                 NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
                            File Name: 16a0486n.06

                                            Nos. 15-1403/1490

                             UNITED STATES COURT OF APPEALS                                     FILED
                                  FOR THE SIXTH CIRCUIT
                                                                                         Aug 18, 2016
                                                                                     DEBORAH S. HUNT, Clerk
STAR INSURANCE COMPANY et al.,                         )
                                                       )
      Plaintiffs-Appellants/                           )
      Cross-Appellees,                                 )          ON APPEAL FROM THE
                                                       )          UNITED STATES DISTRICT
v.                                                     )          COURT FOR THE EASTERN
                                                       )          DISTRICT OF MICHIGAN
NATIONAL UNION FIRE INSURANCE                          )
COMPANY OF PITTSBURGH, PA,                             )
                                                       )                    OPINION
      Defendant-Appellee/                              )
      Cross-Appellant.                                 )
                                                       )


Before: GUY, BOGGS, and MOORE, Circuit Judges.

        KAREN NELSON MOORE, Circuit Judge. In 1999, Meadowbrook Insurance Group

(“Meadowbrook”)1 and National Union Fire Insurance Company of Pittsburgh, PA (“National

Union”) entered into a reinsurance agreement (the “Treaty”).                   The Treaty contained an

arbitration clause. In 2007, National Union accused Meadowbrook of overbilling and started to

withhold payment on claims. In 2011, Meadowbrook demanded that the parties arbitrate their

dispute. Pursuant to the Treaty, Meadowbrook and National Union entered into arbitration

before a three-member panel (the “Arbitration Panel”).

        Meadowbrook alleges that that arbitration, which culminated in a Final Award ordering

Meadowbrook to pay National Union millions of dollars in damages, was fraught with

        1
         The four insurance companies that are appellants/cross-appellees in this case—Star Insurance Company,
Savers Property and Casualty Insurance Company, Ameritrust Insurance Corporation, and Williamsburg National
Insurance Company—refer to themselves, collectively, as Meadowbrook. Meadowbrook Br. at 4.
Nos. 15-1403/1490, Star Ins. Co. v. Nat’l Union Fire Ins.


misconduct. Meadowbrook draws particular attention to the fact that National Union’s party

arbitrator, Jonathan Rosen, communicated ex parte with National Union’s attorney, Neal Moglin,

while the arbitration was ongoing. National Union counters that Meadowbrook’s allegations are

meritless—the last-ditch attempts of a losing party trying to escape liability.

        The district court sided with National Union. Although the district court initially granted

an injunction halting the arbitration after Meadowbrook brought the Arbitration Panel’s alleged

misconduct to light, we dissolved that injunction on jurisdictional grounds, and remanded with

instructions to dismiss without prejudice. After the Arbitration Panel issued a final award and

Meadowbrook filed suit again in the district court, the district court denied Meadowbrook’s

request to conduct discovery, and entered an order confirming in part the Arbitration Panel’s

Interim Final Award and Final Award.

        Meadowbrook appeals, arguing that the district court erred when it confirmed in part the

Arbitration Panel’s two awards.             Meadowbrook additionally argues that the district court

erroneously rejected its discovery request. National Union cross-appeals, taking issue with the

district court’s damages and prejudgment-interest calculations.

        For the reasons set forth below, we REVERSE the district court’s judgment confirming

in part the Interim Final Award and Final Award and VACATE both awards.

                                      I. FACTS AND PROCEDURE

        This case’s history is complex, and the parties present dramatically different accounts of

that history in their briefs. Still, some things are clear. Meadowbrook and National Union

entered into the Treaty in 1999.            Their arbitration commenced in 2011.   Pursuant to two

scheduling orders that the Arbitration Panel issued, Meadowbrook and National Union agreed to



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Nos. 15-1403/1490, Star Ins. Co. v. Nat’l Union Fire Ins.


terminate ex parte communications with members of the Arbitration Panel after filing their first

pre-arbitration-hearing briefs. National Union filed its pre-hearing brief on June 14, 2013.

        The Arbitration Panel issued an Interim Final Award in National Union’s favor on July

23, 2013. That day, arbitrator Rosen communicated ex parte with National Union’s attorney,

Moglin. Rosen and Moglin spoke ex parte at least two more times: once on July 25, and again

on August 7.

        On September 12, 2013, the district court entered an order enjoining further arbitration

proceedings. We dissolved the injunction on jurisdictional grounds and ordered dismissal of the

case without prejudice until the Arbitration Panel issued a final award. The Arbitration Panel

issued its Final Award—also in National Union’s favor—on July 25, 2014.

        Meadowbrook filed a new suit in federal court on July 25, 2014. On October 2, 2014, the

district court denied Meadowbrook’s request to conduct discovery into the Arbitration Panel’s

alleged misconduct.         Then, on March 31, 2015, the district court confirmed in part the

Arbitration Panel’s Interim Final Award and Final Award. National Union moved to amend that

confirmation order under Federal Rule of Civil Procedure 59(e), and the district court denied that

motion on January 27, 2016.

A. Facts

        1. In 1999, National Union and Meadowbrook enter into a reinsurance
           agreement that contains a binding arbitration clause.

        In March 1999, Meadowbrook and National Union entered into the Treaty. R. 31-17

(Treaty) (Page ID #1934).2             Pursuant to the Treaty, National Union agreed to reinsure

Meadowbrook’s workers’-compensation insurance programs. Id. Arts. 1–2. (Page ID #1934).

        2
           Unless otherwise noted, all record citations are to the district-court docket in Star Insurance Company et
al. v. National Union Fire Insurance Company of Pittsburgh, PA, No. 2:14-cv-12915 (E.D. Mich.).

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Nos. 15-1403/1490, Star Ins. Co. v. Nat’l Union Fire Ins.


Put simply, the Treaty obligated Meadowbrook to cover the first $100,000 of any loss under

those programs, at which point Meadowbrook could recover any additional loss—up to a

$150,000 cap—from National Union. Id. Art. 2 (Page ID #1934).

        The Treaty contained an arbitration clause: Article 21. Id. Art. 21 (Page ID #1942–43).

Article 21 provided, in relevant part:

        . . . [A]ny dispute arising out of this Agreement . . . shall be submitted to the
        decision of a board of arbitration composed of two arbitrators and an umpire.
        Any such arbitration shall take place in Southfield, Michigan, unless otherwise
        agreed, and shall be subject to the laws of the State of Michigan.

        The members of the board of arbitration shall be active or retired disinterested
        officials of the insurance or reinsurance companies . . . not under the control of
        either party to this Agreement. Each party shall appoint its arbitrator and the two
        arbitrators shall choose an umpire before instituting the hearing. . . . If the two
        arbitrators fail to agree upon the appointment of an umpire within 60 days after
        their nominations, each of them shall name three, of whom the other shall decline
        two and the decision shall be made by drawing lots.

        ...

        The board shall make its decision with regard to the custom and usage of the
        insurance and reinsurance business. . . .

Id. (Page ID #1942–43).

        2. In 2007, National Union accuses Meadowbrook of overbilling and refuses
           to pay Meadowbrook’s claims, and in 2011 Meadowbrook demands that
           the parties arbitrate their dispute.

