Case 1:09-cv-00752-HTW Document 11 Filed 05/04/09 Page 1 of 28

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA ) ) ) ) ) ) ) Case No.: 1 09-cv-0752-HTW ) ) ) ) )

EMORY UNIVERSITY and EMORY HEALTHCARE, INC., Plaintiffs/Movants, v. JAMES J. MURTAGH, M.D., Defendant/Respondent.

MEMORANDUM IN OPPOSITION TO EMORY UNIVERSITYS AND EMORY HEALTHCARES MOTION TO CONFIRM ARBITRATION AWARD James J. Murtagh, M.D. (Dr. Murtagh) hereby, by the undersigned counsel, respectfully submits his Memorandum in Opposition to Emory universitys and Emory Healthcare, Inc. (Emorys) Motion to Confirm Arbitration Award. For all the reasons stated herein, Emorys motion should be denied. I. GROUNDS FOR DENYING CONFIRMATION OF AND VACATING THE ARBITRATION AWARD EMORYS MOTION TO CONFIRM THE ARBITRATORS AWARD SHOULD BE DENIED BECAUSE OF EVIDENT PARTIALITY ON THE PART OF THE ARBITRATOR, THE ARBITRATOR ENGAGED IN PREJUDICIAL PROCEDURAL MISCONDUCT, AND THE ARBITRATOR EXCEEDED HIS AUTHORITY
1

A.

Case 1:09-cv-00752-HTW Document 11 Filed 05/04/09 Page 2 of 28

1.

CONFIRMATION OF THE ARBITRATION AWARD SHOULD BE DENIED AND THE AWARD SHOULD BE VACATED BECAUSE OF EVIDENT PARTIALITY OF THE ARBITRATOR Section 9 of the Federal Arbitration Act provides that an arbitrators award

should be confirmed upon timely application by a party to the arbitration unless the award is vacated or modified pursuant to Section 10 or 11 of the Act. 9 U.S.C. 10, in turn, provides, in part: (a) In any of the following cases the United States court in and for the district wherein the award was made may make an order vacating the award upon the application of any party to the arbitration * * * * (2) where there was evident partiality or corruption in the arbitrators, or either of them. Confirmation of an arbitration award should be denied where it is shown that there was evident partiality on the part of the arbitrator. Evident partiality on the part of the arbitrator is established when the party challenging the award demonstrates "facts which would establish a reasonable impression of partiality." Middlesex Mutual Insurance Co. v. Levine, 675 F.2d 1197, 1201 (11th Cir. 1982)(quoting Commonwealth Coatings Corp. v. Continental Casualty Co., 393 U.S. 145, 150 (1968). In Commonweath Coatings and Middlesex Mutual Insurance Co., arbitration awards were vacated for evident partiality of the arbitrator under 9 U.S.C.
2

Case 1:09-cv-00752-HTW Document 11 Filed 05/04/09 Page 3 of 28

10(a)(2) because the arbitrator had failed to disclose prior dealings with the opposing party. In writing the plurality opinion for the Court in Commonwealth Coatings, Justice Black explained that courts should, if anything, be even more scrupulous to safeguard the impartiality of arbitrators than judges, since the former have completely free rein to decide the law as well as the facts and are not subject to appellate review. Commonwealth Coatings, 393 U.S. at 149. The Eleventh Circuit Court of Appeals relied on the above-quoted language in expressing its view that 9 U.S.C. 10(a)(2) is meant to be stringently applied. University Commons Urbana, Ltd., Capstone Dev. v. Universal Constructors, Inc., 304 F.2d 1331, 1338. Arbitrators are required to disclose any dealing which might create an impression of possible bias. Id. As part of the Settlement and Confidentiality Agreement and Mutual Release of August 10, 2001, (Settlement Agreement) Murtagh agreed to dismiss several pending cases which he had filed against the Veterans Administration Medical Center and United States employees who worked for the Veterans Administration Medical Center. The arbitrator, Richard H. Deane, Jr., served as United States Attorney for the Northern District of Georgia from 1998 to 2001. Exhibit 3, Deane Rsum. In his capacity as U.S. Attorney, Deane represented the
3

