01-3270 International Medical Group, Inc. v. American Arbitration Ass'n, et al.

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“Once IMG objected to the arbitration, the AAA had only two choices, to proceed or not to proceed. The AAA proceeded after determining that its filing requirements had been met and after informing IMG that it could ask a court to determine the arbitrability of the matter. Indeed, the very documents IMG relies upon to show the AAA decided the arbitrability of the matter contradict its position. The AAA, through Brown, expressly declined to decide the arbitrability of the matter. After informing IMG that it would stop the arbitration if directed by a court to do so, the AAA halted the process at once when IMG obtained a state court order. Until that time, the AAA was well within its rights to proceed with the arbitration, and was acting in a manner similar to a clerk of court upon receiving a filing that complies with the court’s rules. The cases uniformly support arbitral immunity in situations such as occurred here. We have held, for example, that arbitral immunity should extend to cases where the authority of an arbitrator to resolve a dispute is challenged. Tamari v. Conrad, 552 F.2d 778, 780 (7th Cir. 1977). In Tamari, the plaintiff argued that arbitrators are not entitled to immunity if they have no right to arbitrate the dispute in the first place. 552 F.2d at 780. We held that arbitral immunity should apply when the arbitrator’s authority is challenged because arbitrators will be dissuaded from serving if they can be caught up in the dispute and be saddled with the burdens of defending a lawsuit. See Jain v. deMere, 51 F.3d 686, 688 (7th Cir. 1995), cert. denied, 516 U.S. 914 (1995) (noting that the Federal Arbitration Act creates a strong presumption in favor of arbitration). We noted that arbitrators have no interest in the outcome of the matter, and thus should not be compelled to become parties to the dispute. Tamari, 552 F.2d at 781. We found suing an arbitrator to be comparable to suing jurors when a litigant is dissatisfied with the outcome of a lawsuit. Such a suit would place an unfair burden on jurors and would discourage others from jury service. Moreover, the suit would not be necessary for a litigant to obtain relief. The composition of a jury, for example, can be challenged through appellate review of the original action. Similarly, IMG or any party to an arbitration can obtain relief by seeking a stay against the party bringing the arbitration. There is no need to seek a stay against the sponsoring organization.”

Affirmed.

Appeal from the United States District Court for the Southern District of Indiana, Barker, J., Rovner, J.