Amway Global v. Woodward (744 F. Supp. 2d 657, 2010)

United States District Court for the Eastern District of Michigan 2010-09-30

Arbitration

Citations

Full opinion text

OPINION AND ORDER REGARDING CROSS-MOTIONS TO CONFIRM OR VACATE ARBITRATION AWARD

GERALD E. ROSEN, Chief Judge.

I. INTRODUCTION

Petitioner Amway Global commenced this action on July 24, 2009, seeking confirmation of an interim arbitration award entered earlier that same day by arbitrator Linda R. Singer. In this interim award, as subsequently restated in an August 7, 2009 final award, the arbitrator determined (i) that Respondents Orrin and Laurie Woodward were liable to Petitioner in the amount of $12,736,659, (ii) that Respondents Chris and Terri Brady were liable to Petitioner in the amount of $9,578,756, and (iii) that Respondents Tim and Amy Marks were liable to Petitioner in the amount of $3,533,230. Petitioner has moved for an order confirming this award under § 9 of the Federal Arbitration Act (“FAA”), 9 U.S.C. § 9, and Respondents, in turn, have moved to vacate the arbitrator’s award under § 10 of the FAA, 9 U.S.C. § 10, as well as on the threshold ground that the parties’ disputes were not arbitrable. This Court’s subject matter jurisdiction rests upon the diverse citizenship of the parties. See 28 U.S.C. § 1332(a).

The parties’ cross-motions to confirm or vacate the arbitrator’s award have been fully (and extensively) briefed. Having reviewed the parties’ lengthy written submissions and accompanying (and voluminous) exhibits, and having gained considerable familiarity with the issues raised in the present motions by virtue of having presided over an earlier suit involving the same parties, see Quixtar Inc. v. Brady, No. 08-14346, 2008 WL 5386774 (E.D.Mich. Dec. 17, 2008), the Court finds that the relevant allegations, facts, and legal arguments are adequately presented in the parties’ briefs and supporting materials, and that oral argument would not aid the decisional process. Accordingly, the Court will decide the parties’ cross-motions “on the briefs.” See Local Rule 7.1(f)(2), U.S. District Court, Eastern District of Michigan. This opinion sets forth the Court’s rulings on these motions.

II. FACTUAL AND PROCEDURAL BACKGROUND

A. The Parties

Petitioner Amway Global is a Virginia corporation with its headquarters in Ada, Michigan. Petitioner sells health and beauty products, and is the successor in interest to Quixtar Inc. (the petitioner in the prior suit before this court) and the original Amway Corporation. Petitioner sells its products through a network of hundreds of thousands of individuals referred to as Independent Business Owners (“IBOs”). Respondents Orrin and Laurie Woodward, Chris and Terri Brady, and Tim and Amy Marks are Florida residents and former Amway IBOs.

B. The Underlying Arbitration Proceedings

In August of 2007, Petitioner terminated each of the Respondents as IBOs and commenced arbitration proceedings against them, along with several other former IBOs. In this arbitration, Petitioner asserted breach of contract and tortious interference claims against Respondents, arising from their alleged violation of contractual prohibitions against soliciting other IBOs to compete against Petitioner.

These arbitration proceedings were interrupted and delayed by a number of trips to courts across the country. As this Court observed in an earlier suit involving Petitioner, Respondents, and other former Amway IBOs, “[i]t would scarcely be possible to recount” all of the disputes between Petitioner and its IBOs that have ended up in court, but it “[s]uffice[s] ... to say that these parties have proven to be extremely litigious.” Quixtar, 2008 WL 5386774, at *1; see also id. at *2-*3 (summarizing this procedural history). Indeed, the prior suit before this Court was part of this series of detours from the arbitration proceedings, with Petitioner seeking an order compelling Respondents to return to arbitration, and Respondents requesting, among other relief, that the Court abstain in favor of ongoing Georgia state court proceedings. The Court concluded that Respondents were seeking, in essence, interlocutory review of an arbitrator’s rulings in an ongoing arbitration proceeding, and it held that the arbitration should proceed to its conclusion without further judicial intervention. See id. at *14-*15. The Sixth Circuit affirmed this ruling on appeal. See Quixtar, Inc. v. Brady, No. 08-2629, 328 Fed.Appx. 317 (6th Cir.2009).

Upon the parties’ return to arbitration, Petitioner settled its claims against certain of its former IBOs, and motion practice led to the narrowing of Petitioner’s claims against Respondents. Following a hearing spanning from May 5, 2009 to June 4, 2009, the arbitrator issued an interim award on July 24, 2009, holding Respondents Orrin and Laurie Woodward liable to Petitioner in the amount of $12,736,659, holding Respondents Chris and Terri Brady liable to Petitioner in the amount of $9,578,756, and holding Respondents Tim and Amy Marks liable to Petitioner in the amount of $3,533,230. (See Petitioner’s Motion, Ex. 1-A, Interim Award at 6.) The arbitrator then restated these awards in an August 7, 2009 final award. (See Petitioner’s Motion, Ex. 1, Final Award.) Petitioner now requests that this award be confirmed, while Respondents seek to vacate the award on a number of grounds.

III. ANALYSIS

A. There Is No Basis for Disturbing the Arbitrator’s Rulings on Arbitrability Under the Deferential Standard That Governs This Court’s Review.

Apart from deciding Petitioner’s substantive claims against Respondents, the arbitrator also was called upon to rule on a number of threshold questions of arbitrability. In particular, in a pair of motions filed on February 22, 2008, Respondents requested that the arbitrator dismiss the arbitration proceeding, arguing (i) that the agreement giving rise to the arbitration was unenforceable on a number of grounds, and (ii) that, even if this agreement might be enforceable in some instances, the specific claims asserted by Petitioner against Respondents were not subject to arbitration. Following a hearing, the arbitrator denied these motions in an April 1, 2008 order.

In their pending motion to vacate the arbitrator’s award, Respondents seek to reassert these arbitrability challenges that they advanced in the course of the arbitration proceedings. As the parties recognize, the viability of these challenges turns, to a considerable extent, upon the standard of review that the Court elects to apply in resolving these threshold questions of arbitrability. Accordingly, the Court turns first to this question.

1. The Arbitrator’s Rulings on Arbitrability Are Subject to Deferential Review.

In the earlier case brought by Petitioner against Respondents and other former Amway IBOs, the Court and the parties extensively addressed the question whether Respondents had waived their opportunity for independent judicial review of the question of arbitrability by submitting this matter for determination by the arbitrator. See Quixtar, 2008 WL 5386774, at *9-*13. The principal focus of this discussion was the Sixth Circuit’s decision in Cleveland Electric Illuminating Co. v. Utility Workers Union, Local 270, 440 F.3d 809, 813 (6th Cir.2006), in which the court held that plaintiff Cleveland Electric had waived its opportunity for independent judicial review of the issue of arbitrability by “submitting] the question of arbitrability to the arbitrator for his determination” without any indication that it “wanted to reserve the question of arbitrability for the court.”