Case 1:09-cv-00752-HTW Document 11 Filed 05/04/09 Page 4 of 28

United States Veterans Administration and employees as parties in litigation with interests adverse to Murtagh. Murtagh originally filed his complaint in Fulton County Superior Court stating tort claims, amended to state claims for rescission of the settlement, and later amended when arbitration was required to state additional claims to enforce the Settlement Agreement. See Exhibit 1 (which reflects Murtaghs original Complaint). After the case was ordered into arbitration and Deane was selected as arbitrator, Murtagh discovered grounds to rescind the Settlement Agreement. Rescission of the Settlement Agreement would have given Murtagh grounds to seek reinstatement of the dismissed lawsuits thus placing Deanes former clients in jeopardy. The duty to recuse is absolute where the judge was previously the U.S. District Attorney on the same or a related case which was within his jurisdiction while he served as U.S. Attorney. Jenkins v. Bordenkircher, 611 F.2d 162 (6th Cir. 1979) cert. denied, 446 U.S. 943; United States v. Arnpriester, 37 F.3d 466 (9th Cir. 1994). As U.S. Attorney, Deane had supervisory responsibility for representation of the government entities and employees involved in the settled cases. 28 U.S.C. 547. Under 28 U.S.C. 455(b)(3), Deane would have been required to recuse himself as judge over the case. The statute provides:
4

Case 1:09-cv-00752-HTW Document 11 Filed 05/04/09 Page 5 of 28

(a) Any justice, judge, or magistrate [magistrate judge] of the United States shall disqualify himself in any proceeding in which his impartiality might reasonably be questioned.(b) He shall also disqualify himself in the following circumstances: (3) Where he has served in governmental employment and in such capacity participated as counsel, adviser or material witness concerning the proceeding or expressed an opinion concerning the merits of the particular case in controversy [.] 28 U.S.C. 455(a), (b)(3). The Georgia Code of Judicial Conduct Canon 3 contains a similar provision which requires recusal where: (b) the judge served as a lawyer in the matter in controversy, or a lawyer with whom the judge previously practiced law served during such association as a lawyer concerning the matter, or the judge has been a material witness concerning it[.] Ga. Code of Judicial Conduct Canon 3, Section 3(E)(1)(b). It follows that, if arbitrators are to be held to a higher standard than judges as indicated by Justice Black in Commonwealth Coatings, then Deane should have recused himself. At least one federal circuit has ruled that recusal of a former U.S. Attorney is not required by 28 U.S.C. 455(b)(3) unless the judge participated in the case in some way beyond holding the office of U.S. Attorney. United States v. Gipson, 835 F.2d 1323, 1326 (10th Cir. 1988). Research has not disclosed an opinion indicating whether the Eleventh Circuit will follow the Ninth Circuit or the Tenth
5

Case 1:09-cv-00752-HTW Document 11 Filed 05/04/09 Page 6 of 28

Circuit rule. The Ninth Circuit rule is grounded in the language of 28 U.S.C. 547 which makes representation of United States government agencies the sole responsibility of the United States Attorney. Regardless of which rule is adopted, Murtagh learned during the course of the arbitration that Deane played a more active role in the settled cases than he disclosed prior to accepting his appointment. In particular, Deane did not disclose that he had investigated the allegations Murtagh had brought against Samuel M. Aguayo, M.D. in the amended complaint filed in the case of James J. Murtagh, Jr., M.D. v. Emory University, et al., United States District Court for the Northern District of Georgia, Atlanta Division, Civil Action No. 1:99-cv-2864-JEC, (the Kokko case). However, in September, 2007, in the process of reviewing thousands of pages of documents produced in discovery, Murtagh found Deanes certification filed in the Kokko case pursuant to 28 U.S.C. 2679. See Exhibit 5 (Plaintiff Dr. James Murtaghs Motion for Recusal of Arbitrator and Disclosure of Information Related to Potential Conflicts filed in arbitration on January 18, 2008). Deane personally signed the certificate. Exhibit 2 (Deane Certificate dated April 6, 2000). Under 28 C.F.R. 15.3, the authority to make the certificate was vested in Deane, not his office nor in any of the Assistant U.S. Attorneys under his
6

