In Trustmark Insurance Co. v. John Hancock Life Insurance Co., the United States Court of Appeals for the Seventh Circuit considered an appeal seeking review of an injunction barring the parties from further arbitration proceedings so long as a certain arbitrator remained a member of the arbitration panel. The Plaintiff-Appellee argued, and the United States District Court for the Northern District of Illinois, Eastern Division agreed, that having previously arbitrated a dispute between the two parties over essentially the same issue, the arbitrator could no longer be considered disinterested in the proceedings. The Plaintiff-Appellee argued this partiality was due to the arbitrator's preexisting knowledge of the previous arbitration and the dispute. The Seventh Circuit Court of Appeals reversed, clarifying that under §10 of the Federal Arbitration Act ("FAA"), "partiality" means only having a personal or financial stake in the outcome of the arbitration, and that mere knowledge of previous events or arbitrations or interest in reemployment by the parties is not enough to establish partiality.
Mallary Willat, Seventh Circuit Comes to Arbitrator's Defense in Clarifying Narrow Scope of Arbitrator 'Evident Partiality' Under Section 10 of the Federal Arbitration Act, 4 265 (2012).