CASE 0:23-cv-01433-JRT-DJF Doc.

45 Filed 02/21/24 Page 1 of 12

UNITED STATES DISTRICT COURT

DISTRICT OF MINNESOTA

ROBERT ZEIDMAN,
Civil No. 23-1433 (JRT/DJF)
Plaintiff,

v.
MEMORANDUM OPINION AND ORDER
LINDELL MANAGEMENT LLC, CONFIRMING ARBITRATION AWARD

Defendant.

Brian A. Glasser, BAILEY & GLASSER LLP, 209 Capitol Street, Charleston, WV
25301; Cary Joshi, BAILEY & GLASSER LLP, 1055 Thomas Jefferson Street
Northwest, Suite 540, Washington, DC 20007; David E. Schlesinger,
NICHOLS KASTER PLLP, 4700 IDS Center, 80 South Eighth Street,
Minneapolis, MN 55402, for Plaintiff.

Alec J. Beck and Andrew D. Parker, PARKER DANIELS KIBORT LLC, 123 North
Third Street, Suite 888, Minneapolis, MN 55401, for Defendant.

Plaintiff Robert Zeidman responded to Defendant Lindell Management LLC’s

(“Lindell LLC”) “Prove Mike Wrong Challenge” (“Challenge”) concerning November 2020

election fraud allegations. Zeidman presented his findings to the Challenge judges and

upon receipt of an unfavorable outcome, he filed an arbitration demand. The arbitration

panel (“panel”) unanimously found Zeidman won the Challenge and ordered Lindell LLC

to pay Zeidman the $5 million reward. Both parties have asked the Court to review the

arbitration award. Because the panel arguably interpreted and applied the contract, the
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Court will confirm the arbitration award and deny Lindell LLC’s motion to vacate the

award.

BACKGROUND

I. FACTS

Zeidman has 45 years of software development experience. (Decl. David E.

Schlesinger (“Schlesinger Decl.”) ¶ 3, Ex. B (“Arb. Award”) at 3, May 19, 2023, Docket No.

2-2.) 1 Lindell LLC is a Minnesota LLC owned and operated by Michael Lindell. (Id.) Lindell

is widely known to have disputed the 2020 election results. (Id. at 3–4.) Under suspicions

of Chinese involvement in the 2020 presidential election, Lindell LLC hosted a Cyber

Symposium which included a “Prove Mike Wrong Challenge.” (Id. at 3–4.) A participant

who proved “that this cyber data is not valid data from the November Election” would be

awarded $5 million. (Id. at 5.)

Zeidman signed the Challenge rules, which included mandatory arbitration. (Id. at

6; Schlesinger Decl. ¶ 2, Ex. A (“Challenge Official Rules”) ¶ 9, May 19, 2023, Docket No.

2-1.) The relevant Challenge rules stated:

1. Overview. Lindell Management, LLC. (“Lindell [LLC]”) has created a

Challenge where participants will participate in a challenge to prove that
the data Lindell [LLC] provides, and represents reflects information from
the November 2020 election, unequivocally does NOT reflect
information related to the November 2020 election (the “Challenge”). …

1 The parties agreed that the record for the Court’s review is the uncontested factual
record from the arbitration proceedings. (Joint Stipulation Factual R. at 1, July 31, 2023, Docket
No. 21.)
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5. Participants must submit all of their evidence in writing to a three

member panel selected by Lindell [LLC] who will determine whether the
submission proves to a 100% degree of certainty that the data shown at
the Symposium is not reflective of November 2020 election data.
6. Winners. The winners will be determined on August 12, 2021 by 8:00
pm CDT. The three-member panel selected by Lindell [LLC] will identify
the winners based on their professional opinion that the submission
proves to a 100% degree of certainty that the data shown at the
Symposium is not reflective of November 2020 election data. …
7. … In the event there is an alleged or actual ambiguity, discrepancy or
inconsistency between disclosures or other statements contained in any
Challenge-related materials and/or these Official Rules (including any
alleged discrepancy or inconsistency in these Official Rules), it will be
resolved in Lindell [LLC]’s sole discretion. …

(Arb. Award at 6 (omission in original).)

Before the Challenge, Lindell LLC had a group of software professionals review the

data. (Id. at 7.) The format of the data surprised the professionals as they expected it to

be packet capture data, or PCAP files. (Id.) “Most or all” of the data originated from

Dennis Montgomery who claimed to have captured the data from internet traffic. (Id. at

8.) Data extracted in real time from the internet is expected to be packet capture data

or PCAP files. (Id.)