Upon considering the ruling in Cleveland Electric in light of the arbitrability challenges Respondents had submitted for the arbitrator’s determination, this Court opined that “it would appear that Respondents did not sufficiently preserve their opportunity to have a court decide the question of arbitrability.” Quixtar, 2008 WL 5386774, at *11. The Court explained:

In their motion to dismiss filed with the arbitrator, Respondents did not separately and discretely “argue that the arbitrator had no authority to decide the issue of arbitrability.” Cleveland Electric, 440 F.3d at 811. To the contrary, in the brief in support of their motion to dismiss, Respondents cited [Petitioner’s] own Rules of Conduct as conferring upon the arbitrator the authority to “resolve disputes about the interpretation and applicability of these Rules,” and they argued that the arbitrator was obliged to use this authority to make “[a]n early determination of the[ ] pivotal legal issues” that, in their view, would lead to “a dismissal of all claims.” ( [Case No. 08-14346, Dkt. No. 40], Ex. E, Respondents’ Br. in Support of Motion to Dismiss at 1 (quoting Quixtar Rule of Conduct 11.5.4).) Among the “pivotal legal issues” identified in Respondents’ motion was their claim that their disputes with [Petitioner] were not arbitrable because the arbitration provisions in [Petitioner’s] Rules of Conduct were “unenforceable as a matter of law.” (Id.) Just as in Cleveland Electric, then, it appears that Respondents “submitted the issue of arbitrability to the arbitrator for h[er] consideration,” without separately “argu[ing] that the arbitrator had no authority to decide the issue of arbitrability.” Cleveland Electric, 440 F.3d at 811. The Sixth Circuit found a waiver under these circumstances, and nothing in Respondents’ submission to the arbitrator appears to warrant a different result here.

Quixtar, 2008 WL 5386774, at *11.

Nonetheless, this Court recognized that “Cleveland Electric is distinguishable in at least one respect”:

In that case, the court observed that “Cleveland Electric raised the issue of who should decide arbitrability for the first time in its brief to the district court,” a brief filed after the arbitration had concluded. Cleveland Electric, 440 F.3d at 812. Here, in contrast, at least some of the Respondents presented the question of arbitrability to a court before the JAMS Arbitration had begun, seeking a declaration in [a suit brought in a California federal district court] that [Petitioner’s] agreements with its IB Os — including their arbitration provisions — were unlawful and unenforceable. As the Sixth Circuit has explained, a party retains its right to a judicial resolution of the question of arbitrability if it “reserves] the question for initial determination by the court,” typically in “an action to compel or enjoin arbitration.” Vic Wertz Distributing Co. v. Teamsters Local 1088, 898 F.2d 1136, 1140 (6th Cir.1990).

The difficulty here, however, is that Respondents — or, more accurately, some of them — sought but did not obtain an “initial determination by the court” as to the arbitrability of their dispute with Quixtar. The federal district court in California elected to abstain, and thus did not address Respondents’ challenge to arbitrability on the merits. Following this ruling, Respondents did not pursue the matter any further in court, but instead submitted their challenge to arbitrability for the arbitrator to decide. While this perhaps could be more accurately characterized as an “abandonment” of Respondents’ opportunity to have a court decide the issue of arbitrability, and not a “waiver,” the legal effect surely is precisely the same, and Respondents have not cited any authority that might suggest otherwise.

Quixtar, 2008 WL 5386774, at *12. Likewise, in its decision on appeal from this Court’s ruling, the Sixth Circuit concurred in this Court’s conclusion that “Respondents abandoned their efforts to secure a judicial determination of arbitrability and submitted this issue to the arbitrator.” Quixtar, 328 Fed.Appx. at 322 (internal quotation marks and citation omitted).

Yet, while this earlier discussion is instructive here, this Court expressly acknowledged that it was dicta. Specifically, the Court observed that “the issue of waiver [wa]s not yet ripe for decision” while the parties remained in arbitration, and emphasized that it “need not (and does not) decide what issues have been preserved for judicial review at the conclusion of the JAMS Arbitration, nor what standards should govern any such review.” Quixtar, 2008 WL 5386774, at *13 n. 21. Similarly, the Sixth Circuit recognized that “[b]ecause the District Court declined to make any determination on the issue of waiver, there is no decision for this Court to review.” Quixtar, 328 Fed.Appx. at 322. Accordingly, in the absence of any prior “law of the case” on this issue, the Court must now determine the standard that governs its review of the arbitrator’s decisions on matters of arbitrability.

With this renewed opportunity to review the record and consider the pertinent case law, the Court no longer views the issues of waiver and abandonment as controlling here. Rather, the Court views the “standard of review” question as governed by the more general principles of contract law addressed by the Supreme Court in First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 115 S.Ct. 1920, 131 L.Ed.2d 985 (1995). This Court extensively surveyed the First Options decision in the earlier suit brought by Petitioner, and this discussion bears repeating here:

In [First Options ], the Court considered “how a district court should review an arbitrator’s decision that the parties agreed to arbitrate a dispute,” and reasoned that this question, in turn, depended upon whether the parties “agree[d] to submit the arbitrability question itself to arbitration.” First Options, 514 U.S. at 940, 943, 115 S.Ct. at 1922-23. “If so, then the court’s standard for reviewing the arbitrator’s decision about [arbitrability] should not differ from the [deferential] standard courts apply when they review any other matter that parties have agreed to arbitrate.” 514 U.S. at 943, 115 S.Ct. at 1923. “If, on the other hand, the parties did not agree to submit the arbitrability question itself to arbitration, then the court should decide that question just as it would decide any other question that the parties did not submit to arbitration, namely, independently.” 514 U.S. at 943, 115 S.Ct. at 1924. The Court further explained that “[w]hen deciding whether the parties agreed to arbitrate a certain matter (including arbitrability), courts generally ... should apply ordinary state-law principles that govern the formation of contracts.” 514 U.S. at 944, 115 S.Ct. at 1924. The Court then added a “qualification” to this general principle, emphasizing that “[c]ourts should not assume that the parties agreed to arbitrate arbitrability unless there is clear and unmistakable evidence that they did so.” 514 U.S. at 944, 115 S.Ct. at 1924.