Case 1:09-cv-00752-HTW Document 11 Filed 05/04/09 Page 7 of 28

supervision. The certification states that Deane reviewed the allegations against Dr. Aguayo and determined that the alleged misconduct had occurred within the scope of Dr. Aguayos employment with the United States government. Deane could not have made the certification without acquiring personal knowledge of the allegations and the nature and scope of Dr. Aguayos employment. Deanes personal direct involvement in the Kokko case is thus established. Under 28 U.S.C. 455(b)(3) Deane would have had to recuse himself if he were acting as a judge in a federal case. The right to insist on recusal on the basis of a conflict under 28 U.S.C. 455(b)(3) is made absolute and not subject to waiver by 28 U.S.C. 455(e). 1 2. THE ARBITRATOR FAILED TO FOLLOW THE PROCEDURE REQUIRED BY THE ARBITRATION CONTRACT AND THE AAA RULES WHEN PRESENTED WITH THE MOTION FOR RECUSAL, AND THEREBY EXCEEDED HIS AUTHORITY AND ENGAGED IN PREJUDICIAL PROCEDURAL MISCONDUCT Parties are free to designate in their arbitration agreement the rules and procedures by which the arbitration will be conducted. Volt Information Sciences,
Despite the prohibition against waiver of 455(b) conflicts under 28 U.S.C. 455(e), the Eleventh Circuit has ruled that a motion for recusal can be denied if it is not filed within a reasonable time after grounds for the motion are ascertained. Summers v. Singletary, 119 F.3d 917, 921 (11th Cir. 1997). To the extent that Summers creates the possibility of waiver of a 445(b) conflict, Murtagh questions its reasoning, which would appear to be contrary to the applicable federal statute. However, in this case, Murtagh did request Deane to recuse himself within a reasonable time after he discovered the extent of Deanes personal involvement in the settled cases. 7
1

Case 1:09-cv-00752-HTW Document 11 Filed 05/04/09 Page 8 of 28

Inc. v. Bd. of Trustees of Leland Stanford Junior University, 489 U.S. 468, 479 (1989). The Settlement Agreement provided that the arbitration would be conducted in accordance with the rules of the American Arbitration Association (AAA). The Settlement Agreement did not specify which set of AAA rules would be followed. Because the Settlement Agreement settled a dispute regarding Murtaghs employment with Emory, it has been assumed that the AAA rules regarding employment matters would govern the arbitration. Rule 16 of the AAA Employment Arbitration Rules and Mediation Procedures provides: a. Any arbitrator shall be impartial and independent and shall perform his or her duties with diligence and in good faith, and shall be subject to disqualification for: i. partiality or lack of independence, ii. inability or refusal to perform his or her duties with diligence and in good faith, and iii. any grounds for disqualification provided by applicable law. The parties may agree in writing, however, that arbitrators directly appointed by a party pursuant to Section R-13 shall be nonneutral, in which case such arbitrators need not be impartial or independent and shall not be subject to disqualification for partiality or lack of independence. b. Upon objection of a party to the continued service of an arbitrator, or on its own initiative, the AAA shall determine whether the arbitrator should be disqualified under the grounds set out above, and shall inform the parties of its decision, which decision shall be conclusive. Rule 17(b) of the AAA Commercial Arbitration Rules and Mediation
8

Case 1:09-cv-00752-HTW Document 11 Filed 05/04/09 Page 9 of 28

Procedures is identical to the above-quoted Rule 16(b) of the Employment Rules. When Murtagh discovered the extent of Deanes involvement in the settled cases, he requested Deane to recuse himself or refer the issue of whether to recuse himself to the AAA. Both Deane and Emory refused to refer the matter to the AAA and Deane proceeded to issue his own ruling in which he decided not to recuse himself. Exhibit 4, Decision of the Arbitrator dated March 13, 2008. In so doing, Deane violated the parties agreement to follow the AAA procedures. Furthermore, Deane violated rule II.E. of the Code of Ethics for Arbitrators in Commercial Disputes (AAA Code of Ethics) which provides: E. In the event that an arbitrator is requested by all parties to withdraw, the arbitrator should do so. In the event that an arbitrator is requested to withdraw by less than all of the parties because of alleged partiality or bias, the arbitrator should withdraw unless either of the following circumstances exists: (1) If an agreement of the parties, arbitration rules agreed to by the parties, or applicable law establishes procedures for determining challenges to arbitrators, then those procedures should be followed; or, (2) if the arbitrator, after carefully considering the matter, determines that the reason for the challenge is not substantial, and that he or she can nevertheless act and decide the case impartially and fairly, and that withdrawal would cause unfair delay or expense to another party or would be contrary to the ends of justice. As noted above, in this case, the arbitration rules agreed to by the parties, i.e. Rule 16 or the AAA Employment Rules or, possibly Rule 17 of the AAA
9

