreement they had reached when the accounts were opened. Toward the end of 1975, Tamari decided that it wanted the dispute to be resolved by a court instead of by a panel of arbitrators. It filed an action against Bache in the district court for the Northern District of Illinois on December 10, 1975, seeking damages for fraud under the Commodity Exchange Act. It also filed a second action in that court on January 6, 1976 against Bache and the Chicago Board of Trade, seeking to halt the arbitration proceedings. On May 19, 1976 the district court ruled in favor of defendants in both cases, holding that there was an agreement to arbitrate between the parties that was enforceable under the Federal Arbitration Act, 9 U.S.C. §§ 3-4, and that Tamari had to proceed with the arbitration. Tamari appealed the district court's decision to this court. We dismissed the appeal from the first case, without prejudice to any further appeal from an appealable order in that case, on September 23, 1976. Tamari v. Bache & Co. (Lebanon) S.A.L., No. 76-1729 (7th Cir., Sept. 23, 1976). The appeal in the second case is currently pending.

Tamari filed its third action, which is the subject of the present appeal, on June 6, 1976 against the eight arbitrators named by the Chicago Board of Trade who were in the process of resolving the dispute between Tamari and Bache. Tamari contended that the selection and composition of the arbitration panel violated the terms of the agreement to arbitrate as well as the rules of the Chicago Board of Trade. It asked the court to declare that the panel was illegally constituted and any award made by it void. It also requested an injunction halting further arbitration proceedings. Bache was not made a party defendant to this suit, but was permitted to intervene on June 29, 1976 in order to protect its interests. The district court dismissed the action on November 15, 1976, holding that Tamari had to proceed with the pending arbitration and exhaust all avenues of administrative appeal before it could return to the district court.

A fourth suit was filed by Tamari against Bache on January 27, 1977. In this action, which is currently pending, Tamari is asking the district court to set aside the award of the panel of arbitrators in favor of Bache, which was entered on June 21, 1976 and affirmed by the Appeals Committee of the Chicago Board of Trade on January 25, 1977.

II.

Defendants present a number of alternative arguments in support of their position that the district court correctly dismissed the third suit. Because we conclude that as arbitrators they cannot be sued with respect to their authority to resolve a dispute, we need not reach any of their other contentions or the merits of Tamari's claim. 2

There is relatively little case law in the federal courts on the subject of an arbitrator's immunity from suit. The Third Circuit has held that an arbitrator is immune from suit for all acts which he performs in his capacity as an arbitrator. The court stated that an arbitrator has an immunity analogous to judicial immunity because he performs a quasi-judicial function. Cahn v. International Ladies' Garment Union, 311 F.2d 113, 114-15 (3rd Cir. 1962) (per curiam ). See also Hill v. Aro Corp., 263 F.Supp. 324 (N.D.Ohio 1967).

Tamari concedes that these cases were correctly decided, but argues that they do not control the present case. It asserts that its complaint does not challenge any actions of the arbitrators, but rather their capacity to resolve the dispute between Tamari and Bache. It further contends that defendants cannot rely on arbitral immunity if they have no right to...

To continue reading

Request your trial
55 cases
  • Levine v. Wiss & Co.
    • United States
    • United States State Supreme Court (New Jersey)
    • 31 Julio 1984
    ...denied sub nom. Providence Hosp. v. Manhattan Constr. Co., 434 U.S. 1067, 98 S.Ct. 1246, 55 L.Ed.2d 769 (1978); see also Tamari v. Conrad, 552 F.2d 778 (7th Cir.1977) (arbitral immunity extends to cases in which arbitrator's authority to resolve dispute is challenged; individuals familiar w......
  • Austin Mun. Securities, Inc. v. National Ass'n of Securities Dealers, Inc., 84-1237
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • 15 Abril 1985
    ...granting absolute immunity to arbitrators. See Corey v. New York Stock Exchange, 691 F.2d 1205, 1208-11 (6th Cir.1982); Tamari v. Conrad, 552 F.2d 778, 780 (7th Cir.1977); Cahn v. International Ladies' Garmet Union, 311 F.2d 113 (3rd Cir.1962). Arbitrators are not employed by the government......
  • Fleming v. United Parcel Service, Inc.
    • United States
    • Superior Court of New Jersey
    • 22 Enero 1992
    ...by proceeding with his grievance hearing before the appeal from his conviction was decided by the Superior Court. In Tamari v. Conrad, 552 F.2d 778 (7th Cir.1977), where the authority of the arbitral panel was challenged, the court of appeals held "that the district court correctly dismisse......
  • Stasz v. Schwab, B159163.
    • United States
    • California Court of Appeals
    • 5 Agosto 2004
    ...immunity should be extended to cases where the authority of an arbitrator to resolve a dispute is challenged." (Tamari v. Conrad (7th Cir.1977) 552 F.2d 778, 780.) Thus, the "AAA is immune from a suit based on wrongful exercise of jurisdiction." (Intern. Medical Group, Inc. v. American Arbi......
  • Request a trial to view additional results
1 books & journal articles
  • Chapter 5
    • United States
    • Full Court Press Alternative Dispute Resolution in the Work Place
    • Invalid date
    ...Cir. 1985). Sixth Circuit: Corey v. New York Stock Exchange, 691 F.2d 1205, 1208–1211 (6th Cir. 1982). Seventh Circuit: Tamari v. Conrad, 552 F.2d 778, 780 (7th Cir. 1977). Eighth Circuit: Ozark Air Lines v. National Mediation Board, 797 F.2d 557, 564, 123 L.R.R.M. 2168 (8th Cir. 1986). Nin......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT