Goldman Sachs & Co. LLC v. Leissner

Background

The Goldman Sachs Group, Inc. employed Tim Leissner from April 1, 1998, through February 23, 2016. During that period, Leissner entered into at least 14 equity-compensation agreements with the Goldman Sachs Group. Those agreements required arbitration of disputes arising from or relating to them.

The petitioners began a Financial Industry Regulatory Authority (FINRA) arbitration proceeding against Leissner in January 2019. On June 20, 2019, Leissner signed an agreement consenting to FINRA arbitration. A three-arbitrator panel held a hearing on June 27 and 28, 2022, where the parties were represented by counsel and presented evidence, including Leissner’s testimony. On July 27, 2022, the panel unanimously issued an award requiring Leissner to pay the petitioners $20,670,644.

FINRA notified Leissner that the award had to be paid within 30 days unless he filed a motion to vacate it in court. He did not pay the award and did not move to vacate or modify it. The petitioners filed this court action on June 21, 2023, seeking confirmation of the award and interest. Although Leissner was served, he did not oppose the petition or otherwise appear.

Court’s analysis

The court applied the Federal Arbitration Act, which permits a court to confirm an arbitration award unless the award has been vacated, modified, or corrected. The court explained that confirmation generally converts an existing arbitration award into a court judgment. Even though the petition was unopposed, the court reviewed the record under the standard used for summary judgment, which asks whether any genuine dispute over an important fact requires a trial.

The court concluded that the petitioners filed within one year of the award and established that the parties had agreed to arbitrate, that Leissner had consented to FINRA arbitration, and that the panel had issued the award after considering the parties’ submissions and hearing evidence. Because Leissner did not dispute the material facts, and because the record provided more than a minimal justification for the award, the court found no material factual issue and no basis to conclude that the panel acted outside its authority.

The petitioners also sought interest. The court held that the award carried ten-percent yearly interest under California law from July 27, 2022, until judgment. After the award became a court judgment, the federal post-judgment interest rate under 28 U.S.C. § 1961(a) applied.

Disposition

The court granted the petition to confirm the arbitration award. It confirmed the July 27, 2022 award, entered judgment for the petitioners and against Leissner for $20,670,644, ordered ten-percent yearly pre-judgment interest from July 27, 2022, through the judgment date, and ordered federal post-judgment interest from the judgment date. The Clerk of Court was directed to close the case.