Case 1:09-cv-00752-HTW Document 11 Filed 05/04/09 Page 10 of 28

Commercial Rules, established procedures for determining challenges to arbitrators and those procedures should have been followed. Rule I.E. of the AAA Code of Ethics provides: E. When an arbitrator's authority is derived from an agreement of the parties, the arbitrator should neither exceed that authority nor do less than is required to exercise that authority completely. Where the agreement of the parties sets forth procedures to be followed in conducting the arbitration or refers to rules to be followed, it is the obligation of the arbitrator to comply with such procedures or rules. The arbitrator has no obligation to comply with any such procedures or rules that are unlawful, unconscionable, or inconsistent with this Code. Under the above rule, Deane was required to follow the procedure for resolving the recusal issue set forth in Rule 16 of the AAA Employment Rules and submit the matter to the AAA to be independently resolved. If there had been no such procedure available and the arbitrator had no choice but to decide the recusal issue himself (which was not the case), his ruling on the recusal issue was deficient in that it lacked the specific findings required by Rule II.E.(2). Rather than finding that the reason for Murtaghs challenge was not substantial, Deane ruled that Murtagh had waived his objection by consenting to Deanes appointment as arbitrator. Exhibit 4, Decision of the Arbitrator dated March 13, 2008, pp. 8-9. Arbitrator Deane exceeded his authority when he refusal to abide by the
10

Case 1:09-cv-00752-HTW Document 11 Filed 05/04/09 Page 11 of 28

parties arbitration contract and refer the recusal decision to the AAA. This is a sufficient basis to deny confirmation of the award under the FAA. 9 U.S.C. 10. 10. Same; vacation; grounds; rehearing (a) In any of the following cases the United States court in and for the district wherein the award was made may make an order vacating the award upon the application of any party to the arbitration-(1) or (4) where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made. Id. Further, the Arbitrator engaged in prejudicial procedural misconduct when he departed from the AAA rules (and the arbitration contract) and the procedure specified therein for decisions on motions for recusal, and acted contrary to applicable rules of ethics regarding recusal. Such misconduct is also a basis for vacation of an arbitration award under the FAA, 9 U.S.C. 10. 10. Same; vacation; grounds; rehearing (a) In any of the following cases the United States court may make an order vacating the award (1) (3) where the arbitrators were guilty of or of any other misbehavior by which the rights of any party have been prejudiced; or . Id. 3. MURTAGH DID NOT WAIVE HIS RIGHT TO REQUIRE THE ARBITRATOR TO RECUSE HIMSELF The essence of Deanes decision not to recuse himself was that Murtagh
11

Case 1:09-cv-00752-HTW Document 11 Filed 05/04/09 Page 12 of 28

waived the issue by failing to conduct his own investigation into Deanes involvement in the settled cases prior to accepting Deane as the arbitrator. Id. In so holding, Deane improperly shifted his own obligation to disclose conflicts of interest under the AAA Employment Rules, the AAA Commercial Rules, the AAA Ethical Rules and the caselaw under the FAA. Rule 15 of the AAA Employment Rules provides:

12

Case 1:09-cv-00752-HTW Document 11 Filed 05/04/09 Page 13 of 28

15. Disclosure a. Any person appointed or to be appointed as an arbitrator shall disclose to the AAA any circumstance likely to give rise to justifiable doubt as to the arbitrator's impartiality or independence, including any bias or any financial or personal interest in the result of the arbitration or any past or present relationship with the parties or their representatives. Such obligation shall remain in effect throughout the arbitration. b. Upon receipt of such information from the arbitrator or another source, the AAA shall communicate the information to the parties and, if it deems it appropriate to do so, to the arbitrator and others. c. In order to encourage disclosure by arbitrators, disclosure of information pursuant to this Section R-15 is not to be construed as an indication that the arbitrator considers that the disclosed circumstance is likely to affect impartiality or independence. Rule 16 of the AAA Commercial Rules is virtually identical to Rule 15 of the Employment Rules. Rules II.A-C. of the AAA Ethical Rules provide: A. Persons who are requested to serve as arbitrators should, before accepting, disclose (1) any direct or indirect financial or personal interest in the outcome of the arbitration which is known or becomes known; (2) any existing or past financial, business, professional, family or social relationships which are known or become known and are likely to affect impartiality or which might reasonably create an appearance of partiality of bias. Prospective arbitrators should disclose any such relationships which they personally have with any party or its lawyer, with any party-appointed arbitrator, or with any individual whom they have been told will be a witness. They should also disclose any such relationships involving their immediate family or household members or their current employers, partners or professional or business associates; (3) the nature and extent of any prior knowledge he or she may have of the dispute; and
13

