Case 5:20-cv-01464-DSF-SHK Document 92 Filed 06/30/22 Page 1 of 3 Page ID #:3722
`JS-6
`
`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`
`
`VITAL PHARMACEUTICALS,
`INC., et al.,
`
` Plaintiffs,
`
`
`v.
`
`
`EDCV 20-1464 DSF (SHKx)
`
`Order DENYING Motion to
`Vacate Arbitration Award; Order
`GRANTING Motion to Confirm
`Final Arbitration Award (Dkt.
`58, 73)
`
`
`ORANGE BANG, INC., et al.,
`
` Defendants.
`
`
`
` Plaintiffs Vital Pharmaceuticals, Inc. and JHO Intellectual Property
`Holdings, LLC move to vacate the arbitration award in the dispute
`between the parties. Defendants Orange Bang, Inc. and Monster
`Energy Company oppose that motion and move to confirm the
`arbitration award. The Court deems this matter appropriate for
`decision without oral argument. See Fed. R. Civ. P. 78; Local Rule 7-
`15.
` Review of an arbitration award is ‘both limited and highly
`deferential’ and the arbitration award may be vacated only if it is
`‘completely irrational’ or ‘constitutes manifest disregard of the law.’”
`Comedy Club, Inc. v. Improv W. Assocs., 553 F.3d 1277, 1288 (9th Cir.
`2009) (simplified). “The ‘completely irrational’ standard is extremely
`narrow and is satisfied only where the arbitration decision fails to draw
`its essence from the agreement.” Id. (simplified). “[F]or an arbitrator’s
`award to be in manifest disregard of the law, it must be clear from the
`record that the arbitrator recognized the applicable law and then
`ignored it.” Id. at 1290 (simplified).
`
`

`

`Case 5:20-cv-01464-DSF-SHK Document 92 Filed 06/30/22 Page 2 of 3 Page ID #:3723
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` The arbitrator in this case appears to have taken great care with
`both the factual issues and the law. He produced a 177-page final
`award opinion that, whether correct or incorrect, grapples in good faith
`with the various conflicts in the case. The arbitrator consistently
`provided a reasoned basis for his rulings and grounded them in both
`law and fact. In short, there is no basis to find that the award was
`“completely irrational” or that the arbitrator engaged in “manifest
`disregard of the law.” At most, Plaintiffs’ arguments suggest that the
`arbitrator may have been incorrect in his rulings, but that falls far
`short of the standard for vacating an arbitration award.
` Plaintiffs particularly fault the arbitrator’s interpretation of
`“creatine-based” in the 2010 settlement agreement and his crafting of
`remedies.1 Plaintiffs argue that the award does not “draw its essence
`from the agreement” because the arbitrator’s definition of “creatine-
`based” would exclude Plaintiffs’ “Bang Pre-Workout” product, which
`the parties understood to be “creatine-based” at the time of the
`settlement. But the arbitrator confronted this tension and accepted
`Orange Bang’s contention that it had believed that the “Bang Pre-
`Workout” product was creatine-based at the time of settlement because
`of representations made by Plaintiffs that turned out to be false or
`misleading. The arbitrator therefore found it appropriate to focus on
`what “creatine-based” meant in the negotiations between the parties,
`rather than to attempt to define it in terms of what Bang Pre-Workout
`did or did not contain.
` As for remedies, the arbitrator had great flexibility in crafting
`remedies under the Lanham Act, which provides substantial discretion
`in both damages and equitable remedies. The Court sees no indication
`that the arbitrator’s chosen remedies are “completely irrational” or that
`he understood the law and failed to apply it. To the degree that
`
`1 Plaintiffs also claim that the arbitrator exceeded his authority, but this
`argument appears to be just a repackaging of Plaintiffs’ other arguments.
`Plaintiffs also make a claim that the award demonstrates “evident
`partiality,” but Plaintiffs present no evidence that the arbitrator was in any
`way partial against Plaintiffs or in favor of Defendants.
`
`
`
`2
`
`

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`Case 5:20-cv-01464-DSF-SHK Document 92 Filed 06/30/22 Page 3 of 3 Page ID #:3724
`Case 5:20-cv-01464-DSF-SHK Document 92 Filed 06/30/22 Page 3o0f3 Page ID #:3724
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`Plaintiffs argue that the arbitrator imposed a penalty, which would not
`be allowed by the Lanham Act, but there is no indication that the
`arbitrator recognized that a penalty could not be imposed and imposed
`one anyway. In fact, it does not appear that the arbitrator intended to
`impose any penalty at all. If some portion of the award could be
`construed to be a penalty, this would simply be an error by the
`arbitrator and erroris not groundsfor vacating an arbitration award.
`
`An arbitration award must be confirmedif it is not vacated. Hall
`
`
`Street Assocs., L.L.C. v. Mattel, Inc., 552 U.S. 576, 587 (2008). Because
`Plaintiffs’ motion to vacate the award fails, Defendants’ motion to
`confirm must be granted.
`
`The motion to vacate the arbitration award is DENIED. The motion
`
`to confirm the arbitration award is GRANTED.
`
`IT IS SO ORDERED.
`
`Date: June 30, 2022
`
`J
`£.
`y
`if
`Aioe A. ewer
`Dale S. Fischer
`United States District Judge
`
`