Applying these principles to the case before it, the Court held that petitioner First Options had failed to show that the respondents, Manuel and Carol Kaplan, had “clearly agreed to have the arbitrators decide (i.e., to arbitrate) the question of arbitrability.” 514 U.S. at 946, 115 S.Ct. at 1925. In so ruling, the Court found it insufficient that the Kaplans had filed a written memorandum with the arbitrators objecting to their jurisdiction, explaining that “merely arguing the arbitrability issue to an arbitrator does not indicate a clear willingness to arbitrate that issue, ie., a willingness to be effectively bound by the arbitrator’s decision on that point.” 514 U.S. at 946, 115 S.Ct. at 1925. Rather, in light of the Kaplans’ “forceful] objections] to the arbitrators deciding their dispute with First Options,” the Court reasoned that it was far more plausible to conclude “that they did not want the arbitrators to have binding authority over them.” 514 U.S. at 946, 115 S.Ct. at 1925. Accordingly, because the Kaplans “did not clearly agree to submit the question of arbitrability to arbitration,” the Court held that the arbitrators’ determination of this question “was subject to independent review by the courts.” 514 U.S. at 947, 115 S.Ct. at 1925-26.

Quixtar, 2008 WL 5386774, at *10.

To resolve the “standard of review” question here, then, the Court must begin with the terms of the parties’ agreement, inquiring whether the parties agreed to submit the issue of arbitrability to the arbitrator or instead intended to reserve this matter for the courts. Under the Rules of Conduct that governed the relationship between Petitioner and the Respondent IBOs, the parties were directed to use a set of “Dispute Resolution Procedures” to “address any issues that relate to” an IBO’s business. (Petitioner’s Motion, Ex. 2, Rules of Conduct (“ROC”) Rule 11.) As part of this dispute resolution process, if the parties were unable to resolve a dispute within 90 days or after the exhaustion of a “Conciliation Process,” they were “required to submit any remaining claim(s) arising out of or relating to [an] IB, the IBO Plan, or the Rules of Conduct ... to binding arbitration in aecordance with the Arbitration Rules” set forth in the Rules of Conduct. (ROC Rule 11.5.) Under Rule 11.5, the resulting arbitrator’s award was deemed “final and binding” and enforceable “by any court of competent jurisdiction,” with the “United States Arbitration Act” (presumably the FAA) “governing] the interpretation [and] enforcement” of the parties’ arbitration agreement. (Id.)

As noted, the Rules of Conduct incorporate a set of “Arbitration Rules” that govern arbitration proceedings conducted as part of the overall “Dispute Resolution Process.” One of these “Arbitration Rules” specifically addresses the arbitrator’s authority to decide questions of arbitrability:

11.5.4. Interpretation of Rules and Jurisdictional Challenges

Once appointed, the Arbitrator will resolve disputes about the interpretation and applicability of these Rules, including disputes relating to the duties of the Arbitrator and the conduct of the Arbitration Hearing. The resolution of the issue by the Arbitrator is final.

Jurisdictional and arbitrability disputes, including disputes over the existence, validity, interpretation, or scope of the agreement under which Arbitration is sought, may be submitted to and ruled on by the Arbitrator, unless the relevant law requires that a court make such determinations. The Arbitrator has the authority to determine jurisdiction and arbitrability prior to conducting a full hearing on the merits.

(ROC Rule 11.5.4.)

Under Rule 11.5.4, then, the arbitrator is expressly vested with the authority to decide “[j]urisdictional and arbitrability disputes, including disputes over the existence, validity, interpretation, or scope of the agreement under which Arbitration is sought.” Each of the threshold challenges asserted in Respondents’ motion in this case — namely, that the agreement to arbitrate does not reach disputes between Petitioner and former IBOs, and that this agreement is unenforceable as illusory and unconscionable, (see Respondents’ Motion, Br. in Support at T — 30)—plainly qualifies as a “jurisdictional” or “arbitrability” dispute within the meaning of Rule 11.5.4. Under comparable circumstances, where parties have included language in their arbitration agreement authorizing the arbitrator to decide issues of arbitrability, the courts have held that such a provision serves as the requisite “clear and unmistakable evidence” under First Options that the parties agreed to arbitrate arbitrability. See, e.g., Qualcomm Inc. v. Nokia Corp., 466 F.3d 1366, 1373 (Fed.Cir.2006); Terminix International Co. v. Palmer Ranch Limited Partnership, 432 F.3d 1327, 1332 (11th Cir.2005); Contec Corp. v. Remote Solution Co., 398 F.3d 205, 208 (2d Cir.2005); FSC Securities Corp. v. Freel, 14 F.3d 1310, 1312-13 (8th Cir.1994); Apollo Computer, Inc. v. Berg, 886 F.2d 469, 473 (1st Cir.1989); Bishop v. Gosiger, Inc., 692 F.Supp.2d 762, 769 (E.D.Mich. 2010).

In an effort to avoid this result, Respondents point to the seemingly discretionary language of Rule 11.5.4, under which jurisdictional and arbitrability disputes “may be submitted to and ruled on by the Arbitrator.” In Respondents’ view, the parties remain free under this Rule to elect not to submit a jurisdictional or arbitrability dispute to the arbitrator. Yet, this discretionary language does not necessarily distinguish the agreement here from the arbitration agreements in the above-cited cases. Rather, the rulings in these cases rested upon the fact that the parties had authorized the arbitrator to resolve disputes over arbitrability, and not just substantive matters. In Contec, 398 F.3d at 208, for example, the Second Circuit explained that where “parties explicitly incorporate rules that empower an arbitrator to decide issues of arbitrability, the incorporation serves as clear and unmistakable evidence of the parties’ intent to delegate such issues to an arbitrator.” Likewise, in this case, the parties surely empowered the arbitrator to hear and resolve “[jjurisdictional and arbitrability disputes,” and this conclusion does not hinge upon the use of the word “may” or “must” — either word would equally confer the authority to decide such disputes.

In any event, if the language of Rule 11.5.4 alone does not supply a sufficiently clear statement of the parties’ intent to authorize the arbitrator to decide questions of jurisdiction and arbitrability, Respondents have removed all doubt on this point by acting in accordance with this stated intent. In particular, Respondents filed a pair of motions in the arbitration proceedings in which they raised each of the jurisdictional and arbitrability challenges they seek to pursue before this Court. In the first of these motions, Respondents argued that the arbitration provisions in the Rules of Conduct were unenforceable for lack of mutuality of obligation and as procedurally and substantively unconscionable. (See Respondents’ Motion, Ex. 36.) In their second motion, Respondents contended that Petitioner’s claims in arbitration rested upon contractual provisions in the Rules of Conduct that were either unenforceable or did not give rise to legal obligations owed by Respondents. (See Case No. 08-14346, Dkt. No. 40, Ex. E.)