        National Union claims that, sometime in 2007, it discovered that Meadowbrook had been

overbilling. R. 12 (Br. In Support of Def.’s Mot. to Confirm Arbitration Awards at 5–6) (Page

ID #452–53). In response, National Union refused to pay any of Meadowbrook’s claims under

the Treaty. R. 47 (3/31/15 Op. and Order at 1–2) (Page ID #4297).

        The dispute lasted for years. In February 2011, Meadowbrook demanded that the parties

enter into arbitration. R. 36-1 (Demand for Arbitration at 1) (Page ID #2297). Pursuant to

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Nos. 15-1403/1490, Star Ins. Co. v. Nat’l Union Fire Ins.


Article 21 of the Treaty, Meadowbrook and National Union selected party arbitrators. R. 31-17

(Treaty Art. 21) (Page ID #1942). Meadowbrook picked Rex Schlaybaugh, a mergers-and-

acquisitions attorney. Meadowbrook Br. at 9; Nat’l Union Br. at 11. National Union selected

Rosen, who has worked in the reinsurance industry—as a lawyer, arbitrator, and corporate

executive—for decades. R. 13-4 (4/19/11 Letter from National Union to Meadowbrook at 1–3)

(Page ID #661–63).

        Rosen and Schlaybaugh could not settle on an umpire. R. 12 (No. 2:13-cv-13807)

(9/12/13 Order at 3) (Page ID #413). After drawing lots, they elected Thomas Greene, who has

worked in the insurance and reinsurance industries since 1956. R. 13-5 (Greene Resume) (Page

ID #683); R. 12 (No. 2:13-cv-13807) (9/12/13 Order at 3) (Page ID #413).

        3. After consulting Meadowbrook and National Union, the Arbitration
           Panel issues two scheduling orders, both of which provide that ex parte
           contacts should terminate after the parties file their opening briefs.

        The Arbitration Panel—Greene, Schlaybaugh, and Rosen—met with counsel for

Meadowbrook and National Union at an organizational meeting on August 1, 2012. R. 9-2

(Organizational Meeting Tr.) (Page ID #344). During the meeting, the Arbitration Panel and

counsel for the parties discussed instituting a ban on ex parte communications.          Moglin

suggested that ex parte communications “cease with the submission of the first brief.” Id. at 7

(Page ID #350). After that point, Moglin said, “the curtain would fall.” Id. at 8 (Page ID #351).

Meadbowbrook’s counsel, Douglas Young, responded that Moglin’s proposed cutoff date might

be too early; Young was concerned that the Arbitration Panel might have questions for the

parties after they submitted their initial pre-hearing briefs. Id. Rosen assured him that that

would not occur: “That wouldn’t happen. That never happens. . . . I’d never call you.” Id.



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Nos. 15-1403/1490, Star Ins. Co. v. Nat’l Union Fire Ins.


        Ultimately, the Arbitration Panel “ruled that ex parte communication[s would] cease with

the filing of the initial brief.” Id. at 8 (Page ID #351).

        On August 21, 2012, the Arbitration Panel issued a Scheduling Order, which provided:

“Ex parte communications with any member of the [Arbitration] Panel shall cease upon the

filing of the parties’ initial pre-hearing briefs.” R. 31-18 (Scheduling Order at 5) (Page ID

#1959); see R. 13-18 (Meadowbrook Emergency Mot. to Stay at 2) (Page ID #868). On March

11, 2013, the Arbitration Panel issued a First Amended Scheduling Order that imposed an

identical ban on ex parte communications. R. 31-19 (First Amend. Scheduling Order at 4) (Page

ID #1965); see R. 13-18 (Meadowbrook Emergency Mot. to Stay at 2) (Page ID #868). Neither

the Scheduling Order nor the First Amended Scheduling Order stated when—or whether—ex

parte communications could resume.

        4. In its pre-hearing briefs, National Union demands $1,584,113.96 in
           damages plus interest.

        On July 27, 2012—over a year before filing its pre-hearing brief—National Union filed a

Preliminary Statement that outlined, broadly, its claims in the arbitration. R. 41-14 (Nat’l Union

Preliminary Statement) (Page ID #3848). In a section titled “Relief Requested,” National Union

did not identify a specific damages figure, but instead wrote:

        National Union seeks an Order from this Panel:

        ...

        Requiring Meadowbrook to return to National Union all amounts improperly
        collected from National Union under the Treaty from inception through the date
        of this submission;

        Requiring Meadowbrook to pay interest on all such improperly collected amounts
        at a rate sufficient to compensate National Union for the lost use of those funds;
        and


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Nos. 15-1403/1490, Star Ins. Co. v. Nat’l Union Fire Ins.


        Granting such other and further relief as this Panel deems appropriate.

Id. at 3 (Page ID #3850). National Union concluded its Preliminary Statement as follows:

“National Union reserves the right to amend its request for relief as appropriate if, in the course

of this arbitration, additional facts or issues come to light.” Id. at 4 (Page ID #3851).

        In its June 14, 2013 Pre-Hearing Submission (i.e., its first pre-hearing brief), National

Union narrowed considerably the relief it was seeking. R. 41-9 (National Union Pre-Hr’g

Submission at 51–52) (Page ID #3410–11). There, National Union alleged that Meadowbrook

had overbilled National Union by $1,584,113.96. Id. at 52 (Page ID #3411). National Union

sought damages in that amount, plus at least $1,950,680.48 in interest. Id.

        In its June 28, 2013 Pre-Hearing Reply Submission, National Union appeared to clarify

that Meadowbrook had overbilled for losses that it incurred through six of its workers’-

compensation programs. R. 41-10 (National Union Pre-Hr’g Reply Submission at 30) (Page ID

#3443). By Meadowbrook’s reading, in that document National Union took the position that

$1,584,113.96 (plus interest) set the outer limit of Meadowbrook’s damages liability—i.e., that

National Union was seeking damages for Meadowbrook’s overbilling in relation to six programs,

and only those six programs. See, e.g., Meadowbrook Br. at 9–11. National Union, in contrast,

argues that it never confined its damages request to those six workers’-compensation programs.

See, e.g., Nat’l Union Br. at 12–13.

        5. After the Arbitration Panel issues an Interim Final Award in National
           Union’s favor on July 23, 2013, Rosen and Moglin commence their ex
           parte communications.

        The arbitration hearing began in mid-July 2013. See R. 13-12 (7/16/13 Arbitration Hr’g

Tr.) (Page ID #750). In its closing argument, National Union urged the Arbitration Panel to

adopt one of two Proposed Orders. R. 13-13 (7/18/13 Nat’l Union Closing Slides at 62–63)

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Nos. 15-1403/1490, Star Ins. Co. v. Nat’l Union Fire Ins.


(Page ID #816–17). “Version One” tracked the relief that National Union requested in its June

14, 2013 Pre-Hearing Submission: National Union demanded $1,584,113.96 in damages and

$1,950,680.48 in interest. Id. at 62 (Page ID #816). Version One also contained the following

provision: “[T]he Panel declares that National Union is not liable for any program in which

Meadowbrook has produced in this Arbitration insufficient contemporaneous documentation to

allow National Union to verify the percentage of the retained risk reported by Meadowbrook.”

Id. Finally, National Union requested to be reimbursed “for its attorneys’ fees and all costs

associated with th[e] Arbitration.”           Id.   National Union’s other Proposed Order—“Version

Two”—sought considerably broader relief: “full rescission” of the Treaty. Id. at 63 (Page ID

#817).

         On July 23, 2013, the Arbitration Panel issued an Interim Final Award. R. 13-1 (7/23/13

Interim Final Award) (Page ID #499). The Arbitration Panel found for National Union, and

effectively adopted Version One of its Proposed Order. Id. In Paragraph Three of the Interim

Final Award, the Arbitration Panel ordered Meadowbrook to pay National Union $1,584,113.96,

plus $1,950,680.48 in interest; those figures, the Arbitration Panel wrote, were “capable of

immediate computation.” Id. at 1–2 (Page ID #499–500). However, in Paragraph Four of the

Interim Final Award, the Arbitration Panel added a caveat that held the potential to expand

dramatically Meadowbrook’s liability:

         Notwithstanding the ruling . . . above, the [Arbitration] Panel declares that
         National Union is not liable for any program in which Meadowbrook has
         produced in this Arbitration insufficient documentation to allow National Union
         to verify the percentage of the retained risk reported by Meadowbrook.
         Meadowbrook is ordered to prepare within fourteen days a list of all programs
         and provide all supporting documentation with respect to the program and
         retained risk . . . . Any dispute over such retained risk and supporting
         documentation will be adjudicated by the [Arbitration] Panel.


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Nos. 15-1403/1490, Star Ins. Co. v. Nat’l Union Fire Ins.


Id. at 2 (Page ID #500).

         The day the Arbitration Panel issued the Interim Final Award—July 23, 2013—Moglin

and Rosen communicated ex parte. R. 13-18 (Meadowbrook Emergency Mot. to Stay, Ex. B—

Moglin Timesheets (“Moglin Timesheets”) at 1) (Page ID #880). The two discussed the Interim

Final Award. Id. Moglin and Rosen spoke again, for a half-hour, on July 25. Id. at 2 (Page ID

#881).

         6. After Meadowbrook files a supplemental brief pursuant to Paragraph
            Four of the Interim Final Award, Rosen and Moglin again communicate
            ex parte, and days later Rosen and Greene—but not Schlaybaugh—issue
            an order striking that supplemental brief.

         Over the course of one week in August 2013, Greene and Rosen issued two orders

without first hearing from Schlaybaugh, who was on vacation in northern Canada. Emails were

sent and missed; wires were crossed.               In between, arbitrator Rosen and attorney Moglin

communicated ex parte.

         August 6, 2013: Pursuant to the Arbitration Panel’s directive in Paragraph Four of the

Interim Final Award, Meadowbrook filed a supplemental brief on August 6, 2013. R. 44-1

(8/6/13 Meadowbrook Supp. Br.) (Page ID #4178). In this supplemental brief, Meadowbrook

purported to “address[] two categories of claim recoveries Meadowbrook believe[d] the

[Arbitration] Panel awarded Meadowbrook.” R. 44-1 (11/6/14 Meadowbrook’s Supp. Br. at 2)

(Page ID #4179).

         August 7, 2013: One day later—August 7—Moglin and Rosen resumed their ex parte

communications. R. 13-18 (Moglin Timesheets at 3) (Page ID #882). That day, Moglin and

Rosen conducted an “extended telephone conference.” Id.




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Nos. 15-1403/1490, Star Ins. Co. v. Nat’l Union Fire Ins.


        August 9, 2013: On August 9, National Union filed an emergency motion to strike

Meadowbrook’s August 6 supplemental brief and to compel Meadowbrook to comply with the

Arbitration Panel’s Interim Final Award. R. 9-3 (8/9/13 Nat’l Union Mot. to Strike at 1) (Page

ID #363). National Union explained that, in its view, “time is very much of the essence here

since National Union wants to adhere to the schedule set by the [Arbitration] Panel (which

requires a substantive response from National Union by August 20th).”            Id. Accordingly,

National Union requested that the Arbitration Panel:

        . . . [I]ssue a ruling . . . [o]rdering that by no later than August 13, 2013,
        Meadowbrook shall comply with Paragraph 4 of the Interim Final Award by
        providing to the [Arbitration] Panel and National Union a detailed list of all
        programs (and not merely those with outstanding balances) and all supporting
        documentation with respect to such programs produced by Meadowbrook in
        discovery in this arbitration proceeding that refer or relate to the percentage of
        risk alleged to have been retained by Meadowbrook.

Id. at 8 (Page ID #370).

        About three hours after National Union submitted its August 9 motion to strike, Rosen

emailed Schlaybaugh and Greene. R. 13-2 (Final Award, App., Ex. J—8/9/13 Panel Emails)

(Page ID #557). Rosen requested that the Arbitration Panel “speak as soon as possible about the

substance of” the motion to strike Meadowbrook’s brief.          Id.   Rosen added that he “was

appalled” by Meadowbrook’s apparent attempt to introduce new documents and “seek relief that

was clearly not part of or contemplated by” the Interim Final Award. Id.

        Schlaybaugh, however, did not receive Rosen’s email—at least not right away. The same

day that National Union filed its motion to strike, August 9, Schlaybaugh left for a sailing trip to

Canada.      R. 31-12 (10/6/14 Schlaybaugh Dec. ¶ 5) (Page ID #1875).            Before departing,

Schlaybaugh instructed his assistant “to respond to any time-sensitive emails to inform the writer

that” Schlaybaugh would be out of contact during his vacation. Id. ¶ 6 (Page ID #1875).

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Nos. 15-1403/1490, Star Ins. Co. v. Nat’l Union Fire Ins.


        Greene responded to Rosen’s email on August 9, writing that he would be available for a

conference call “tomorrow, Sunday and Monday.” R. 13-2 (Final Award, App., Ex. J—8/9/13

Panel Emails) (Page ID #557).

        August 10, 2013: On August 10, Greene sent a group text message to Schlaybaugh and

Rosen, asking Schlaybaugh if he would be available for a conference call on August 10, 11, or

12. R. 13-12 (Final Award, App., Ex. K—8/10/13 Text Message from Greene to Rosen and

Schlaybaugh) (Page ID #560). Meadowbrook asserts in its brief that the phone number to which

Greene sent that text message “is neither Schlaybaugh’s cell phone number . . . nor his work

number.” Meadowbrook Br. at 18 n.6.

        August 12, 2013: On August 12, Schlaybaugh’s assistant emailed Rosen and Greene. R.

13-2 (Final Award, App., Ex. J—8/9/13 Panel Emails) (Page ID #557). She wrote: “Rex asked

me to let you know that he is in remote parts of Northern Canada with at best intermittent cell or

data availability through [August 15] so will be unable to connect with you by phone till later in

the week.” Id. Later that day, Schlaybaugh contacted his assistant, who told Schlaybaugh that

she had informed Rosen and Greene that Schlaybaugh would be unavailable “from August 9

through mid-week of August 12.” R. 31-12 (10/6/14 Schlaybaugh Dec. ¶ 7) (Page ID #1875).

        About one hour after Schlaybaugh’s assistant emailed Rosen and Greene to tell them that

Schlaybaugh was out of the country, Rosen emailed Greene a draft order granting National

Union’s August 9 motion to strike. R. 13-2 (Final Award, App., Ex. L—8/12/13 Email from

Rosen to Greene) (Page ID #562). Rosen did not copy Schlaybaugh on that email. Id. Rosen’s

proposed order also modified Paragraph Four of the Interim Final Award to clarify that




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Nos. 15-1403/1490, Star Ins. Co. v. Nat’l Union Fire Ins.


Meadowbrook was obligated to produce documents regarding all of the programs that the Treaty

covered:

        . . . Meadowbrook is ordered to comply with Paragraph 4 of the Interim Final
        Award by providing the [Arbitration] Panel and National Union by no later than
        August 14, 2013 with a list of all programs (and not merely those with
        outstanding balances) and all supporting documentation with respect to such
        programs produced by Meadowbrook in discovery in this arbitration proceeding
        that refer or relate to the percentage of risk alleged to have been retained by
        Meadowbrook.

Id. Rosen also asked Greene to send an email to Schlaybaugh stating that unless Schlaybaugh

responded “by close of business” on August 12, Rosen and Greene would issue Rosen’s

proposed order. Id.

        Greene emailed Schlaybaugh on August 12. R. 13-2 (Final Award, App., Ex. M—

8/12/13 Email from Greene to Schlaybaugh) (Page ID #564). Schlaybaugh did not immediately

respond.

        That same day—August 12—Greene issued an order granting National Union’s August 9

motion to strike and ordering Meadowbrook “to comply with Paragraph 4 of the Interim Final

Award . . . by no later than August 14, 2013.” R. 13-2 (Final Award, App., Ex. Q—8/12/13

Order) (Page ID #582). Greene signed that order: “For the Panel.” Id.

        August 13, 2013:          On August 13, Meadowbrook filed an Emergency Motion for

Clarification and Additional Time to Respond. R. 13-2 (Final Award, App., Ex. R—8/13/13

Meadowbrook Mot.) (Page ID #584). Rosen emailed Greene and Schlaybaugh with a proposed

order denying Meadowbrook’s motion for clarification, but granting Meadowbrook time to

respond to the August 12 order. R. 13-2 (Final Award, App., Ex. S—8/13/13 Email from Rosen

to Panel) (Page ID #589). Greene—again, without hearing any input from Schlaybaugh—issued

an order consistent with Rosen’s email; the order directed Meadowbrook to comply with the

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Nos. 15-1403/1490, Star Ins. Co. v. Nat’l Union Fire Ins.


Arbitration Panel’s August 12 order by August 19, 2013. R. 13-2 (Final Award, App., Ex. T—

8/13/13 Order) (Page ID #592). Like the August 12 order, Greene signed the August 13 order:

“For the Panel.” Id.

B. Procedural History

        1. Meadowbrook files suit in Michigan state court, and unsuccessfully
           moves the Arbitration Panel to reconsider its August 12 order striking
           Meadowbrook’s supplemental brief.

        On August 13, 2013, Meadowbrook filed a complaint against National Union in

Michigan’s Oakland County Circuit Court. R. 1-2 (No. 2:13-cv-13807) (Meadowbrook State-

Court Compl.) (Page ID #7). Meadowbrook argued, inter alia, that that court should vacate

entirely the Arbitration Panel’s Interim Final Award. Id. at 3–4 (Page ID #9–10). In support,

Meadowbrook wrote that it had recently learned that while the arbitration was pending, Rosen

and Moglin sat on a panel at a presentation at Moglin’s law office. Id. at 5–6 (Page ID #11–12).

Thus, Meadowbrook argued, the Arbitration Panel’s Interim Final Award was “the product of

evident partiality,” and thus void under Michigan Court Rule 3.602(J). Id. at 3, 6 (Page ID #9,

12).

        About a week later—on August 19, 2013—Meadowbrook filed with the Arbitration

Panel a “Motion for Reconsideration of Panel’s 8-12-2013 Decision.” R. 13-2 (Final Award,

App. Ex. V—8/19/13 Mot. for Reconsideration) (Page ID #598). That same day, Meadowbrook

also circulated a response to the Arbitration Panel’s August 13 order.       R. 41-23 (8/19/13

Meadowbrook Response) (Page ID #3970).




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         2. After discovering that Rosen and Moglin had communicated ex parte,
            Meadowbrook files an unsuccessful emergency motion to stay further
            arbitration proceedings, but that motion draws a lengthy dissent from
            Schlaybaugh.

         Because the Interim Final Award provided that National Union could recover costs and

attorney’s fees from Meadowbrook, National Union submitted a bill of costs on August 12,

2013. R. 13-1 (7/23/13 Interim Final Award ¶ 5) (Page ID #500); Meadowbrook Br. at 21.

Moglin attached timesheets to that bill of costs—and those timesheets contained several entries

confirming that Moglin and Rosen had communicated ex parte after National Union filed its June

14 Pre-Hearing Submission. R. 13-18 (Moglin Timesheets at 1–3) (Page ID #880–82).

         On August 21, 2013, Meadowbrook filed with the Arbitration Panel an Emergency

Motion to Stay All Proceedings. R. 13-18 (Meadowbrook Emergency Mot. to Stay) (Page ID

#867).      Meadowbrook argued that, under Michigan law, the “impermissible ex parte

communications” between Rosen and Moglin “taint[ed] th[e] Panel beyond remediation, and

w[ould] most likely necessitate vacating the Interim Final Award.” Id. at 2 (Page ID #868).

Meadowbrook asked the Arbitration Panel to stay further proceedings so Meadowbrook could

investigate the full extent of Rosen’s ex parte contacts. Id. at 6 (Page ID #872).

         On August 29, 2013, Greene issued an order that (1) denied Meadowbrook’s August 21

motion to stay; (2) denied Meadowbrook’s August 19 reconsideration motion, and (3) granted

National Union’s August 12 bill of costs. R. 13-2 (Final Award, App., Ex. W—8/29/13 Order at

1–2) (Page ID #609–10). In that order, Greene rejected Meadowbrook’s claim that Rosen’s ex

parte contacts with Moglin constituted grounds to stay the arbitration:         “A review of the

Organizational Meeting transcript and Scheduling Orders entered in connection with this

proceeding readily establish that the prohibition on ex parte contact came to an end upon the


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Nos. 15-1403/1490, Star Ins. Co. v. Nat’l Union Fire Ins.


[Arbitration] Panel ruling on the merits of this dispute” (i.e., when the Arbitration Panel issued

the Interim Final Award). Id. at 1–2 (Page ID #609–10).

        The next day—August 30—Schlaybaugh filed a five-page dissent from the August 29

order. R. 31-6 (8/30/13 Schlaybaugh Dissent) (Page ID #1814). Schlaybaugh began by writing

that “the Majority”—i.e., Greene and Rosen—“ha[d] erred in their conclusion that no

impermissible communications have occurred.” Id. at 1 (Page ID #1814). Schlaybaugh added:

“The parties negotiated not one but two Scheduling Orders both of which contained expressed

prohibitions on ex parte communications after Prehearing Briefs were filed. Nothing could be

clearer about what the parties’ intentions were at the time.” Id. at 3 (Page ID #1816). As for the

August 29 order’s conclusion that the parties’ ex parte-communications ban ended after the

Arbitration Panel issued its Interim Final Award, Schlaybaugh wrote that such an interpretation

was inconsistent with both scheduling orders. Id.

