Unreported / Non-Citable
Background
Waleed Mohamed Esaadi, proceeding pro se, brought employment claims against Pilot Catastrophe Services, Inc. and All State Insurance Company. The district court stayed the case pending arbitration and directed the parties to submit a joint status report.
Before that deadline, Esaadi moved for an extension of time and assistance concerning arbitration costs. Citing his limited financial circumstances, he asked the court to consider appointing or identifying an arbitrator at a reasonable cost or equitably allocating the expense between the parties.
The Court’s Holding
The court denied Esaadi’s motion. It held that none of the circumstances permitting judicial appointment of an arbitrator under Section 5 of the Federal Arbitration Act was present: the agreement supplied a selection method, accounted for a party’s failure to make a selection, and had not experienced a mechanical breakdown rendering the selection process unenforceable. Because a contractual procedure remained available, the parties were required to follow it.
The court also declined to intervene based on the alleged financial burden of holding proceedings in Mobile County, Alabama, paying each side’s panel designee, and splitting the umpire and arbitration expenses. It concluded that pre-award challenges concerning arbitral procedure and the alleged unfairness of that procedure must be addressed in arbitration rather than by the district court.
Key Takeaways
- Section 5 permits a court to select an arbitrator only in limited circumstances involving an absent, disregarded, or failed contractual selection process.
- A court will not intervene when the arbitration agreement provides a functioning method for selecting the panel and resolving a selection impasse.
- Objections to arbitration costs and the fairness of arbitral procedures generally must be presented to the arbitrator before an award issues.
Why It Matters
The decision underscores the narrow scope of judicial involvement in an arbitration before an award. Financial hardship alone does not authorize a federal court to replace the parties’ agreed selection and cost-allocation procedures when those procedures remain workable.