Case 1:09-cv-00752-HTW Document 11 Filed 05/04/09 Page 14 of 28

(4) any other matters, relationships or interests which they are obligated to disclose by the agreement of the parties, the rules or practices of the institution which is administering the arbitration, or applicable law regulating arbitrator disclosure. B. Persons who are requested to accept appointment as arbitrators should make a reasonable effort to inform themselves of any interests or relationships described in the preceding subparagraph A. C. The obligation to disclose interests or relationships described in the preceding subparagraphs A and B is a continuing duty which requires a person who accepts appointment as an arbitrator to disclose forthwith, at any stage of the arbitration, any such interests or relationships which may arise, or which are recalled or discovered. Rule I.B. of the above-quoted AAA Ethical Rules clearly places the burden on the potential arbitrator to make a reasonable effort to inform himself of conflicts. Cases decided under the Federal Arbitration Act also place the burden of investigating conflicts on the potential arbitrator. HSMV Corp. v.ADI, Ltd. 72 F.Supp.2d 1122 (C.D.Cal. 1999); Applied Indust. Materials Corp. v. Ovalar Makine Ticaret Ve Sanayi, A.S., 492 F.3d 132(2nd Cir. 2007)(where arbitrator has reason to believe conflict may exist, he has duty to investigate). Deane did not have the option of turning a blind eye to the potential conflicts arising from his role as U.S. Attorney in the settled cases. His actual lack of knowledge of the nature and extent of his involvement cannot be used to avoid a conclusion of evident partiality. On the other hand, when Murtagh became aware of Deanes involvement in the prior litigation, he promptly sought recusal. There was no waiver of the right to
14

Case 1:09-cv-00752-HTW Document 11 Filed 05/04/09 Page 15 of 28

recusal on Murtaghs part. EMORYS MOTION TO CONFIRM THE ARBITRATORS AWARD SHOULD BE DENIED IN SUBSTANTIAL PART REGARDING THE AWARD OF ATTORNEY FEES BECAUSE THE ATTORNEY FEES AWARD WAS OBTAINED BY FRAUD AND/OR UNDUE MEANS Knowingly false and misleading exhibits and witness testimony were presented to the Arbitrator in support of Emorys request for an award of fees as part of the arbitration award with the intent that the Arbitrator rely on them. The Arbitrator did rely on them in granting Emory the ultimate fee awards. The false information in the exhibits and testimony was material to the Arbitrator's decision (logically and/or legally mattered to that decision). Movant Murtagh was prejudiced (legally harmed in some way) by this particular Arbitrator's decision. Dr. Murtagh has conducted a detailed review of a portion of Emorys fee petitions and supporting materials. There are numerous indications that the fee petition submissions are not accurate and reliable or even trustworthy. See Exhibits 7, 9, and 10 for some examples from a sampling of the invoices submitted in support of Emorys fee request. In a number of instances Emory deleted tasks in the non-original invoices submitted to the Arbitrator as compared to the originals but did not reduce the hours at all or substantially. In a number entries Emory
15

B.

Case 1:09-cv-00752-HTW Document 11 Filed 05/04/09 Page 16 of 28

included a task relating to defending against Murtaghs claims which are not eligible for an award under applicable law. In addition, invoices were found with different invoice numbers but almost completely the same entries and other invoices were found with identical invoice numbers, but substantially different entries. This evidence reflects an apparent attempt to deceive the Arbitrator. Dr. Murtagh requests an evidentiary hearing to prove this apparent fraud regarding attorney fees awarded. Knowingly false and misleading exhibits and witness testimony were presented to the Arbitrator in support of Emorys request for an award of fees as part of the arbitration award with the intent that the Arbitrator rely on them. The Arbitrator did rely on them in granting Emory the ultimate fee awards. The false information in the exhibits and testimony was material to the Arbitrator's decision (logically and/or legally mattered to that decision). Movant Murtagh was prejudiced (legally harmed in some way) by this particular Arbitrator's decision. After the Arbitrator declared that Emory was entitled to an award of fees based on Murtagh's discovery misconduct, the Arbitrator directed Emory to submit an attorney fees petition to document the fees to which it was entitled. Emory submitted a fee petition which included an affidavit by Emory's lead outside counsel with attached (purported) invoices submitted by Emory's outside
16

