     11-886
     Duferco S.A. v. Tube City IMS, L.L.C.


                          UNITED STATES COURT OF APPEALS
                              FOR THE SECOND CIRCUIT

                                     SUMMARY ORDER
     RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED
     ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE
     PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A
     DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
     ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST
     SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

 1            At a stated term of the United States Court of Appeals
 2       for the Second Circuit, held at the Daniel Patrick Moynihan
 3       United States Courthouse, 500 Pearl Street, in the City of
 4       New York, on the 8th day of March, two thousand twelve.
 5
 6       PRESENT: DENNIS JACOBS,
 7                              Chief Judge,
 8                DENNY CHIN,
 9                SUSAN L. CARNEY,
10                              Circuit Judges.
11
12       - - - - - - - - - - - - - - - - - - - -X
13       DUFERCO S.A.,
14                Plaintiff-Appellant,
15
16                    -v.-                                               11-886
17
18       TUBE CITY IMS, L.L.C., R. KELLY
19       FREEDMAN HOLDING GROUP, L.L.C.
20                Defendants-Appellees.*
21       - - - - - - - - - - - - - - - - - - - -X
22



                *
               The Clerk of Court is respectfully directed to amend
         the caption to conform to this order.
                                                  1
 1   FOR APPELLANT:             Gary S. Stein, Pashman Stein,
 2                              P.C., Hackensack, N.J.; Leo G.
 3                              Kailas (on the brief), Reitler
 4                              Kailas & Rosenblatt, LLC, New
 5                              York, N.Y.; Robert P. Stein (on
 6                              the brief), Duferco S.A.,
 7                              Lugano, Switzerland.
 8
 9   FOR APPELLEES:             David W. Brown, (Joshua D.
10                              Anders on the brief), Paul,
11                              Weiss, Rifkind, Wharton &
12                              Garrison LLP, New York, N.Y.
13                              (counsel for Tube City IMS,
14                              L.L.C.);
15
16                              James M. Reilly (on the brief),
17                              Herzog Law Firm, P.C., Albany,
18                              N.Y. (counsel for R. Kelly
19                              Freedman Holding Group, LLC).
20
21        Appeal from a judgment of the United States District
22   Court for the Southern District of New York (Rakoff, J.).
23
24        UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED
25   AND DECREED that the judgment of the district court be
26   AFFIRMED.
27
28
29        Duferco S.A. (“Duferco”) appeals an order confirming an
30   arbitral award in favor of Tube City IMS, L.L.C. (“Tube
31   City”) and R. Kelly Freedman Holding Group, L.L.C. We
32   assume the parties’ familiarity with the underlying facts,
33   the procedural history, and the issues presented for review.
34
35        “We review a district court’s decision to confirm an
36   arbitration award de novo to the extent it turns on legal
37   questions, and we review any findings of fact for clear
38   error.” Duferco Int’l Steel Trading v. T. Klaveness
39   Shipping A/S, 333 F.3d 383, 388 (2d Cir. 2003).
40
41        An award may be vacated if, inter alia, an arbitrator
42   is “guilty of misconduct . . . in refusing to hear evidence
43   pertinent and material to the controversy.” 9 U.S.C. §
44   10(a)(3). Duferco argues such a vacatur can be based on an
45   arbitrator’s error of law even if the arbitrator did not act
46   in manifest disregard of the law. See Klaveness, 333 F.3d
47   at 388-90 (discussing manifest disregard). Even supposing

                                  2
 1   this to be true, Duferco does not show the arbitrator erred,
 2   let alone committed an error in “bad faith or so gross as to
 3   amount to affirmative misconduct.” United Paperworkers
 4   Int’l Union v. Misco, Inc., 484 U.S. 29, 40 (1987)
 5   (reviewing arbitrator’s evidentiary determination).
 6
 7        According to Duferco’s contract to purchase scrap steel
 8   from Tube City, measurement of the impurity level of the
 9   scrap would be performed by an independent inspector and
10   would be “final at loadport.” Duferco argues that the
11   arbitrator misinterpreted New York law in holding that
12   evidence from subsequent inspections--which could indicate
13   the independent inspector grossly erred--is insufficient to
14   establish that the inspector acted in bad faith and
15   therefore insufficient to overcome the “final at loadport”
16   provision. But Duferco failed to present to the arbitrator
17   any New York authority in which a court found such evidence
18   sufficient, let alone precedent that bound the arbitrator to
19   consider--at the first phase of the arbitration--the
20   subsequent inspection as evidence that the first inspection
21   was conducted in bad faith. Cf. Sempra Energy Trading Corp.
22   v. BP Prods. N. Am., Inc., 52 A.D.3d 350, 350, 860 N.Y.S.2d
23   71 (1st Dep’t 2008) (“[P]ostdischarge report . . . was not
24   material under the parties’ agreement[] to allege the
25   possibility of manifest error in the official binding
26   predischarge report.”).
27
28
29        Finding no merit in Duferco’s remaining arguments, we
30   hereby AFFIRM the judgment of the district court.
31
32
33                              FOR THE COURT:
34                              CATHERINE O’HAGAN WOLFE, CLERK
35
36
37
38




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