        On September 3, 2013, Greene circulated an email addressing Schlaybaugh’s August 30

dissent. R. 13-2 (Final Award, App., Ex. X—9/3/13 Greene Email) (Page ID #612). Regarding

Rosen’s ex parte contacts with Moglin, Greene wrote that both the Scheduling Order and the

First Amended Scheduling Order “only contemplated an ex parte preclusion until the conclusion

of the [arbitration] hearing.” Id. at 2 (Page ID #613).

        3. National Union files a brief seeking $25,012,671.51 in damages and
           removes Meadowbrook’s state-court suit to the Eastern District of
           Michigan, where Meadowbrook obtains an injunction staying the
           arbitration.

        National Union responded to Meadowbrook’s August 19 submission on September 4,

2013. R. 41-21 (9/4/13 Nat’l Union Br.) (Page ID #3923). National Union argued that after

reviewing Meadowbrook’s August 19 brief, it had concluded that there were sixteen workers’-


                                                        15
Nos. 15-1403/1490, Star Ins. Co. v. Nat’l Union Fire Ins.


compensation programs for which Meadowbrook had overbilled National Union. Id. at 8 (Page

ID #3930). In total, National Union sought to recover $25,012,671.51 in damages as a result of

this overbilling. Id.

        Two days later—on September 6, 2013—National Union removed Meadowbrook’s state-

court suit to the Eastern District of Michigan.              R. 1 (No. 2:13-cv-13807) (Def.’s Pet. for

Removal) (Page ID #1). On September 10, 2013, Meadowbrook filed a motion for a temporary

restraining order and preliminary injunction in the district court. R. 4 (No. 2:13-cv-13807) (Mot.

for TRO and Prelim. Inj.) (Page ID #61). In a brief accompanying that motion, Meadowbrook

recounted what it had learned in the preceding weeks—namely, that Rosen and Moglin had

communicated ex parte and that Greene and Rosen had issued two orders without Schlaybaugh’s

input. R. 4 (No. 2:13-cv-13807) (Br. in Support of Mot. for TRO and Prelim. Inj. at 3–10) (Page

ID #68–75). Meadowbrook requested that the district court enjoin Greene and Rosen from

engaging in any further proceedings. Id. at 24 (Page ID #89).

        The district court issued an order granting Meadowbrook’s motion for injunctive relief on

September 12, 2013. R. 12 (No. 2:13-cv-13807) (9/12/13 Order) (Page ID #411). The district

court first concluded that it had jurisdiction to grant the injunction, because the essence of

Meadowbrook’s claim concerned an alleged breach of a contract provision: Article 21 of the

Treaty. Id. at 7–9 (Page ID #417–19). Turning to the merits of Meadowbrook’s motion, the

district court reasoned that Meadowbrook had raised legitimate concerns about Rosen’s

partiality, and that Rosen’s ex parte contacts with Moglin appeared to have violated the express

terms of the First Amended Scheduling Order. Id. at 11–13 (Page ID #421–23).




                                                        16
Nos. 15-1403/1490, Star Ins. Co. v. Nat’l Union Fire Ins.


        In an opinion dated April 9, 2014, a panel of this court dissolved the injunction, holding

that the district court lacked jurisdiction to enjoin the arbitration because the Arbitration Panel

had yet to render a final award. Savers Prop. & Cas. Ins. Co. v. Nat’l Union Fire Ins. Co., 748

F.3d 708, 722 (6th Cir. 2014).

        4. After Meadowbrook unsuccessfully moves to disqualify Rosen, Greene
           and Rosen—over Schlaybaugh’s dissent—issue a Final Award in
           National Union’s favor.

        On May 20, 2014—about a month after we dissolved the district court’s injunction—

Meadowbrook filed with the Arbitration Panel a Motion to Disqualify Arbitrator Rosen and to

Disband the Panel. R. 13-19 (5/20/14 Meadowbrook Mot. to Disqualify) (Page ID #895). The

Arbitration Panel denied that motion over Schlaybaugh’s dissent. R. 13-2 (Final Award, App.,

Ex. Y—6/19/14 Order) (Page ID #616).

        The Arbitration Panel issued its Final Award on July 25, 2014. R. 13-2 (Final Award)

(Page ID #503). The Final Award ordered Meadowbrook to pay National Union: (1) an

additional $8,993,576.72, plus interest; (2) an as-yet-undetermined amount for Meadowbrook’s

overbilling in relation to three of its workers’-compensation programs; and (3) National Union’s

attorneys’ fees and costs. Id. at 2 (Page ID #504).

        Rosen and Greene attached a lengthy Appendix, containing twenty-six exhibits, to the

Final Award. R. 13-2 (Final Award, App.) (Page ID #506). In the Appendix, they wrote that

they were both “profoundly disturbed by Meadowbrook’s attack on the reputations and integrity

of Umpire Greene and Arbitrator Rosen,” id. ¶ 1 (Page ID #506), and provided a detailed

timeline of how the arbitration had unfolded. Id. ¶¶ 2–29 (Page ID #506–12). The Appendix

also attempted to justify Rosen’s August 7, 2013 ex parte contact with Moglin:



                                                        17
Nos. 15-1403/1490, Star Ins. Co. v. Nat’l Union Fire Ins.


        Furthermore, inasmuch as Meadowbrook’s August 6, 2013, Paragraph 4
        submission flew in the face of National Union’s counsel’s July 25, 2013 and
        August 5, 2013 emails . . . National Union was logically compelled to react,
        which given the circumstances, underpinned by Meadowbrook’s flagrant
        discovery abuse, logically (and permissibly) required conferring with Arbitrator
        Rosen as a pre-cursor to bringing the Motion. That is entirely consistent with the
        motion protocol as respects ex parte communications that was ordered by the
        [Arbitration] Panel at the Organizational Meeting as well as Arbitrator Rosen’s
        function and role as National Union’s party appointed arbitrator, thus prompting
        Umpire Greene in his September 3, 2013, communication to the parties to note
        that the ex parte communication complained of “was not inappropriate and,
        indeed, is what I would have expected in the circumstances” . . . . As such, the
        [Arbitration] Panel majority remains steadfast in its rejection of Meadowbrook’s
        allegations of improper behavior on Arbitrator Rosen’s part.

Id. ¶ 28 (Page ID #512).

        In dissent, Schlaybaugh argued that the Final Award had the effect of expanding

Meadowbrook’s liability from roughly $1.5 million (the amount National Union demanded in its

Pre-Hearing Submission) to over $25 million. R. 31-26 (7/25/14 Schlaybaugh Dissent at 1)

(Page ID #2045).

        5. Meadowbrook moves to vacate the Interim Final Award and Final
           Award, and seeks to conduct discovery.

        On July 25, 2014—the same day the Arbitration Panel issued the Final Award—

Meadowbrook filed a new complaint in the United States District Court for the Eastern District

of Michigan. R. 1 (7/25/14 Compl.) (Page ID #1). Meadowbrook urged the district court to

vacate the Interim Final Award and the Final Award under Michigan Court Rule 3.602(J). Id. at

4 (Page ID #4). Meadowbrook asserted several grounds for vacating the Arbitration Panel’s two

awards, including (1) Rosen’s ex parte contacts with Moglin and (2) Greene’s and Rosen’s

disenfranchisement of Schlaybaugh. Id. at 4–22 (Page ID #4–22).