Case 1:09-cv-00752-HTW Document 11 Filed 05/04/09 Page 17 of 28

lawfirm to Emory at the time the attorney fees were incurred. However, a close inspection of the submitted affidavit and the purported invoices, and a comparison of the submitted invoices with another set of invoices purported to be the original invoices that Emory provided to Murtagh at the hearing before the Arbitrator on Murtagh's request, supports the conclusion that material false representations were made in the affidavit and that the submitted invoices had been materially altered to falsely support Emory's argument that it was entitled to substantially more fees than it was avctually entitled to under the Arbitrator's order. The false representations, explicit and implicit, in the affidavit and invoices submitted by Emory include: 1) That only lead attorney Wozniak edited the invoices; 2) That the only edits to the invoices were redactions to protect attorney client privilege; 3) That fees incurred for attorney time spent defending Emory against Murtagh's claims were excluded (because the statute under which Emory sought fees, OCGA 13-6-11, does not allow for recovery of fees spent in defending against the opposing party's claims, but only allows a fee award for fees incurred in prosecuting a party's own claims); 4) That the invoices produced at the hearing were true originals;
17

Case 1:09-cv-00752-HTW Document 11 Filed 05/04/09 Page 18 of 28

5) That all work included in the invoices was for the arbitration and not for other matters or cases including emory's counterclaims for injunctive relief pending before the Superior Court; 6) That the total time and total fees charged for a block billed task were properly reduced when edits were made to exclude non-allowable work such as work on other cases or work defending against Murtagh's claims; and 7) That all work charged in the invoices was reasonable and necessary for prosecuting Emory's claims against Murtagh and dealing with the discovery issues in the arbitration. As a result of Emory's use of the altered invoices and the misrepresentations made in Emory's counsel's affidavit submitted with Emory's fee petition, the Arbitrator was misled into concluding erroneously that: a) Emory's fee petition, Emory's counsel's affidavit, and Emory's invoices were accurate, honest and reliable; b) Emory was entitled to all the fees requested (beyond the fees excluded by the Arbitrator based on Emory's use of block billing and some failures by Emory to reduce the time charged for items after an a non-allowed task was removed from a block billing). Had Emory not made these material misrepresentations relied on by the
18

Case 1:09-cv-00752-HTW Document 11 Filed 05/04/09 Page 19 of 28

Arbitrator, either Emory's fee petition would have been denied in its entirety based on the applicable case law which places the burden on the fee applicant to separate out non-allowable tasks from those for which fees may be awarded, or Emory's fee award would have been substantially reduced beyond the reductions the Arbitrator made. Dr. Murtagh requests discovery and an evidentiary hearing related to this claim. C. EMORYS MOTION TO CONFIRM THE ARBITRATORS AWARD SHOULD BE DENIED BECAUSE THE ARBITRATOR ENGAGED IN PREJUDICIAL PROCEDURAL MISCONDUCT IN APPLYING A DOUBLE STANDARD REGARDING COMPELLING DISCOVERY AND SANCTIONING PARTIES WHO FAILED TO COMPLY WITH DISCOVERY ORDERS Emory failed to produce documents requested by Murtagh in discovery. The Arbitrator granted Murtagh's Motion to Compel and noticed Emory that the Arbitrator would consider granting Murtagh's request for attorney fees if Emory failed to comply with the deadline set in the Arbitrator's Order. Emory failed to comply with this Order. See Exhibit 8, chronology of discovery events taken largely from Arbitrators docket/index with some clarifying descriptions added by counsel. Murtagh filed a motion for sanctions and fees. The Arbitrator denied Murtaghs request for fees and sanctions. Following this sequence of events, Emory accused Murtagh of a similar failure to produce discovery documents in
19