Lindell LLC provided Zeidman with 11 files, only a portion of the total data. (Id. at

9–10.) After reviewing the files, Zeidman presented a 15-page report explaining that each

file he received lacked packet capture data. (Id. at 10.) After considering Zeidman’s

response, the Challenge judges determined he had not provided enough information to

unequivocally prove the data was not election data. (Id. at 11.) In response, Zeidman

filed an arbitration demand. (Id.)

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The panel limited its decision to whether Zeidman won the Challenge, whether the

Challenge rules were unconscionable, and whether Lindell LLC violated the Minnesota

Consumer Fraud Act. (Id.) The panel further limited itself to the 11 files Zeidman

analyzed. (Id. at 11.)

The panel determined Minnesota contract law applied to the legal issues. (Id.) The

panel began by interpreting two phrases: (1) “prove that the data Lindell [LLC] provides,

and represents reflects information from the November 2020 election, unequivocally

does NOT reflect information related to the November 2020 election,” and (2) “whether

the submission proves to a 100% degree of certainty that the data shown at the

Symposium is not reflective of November 2020 election data.” (Id. at 12–13 (emphasis in

Arb. Award).)

The parties and the panel agreed that the language in the Challenge rules was

unambiguous, and thus interpretation required no parole or extrinsic evidence. (Id. at 13,

15.) The panel determined that “from the election” unambiguously meant data

specifically “from the election process itself,” rather than any data broadly “related to” or

“about” the election as Lindell LLC argued. (Id. at 13–14.) While unambiguous contract

terms are to be given their plain meaning, the panel explained that the meaning still must

be reasonable in the context of the entire contract, construed with the parties’ intent in

mind, and the panel feared the reading proposed by Lindell LLC would render the

Challenge unwinnable and thus unreasonable. (Id. at 13–15.) The panel also concluded

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that the only possible election data would be packet capture data, so if the participant

concluded it was not that type of data, they would have proven it cannot be “related to

the November 2020 election.” (Id. at 14.)

With the meanings of the unambiguous terms established, the panel then looked

at Zeidman’s proof for each file, his expert support, and the responses of Lindell LLC’s

experts. (Id.) The panel concluded that Zeidman proved that each file did not include

packet capture data and thus was not related to the November 2020 election, so he had

satisfied the Challenge rules, and was entitled to the $5 million reward. (Id. at 15–22.)

The panel then disposed of the unconscionability and Minnesota Consumer Fraud Act

claims. (Id. at 23.)

II. PROCEDURAL HISTORY

Lindell LLC filed a motion in state court to vacate the arbitration award. (See Order

at 1, Jun. 22, 2023, Docket No. 1.) Zeidman filed this current action to confirm the

arbitration award. (Pet., May 19, 2023, Docket No. 1.) The state action was removed to

federal court and consolidated with this action. (See Order at 2–3.)

DISCUSSION

I. STANDARD OF REVIEW

A court’s review of an arbitration award is very limited. Lee v. Chica, 983 F.2d 883,

885 (8th Cir. 1993). Where parties agree to arbitrate, a court cannot substitute a judicial

determination for the arbitrator’s decision. United Paperworkers Int’l Union, AFL-CIO v.

Misco, Inc., 484 U.S. 29, 40–41 n.10 (1987). Courts may not review the merits of an

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arbitration award “even though the parties may allege that the award rests on errors of

fact or on misinterpretation of the contract.” Bureau of Engraving, Inc. v. Graphic

Commc’n Int’l Union, Loc. 1B, 284 F.3d 821, 824 (8th Cir. 2002) (quoting Misco, 484 U.S. at

36). Even if the Court is convinced that the arbitrator committed serious factual or legal

error, so “long as the arbitrator is even arguably construing or applying the contract and

acting within the scope of his authority,” arbitration awards must be confirmed. Id.

(quoting Misco, 484 U.S. at 38).

Although extremely limited, arbitration awards are not entirely free from judicial

review. The Federal Arbitration Act (“FAA”) provides limited grounds on which an

arbitration award may be vacated. 9 U.S.C. § 10. The FAA requires that an arbitration be

upheld unless it is obtained by “corruption, fraud, or undue means,” where there is

“evident partiality or corruption in the arbitrators,” where there was misconduct by the

arbitrators, or where the arbitrators exceeded their powers. Id. §§ 10(a)(1)–(4). The

Eighth Circuit has held that beyond the grounds provided in the FAA, an arbitration award

will be vacated only where it is “completely irrational or evidences a manifest disregard

for the law.” Hoffman v. Cargill, Inc., 236 F.3d 458, 461 (8th Cir. 2001) (citation omitted).