        On August 20, 2014, National Union responded by filing both an Answer and a Motion

to Confirm Arbitration Awards. R. 8 (Def.’s Answer) (Page ID #179); R. 12 (Mot. to Confirm)

                                                        18
Nos. 15-1403/1490, Star Ins. Co. v. Nat’l Union Fire Ins.


(Page ID #438). In its confirmation motion, National Union requested that the district court

order Meadowbrook to pay National Union $17,903,667.52—the balance that National Union

alleged was outstanding under the Interim Final Award and Final Award. Id. at 25 (Page ID

#472).

         The following day, Meadowbrook filed a motion seeking leave to conduct expedited

discovery. R. 16 (Mot. for Leave to Conduct Immediate, Expedited Disc.) (Page ID #1307). In

a brief accompanying that motion, Meadowbrook requested that the district court hold in

abeyance National Union’s motion to confirm the Arbitration Panel’s two awards. R. 16 (Br. in

Support of Pltfs.’ Mot. for Leave to Conduct Immediate, Expedited Disc. at 8) (Page ID #1319).

         6. The district court denies Meadowbrook’s discovery motion and enters an
            order confirming in part the Interim Final Award and Final Award.

         On October 2, 2014, the district court issued an order denying Meadowbrook’s request to

conduct discovery (the “October 2, 2014 Order”). R. 27 (10/2/14 Order at 1) (Page ID #1651).

Regarding Rosen’s ex parte communications with Moglin, the district court concluded that

Meadowbrook had “fail[ed] to allege specific instances of misconduct.” Id. at 5 (Page ID

#1655). Further, the district court read the Appendix to the Final Award as confirming that

Rosen spoke with Moglin just once, and that Meadowbrook had not demonstrated that that lone

communication was improper. Id. at 5–6 (Page ID #1655–56). As for Meadowbrook’s claim

that Greene and Rosen disenfranchised Schlaybaugh, the district court concluded that

Meadowbrook had “fail[ed] to develop this argument.” Id. at 6 (Page ID #1656).

         On March 31, 2015, the district court issued an order granting in part National Union’s

motion to confirm the arbitration awards (the “March 31, 2015 Order”). R. 47 (3/31/15 Op. and

Order at 19) (Page ID #4314). That order reiterated the conclusion that the district court reached


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Nos. 15-1403/1490, Star Ins. Co. v. Nat’l Union Fire Ins.


in its October 2, 2014 Order: Meadowbrook had failed to allege improprieties sufficient to

vacate the Arbitration Panel’s Interim Final Award or Final Award. Id. at 3–12 (Page ID #4298–

307).

        The district court did identify one error with the Arbitration Panel’s Interim Final Award

and Final Award: the Arbitration Panel had miscalculated the amount of prejudgment interest

that Meadowbrook owed National Union. Id. at 13–14, 16–17 (Page ID #4308–09, 4311–12).

The district court ordered the parties to return to arbitration in order to resolve any dispute over

this issue. Id. at 14, 17 (Page ID #4309, 4312).

        Meadowbrook filed its notice of appeal on April 3, 2015. R. 49 (Notice of Appeal) (Page

ID #4317).

        7. National Union unsuccessfully moves to amend the March 31, 2015
           judgment under Rule 59(e)

        On April 13, 2015, National Union filed a Rule 59(e) motion to amend the district court’s

March 31, 2015 judgment.              R. 54 (4/13/15 Mot. to Amend) (Page ID #4421).           In its

accompanying brief, National Union argued that it was in fact entitled to recover more than the

$17,903,667.52 it demanded in its motion to confirm. R. 54 (4/13/15 Br. in Support of Mot. to

Amend at 2–3) (Page ID #4429–30). The actual amount of National Union’s damages, the Rule

59(e) motion claimed, was $19,559,658.94.                    Id. at 2 (Page ID #4429).   Meadowbrook

subsequently filed a notice of cross-appeal from the March 31, 2015 judgment—which it styled

“Defendant’s Notice of Appeal”—on April 24, 2015. R. 57 (Def.’s Notice of Appeal) (Page ID

#4499).

        On January 27, 2016, the district court denied National Union’s motion to amend in a

written order (the “January 27, 2016 Order”). R. 69 (1/27/16 Order at 2) (Page ID #4652).


                                                        20
Nos. 15-1403/1490, Star Ins. Co. v. Nat’l Union Fire Ins.


National Union filed an Amended Notice of Cross Appeal—in which National Union wrote that

it was appealing the district court’s January 27, 2016 Order and its March 31, 2015 judgment—

on February 4, 2016. R. 70 (Def.’s Amend. Notice of Cross-Appeal at 2) (Page ID #4662).

                                                II. ANALYSIS

        The procedural history of this case is complex, but at bottom the parties are challenging

three district-court orders:

        1. The October 2, 2014 Order denying Meadowbrook’s discovery request.
           Meadowbrook challenges this order.

        2. The March 31, 2015 Order confirming in part the Arbitration Panel’s Interim
           Final Award and Final Award. Both Meadowbrook and National Union
           challenge this order.

        3. The January 27, 2016 Order denying National Union’s Rule 59(e) motion to
           amend the March 31, 2015 judgment. National Union challenges this order.

        Our analysis begins and ends with the second of these orders. The district court erred

when it refused to vacate the Arbitration Panel’s Interim Final Award and Final Award, because

Rosen’s ex parte contacts with Moglin voided both awards. For that reason, we must reverse the

district court’s March 31, 2015 judgment, and vacate both of the Arbitration Panel’s awards.

        Meadowbrook identifies seven flaws with the March 31, 2015 Order. One is clearly

meritorious: Meadowbrook argues that the district court should have vacated the Interim Final

Award and Final Award because Rosen and Moglin communicated ex parte. We agree.

        The Treaty provides—and the parties agree—that Michigan law governs this appeal. R.

31-17 (Treaty Art. 21) (Page ID #1942). We review de novo the district court’s March 31, 2015

Order confirming in part the Interim Final Award and Final Award. See, e.g., City of Ann Arbor

v. Am. Fed’n of State, Cty., & Muni. Employees (AFSCME) Local 369, 771 N.W.2d 843, 854

(Mich. Ct. App. 2009). The scope of our review, however, “is narrowly circumscribed.” Id. In

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Nos. 15-1403/1490, Star Ins. Co. v. Nat’l Union Fire Ins.


Michigan, “[j]udicial review of a binding arbitrator’s award is strictly limited by statute and

court rule.” Krist v. Krist, 631 N.W.2d 53, 57 (Mich. Ct. App. 2001).

        Michigan Court Rule 3.602(J) lists four conditions that void an arbitration award:

        On motion of a party, the court shall vacate an award if:

        (a) the award was procured by corruption, fraud, or other undue means;

        (b) there was evident partiality by an arbitrator appointed as a neutral, corruption
            of an arbitrator, or misconduct prejudicing a party’s rights;

        (c) the arbitrator exceeded his or her powers; or

        (d) the arbitrator refused to postpone the hearing on a showing of sufficient
            cause, refused to hear evidence material to the controversy, or otherwise
            conducted the hearing to prejudice substantially a party’s rights.