Case 1:09-cv-00752-HTW Document 11 Filed 05/04/09 Page 20 of 28

violation of an Order of the Arbitrator. Id. The Arbitrator issued severe sanctions against Murtagh, including dismissal of Murtagh's claims, striking of Murtagh's defenses to Emory's counterclaims and granting Emory a default judgment, and awarding attorney fees to Emory. Because Emory's discovery misconduct occurred first, had the Arbitrator not applied a double standard regarding compelling discovery and sanctions, the outcome of the arbitration would have been substantially different, i.e. either Murtagh would have prevailed based on sanctions issued against Emory or both sides would have had similar sanctions imposed making the outcome essentially a wash. D. EMORYS MOTION TO CONFIRM THE ARBITRATORS AWARD SHOULD BE DENIED BECAUSE DR. MURTAGH WAS FRAUDULENTLY INDUCED TO ENTER THE ARBITRATION AGREEMENT Dr. Murtagh entered into the settlement in reasonable reliance on Emory's representations regarding Emory having conducted a peer review and fitness review relating to Dr. Murtagh, regarding which doctors had participated in such reviews, and regarding what findings were made by whom as part of such reviews which reflected unfavorably on Murtagh; and by misleading him into believing that this controversy would be kept confidential during an arbitration proceeding, even though Emory has since demonstrated that it had no intention of keeping its
20

Case 1:09-cv-00752-HTW Document 11 Filed 05/04/09 Page 21 of 28

allegations against Murtagh confidential. Such representations were material to Dr. Murtagh's decision to enter into the settlement because such reviews and findings, even if incorrect, had significant potential for harming Dr. Murtagh's chances of advancing his medical career and posed a threat of precluding a meaningful medical career. The settlement included an arbitration clause which Dr. Murtagh also agreed to in reasonable reliance on Emory's material representations regarding the peer review and fitness review allegedly conducted regarding dr. Murtagh. Dr. Murtagh discovered post settlement that some or all of these Emory material representations were substantially false. Had Dr. Murtagh known the truth, including that Emory did not conduct the peer review as it had represented at the time of settlement, and that the doctors named as having made or concurred in certain findings adverse to Dr. Murtagh based on such reviews actually had not made or concurred in such findings, Dr. Murtagh would have not decided to enter either the settlement or the arbitration clause. Because Dr. Murtagh was fraudulently induced to enter into the settlement and arbitration clause, neither is valid. As a result, Emory's counterclaims based on the settlement are invalid and no basis for a default judgment against Dr.
21

Case 1:09-cv-00752-HTW Document 11 Filed 05/04/09 Page 22 of 28

Murtagh, and more significantly the entire arbitration process itself and the award that resulted from Emory's motion to compel arbitration is void or voidable as a result of this fraud in the inducement. Dr. Murtagh requests discovery and an evidentiary hearing related to this claim. E. EMORYS MOTION TO CONFIRM THE ARBITRATORS AWARD SHOULD BE DENIED BECAUSE EMORY WAIVED ITS RIGHT TO ARBITRATE BY SEEKING JUDICIAL RELIEF OF MATTERS SUBJECT TO ARBITRATION UNDER THE PARTIES SETTLEMENT AND ARBITRATION AGREEMENT Emory sought relief and obtained relief from the Superior Court on claims that Dr. Murtagh violated the settlement non-disparagement clause, paragraph 18 of the Settlement. See Superior Court Temporary Injunction and Contempt Orders. Issues of violation of the non-disparagement clause were required to be arbitrated under the parties settlement and arbitration agreement. Emorys actions in seeking to litigate and obtain relief from a court regarding a matter within the arbitration agreement constitutes a waiver of its right to arbitration, and any arbitration award is void or voidable as a result. The Arbitrators refusal to declare that Emory had waived its right to arbitrate and the Arbitrators issuance of an award notwithstanding this waiver represents prejducial procedural misconduct that is a basis for vacating the award under the FAA section 10. Dr. Murtagh requests discovery and an evidentiary hearing related to this claim.
22

Case 1:09-cv-00752-HTW Document 11 Filed 05/04/09 Page 23 of 28

F.

EMORYS MOTION TO CONFIRM THE ARBITRATORS AWARD SHOULD BE DENIED BECAUSE EMORY LOST ITS RIGHT TO ENFORCE THE ARBITRATION AGREEMENT BY BREACHING THAT AGREEMENT Emory breached the arbitration clause by refusing to refer the Arbitrator's

recusal issue to the AAA, as provided for in the AAA rules. The arbitration clause reflects the agreement of the parties that the AAA rules would govern and would be followed during the course of the arbitration. The AAA rules provide that when a party requests the recusal or disqualification of an arbitrator, that the AAA, not the arbitrator himself, should decide whether the arbitrator is to be disqualified. Murtagh filed a recusal motion and Arbitrator Deane and Emory refused to refer the motion/decision to the AAA. The arbitrator then decided the motion and refused to disqualify himself. Emory breached the arbitration clause by seeking and obtaining injunctive relief from the Superior Court regarding alleged violations by Murtagh of paragraph 18, the non-disparagement provision, of the settlement, notwithstanding that the settlement and arbitration clause only allowed Emory to take injunctive relief claims to a court if the claim related to an alleged violation by Murtagh of paragraphs 7 or 8 of the settlement. The FAA provides: 2. Validity, irrevocability, and enforcement of agreements to arbitrate
23

