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Ex-VMware veep loses attempt to throw out his own $1.5m legal win

Strange things indeed happen in Californian courts

A former VMware veep who claimed tens of millions of dollars from the virtualization company over whistleblower victimisation has lost his legal attempt (PDF) to throw out a $1.5m arbitration award made in his favour.

Dane Smith, a one-time vice president of the Americas at VMware, blew the whistle some years ago on a secret agreement between VMware and Carahsoft that would have overcharged the US government by $75m for its sweet virtualization goodness.

Smith then said VMware retaliated and forced him into arbitration. After two years in arbitration mediated by for-profit company JAMS, during which he won $1.57m – comprised of around $300,000 in damages and the rest being made up of legal fees, costs and interest – Smith popped up again in July in the public US courts trying to have his arbitration award thrown out and the case reheard by a proper court.

Why? His lawyer – Patricia Gillette – left halfway through his arbitration case to join JAMS to work in the same office as the arbitration judge hearing his case, William Cahill. Smith felt that his ex-lawyer suddenly becoming professional mates with the judge introduced "evident partiality" against him – in plain English, bias. This bias, he argued, meant the judge awarded him less cash than he was entitled to in law.

That was the thrust of his appeal against the JAMS award, made to the US District Court for Northern California. Judge Haywood Gilliam ruled, however, that Smith had not raised any objection about his lawyer joining JAMS until after the arbitration had ended, despite knowing about it while the case was ongoing.

Smith had, naturally enough, told Gillette a lot of sensitive details about his claim before she quit law for arbitration. Smith's lawyer, Jeffrey Ryan, "noted" in the filing that when he received a marketing email from JAMS declaring that Gillette was joining the company and would be working from the same office as the arbitration judge hearing his claim, he became suspicious.

In court filings, Ryan, acting for Smith, said: "If I had known that Ms Gillette would be joining the JAMS organization, and in the same office as Judge Cahill, prior to the conclusion of Smith’s arbitration of his employment retaliation claims against VMware, I would have declined [VMware's] suggestion that we agree to use JAMS instead of [a competing arbitration provider]."

Throwing this out, Judge Gilliam ruled: "Nowhere does Plaintiff address why he did not object to Judge Cahill as a mediator before the end of arbitration and the filing of this motion."

Smith also claimed that the arbitration judge had made errors of law and failed to fully reimburse his legal costs according to US law, two other grounds of appeal that Judge Gilliam also threw out.

His application for vacatur (American legalese for "throw it out and start again") having been denied, Smith has to be content with his original winnings of $305,412.66 in compensatory damages, $4,546 in interest and $244,178 in costs. His lawyers, poor things, have to get by with $1,016,684.85 in legal fees, and curious folk can read the full judgment here in PDF format. ®

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