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Local Lawyer's Penchant for New York Lawyer When fists fly at an arbitration proceeding, the arbitrator isn't liable for not averting the altercation, a New Jersey appeals court says in an interpretation of the model Arbitration Act. The judges, in Malik v. Ruttenberg, A-6615-06, reversed a trial court's refusal to dismiss a suit charging an arbitrator knew of a lawyer's dangerous propensities yet did not remove him from the case, and an assault allegedly ensued when a recess was called. The appeals court found that decisions relating to control of the arbitral forum are within the immunity accorded by the N.J. Arbitration Act, adopted from the model act devised by the National Conference of Commissioners on Uniform State Laws. Eric Tuchman, the general counsel for the American Arbitration Association -- a defendant in the case -- says the ruling is the first in the nation to interpret the act's immunity provision. The act has been adopted in 13 states, including New Jersey, and is under consideration in four others. "Opinions like this really permit arbitrators and sponsoring organizations to preside over and administer cases in a way that is free and impartial," Tuchman says. The dispute arose from a long, bitter arbitration between homeowners and their renovation contractor, Rick Malik. At one point in the proceedings, Malik's lawyer, David Rochman, objected to actions of A. Fred Ruttenberg, the homeowners' lawyer. Rochman asked arbitrator Peter Liloia III to remove Ruttenberg from the case. Liloia declined to remove Ruttenberg and then called a brief recess, during which, Malik claims, Ruttenberg assaulted him outside the meeting room. The parties disagree whether there was a physical altercation. Ruttenberg, now with Flaster/Greenberg in Cherry Hill, says he did not assault Malik and was acquitted in Westampton Municipal Court of assault charges stemming from the Nov. 17, 2005, incident. Nevertheless, Malik sued for damages from the alleged assault, naming as defendants Liloia, AAA as the arbitral forum, Ruttenberg and Blank Rome, the firm where Ruttenberg worked at the time. AAA and Liloia filed an answer asserting that the arbitration act immunized them. The statute provides, at N.J.S.A. 2A:23B-14, that an arbitrator or an arbitration organization acting in that capacity "is immune from civil liability to the same extent as a judge of a court of this State acting in a judicial capacity." The act's immunity "supplements any immunity under other law." Camden County Superior Court Judge Ronald Freeman denied a motion to dismiss by Liloia and the AAA, based on an affidavit of merit by a plaintiffs' expert that said failure to control the proceedings fell outside the scope of immunity. But the appeals court disagreed. "We can think of no more judicial function than controlling the proceedings," wrote Judge Mary Cuff, joined by Judges Joseph Lisa and Marie Lihotz. "The act of calling a recess and denying an application to remove an attorney from an arbitration proceeding falls directly within the adjudicative functions of the arbitrator." "It is of no legal consequence that the arbitrator may have exercised his authority differently," Cuff wrote. "Immunity trumps liability." The judges found that the immunity extends to the arbitral organization, AAA, since the immunity afforded the arbitrator would otherwise be rendered illusory. Hanan Isaacs, a former president of the New Jersey Association of Professional Mediators, says the statute reflects a public policy to protect arbitrators and arbitration organizations from the threat of liability for actions related to control of the proceedings. "It doesn't mean arbitrators shouldn't step in if there's a problem," says Isaacs, a Princeton solo. "It means arbitrators have civil immunity for anything they do with the actual decision-making process." The closer the allegation of liability gets to the arbitration process itself, "the less leeway the court will give," he adds. The attorney for Liloia and the AAA, Thomas Rees, of High Swartz in Norristown, Pa., declined to discuss details of the alleged confrontation and referred other questions to Tuchman. Ruttenberg's lawyer, Linton Turner of Mayfield, Turner, O'Mara, Donnelly & McBride in Cherry Hill, did not return calls. Malik's lawyer Rochman, a Cherry Hill solo, could not be reached.
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A Feast
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