As this Court observed in the earlier litigation between Petitioner and Respondents, these motions did not contest the arbitrator’s authority to decide Respondents’ threshold challenges to the arbitrator’s jurisdiction and to arbitrability. See Quixtar, 2008 WL 5386774, at *11. To the contrary, and as this Court previously recognized, Respondents expressly cited Rule 11.5.4 as imposing upon the arbitrator the affirmative obligation to resolve these threshold matters. See Quixtar, 2008 WL 5386774, at *11 (citing Case No. 08-14346, Dkt. No. 40, Ex. E, Respondents’ Br. in Support of Motion to Dismiss at 1). Indeed, a party seemingly cannot invite an arbitrator to dismiss an arbitration proceeding on jurisdictional or arbitrability grounds without acknowledging, at least implicitly, that the arbitrator has the authority to decide such questions. Here, this recognition was explicit in Respondents’ motions, and confirmed what was clear from Rule 11.5.4 itself — namely, that the parties had empowered the arbitrator to rule upon “[jjurisdictional and arbitrability disputes.”

Under this record, the Court does not view the “standard of review” question as turning upon considerations of waiver or abandonment. Nor does the Court find it necessary to decide whether Respondents exhausted (or were required to exhaust) all possible avenues of judicial recourse before they presented their jurisdictional and arbitrability disputes to the arbitrator. Rather, the Court instead views Respondents’ actions during the arbitration — -and, in particular, their submission of motions challenging the arbitrator’s jurisdiction and the arbitrability of Petitioner’s claims — as both an acknowledgment and an affirmative exercise of the parties’ contractual right to present questions of jurisdiction and arbitrability for determination by the arbitrator. Having asserted this contractual right, and having secured the requested rulings (albeit not the desired outcome) on their challenges to jurisdiction and arbitrability, Respondents cannot now seek independent judicial review of these matters. See PowerAgent Inc. v. Electronic Data Systems Corp., 358 F.3d 1187, 1192 (9th Cir.2004) (“Having affirmatively urged the arbitrators to decide arbitrability and asserted their authority to do so, [a party to the arbitration] cannot await the outcome and, after an unfavorable decision, challenge the authority of the arbitrators to act on that very issue.”); Tristar Pictures, Inc. v. Director’s Guild of America, Inc., 160 F.3d 537, 540 (9th Cir.1998) (reasoning that by submitting an arbitrability challenge to the arbitrator, petitioner Tristar “by its conduct evinced clearly its intent to allow the arbitrator to decide not only the merits of the dispute but also the question of arbitrability” (internal quotation marks, alteration, and citations omitted)).

This conclusion is fully in accord with the Supreme Court’s recognition in First Options that “arbitration is simply a matter of contract between the parties,” with the parties free to choose which types of disputes (if any) they wish to resolve through this means. First Options, 514 U.S. at 943, 115 S.Ct. at 1924. In that case, two of the parties before the Court, Manuel and Carol Kaplan, “denied that their disagreement with [petitioner] First Options was arbitrable,” on the ground that they “had not personally signed” the “only ... document ... that contained an arbitration clause.” 514 U.S. at 941, 115 S.Ct. at 1922. Although the Kaplans “fil[ed] with the arbitrators a written memorandum objecting to the arbitrators’ jurisdiction,” the Court found that this did not “indicate a clear willingness to arbitrate that issue, i.e., a willingness to be effectively bound by the arbitrator’s decision on that point.” 514 U.S. at 946, 115 S.Ct. at 1925. Rather, the Court observed that “insofar as the Kaplans were forcefully objecting to the arbitrators deciding their dispute with First Options, one naturally would think that they did not want the arbitrators to have binding authority over them.” 514 U.S. at 946, 115 S.Ct. at 1925.

First Options shows, then, that a party’s mere submission of an arbitrability challenge to the arbitrator does not, by itself, demonstrate the requisite “clear and unmistakable” intent to be bound by the arbitrator’s resolution of this challenge. Here, however, Respondents’ election to submit issues of jurisdiction and arbitrability to the arbitrator does not stand alone, but is instead accompanied by contractual language that both (i) permits the parties to submit these issues to the arbitrator, and (ii) empowers the arbitrator to decide these issues. There was no such contractual language in First Options that a court could look to as evidence of the parties’ intent; to the contrary, the Kaplans, as individuals, were not even parties to any contract containing an arbitration clause. In light of this crucial distinction, the Court finds ample basis for a different result here.

Finally, the Supreme Court’s recent decision in Rentr-A-Center, West, Inc. v. Jackson, — U.S.-, 130 S.Ct. 2772, 177 L.Ed.2d 403 (2010), lends further support to the conclusion that the arbitrator’s decisions on jurisdiction and arbitrability should be reviewed under a deferential standard. In that case, the parties’ arbitration agreement included provisions that broadly called for arbitration of “all past, present or future disputes arising out of [respondent] Jackson’s employment with [petitioner] Rent-a-Center,” and that conferred upon the arbitrator the “exclusive authority to resolve any dispute relating to the enforceability of’ the arbitration agreement. Rent-A-Center, 130 S.Ct. at 2777 (internal quotation marks, alterations, and citations omitted). The Court referred to the latter of these two provisions as the “delegation provision,” and observed that, under its precedents, “parties can agree to arbitrate gateway questions of arbitrability, such as whether the parties have agreed to arbitrate or whether their agreement covers a particular controversy.” 130 S.Ct. at 2777 (citations omitted). Such “[a]n agreement to arbitrate a gateway issue is simply an additional, antecedent agreement the party seeking arbitration asks the federal court to enforce, and the FAA operates on this additional arbitration agreement just as it does on any other.” 130 S.Ct. at 2777-78.

The Court then discussed the different types of challenges that a party might bring under § 2 of the FAA, 9 U.S.C. § 2, in order to contest the validity or enforceability of an agreement to arbitrate:

There are two types of validity challenges under § 2: One type challenges specifically the validity of the agreement to arbitrate, and the other challenges the contract as a whole, either on a ground that directly affects the entire agreement {e.g., the agreement was fraudulently induced), or on the ground that the illegality of one of the contract’s provisions renders the whole contract invalid. In a line of cases neither party has asked us to overrule, we held that only the first type of challenge is relevant to a court’s determination whether the arbitration agreement at issue is enforceable. That is because § 2 states that a “written provision” “to settle by arbitration a controversy” is “valid, irrevocable, and enforceable” without mention of the validity of the contract in which it is contained. Thus, a party’s challenge to another provision of the contract, or to the contract as a whole, does not prevent a court from enforcing a specific agreement to arbitrate. As a matter of substantive federal arbitration law, an arbitration provision is severable from the remainder of the contract.

