You can't make this stuff up. Sheena Monnin was the winner in the Miss Pennsylvania USA 2012 competition. After her victory, she was signed up by Miss Universe LP LLP (partly owned by a well-known property developer with bad hair and a taste for shiny ties) to be a contestant in the Miss USA Pageant. Monnin claims she barely read the 'extremely dense' agreements, which were 'full of legal terms', although she did initial each page and sign the last ones. On the day of the contest, the backstage chatter amongst some of the participants (conducted by text; presumably you can stash a phone under your sash) was that the whole thing was rigged: one of the contestants had allegedly seen a piece of paper which gave the names of the five finalists, even before the rest of the contestants had done their song-and-dance routines and stated how they would end world poverty (or whatever). Monnin was evidently outraged, as she emailed the agent who had signed her up, indicating she was terminating the contract on the grounds that there had not been 'fair play' -- and on account of a decision by Miss Universe LP LLP to allow transgendered contestants. As people are wont to do, she posted on Facebook saying that the contest was 'fraudulent' and 'lacking in morals' and later reiterated her claims on a TV talk-show. Miss Universe LP LLP, none too pleased, threatened legal action and pointed to the arbitration clause in her contracts, which required any dispute to be settled first through direct discussion then through binding arbitration. Monnin failed to participate in the arbitration, at least partly (it seems) on the advice of her lawyer, one Klineburger. Miss Universe LP LLP filed a demand for arbitration with the arbitrator and obtained an award for US$5 million for defamation, tortious interference with prospective economic advantage and breach of contract.
Monnin moved to have the arbitration award set aside, on the
grounds that the arbitrator exceeded his powers. Monnin also argued
she had not been notified (actually or constructively) of the
arbitration and the award was based on a manifest disregard for the
law. The district court in Manhattan rejected all of Monnin's
claims: Miss Universe LP LLP v Monnin (SDNY, 2 July 2013).
The arbitrator did not exceed his jurisdiction, considering matters
which were properly put before him and not manifestly misapplying
the law to them. Monnin clearly had received actual notice of the
arbitration, both directly and through her counsel, and had no
basis to wiggle out of the arbitration clause on the grounds she
wasn't bound by it. It was true, however, that her lawyer had
done her a disservice in repeatedly telling her that she was not
bound to participate in the process, made worse by a last-ditch
attempt to say he had never represented her and was not a New York
lawyer in any event. Klineburger's serious deficiencies as a
lawyer could not, however, alter the fact that a court has very
limited ability to overturn an arbitral award: 'Sympathy, or
apparent inequity, may play no role in a court's legal
analysis, and here, the law is clear', in the words of Oetken
J, who affirmed the $5-million award.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
