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Bowen v. Amoco Pipeline Co.

ELR Citation: 31 ELR 20719
Nos. No. 00-7039, 254 F.3d 925/(10th Cir., 06/20/2001)

The court holds that parties may not contractually alter the standard of judicial review for an arbitration panel's award of damages to individuals for an oil company's pollution of a creek on the individuals' property and, therefore, affirms the panel's award of damages. After initially denying any responsibility for the pollution, the oil company submitted to arbitration with the individuals. The arbitration panel granted relief to the individuals, the oil company appealed to a district court, and the district court affirmed the award after applying a limited standard of judicial review. The oil company then appealed to the Tenth Circuit claiming that the parties had contracted for expanded judicial review.

The court first holds that parties may not contract for expanded judicial review of arbitration awards. The purposes behind the Federal Arbitration Act (FAA), as well as the principles announced in various U.S. Supreme Court cases, do not support a rule allowing parties to alter the judicial process by private contract. The FAA's limited review ensures judicial respect for the arbitration process and prevents courts from enforcing parties' agreements to arbitrate only to refuse to respect the results of the arbitration. Moreover, expanded judicial review places federal courts in the awkward position of reviewing proceedings conducted under potentially unfamiliar rules and procedures. The court also holds that the arbitration panel did not exceed its powers or act in manifest disregard of the law in concluding that it had jurisdiction over the case and ordering the cleanup of the individuals' property, awarding damages to the individuals and creating an escrow account for the cleanup of the property, and awarding punitive damages.

Counsel for Plaintiffs
Michael L. Darrah
Durbin, Larimore & Bialick
920 N. Harvey St., Oklahoma City OK 73102
(405) 235-9584

Counsel for Defendant
Stephen Ward
Gardere, Wynne & Sewell
200 Oneok Plaza
100 W. 5th St., Tulsa OK 74103
(918) 699-2900

Tacha, J. Before Gibson* and Lucero, JJ.

* Honorable John R. Gibson, Senior Circuit Judge. United States Court of Appeals for the Eighth Circuit, sitting by designation.