Mich. Ct. R. 3.602(J)(2) (emphasis added).

        National Union and Meadowbrook appear to agree that our authority to vacate the district

court’s judgment confirming in part the Interim Final Award and Final Award derives from Rule

3.602(J). Meadowbrook Br. at 32; National Union Br. at 33, 66; see also R. 1 (7/25/14 Compl.

at 4) (Page ID #4) (asking district court to vacate both awards pursuant to Rule 3.602(J)(2)(b)–

(d)). Neither party, however, identifies which of Rule 3.602(J)’s enumerated grounds covers

Meadowbrook’s strongest argument: that Rosen’s ex parte contacts with Moglin require us to

vacate the Interim Final Award and Final Award.

        We think that Rule 3.602(J)(2)(b)—under which a Michigan court will vacate an award if

an arbitrator engaged in “misconduct prejudicing a party’s rights”—most clearly encompasses

such ex parte communications. See Kerezsi v. Kerezsi, No. 202876, 1999 WL 33446485, at *1

(Mich. Ct. App. Apr. 27, 1999) (identifying ex parte contact between party and arbitrator

“regarding the subject matter of an arbitration award” as a form of “misconduct” that voids the


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Nos. 15-1403/1490, Star Ins. Co. v. Nat’l Union Fire Ins.


award). Regardless of how we classify the ex parte contacts between Rosen and Moglin,

however, Michigan case law makes plain that we must vacate the Arbitration Panel’s two

awards, because these ex parte contacts clearly violated the parties’ scheduling orders.

        To explain how we reach this conclusion, we start by examining Michigan law

interpreting the effect of ex parte communications during an arbitration. We then explain why

the ex parte communications between Rosen and Moglin warrant reversal here.

        1. In Michigan, ex parte contacts between a party and an arbitrator are
           grounds to vacate an arbitration award if those communications violate
           the parties’ agreement to arbitrate.

        Meadowbrook argues for a bright-line rule. Relying on the Michigan Supreme Court’s

opinion in Hewitt v. Village of Reed City, 82 N.W. 616 (Mich. 1900), Meadowbrook argues that

any ex parte contact between an arbitrator and a party while the arbitration is pending is grounds

for vacating an arbitration award. In the century-plus since Hewitt issued, Michigan courts have

retreated from its apparently absolute ban on ex parte communications. However, those courts

have settled on a middle-ground position that supports Meadowbrook: ex parte communications

between a party and an arbitrator void an arbitration award if those communications violate the

parties’ arbitration agreement.

        We begin with Hewitt. Plaintiff Kate Hewitt injured herself while walking on a Village

of Reed City sidewalk. Id. at 616. The parties entered into arbitration, and the arbitrator found

for the village. Id. After the parties testified—but before the arbitrator rendered a decision—the

village’s president filed with the arbitrator “a memorandum of cases or authorities.” Id. The

Michigan Supreme Court concluded that that ex parte communication warranted vacating the

arbitration award, without first inquiring into whether the communication had prejudiced Hewitt:



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Nos. 15-1403/1490, Star Ins. Co. v. Nat’l Union Fire Ins.


        The rule is very strict in excluding any communication to an arbitrator, made ex
        parte after the case is submitted; and when such communication, which may
        affect the result, is made, it is not usual to enter into an inquiry as to whether the
        arbitrator was in fact influenced by it or not.

Id.

        Although Hewitt is an old case, the Michigan Supreme Court recently issued an order

explicitly adopting Hewitt’s reasoning. See Gates v. USA Jet Airlines, Inc., 756 N.W.2d 83

(Mem.) (Mich. 2008) (applying Hewitt and vacating arbitration award because party filed brief

with arbitrators after parties put on proof, which violated “express rules” arbitrators had laid out

before arbitration commenced), reversing Gates v. USA Jet Airlines, Inc., No. 272860, 2008 WL

314937 (Mich. Ct. App. Feb. 5, 2008).

        After Gates, Michigan courts have refined Hewitt’s rule and taken the view that although

ex parte communications between a party and an arbitrator may not categorically be grounds for

vacating an arbitration award, such communications do void an award if they violate the parties’

arbitration agreement. See Cummings v. Cummings, No. 318724, 2015 WL 2412470, at *5

(Mich. Ct. App. May 19, 2015) (“There is no rule that ex parte contact between an arbitrator and

the parties requires that the award be vacated. . . . Rather, cases where the arbitration award was

vacated due to ex parte communication involved a violation of the arbitration agreement

prohibiting such conduct.” (internal citation omitted)); Cipriano v. Cipriano, 808 N.W.2d 230,

236 (Mich. Ct. App. 2010) (“[T]he definitive question is not whether there is a bright-line rule

but, rather, whether the ex parte contact violated the parties’ arbitration agreement.”).

        2. Rosen’s ex parte communications with Moglin violated the plain terms of
           the parties’ two scheduling orders.

        In light of this Michigan arbitration law, the question before us is narrow: did Rosen’s ex

parte contacts with Moglin violate the parties’ agreement to arbitrate? We answer that question

                                                        24
Nos. 15-1403/1490, Star Ins. Co. v. Nat’l Union Fire Ins.


“yes.” At the August 1, 2012 organizational meeting, Meadowbrook and National Union agreed

to terminate ex parte communications with the Arbitration Panel after filing pre-hearing briefs.

The Arbitration Panel subsequently issued two scheduling orders that memorialized this

deadline. Rosen’s ex parte contacts with Moglin—which commenced one month after National

Union filed its first pre-hearing brief—violated that deadline. The district court erred on the

facts and the law when it held otherwise. As a result, we reverse the district court’s March 31,

2015 judgment and vacate the Arbitration Panel’s two awards.

        Both the August 21, 2012 Scheduling Order and the March 11, 2013 First Amended

Scheduling Order forbade the parties from communicating ex parte with the Arbitration Panel

after filing their “initial pre-hearing briefs.” National Union filed its initial pre-hearing brief on

June 14, 2013. Rosen and Moglin communicated ex parte three times after June 14: once on

July 23, 2013 (the day the Arbitration Panel issued its Interim Final Award); once on July 25,

2013; and again on August 7, 2013 (the day after Meadowbrook filed its supplemental brief

pursuant to Paragraph Four of the Interim Final Award). Those ex parte communications clearly

violated both scheduling orders.

        National Union counters this conclusion by highlighting a gap in the scheduling orders:

the orders stipulated when ex parte communications would cease, but never said when they

could resume. Nat’l Union Br. at 48. In support of this interpretation, National Union relies on

the justification that the Panel Majority—i.e., Greene and Rosen—provided in their Appendix to

the Final Award:        that in the reinsurance-arbitration field, “it is generally recognized and

understood that once a panel issues a dispositive ruling on the merits of a matter following a

hearing, absent a panel order to the contrary, the preclusion on ex parte communications ceases



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Nos. 15-1403/1490, Star Ins. Co. v. Nat’l Union Fire Ins.


and the parties are free to communicate with their appointed arbitrators.” R. 13-2 (Final Award,

App. ¶ 27) (Page ID #512).3 Thus, National Union asserts that because “the Interim Final Award

disposed of all issues of liability between the parties,” it was “a ruling on the merits,” and neither

Rosen nor Moglin violated the scheduling orders when they communicated on (or after) the date

that the Interim Final Award issued. Nat’l Union Br. at 49; see also Duckert v. Duckert, No.

