Punitive damages in arbitral award.
USD 25 million was grossly excessive punitive damages and
constituted manifest disregard of law, but not public policy.
Claimants: 1. Stephen B. Sawtelle (USA)
2. Hackett Associates, Inc. (USA)
Respondents: 1. Waddell & Reed, Inc. (USA)
2. Torchmark Corporation (USA)
Place of court proceedings:
New York, USA
Arbitration proceedings before the National Association of
Securities Dealers, USA
The U.S. Federal Arbitration Act
Terminated mutual fund broker (Stephen B Sawtelle) and his
current employer (Hackett & Associates) filed claim with the National
Association of Securities Dealers (NASD) against broker's former
employer (Waddell & Reed, Inc.) and certain of its representatives,
alleging tortuous interference with business expectancy and a violation
of the Connecticut Unfair Trade Practices Act (CUTPA).
Following arbitration award of approximately $27 million in favour
of plaintiffs, plaintiffs commenced proceeding to confirm award. The
Supreme Court, New York County, Michael Stallman, J., reduced award