WASHINGTON, D.C. - (Mealey's) The U.S. Supreme Court on May 16 said it would not hear a challenge to a Seventh Circuit U.S. Court of Appeals decision regarding arbitrator partiality (Trustmark Insurance Company v. John Hancock Life Insurance Company, No. 10-1213, U.S. Sup.).
Trustmark Insurance Co. sued John Hancock Life Insurance Co. in the U.S. District Court for the Northern District of Illinois on July 1, 2009, regarding one of a number of reinsurance arbitrations between the two.
Trustmark claimed that because John Hancock's assigned arbitrator had sat on a panel in an earlier arbitration between the two companies, a confidentiality agreement from the earlier arbitration would be violated.
Judge James B. Zagel found on Sept. 30, 2009, that the arbitrator was not disinterested because of his knowledge. John Hancock on Oct. 29, 2009, appealed the judge's decision to the Seventh Circuit.
A panel comprising Judges Frank H. Easterbrook, Richard D. Cudahy and Ilana Diamond Rovner reversed Judge Zagel's decision on Jan. 31, 2011, and held that the arbitrator was disinterested because he had no financial stake in the outcome of the arbitration.
Trustmark's request for a rehearing en banc was denied on March 1, and on April 6 Trustmark filed a writ of certiorari with the Supreme Court. On April 20, John Hancock waived its right to respond.
The high court made its ruling without comment.
[Editor's Note: Full coverage will be in the May 17 issue of Mealey's Litigation Report: Reinsurance. For all of your legal news needs, please visit www.lexisnexis.com/mealeys.]
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