Berkowitz v. Gould Paper Corp.

• Decision Date: 12 January 2022
• Docket Number: 21-CV-6582 (VEC)
• Parties: DAVID BERKOWITZ, Petitioner, v. GOULD PAPER CORP., Respondent.
• Court: U.S. District Court — Southern District of New York

DAVID BERKOWITZ, Petitioner, v. GOULD PAPER CORP., Respondent.

No. 21-CV-6582 (VEC)

United States District Court, S.D. New York

January 12, 2022

OPINION & ORDER

VALERIE CAPRONI UNITED STATES DISTRICT JUDGE

Petitioner David Berkowitz seeks, pursuant to the Federal Arbitration Act (“FAA”), 9 U.S.C. § 1 et seq. to confirm in part and modify or vacate in part an arbitration award entered at the completion of an arbitration between him and Respondent Gould Paper Corp. (“GPC”). See Pet., Dkt. 1. Respondent moved to dismiss the petition as untimely and for failure to prove that the award may be modified under the FAA. See Not. of Motion, Dkt. 10. For the following reasons, Petitioner's motion to confirm in part and modify or vacate in part is DENIED. Respondent's motion to dismiss, construed as a motion to confirm the arbitration award and as an opposition to the petition to modify or vacate the award, is GRANTED.^[1]

BACKGROUND

Berkowitz began his employment at GPC in 2007 and eventually became the company's president and CEO in 2015. Pet. ¶¶ 8 10. On or about May 1, 2015, Berkowitz entered into an employment agreement (the “Agreement”) with GPC; the Agreement had an initial four-year term, running from May 1, 2015, to April 30, 2019. Id. ¶ 11. The Agreement provided for successive one-year term renewals by mutual agreement of the parties. Employment Agreement, Dkt. 1-1 § 1.2(a). The Agreement required binding arbitration in the event of a dispute and stated that “the arbitrator's award shall include reimbursement by the losing party to the prevailing party for the prevailing party's reasonable attorneys' fees and costs.” Id. §§ 4.1.1, 4.1.5.

Toward the end of the initial four-year term, Berkowitz asked to renew his employment contract for at least two years. Pet. ¶ 20. On July 12, 2018, Berkowitz met with the Chairman of GPC's parent company, Akihito Watanabe, in Tokyo. Id. ¶ 21. Berkowitz asserts that during the meeting, Watanabe expressed full satisfaction with Berkowitz's performance. Despite the expressed satisfaction, Watanabe told Berkowitz that his employment contract would not be renewed. Berkowitz alleges that Watanabe told him that “the Company needed to move younger guys up.” Id. ¶ 22. Berkowitz's employment was not renewed at the end of the initial four-year term. Instead, he was offered a “no show” consulting role at half of his previous pay, which he declined. Id. ¶ 24. He was replaced by a “significantly younger” employee whom Berkowitz had hired several years earlier with the plan to train him to replace Berkowitz as President and CEO of GPC. Id. ¶¶ 18, 25. At the time Berkowitz was terminated, he believed that the younger employee was not ready to take over as President and CEO. Id. ¶ 19.

On July 9, 2019, Berkowitz initiated arbitration proceedings against GPC before JAMS, a New York-based arbitral body, alleging age discrimination. Id. ¶¶ 26-27; Not. of Claim, Dkt. 1-1 ¶¶ 22-31.^[2] Berkowitz requested that the Arbitrator award, among other items, compensatory, liquidated, and emotional distress damages as well as attorneys' fees and costs. Not. of Claim at 5. GPC denied Berkowitz's allegations and asserted counterclaims for conversion and unjust enrichment. Award, Dkt. 16-2 at 9.^[3] After a four-day hearing, Pet. ¶ 31, the Arbitrator entered a Final Award dated February 18, 2021, and an Amended Award dated March 17, 2021.^[4] In the Amended Award, the Arbitrator found for Berkowitz on the age discrimination claim and awarded him damages of $250, 000 and found for GPC on the unjust enrichment claim and awarded it damages of $204, 466.51. Netting the awards, the Arbitrator ordered GPC to pay Berkowitz $45, 533.49. The arbitration award rejected all other relief sought by either party, including fees and costs. Award at 21-22; Amended Award, Dkt. 16-2 at 1.

Berkowitz filed this petition on August 4, 2021, seeking to confirm in part and modify in part the award. See Pet., Dkt. 1. Berkowitz argues that the Arbitrator erred by failing to award attorneys' fees and costs under the Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq. (“ADEA”), liquidated damages under the ADEA, and emotional distress damages under New York state law. See Pet. ¶¶ 36-42; Pet'r Br., Dkt. 1-4 at 10-19; Pet'r Resp., Dkt. 16 at 14- 19. Berkowitz petitions to confirm the awarded compensatory damages and to modify the award so as to grant attorneys' fees and costs, liquidated damages, and emotional distress damages. See Pet. at 7.^[5] GPC opposes the petition. Resp't Mem., Dkt. 11.

