Ga.-Based Company Claims Arbitrator Couldn't Hear, Dozed Off
IOWA CITY, Iowa -- A company is trying to get out of paying an Iowa utility millions of dollars in a construction dispute by claiming that a retired judge who oversaw the arbitration proceedings had serious hearing problems, fell asleep and was confused.
Dustex Corp. asked a federal court in Iowa this week to vacate a $3.4 million arbitration award in favor of the municipal utility in Cedar Falls, Iowa. Kennesaw, Ga.-based Dustex argues that it did not receive a fair hearing due to the behavior of 76-year-old arbitrator Marshall P. Young, a retired state and federal judge in South Dakota.
Young chaired a three-member panel that heard a dispute over environmental upgrades that the Cedar Falls utility sought to make to a coal-fired power plant in 2006. The utility contracted with Miron Construction to manage the project, and Miron hired Dustex to supply a piece of equipment called a baghouse, which reduces emissions.
The utility claimed the baghouse never worked as intended, while Miron claimed the utility owed it money. The dispute went to arbitration. The American Arbitrators Association picked Young, who retired as a federal magistrate in 2007 after four decades on the bench, to chair the hearing panel and two other arbitrators as members.
After 12 days of hearings over the last year, the panel in November ordered Miron, Dustex and Continental Casualty Co. to pay the utility $3.4 million for the costs of fixing the baghouse.
Dustex and Neenah, Wis.-based Miron each filed documents this week seeking to throw out the award on several grounds, while Cedar Falls Utilities asked for the award to be confirmed.
Dustex's filings, which include an affidavit from president and general manager Patrick Paul, repeatedly criticize Young's conduct, saying he suffered from a "significant hearing disability" that caused him to ignore numerous legal objections and miss witness testimony.
Young did not have "the cognitive ability" to recognize the parties or attorneys, confusing their names even after several days of hearings; did not take notes or look at the exhibits in the highly technical case; misstated evidence; and repeatedly appeared to doze off during the proceedings, Dustex claims.
Paul wrote that he clocked Young snoozing for 20 minutes on one occasion and saw him nod off other times, adding that he did not believe Young was competent to serve. Young nonetheless had great influence because the other two members, Jerome Bales of Kansas City, Mo., and Wyatt Hoch of Wichita, Kan., deferred to his decisions on procedural issues, Paul wrote.
Young, a resident of Rapid City, S.D., didn't return a phone message seeking comment. Hoch and Bales said they were not permitted to comment under the rules of arbitration.
Dustex said that it reported Young's hearing problems and sleeping to the American Arbitrators Association in February, but did not ask for Young's removal because of the delay and additional expense that would have entailed. Association spokesman Michael Clark declined comment.
Miron attorney William McCardell, who was present for the hearings, said he did not dispute Dustex's descriptions of Young's behavior. But he said Miron chose to focus on another issue — that the award conflicted with Iowa's competitive bidding law — in its appeal.
Jeff Stone, a Cedar Rapids-based attorney representing Cedar Falls Utilities, dismissed the claims against Young, saying that "all of the parties received a full and fair hearing."
"Marshall Young is a very well-respected jurist who did an excellent job in the arbitration, as did the other two arbitrators," he said.
Young's biographer, Don Theye of Rapid City, said Young is a highly respected judge who handled many high-profile cases, including a 1984 heroin possession case involving Bobby Kennedy Jr. and the 1975 trial of American Indian Movement leader Dennis Banks.
Theye, 82, said that he did not believe Young had significant hearing problems since the two were able to talk easily during his research for the recently published book.
"As far as dozing off, I don't know," Theye said. "But if I sat in 12 days of bloody hearings, I would doze off, too."