But that agreements to arbitrate are severable does not mean that they are unassailable. If a party challenges the validity under § 2 of the precise agreement to arbitrate at issue, the federal court must consider the challenge before ordering compliance with that agreement under § 4----In some cases the claimed basis of invalidity for the contract as a whole will be much easier to establish than the same basis as applied only to the severable agreement to arbitrate. Thus, in an employment contract many elements of alleged unconscionability applicable to the entire contract (outrageously low wages, for example) would not affect the agreement to arbitrate alone. But even where that is not the case ... we nonetheless require the basis of challenge to be directed specifically to the agreement to arbitrate before the court will intervene.

130 S.Ct. at 2778 (internal quotation marks and citations omitted).

Applying these principles to the case before it, the Court observed that respondent Jackson had “challenged only the validity of the contract as a whole” — that is, the entirety of the parties’ arbitration agreement — and had not mounted a separate and distinct challenge to the “delegation provision.” 130 S.Ct. at 2779. In particular, Jackson contended that the entire arbitration agreement, including its delegation provision, was both procedurally and substantively unconscionable, but he did not separately contest petitioner Rent-a-Center’s argument that, under the agreement’s delegation provision, the arbitrator was to decide Jackson’s threshold challenges to the enforceability of the agreement. 130 S.Ct. at 2779-80. Because Jackson had not “challenged the delegation provision specifically,” and because it was this provision that Rent-a-Center was seeking to enforce, the Court held that “we must treat it as valid under § 2, and must enforce it under §§ 3 and 4, leaving any challenge to the validity of the [arbitration agreement] as a whole for the arbitrator.” 130 S.Ct. at 2779.

The ruling in Rent-A-Center provides further confirmation that the arbitrator’s decisions in this case on matters of jurisdiction and arbitrability must be reviewed under a deferential standard. As discussed in this Court’s opinion in the earlier suit brought by Petitioner, and as reiterated above, “Respondents submitted the issue of arbitrability to the arbitrator for her consideration, without separately arguing that the arbitrator had no authority to decide the issue of arbitrability.” Quixtar, 2008 WL 5386774, at *11 (internal quotation marks, alteration, and citation omitted). Similarly, in their pending motion to vacate in the present suit, Respondents have advanced various challenges to the enforceability of the parties’ arbitration agreement as a whole, as well as the Rules of Conduct within which this agreement is contained, but they do not separately contest the enforceability of the specific provision within the Rules of Conduct, Rule 11.5.4, that empowers the arbitrator to decide jurisdictional and arbitrability disputes. Under Rent-A-Center, then, this “delegation provision” in Rule 11.5.4 is entitled to enforcement under the FAA, and Respondents’ challenges to the validity of the parties’ arbitration agreement as a whole were properly left for the arbitrator to decide. This, in turn, triggers deferential review of the arbitrator’s determinations on those matters that Rule 11.5.4 gave her the power to decide.

2. The Arbitrator’s Rulings on Arbitrability Readily Survive Scrutiny Under the Deferential Standard of Review That Applies to These Rulings.

Having resolved the threshold issue of the standard of review under which to review the arbitrator’s decisions on matters of jurisdiction and arbitrability, the Court turns to the (far easier) question whether the arbitrator’s determinations pass muster under this standard. An arbitrator’s decision on a matter that the parties have elected to submit for her determination may be set aside only on the limited grounds set forth in § 10 of the FAA, 9 U.S.C. § 10. See Hall Street Associates, L.L.C. v. Mattel, Inc., 552 U.S. 576, 590, 128 S.Ct. 1396, 1406, 170 L.Ed.2d 254 (2008); Grain v. Trinity Health, Mercy Health Services Inc., 551 F.3d 374, 378 (6th Cir.2008). Section 10, in turn, provides that an arbitrator’s decision may be vacated only under the following circumstances:

(1) where the award was procured by corruption, fraud, or undue means;

(2) where there was evident partiality or corruption in the arbitrators, or either of them;

(3) where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced; or

(4) where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made.

9 U.S.C. § 10(a). As the Supreme Court has recognized, only in “very unusual circumstances” will an arbitrator’s decision fail to survive scrutiny under this deferential standard. First Options, 514 U.S. at 942,115 S.Ct. at 1923.

In this case, as Petitioner points out, Respondents have utterly failed to “argue or explain how the Court could vacate the Arbitrator’s ruling on arbitrability” under the deferential standard that governs the Court’s review of this ruling. (Petitioner’s 12/31/2009 Reply Br. at 12.) Rather, Respondents’ argument on this point is relegated to a footnote, in which they summarily assert that “the Arbitrator’s rulings on the arbitrability issues were flatly contrary to clearly established law and to the undisputed facts,” and “[tjherefore ... would have to be vacated even under a deferential standard of review.” (Respondents’ Motion, 12/4/2009 Br. in Support at 7 n. 7.) “It is well-established that issues adverted to in a perfunctory manner, unaccompanied by some effort at developed argument, are deemed waived.” Dillery v. City of San-dusky, 398 F.3d 562, 569 (6th Cir.2005) (internal quotation marks and citations omitted); see also Bishop, supra, 692 F.Supp.2d at 774 (“It is not sufficient for a party to mention a possible argument in a most skeletal way, leaving the court to put flesh on its bones.” (internal quotation marks and citations omitted)). This rule is particularly applicable here, where Respondents are represented by able counsel who have proven quite capable of advancing a number of arguments backed by a thorough discussion of the case law and citation to the pertinent record, and where Respondents have been given ample opportunity to present and develop any desired arguments over the course of a 50-page brief.

Even if this challenge had not been waived, the Court would readily conclude that the arbitrator’s decisions on questions of arbitrability were not “flatly contrary to clearly established law” as Respondents contend. Assuming that Respondents mean by this contention to appeal to the “manifest disregard” standard of review, and assuming that this standard remains viable in the wake of the Hall Street decision, the Sixth Circuit has recognized that “manifest disregard of the law is a very narrow standard of review,” and that “[a] mere error in interpretation or application of the law is insufficient” to disturb an arbitrator’s ruling. Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Jaros, 70 F.3d 418, 421 (6th Cir.1995). “Rather, the decision must fly in the face of clearly established legal precedent,” and an arbitrator will not be deemed to have acted in manifest disregard of the law “unless (1) the applicable legal principle is clearly defined and not subject to reasonable debate; and (2) the arbitrators refused to heed that legal principle.” Merrill Lynch, 70 F.3d at 421.