239952, 2003 WL 22221387, at *1–*2 (Mich. Ct. App. Sept. 25, 2003) (rejecting defendants’

claim that arbitrator’s ex parte communications warranted vacating arbitration award because,

unlike in Hewitt, there was no indication that arbitrator had ex parte contact with party before

issuing final opinion).

        There are at least three reasons why National Union’s argument fails. First, National

Union’s reading of both scheduling orders is inconsistent with their plain language. Neither

order was ambiguous: the Scheduling Order and First Amended Scheduling Order forbade the

parties from communicating with the Arbitration Panel after submitting their first pre-hearing

briefs. National Union violated that unequivocal ban on ex parte communications three times.

Moreover, the parties and the Arbitration Panel—sophisticated businesspeople all, with extensive

experience conducting reinsurance arbitrations—settled on this ban at National Union’s urging.

It was Moglin who insisted that Meadowbrook and National Union terminate all contact with the

Arbitration Panel after the first briefs were filed.                At bottom, the plain language of the

Scheduling Order and First Amended Scheduling Order forecloses National Union’s argument

        3
          National Union’s position on this issue conflicts with AIDA Reinsurance and Insurance Arbitration
Society (“ARIAS”) Rule 15.5, which provides that parties to a reinsurance arbitration should not communicate ex
parte with the panel “until the [p]anel issues its final award.” ARIAS, U.S. Rules for the Resolution of U.S.
Insurance and Reinsurance Disputes, R. 15.5, https://www.arias-us.org/pdfs/arias-rules-final.pdf (emphasis added).
National Union claims that Rule 15.5 was not in effect when the parties entered into arbitration in 2011, Nat’l Union
Br. at 52–53, a fact Meadowbrook does not dispute. Meadowbrook Reply Br. at 13 n.9. Nonetheless, we agree with
Meadowbrook that ARIAS Rule 15.5 belies National Union’s claim that Rosen’s ex parte contacts with Moglin
comported with common practices in the reinsurance-arbitration field. Meadowbrook Br. at 37 n.13.

                                                         26
Nos. 15-1403/1490, Star Ins. Co. v. Nat’l Union Fire Ins.


that ex parte communications could resume after the Arbitration Panel issued its Interim Final

Award.

         Second, National Union’s claim that the Interim Final Award was a “final” merits ruling

is at odds with the motivating intellectual impulse behind its briefing before us. National Union

has consistently maintained that the Interim Final Award was just that. By National Union’s

logic, the Interim Final Award contemplated an inchoate form of relief, and thus Meadowbrook

cannot claim unfair surprise over the fact that the Final Award appeared to increase,

dramatically, its damages liability. As Schlaybaugh wrote in his August 30, 2013 dissent, the

Interim Final Award left “critical issues” unresolved—issues, Schlaybaugh wrote, that

“amplifie[d] why the initial Award was designated as ‘Interim.’” R. 31-6 (8/30/13 Schlaybaugh

Dissent at 3) (Page ID #1816). Indeed, this is the reason why this court dissolved the district

court’s injunction. We reasoned that the district court lacked jurisdiction to enjoin the arbitration

in September 2013 because, at that point, the Arbitration Panel had issued only an Interim Final

Award. Savers Prop. & Cas. Ins. Co., 748 F.3d at 722. In reaching that conclusion, we

recognized that in the absence of a final award, “the arbitration was not complete.” Id. at 719.

         Finally, although Greene and Rosen are certainly in a position to opine on standard

operating procedures in reinsurance arbitrations, so is Schlaybaugh. And in his August 30, 3013

dissent, Schlaybaugh contended that Rosen unequivocally violated the scheduling orders when

he communicated ex parte with Moglin. Id. at 1–4 (Page ID #1814–17). For all three reasons,

National Union’s reading of the scheduling orders’ bans on ex parte contact lacks merit.

         The district court’s reasoning in its March 31, 2015 Order was just as problematic as

National Union’s justifications for these ex parte contacts. There, the district court cited no



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Nos. 15-1403/1490, Star Ins. Co. v. Nat’l Union Fire Ins.


Michigan cases assessing the effect of ex parte communications on an arbitration award. R. 47

(3/31/15 Op. and Order at 6) (Page ID #4301). Instead, the court cross-referenced its October 2,

2014 Order denying Meadowbrook’s request to conduct discovery. Id. However, in this earlier

order, the district court also did not cite any Michigan case law when it held that Meadowbrook

could not conduct discovery into Rosen’s ex parte communications with Moglin. R. 27 (10/2/14

Order at 4–6) (Page ID #1654–56).

        Instead, in its October 2, 2014 Order, the district court denied Meadowbrook relief based

on its conclusion that the Appendix to the Final Award exonerated Rosen. By the district court’s

reading, in the Appendix the Arbitration Panel majority—again, Greene and Rosen—stated that

Rosen had had one innocuous ex parte communication with Moglin. Id. at 5–6 (Page ID #1655–

56). Rosen, however, communicated ex parte with Moglin at least three times: once on July 23,

2013; again on July 25, 2013; and one final time on August 7, 2013. As Michigan law makes

plain, the prejudicial effect vel non of those communications is irrelevant. Rosen and Moglin

violated the scheduling orders, and as a result the district court should have vacated the

Arbitration Panel’s two awards. In reaching an opposite result, the district court erred on the law

and erred on the facts.

        We hold that because Moglin’s ex parte communications with Rosen violated the plain

terms of the parties’ scheduling orders, Meadowbrook need not demonstrate prejudice for us to

vacate the Arbitration Panel’s two awards. Nonetheless, because National Union contends that

“the ex parte communications had no direct, prejudicial impact as to substantive decisions at

issue” in this case, National Union Br. at 51, we think it important to review briefly how the

arbitration unfolded after the Arbitration Panel issued its Interim Final Award on July 23, 2013.



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Nos. 15-1403/1490, Star Ins. Co. v. Nat’l Union Fire Ins.


        That day, Rosen and Moglin spoke ex parte in violation of both scheduling orders. They

discussed the Interim Final Award. Two days later, they spoke again. And two weeks after that

ex parte contact, when Meadowbrook filed its August 6 supplemental brief, Moglin and Rosen

resumed their ex parte communications. Days later, Greene issued an order—taken wholesale

from an email Rosen sent him—striking that supplemental brief, without first hearing from

Meadowbrook’s party arbitrator, Schlaybaugh. When Greene and Rosen issued a Final Award

over Schlaybaugh’s dissent about one year later, Meadowbrook found itself liable for millions

more than it had anticipated when the arbitration commenced. Put simply, this was an arbitration

in which “the coincidences all br[oke] one way.” Thomas Kinkade Co. v. White, 711 F.3d 719,

720 (6th Cir. 2013).

        In sum, Rosen’s ex parte communications with Moglin violated the scheduling orders’

explicit bans on ex parte communications. For that reason, we reverse the district court’s March

31, 2015 judgment and vacate the Arbitration Panel’s two awards.

                                                   III. CONCLUSION

        For the reasons set forth above, we REVERSE the district court’s March 31, 2015

judgment confirming in part the Arbitration Panel’s Interim Final Award and Final Award and

VACATE both awards.




                                                        29
