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Modern Piping, Inc. (Modern Piping) and the University of Iowa, Board of Regents, and State of Iowa (University) entered into two construction contracts, both containing arbitration provisions. Disputes arose related to each contract and Modern Piping filed a demand for arbitration with the American Arbitration Association (AAA). The University filed an action against AAA, seeking to enjoin it from arbitrating the disputes. AAA filed a motion for summary judgment on the grounds that arbitral immunity doctrine applied. The district court granted AAA’s motion and the University appealed.
The doctrine of arbitral immunity provides that arbitrators are immune from liability for acts performed in their arbitral capacity and generally shields all functions which are integrally related to the arbitral process. The doctrine applies to a claim against an arbitrator where the claim effectively seeks to challenge the decisional act of an arbitrator or arbitration panel. The immunity extends to associations administering arbitration procedures.
On appeal, the University argued that the arbitral immunity doctrine did not apply to the AAA because the AAA lacked jurisdiction to arbitrate the dispute with Modern Piping.