Respondents have identified three aspects of the arbitrator’s rulings which, in their view, were flatly contrary to clearly established law. First, they contend that the parties’ arbitration agreement requires only current IBOs, and not former IBOs, to participate in arbitration. As support for this proposition, they rely principally upon a district court ruling that construed the Amway Rules of Conduct as binding only current IBOs to arbitrate their disputes with Petitioner, and as reaching only those disputes that arise prior to the termination of an IBO’s relationship with Petitioner. See Monavie, LLC v. Quixtar Inc., 741 F.Supp.2d 1227, 1235-37, 1238-40, 2009 WL 3584331, at *5-*6, *8 (D.Utah Oct. 26, 2009). As Petitioner points out, however, this ruling is in tension with (and does not address) the presumption that a party’s obligation to arbitrate generally survives the termination of the underlying contract containing the arbitration provision, at least as to disputes arising out of the contractual relationship. See Litton Financial Printing Division v. NLRB, 501 U.S. 190, 208, 111 S.Ct. 2215, 2226, 115 L.Ed.2d 177 (1991) (“We presume as a matter of contract interpretation that the parties did not intend a pivotal dispute resolution provision to terminate for all purposes upon the expiration of the agreement.”); Zueker v. After Six, Inc., 174 Fed.Appx. 944, 947-48 (6th Cir.2006); Bishop, supra, 692 F.Supp.2d at 775; Lyman v. Greater Boston Radio, Inc., No. 09-14502, 2010 WL 2557831, at *6 (E.D.Mich. June 21, 2010) (collecting cases). Moreover, the dispute here arguably arose out of the contractual relationship, as it rests upon allegations that Respondents breached obligations owed under the Rules of Conduct not to solicit IBOs to a competitor for a limited time and not to use Petitioner’s trade secrets. Under these circumstances, the arbitrator’s decision cannot be said to be flatly contrary to clearly established law.

Next, Respondents contend that the arbitrator erred by failing to follow, or give preclusive effect to, the Fifth Circuit’s ruling in Morrison v. Amway Corp., 517 F.3d 248, 254-57 (5th Cir.2008), that the arbitration agreement between Petitioner and the plaintiff distributors in that case was illusory and unenforceable. Yet, as to Respondents’ claim of issue preclusion, this Court expressed doubt in the prior suit brought by Petitioner that the ruling in Morrison, decided under Texas law, would be binding on Petitioner under the standards of Michigan law that govern here. See Quixtar, 2008 WL 5386774, at *5. Moreover, it is clear that Morrison would be entitled to issue-preclusive effect only if that ease and this one involve the same or materially indistinguishable facts. See Cincinnati Insurance, 594 F.3d at 445. As Petitioner points out, Michigan Circuit Judge (and now federal District Judge) Mark A. Goldsmith held that there were “critical distinctions” between the facts in Morrison and the facts of the case before him, Freeze v. Quixtar, Inc., No. 07-085295, slip op. at 5 (Mich.Cir.Ct. July 28, 2008) (attached as Exhibit 10 to Petitioner’s Response to Respondents’ Motion), and these same factual distinctions are present here — most notably, that in Morrison, 517 F.3d at 256, Petitioner sought “to enforce an arbitration agreement with respect to a dispute which arose, and concerning] matters which occurred, before ” Petitioner introduced an arbitration provision into its IBO agreements, while the disputes here (and in Freeze) post-date the parties’ entry into an agreement to arbitrate their disputes. Accordingly, Judge Goldsmith held that the ruling in Morrison was “neither controlling nor persuasive,” Freeze, slip op. at 6, and the arbitrator would not have acted in disregard of clearly established law by reaching the same conclusion in this case.

Finally, Respondents suggest that the arbitrator ruled contrary to clearly established law by failing to hold that the parties’ arbitration agreement is procedurally and substantively unconscionable. As Respondents recognize, Michigan law requires that both forms of unconscionability must be shown in order to declare an arbitration provision unconscionable. See Lozada v. Dale Baker Oldsmobile, Inc., 91 F.Supp.2d 1087, 1100 (W.D.Mich.2000). Again, however, Petitioner points to decisions in which courts have found that its arbitration agreement with its IBOs is not procedurally unconscionable. See, e.g., McCrone v. Quixtar, Inc., No. 07-2737, slip op. at 9-12 (N.D.Ohio Feb. 21, 2008) (attached as Exhibit 12 to Petitioner’s Response to Respondents’ Motion); U-CAN-II v. Setzer, No. 02-2535-CA, slip op. at 15-16, 2003 WL 25919932 (Fla.Cir.Ct Apr. 23, 2003) (attached as Exhibit 13 to Petitioner’s Response to Respondents’ Motion). Thus, it cannot be said that the arbitrator disregarded a clearly established and unified body of law in rejecting Respondents’ unconscionability challenge to their arbitration agreement with Petitioner.

B. The Arbitrator’s Rulings on the Merits of Petitioner’s Claims Against Respondents Survive Scrutiny Under the Applicable, Deferential Standard of Review.

1. The Standards Governing This Court’s Review of the Arbitrator’s Rulings.

Respondents acknowledge that this Court’s review of the arbitrator’s decisions on the merits of Petitioner’s claims against Respondent is governed by a deferential standard. In particular, and as stated earlier, the arbitrator’s award may be vacated only on the four grounds set forth in § 10 of the FAA, 9 U.S.C. § 10, which are listed above and need not be repeated here. Alternatively, the arbitrator’s award may be modified or corrected on the following grounds:

(a) Where there was an evident material miscalculation of figures or an evident material mistake in the description of any person, thing, or property referred to in the award[;]

(b) Where the arbitrators have awarded upon a matter not submitted to them, unless it is a matter not affecting the merits of the decision upon the matter submitted[; or]

(c) Where the award is imperfect in matter of form not affecting the merits of the controversy.

9 U.S.C. § 11.

As the Sixth Circuit has observed, the FAA “expresses a presumption that arbitration awards will be confirmed,” and judicial review of an arbitrator’s decision “is very narrow; one of the narrowest standards of judicial review in all of American jurisprudence.” Nationwide Mutual Insurance, 429 F.3d at 643. Nonetheless, an arbitrator’s award must be set aside where the arbitrator exceeds her power by “act[ing] beyond the material terms of the contract from which [she] draw[s][her] authority, or in contravention of controlling principles of law.” Electronic Data Systems Corp. v. Donelson, 473 F.3d 684, 688 (6th Cir.2007) (internal quotation marks and citations omitted). Similarly, an award must be vacated “if, from an analysis of the transcript of the arbitration proceeding and the evidence provided to the [arbitrator], absolutely no rational means c[an] be determined by which the [arbitrator] may have come to [her] decision.” Fitzgerald v. H & R Block Financial Ad-visors, Inc., No. 08-10784, 2008 WL 2397636, at *5 (E.D.Mich. June 11, 2008).