II. ANALYSIS

Lindell LLC challenges the arbitration award on only one ground; that the panel

acted outside the scope of its authority by modifying the Challenge rules.

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A. Contract Interpretation Under Minnesota Law

The arbitration clause of the Challenge rules allowed the panel to interpret the

contract and apply it to Zeidman’s performance. The primary goal in interpreting a

contract is “to determine and enforce the intent of the parties.” Staffing Specifix, Inc. v.

TempWorks Mgmt. Servs., Inc., 913 N.W.2d 687, 692 (Minn. 2018) (quotation omitted).

Whether a contract is ambiguous, and the interpretation of an unambiguous term are

questions of law. Denelsbeck v. Wells Fargo & Co., 666 N.W.2d 339, 346 (Minn. 2003). “A

contract is ambiguous only if its language is reasonably susceptible to more than one

interpretation.” Winthrop Res. Corp. v. Sabert Corp., 567 F. Supp. 2d 1084, 1091 (D. Minn.

2008) (citing Art Goebel, Inc. v. N. Suburban Agencies, Inc., 567 N.W.2d 511, 515 (Minn.

1997)). The interpretation of an ambiguous term is a factual question. See Denelsbeck,

666 N.W.2d at 346. Because the parties and the panel agree that the Challenge rules are

unambiguous, the interpretation is a matter of law for the panel to decide.

Unambiguous terms in a contract are to be given their plain and ordinary meaning.

Minneapolis Pub. Hous. Auth. v. Lor, 591 N.W.2d 700, 704 (Minn. 1999). The contract

terms are also to be interpreted as a whole, within the context of the entire contract, to

meet the parties’ intent and harmonize all contract provisions. Trebelhorn v. Agrawal,

905 N.W.2d 237, 242 (Minn. Ct. App. 2017). Unambiguous provisions cannot be

rewritten, modified, or limited in effect by a specific construction. Storms, Inc. v. Mathy

Constr. Co., 883 N.W.2d 772, 776 (Minn. 2016) (citation omitted). Additionally, extrinsic

evidence cannot be used when the contract is unambiguous. Trebelhorn, 905 N.W.2d at
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243. When the contract term is unambiguous, the parties’ intent must be determined

from the “language of the written contract alone.” Minnesota Vikings Football Stadium,

LLC v. Wells Fargo Bank, Nat’l Ass’n, 193 F. Supp. 3d 1002, 1011 (D. Minn. 2016) (citation

omitted).

B. Contract Modification

Lindell LLC argues the panel modified the Challenge rules in two ways: inputting

the requirement of packet capture data and reversing the burden such that it rested with

Lindell LLC. Arbitrators are not entitled to deference when their interpretation does not

“draw its essence” from the contract such that its interpretation of an unambiguous term

is “expressly contrary to the terms of the agreement.” United States Postal Serv. v. Am.

Postal Workers Union, AFL-CIO, 907 F. Supp. 2d 986, 993–94 (D. Minn. 2012) (citation

omitted).

i. Language Modification

The panel began its analysis of the Challenge rules by accepting the proposition of

both parties that the language was unambiguous and thus could be interpreted without

the use of extrinsic evidence. When it identified the provisions requiring interpretation,

its focus was less on the term “related to” and more on the overall concept of

“information from the November 2020 election” and “November 2020 election data.”

The panel’s conclusion that the contract referred to data specifically from the

election process considered the fact that anything even remotely connected to the

election, as Lindell LLC proposed, could include newspaper articles and broadcast news
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which would effectively negate the purpose of having a challenge to begin with. The

Court finds this step in the interpretation to logically honor and harmonize the contract.

Thus, the panel did not modify the contract or exceed its scope by imposing this

interpretation.

The panel took its interpretation a step further by finding packet capture data was

the only possible type of election data. The panel justified this finding with the fact that

the data was captured from the internet and the only possible way to capture data live

from the internet is through packets. The panel cited to the statement by Dr. Douglas

Frank, one of Lindell LLC’s experts and a Challenge judge, and statements by Lindell

himself that claimed the data would be in packet form and if it was not in packet form, it

could not be election data. The panel also referenced the source of “most or all” of the

data, Dennis Montgomery, who “captured the data from internet traffic.” (Arb. Award at

7.) All this information together led the panel to the conclusion that if the data were to

relate to the election, it would have to be packet capture data and thus proof that the

data was in any other form proved it was not election data.

