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Positive Software Solutions v. New Century Mortgage Corp.

476 F.3d 278 (2007)

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Positive Software Solutions v. New Century Mortgage Corp.

United States Court of Appeals for the Fifth Circuit

476 F.3d 278 (2007)

Facts

Positive Software Solutions, Inc. (Positive) (plaintiff) sued New Century Mortgage Corporation (New Century) (defendant) in federal court for allegedly making illegal copies of Positive’s software. The dispute was sent to arbitration, and the parties selected Peter Shurn as the arbitrator. Shurn ruled for New Century, dismissing Positive’s claims and awarding New Century $1.5 million in attorney’s fees. Upset about the outcome, Positive conducted an extensive search of Shurn’s background and discovered that Shurn and one of New Century’s attorneys, Ophelia Camiña, had both been involved in representing the same client in a patent dispute that had ended seven years earlier. Seven firms and 34 attorneys had represented that client during the many years that the case lasted. Shurn and Camiña had belonged to two different firms; they never spoke to or saw each other during their involvement and never attended the same meetings or events in the case. Positive moved to vacate the arbitration award due to the appearance of bias created by Shurn’s nondisclosure of his connection to New Century’s attorney. The district court and a panel of the Fifth Circuit both ruled that the award should be vacated. The matter was then considered by the Fifth Circuit en banc.

Rule of Law

Issue

Holding and Reasoning (Jones, C.J.)

Dissent (Wiener, J.)

Dissent (Reavley, J.)

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