In this case, the arbitrator did not give reasons for her award in favor of Petitioner and against Respondents, explaining that under Rule 11.5.47 of the Rules of Conduct, the arbitrator may provide a summary of reasons for an award only upon the unanimous written request of all parties, and that only Petitioner, and not Respondents, gave the requisite consent. (See Petitioner’s Motion, Ex. 1, Final Award at 2.) “Arbitrators are not required to explain their decisions,” and “[i]f they choose not to do so, it is all but impossible to determine whether they acted with manifest disregard for the law.” Dawahare v. Spencer, 210 F.3d 666, 669 (6th Cir.2000); see also Merrill Lynch, 70 F.3d at 421 (“Where, as here, the arbitrators decline to explain their resolution of certain questions of law, a party seeking to have the award set aside faces a tremendous obstacle.”); Fitzgerald, 2008 WL 2397636, at *4-*5. Under these circumstances, “[i]f a court can find any line of argument that is legally plausible and supports the award then it must be confirmed,” and “[o]nly where no judge or group of judges could conceivably come to the same determination as the arbitrators must the award be set aside.” Merrill Lynch, 70 F.3d at 421.

2. Respondents’ Various Challenges to the Arbitrator’s Determinations on Liability and Damages Do Not Provide a Basis for Vacating the Arbitrator’s Award.

Broadly speaking, Respondents have mounted three challenges to the arbitrator’s award. First, they contend that the arbitrator’s award of over $25.8 million was based on theories of liability and damages that are contrary to clearly established law and unsupported by the evidentiary record presented to the arbitrator. Next, they argue that the arbitrator’s imposition of liability upon the Respondent wives — Laurie Woodward, Terri Brady, and Amy Marks — was the product of a manifest disregard for the law. Finally, Respondents assert that Petitioner procured an award in its favor by undue means, where it purportedly withheld pertinent information that would have enabled Respondents to impeach the testimony of Petitioner’s damage expert. The Court addresses each of these challenges in turn,

(a) Petitioner’s Theories of Liability and Damages

As noted earlier, and as summarized in the arbitrator’s award, Petitioner’s claims against Respondents rested upon theories of breach of contract, tortious interference, and misappropriation of trade secrets. In light of the arbitrator’s statements in her award regarding (i) her rulings on the parties’ motions for summary disposition and (ii) the conduct giving rise to Respondents’ liability, (see Final Award at 4, 6), it seems fair to say that the award was based upon the first of these theories — namely, that Respondents breached the Rules of Conduct by soliciting other IBOs to compete with Petitioner’s business. More specifically, Respondents evidently were held liable for violating Rule of Conduct 6.5.5, which prohibits IBOs from “encouraging], soliciting], or otherwise attempting] to recruit or persuade any other IBO to Compete with the business of the Corporation.” (Petitioner’s Response to Respondents’ Motion, Ex. 5, ROC Rule 6.5.5.) In challenging the arbitrator’s award, Respondents argue that there was no evidentiary or legal basis upon which the arbitrator could have found that they breached Rule of Conduct 6.5.5, and that the arbitrator’s award of damages for any such breach likewise lacked support in the record or the law.

Turning first to Respondents’ challenge to the arbitrator’s finding of breach-of-contract liability, Respondents do not contest that Petitioner introduced evidence in the course of the arbitration proceeding of a three-stage strategy employed by Respondents under which (i) IBOs terminated their relationship with Petitioner, (ii) these former IBOs remained affiliated among themselves and with Respondents by means of the “TEAM” organization co-founded by Respondents Orrin Woodward and Chris Brady, and (iii) Respondents then issued coordinated statements in which they announced that they were joining Petitioner’s competitor, MonaVie, and listed their reasons for doing so. This record includes evidence that would readily be characterized as solicitations; most notably, in a blog entry in which Orrin Woodward announced his decision to join MonaVie and gave his reasons for doing so, he stated, “If you knew what I knew, you would do what I do.” (Petitioner’s Response to Respondents’ Motion, Ex. 82.) More generally, this record is summarized in Petitioner’s brief in response to Respondents’ motion to vacate the arbitrator’s award, (see Petitioner’s Response, Br. at 35-39), and this summary need not be repeated here, as Respondents do not challenge the general thrust of this evidence.

Rather, Respondents contend that this record fails in two respects to establish any actionable solicitation in violation of Rule of Conduct 6.5.5. First, they assert that to the extent Petitioner relies upon blogs and website postings to establish violations of the non-solicitation provision in the Rules of Conduct, such passive, untargeted communications fail as a matter of law to qualify as actionable solicitations. Yet, common sense dictates that it is the substance of the message conveyed, and not the medium through which it is transmitted, that determines whether a communication qualifies as a solicitation. The above-quoted statement from Respondent Woodward’s website, for example, is readily characterized as an invitation for the reader to follow his lead and join Petitioner’s competitor MonaVie, and this is true despite the diffuse and uncertain readership of the site.

The courts have confirmed that communications qualifying as solicitations do not lose this character simply by virtue of being posted on the Internet. See, e.g., Domino’s Pizza PMC v. Caribbean Rhino, Inc., 453 F.Supp.2d 998, 1000 (E.D.Mich. 2006) (describing the defendant’s efforts to “solicitf ] pizza franchises by telephone and internet websites to participate in his pizza card program”); United States v. Zein, No. 09-20237, 2009 WL 4884973, at *2 (E.D.Mich. Dec. 11, 2009) (determining, for purposes of calculating a defendant’s sentencing range under the U.S. Sentencing Guidelines, that the placement of an advertisement on the Craigslist website “certainly qualifies as a plan to solicit by the internet”). More to the point, in United States v. Pirello, 255 F.3d 728, 732 (9th Cir.2001), the Ninth Circuit rejected a defendant’s contention that he had not engaged in “mass marketing” by posting classified ads on the Internet because “only three people responded to his advertisement.” In holding that the defendant was properly subject to a “mass marketing” sentencing enhancement, the court reasoned that his ad “invited any and all persons to send money for computers that [he] had no intention of providing,” and that “[t]he relatively low number of individuals actually victimized by [the defendant] before the FBI ended his scheme was the product of chance, and is in no way indicative of the breadth of [his] solicitation.” Pirello, 255 F.3d at 732. Notably, the dissent in that case, like Respondents here, argued that the “passive placement” of an advertisement on an Internet website devoted to that purpose should not qualify as solicitation because it did not entail “one-on-one importuning” and was not “directed at specific individuals,” Pirello, 255 F.3d at 733 (Berzon, J, dissenting), but this contention failed to carry the day. While these cases, of course, arise in different contexts and under different bodies of law, they nonetheless demonstrate that the arbitrator did not act with manifest disregard for the law by viewing Respondents’ Internet-based communications as evidence of actionable solicitation.