The Court tracks the path interpreting “election data” but finds the panel loses

focus on its discussion of packet capture data. Admittedly, the panel was tasked with the

difficult job of interpreting a poorly written contract, but in evaluating the same

information, the Court finds it to be quite a leap that the only possible data that could

constitute “election data” would be packet capture data.

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However, the Court’s potential disagreement with the outcome is not the standard

upon which to review an arbitration award. The Court must only decide if the panel was

arguably applying the contract. Horton, Inc. v. NSK Corp., Inc., 544 F. Supp. 2d 817, 823

(D. Minn. 2008). There are two explanations for the panel’s outcome that align with the

legal standard of review. First, it is possible that the insertion of packet capture data was

simply an application of the law to the facts in this case. More likely, although the panel

and parties agreed the language was unambiguous, the panel used extrinsic evidence.

Under Minnesota contract law, in interpreting unambiguous terms, the use of

extrinsic evidence is not permitted. Trebelhorn, 905 N.W.2d at 243. But even a serious

legal error is not a reason to vacate the award. Horton, 544 F. Supp. 2d at 823. Because

the panel was arguably interpreting and applying the contract, even the potentially

serious legal error of using extrinsic evidence to interpret an unambiguous term is not

enough to vacate the award. As such, the Court will not vacate the award despite the fact

that it may have reached a different outcome if reviewing the case de novo. 2

ii. Burden Shift

Lindell LLC’s burden shift argument stems from the panel’s interpretation of the

language stating that Challenge participants must “prove that the data Lindell [LLC]

2 To be clear, the Court’s disagreement with the panel is limited to the technical matter
of contract interpretation. It will not entertain any unproven theories of election fraud or
interference and its position here should not be understood as even the slightest endorsement
of Lindell’s broader election related claims.
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provides, and represents reflects information from the November 2020 election,

unequivocally does NOT reflect information related to the November 2020 election.”

(Arb. Award at 12–13 (emphasis in Arb. Award).) The dispute is over whether the first

clause can be read into the Challenge rules or if it is merely a predecessor statement to

contextualize what the participants must do.

Lindell LLC argues that the panel’s decision that Zeidman need only insert doubt

about the data Lindell LLC presented is not the same as proving that the data is

unequivocally not from the election thus shifting the burden and modifying the contract.

Lindell LLC’s argument may be a compelling alternative interpretation but the standard

for reviewing an arbitration award does not weigh competing interpretations. The Court

is not at liberty to review the outcome of an arbitration award simply because one party

believes it to be incorrect. Retrial of the issues is not within the purview of the Court. St.

Mary’s Med. Ctr. v. Int’l Union of Operating Eng’rs, Local 70, No. 11-1641, 2013 WL

3270388, at *2 (D. Minn. June 26, 2013) (citing Oxford Health Plans LLC v. Sutter, 569 U.S.

564, 569 (2013)). Thus, Lindell LLC’s burden shifting argument is insufficient to vacate the

arbitration award when the panel’s result conforms with its authority to interpret the

contract.

CONCLUSION

The Court’s responsibility in reviewing an arbitration award is not to reevaluate the

merits but rather ensure that the panel acted appropriately. Lindell LLC’s only basis for

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Court action was that the panel acted outside the scope of its authority in issuing the

award. Even though the Court may have reached a different outcome given an

independent initial review of the information, the Court fails to identify evidence that the

panel exceeded its authority. Under the Court’s narrow review, it will confirm the

arbitration award.

ORDER

Based on the foregoing, and all the files, records, and proceedings herein, IT IS

HEREBY ORDERED that:

1. Plaintiff’s Motion to Confirm Arbitration Award [Docket No. 22] is GRANTED.

2. Defendant’s Motion to Vacate Arbitration Award [Docket No. 35] is DENIED.

3. Plaintiff is awarded $5 million plus post-judgment interest beginning April 19,

2023, to be paid within 30 days of issuance of this Order, per the Arbitration

Award.

LET JUDGMENT BE ENTERRED ACCORDINGLY.

DATED: February 21, 2024

at Minneapolis, Minnesota. JOHN R. TUNHEIM
United States District Judge

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