DISCUSSION

I. Legal Standard

Pursuant to the FAA, if the parties to an arbitration agree that a judgment of the court will be entered on the arbitration award, then any party can apply within one year of the award for an order confirming the award. Upon such a petition, “the court must grant such an order, unless the award is vacated, modified, or corrected as prescribed in sections 10 and 11 of [the FAA].” 9 U.S.C. § 9. “There is nothing malleable about ‘must grant,' which unequivocally tells courts to grant confirmation in all cases, except when one of the ‘prescribed' exceptions applies.” Hall St. Assocs., L.L.C. v. Mattel, Inc., 552 U.S. 576, 587 (2008). “The arbitrator's rationale for an award need not be explained, and the award should be confirmed ‘if a ground for the arbitrator's decision can be inferred from the facts of the case.'” D.H. Blair & Co. v. Gottdiener, 462 F.3d 95, 110 (2d Cir. 2006) (quoting Barbier v. Shearson Lehman Hutton Inc., 948 F.2d 117, 120 (2d Cir. 1991)). “Only ‘a barely colorable justification for the outcome reached' by the arbitrators is necessary to confirm the award.” Id. (quoting Landy Michaels Realty Corp. v. Local 32B-32J, Serv. Emps. Int'l Union, 954 F.2d 794, 797 (2d Cir. 1992)).

Accordingly, the Second Circuit has “repeatedly recognized the strong deference appropriately due arbitral awards and the arbitral process, and has limited its review of arbitration awards in obeisance to that process.” Porzig v. Dresdner, Kleinwort, Benson, N. Am. LLC, 497 F.3d 133, 138 (2d Cir. 2007). Courts should “vacate an arbitration award only upon finding a violation of one of the four statutory bases [enumerated in the FAA], or, more rarely, if [the court] find[s] a panel has acted in manifest disregard of the law.” Id.^[6] Similarly, “[a] motion to modify an award is limited to the grounds set forth in 9 U.S.C. § 11.” Oceania Shipping Corp. v. Thos. P. Gonzalez Corp., 442 F.Supp. 997, 999 (S.D.N.Y. 1977).^[7]

II. Timeliness

GPC contends that Berkowitz's petition, filed on August 4, 2021, must be rejected as untimely. The statutory period during which a motion to vacate or modify may be filed is three months after the arbitration award is “filed or delivered.” 9 U.S.C. § 12. Because “the FAA does not define the terms ‘filed' and ‘delivered, '” courts look to the arbitration agreement and the arbitration rules for guidance. See Salus Cap. Partners, LLC v. Moser, 289 F.Supp.3d 468, 476 (S.D.N.Y. 2018) (referencing the arbitration rules by which the parties agreed to be bound in order to define “filed” or “delivered”).

Neither party disputes that the three-month limitation applies, but they disagree over when the period began to run. GPC argues that the three-month period began on February 18, 2021, the date that the Arbitrator “rendered” the Final Award, Resp't Mem. at 5, or, at the latest, on March 18 2021, the date that Berkowitz received the Amended Award via e-mail. Resp't Reply, Dkt. 19 at 3. Berkowitz acknowledges that he received the Amended Award on March 18, 2021, Pet'r Resp. at 3, but he argues that delivery by email was insufficient to constitute “delivery” or “filing” under the JAMS Rules. In support, he points to Rule 24(i) of JAMS's Employment Arbitration Rules & Procedure, which provides that “the award shall be issued by serving copies on the Parties. Service may be made by U.S. mail. It need not be sent certified or registered.” See Id. at 7 (citing JAMS Rules, Dkt. 16-2 at 23). Because email delivery is insufficient under Rule 24(i), Berkowitz argues that the award was not “filed” or “delivered” on February 18, 2021, or on March 18, 2021.^[8] Pet'r Resp. at 7-9. He argues that the award was “delivered” only when he served it on GPC on August 12, 2021, as part of this litigation. Pet'r Resp. at 4, 12. Accordingly, Berkowitz argues, the petition was timely filed.^[9] The question of when an award is considered “filed or delivered” has not been definitively settled in this Circuit. One line of cases interprets “filed” to mean that the clock starts on the day the award is entered, signed, or dated. See, e.g., Vector Media Grp., Inc. v. MyLocker.com, LLC, No. 20-CV-5642, 2020 WL 5371195, at *4 (S.D.N.Y. Sept. 8, 2020) (“Courts in this district routinely start counting from the date of entry.”); Marsillo v. Geniton, No. 03-CV-2117, 2004 WL 1207925, at *5 (S.D.N.Y. June 1, 2004) (finding a motion to vacate untimely even though the moving party never had notice of the award); see also Guerrero v. FJC Sec. Servs. Inc., No. 12-CV-5763, 2013 WL 5273795, at *4 (S.D.N.Y. Sept. 18, 2013); Dalbec v. Alusuisse Flexible Packaging, Inc., No. 94-CV-288, 1997 WL 57242, at *1 (E.D.N.Y. Feb. 10, 1997); Harrison v. Westcon Grp. N. Am., Inc., No. 06-CV-4499, 2007 WL 9815660, at *2 (S.D.N.Y. Nov. 5, 2007). Another line of cases suggests that the issuance of an award is not sufficient for the award to be considered “filed or delivered;” instead, an award is only “filed or delivered” when it is served on the party in a manner that definitively complies with the arbitral body's rules. See Salus, 289 F.Supp.3d at476; Dist. Council 1707 v. Hope Day Nursery, Inc., No. 05-CV-3642, 2006 WL 17791, *3 (S.D.N.Y. Jan. 3, 2006); ...