On a related note, Petitioner points to the decision in Neways Inc. v. Mower, 543 F.Supp.2d 1277 (D.Utah 2008), as indicating that solicitation encompasses more than simply explicit, one-to-one exhortations. In that case, the court found that the defendant distributors violated a contractual non-solicitation clause through such activities as (i) providing information to other distributors about the plaintiffs competitor, (ii) holding a series of meetings at the home of one of the defendant distributors at which the competitor’s products and compensation plan were discussed, (iii) sponsoring former distributors of the plaintiffs products into the competitor’s network of distributors, and (iv) giving speeches about the competitor’s mission and products at seminars likely to be attended by plaintiffs distributors. Ne-ways, 543 F.Supp.2d at 1286-87. Likewise, in this case, even assuming the record lacked any overt appeals to enlist with MonaVie, it certainly discloses examples of Respondents providing information to other current and recently-departed members of Petitioner’s IBO network about the drawbacks of remaining as Petitioner’s IBOs and the advantages of joining the MonaVie network. To the extent that Respondents conveyed this information over the Internet, Petitioner points to evidence that Respondents viewed this as a more efficient and effective means of communication than, say, telephone calls, (see, e.g., Arb. Hearing Tr. at 1302-03, 3905-06), as well as evidence of Respondents’ awareness of the sizable audience they could reach through this means, (see, e.g., Petitioner’s Response to Respondents’ Motion, Ex. 83 (Respondent Woodward’s statement on his blog that there were nearly 100,000 viewings of his announcement that he was joining MonaVie)). Under this record, the arbitrator permissibly could have found that Respondents engaged in solicitation in violation of Rule of Conduct 6.5.5.

Next, Respondents seize upon Petitioner’s failure to produce evidence that any particular IBO received the communications characterized by Petitioner as solicitations, much less that any specific IBO actually acted and relied upon these communications as grounds for leaving Petitioner’s distributor network and joining MonaVie. Indeed, as a matter of brute fact, Respondents note that a large number of TEAM-affiliated IBOs had already terminated their relationships with Petitioner before Respondents began any of the activities that Petitioner has identified as impermissible solicitations — namely, Respondents’ communications informing others about MonaVie and urging them to follow Respondents to this competitor. It follows, in Respondents’ view, that Petitioner cannot establish a breach of the non-solicitation provision in the Rules of Conduct.

There are two problems with this argument. First, and as Respondents themselves expressly acknowledge, nothing in the pertinent Rule of Conduct, Rule 6.5.5, “prohibit[s] soliciting an IBO to leave Amway.” (Respondents’ Motion, Br. in Support at 33.) Consequently, it is immaterial to Respondents’ breach-of-contract liability whether their communications led any IBO to leave Petitioner’s network of distributors, and it follows that they cannot be absolved of liability by showing that any such departing IBO did so before they commenced their solicitations to join MonaVie. Next, and more importantly, the prohibition in Rule of Conduct 6.5.5 is against “eneourag[ing], soliciting], or otherwise attempting] to recruit or persuade any other IBO to Compete with” Petitioner’s business, (ROC Rule 6.5.5), and a violation of this rule plainly does not turn upon the success of an IBO in persuading a fellow IBO to join a competitor such as MonaVie — it is enough that an IBO engaged in the act of soliciting the fellow IBO to do so, even if unsuccessfully. Any question as to the success of Respondents’ solicitation efforts goes to the issue of damages.

Accordingly, the Court turns to Respondents’ challenges to the arbitrator’s determination of the amount of a damage award. As Respondents point out, the arbitrator awarded the entirety of the damages computed by Petitioner’s expert. Respondents summarize this damage calculation as follows (and Petitioner does not dispute the accuracy of this summary):

Damages for Amway’s solicitation claim were based upon the testimony of its two damage experts, Vincent Thomas, CPA, and Kenneth Wise, Ph.D. Thomas’ expert opinions were limited solely to matching processes in which he determined that of the 110,000 distributors in Respondents’ MonaVie down-lines, 26,004 were former Amway IBOs. Wise used Thomas’ match of 26,004 as a starting point to calculate the profits Amway “lost” due to solicitation, subtracting the IBOs who left Amway prior to August 9, 2007[] and those who remained in Amway while joining Mona-Vie.

The result was 22,778 former Amway IBOs in Respondents’ MonaVie down-lines, each of whom was a former Amway IBO who left Amway after August 9, 2007 and joined MonaVie before December 31, 2008. Wise then ran a query on this group of IBOs to determine the number of such former Amway IBOs in each of Respondents’ individual Mona-Vie downlines. For Woodward, Wise calculated 4,602; for Brady, 3,499; for Marks, 1,279, for a total of 9,380. Wise’s query did not include any names or other identifiers of those IBOs.

To reach a lost profits amount, Wise then separately calculated an annual profit figure for Amway IBOs based on “seniority;” multiplied that figure by the number of IBOs in each of the Respondents’ MonaVie downlines; carried out the calculation 20 years into Amway’s future; then reduced the total to a net present value. The resulting “lost profits” were: Woodward: $12,736,659; Brady: $9,578,756; and Marks: $3,533,230. These are the exact amounts awarded by the Arbitrator. Neither Thomas nor wise had any opinions as to why any of the 9,380 left Amway or joined MonaVie. Thus, at best, all the experts did was calculate a purported lost profit number based on the departure of 9,380 former Amway IBOs.

(Respondents’ Motion, Br. in Support at 32-33 (footnote and citations to record omitted)).

In challenging the arbitrator’s decision to award damages in the full amount identified by Petitioner’s expert, Respondents point to various purported deficiencies in Petitioner’s effort to prove that these damages were properly attributable to Respondents’ breach of the non-solicitation provision at Rule of Conduct 6.5.5. First, and as noted earlier, Respondents point to the absence of evidence that they actually solicited the above-cited 9,380 former IBOs to leave Petitioner’s network of distributors and join MonaVie, much less that any such solicitation efforts were the cause of these former IBOs’ decisions to join Petitioner’s competitor. Indeed, Petitioner made no effort to identify anyone in this class of 9,380 former IBOs, making it impossible, in Respondents’ view, for Petitioner to meet its burden of linking Respondents’ purported breach of Rule of Conduct 6.5.5 to any losses arising from this breach. Respondents further submit that Petitioner and its experts impermissibly failed to address or negate the many other reasons why, in their view, IBOs might have elected to leave Petitioner and join MonaVie.

As the parties agree, the Michigan courts follow the venerable rule of Hadley v. Baxendale, 9 Exch. 341 (1954), in determining the damages recoverable for a breach of contract. As state