Case 1:09-cv-00752-HTW Document 11 Filed 05/04/09 Page 24 of 28

A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract. 9 U.S.C. 2. This FAA provision provides that in addition to the grounds for vacating an award pursuant to a valid arbitration agreement, see 9 U.S.C. 10, an arbitration award may also be defeated if one can show under the law applicable to contracts generally that the arbitration contract is invalid under the law of contracts. Here, the arbitration contract is invalid under Georgia contract law for the reasons stated supra and infra. G. EMORYS MOTION TO CONFIRM THE ARBITRATORS AWARD SHOULD BE DENIED BECAUSE THE ARBITRATION AGREEMENT WAS NOT RATIFIED BY A NECESSARY PARTY The arbitration contract was void ab initio because Grady never properly ratified it. Grady's agreement was material to Murtagh's agreement to enter into arbitration. Dr. Murtagh requests discovery and an evidentiary hearing related to this claim. CONCLUSION AND RELIEF REQUESTED For all the foregoing reasons, both the Arbitrators Decision and judgment dated February 4, 2009 should not be confirmed but should be vacated pursuant to
24

Case 1:09-cv-00752-HTW Document 11 Filed 05/04/09 Page 25 of 28

9 U.S.C. 10, and Emorys motion should be denied. Dr. Murtagh requests discovery and an evidentiary hearing in support of certain claims asserted herein. Should Dr. Murtaghs Motion to deny or strike Emorys Motion to Confirm, or to set new deadline for Dr. Murtaghs response be granted in the second alternative (new deadline set), Dr. Murtagh requests that this response be allowed to be supplemented by the new deadline.

Respectfully submitted, s/ J. Clayton Culotta J. CLAYTON CULOTTA Culotta & Culotta LLP Jefferson Hall 432 E. Court Avenue Jeffersonville, Indiana 47130 Telephone No. (812) 288-5141 Facsimile No. (812) 288-8305 1615 L Street, NW Suite 1350 Washington, D.C. 20036 s/ Mick G. Harrison The Caldwell Center 323 S. Walnut Street Bloomington, IN 47401 Telephone and Fax No. (812) 323-7274 Cell phone No. (812) 361-6220 E-mail: mickharrisonesq@earthlink.net Glenn L. Goodhart, Esq., GA Bar # 300540
25

Case 1:09-cv-00752-HTW Document 11 Filed 05/04/09 Page 26 of 28

6065 ROSWELL RD NE STE 410 SANDY SPRINGS, GA 30328 TEL. 404-255-3282 FAX 404-255-3524 Attorneys for Plaintiff, James J. Murtagh, M.D.

26

Case 1:09-cv-00752-HTW Document 11 Filed 05/04/09 Page 27 of 28

CERTIFICATE OF COMPLIANCE WITH L.R. 5.1B I HEREBY CERTIFY that the foregoing memorandum was prepared in Times New Roman, 14-point font, as approved by Local Rule 5.1B. s/ Mick G. Harrison Mick Harrison, Esq. Pro Hac Vice

27

Case 1:09-cv-00752-HTW Document 11 Filed 05/04/09 Page 28 of 28

CERTIFICATE OF SERVICE This is to certify that I have served a copy of the foregoing MEMORANDUM IN OPPOSITION TO EMORYS MOTION TO CONFIRM THE ARBITRATOR'S FINAL JUDGMENT AND AWARD upon the following parties by filing the same electronically using the Courts CM/ECF system: Todd D. Wozniak Lindsey Camp Edelmann GREENBERG TRAURIG LLP 3920 Northside Parkway, Suite 400 Atlanta, GA 30327 wozniakt@gtlaw.com Theodore B. Eichelberger Alton & Bird LLP One Atlantic Center 1201 West Peachtree Street Atlanta, GA 30309-3424 teichelberger@alston.com

/s/ Glenn L. Goodhart Glenn L. Goodhart, Esq.

28