94-9174 and 94-10031: Smith Barney Shearson v. Warren Boone

94-9174 and 94-10031: Smith Barney Shearson v. Warren Boone

UNITED
IN THE
STATES
COURT OF APPEALS
FOR THE FIFTH
CIRCUIT
SMITH BARNEY SHEARSON INC.,
)
>
Plaintiff-Appellant,
)
vs.
1
WARREN BOONE, INDIVIDUALLY
AND
AS TRUSTEE FOR WATERCOL PROFIT
SHARING PLAN, DATED l/7/80,
vs.
SCOTT G. SHERMAN,
Defendant-Appellee.
BRIEF
Case No.
9440031
)
-
Plaintiff-Appellant,
93-9174
1
Defendant-Appellee.
SMITH BARNEY SHEARSON INC.,
Case No.
1
>
>
AND
1
>
)
1
1
1
1
)
)
-
OF THE PUBLIC INVESTORS ARBITRATION
BAR ASSOCIATION AS AMICUS CURIAE
Michael
P. Gilmore
John E. Lawlor
LAW OFFICES OF JOHN E. LAWLOR, ESQ.
1461 Franklin
Avenue
Garden City,
N.Y.
11530
(516) 248-7700
(516) 742-7675
(Telecopy)
ON THE BRIEF FOR THE PUBLIC
INVESTORS ARBITRATION
BAR
ASSOCIATION AS AMICUS CURIAE
SUPPORT OF DEFENDANT-APPELLEE
WARREN BOONE
IN
-ANDL. Jerome Stanley
*
LAW OFFICES OF L. JEROME STANLEY
7909 Wrenwood Boulevard,
Suite
C
Baton Rouge, Louisiana
70809
ATTORNEY AND DIRECTOR ON BEHALF OF
THE PUBLIC INVESTORS BAR
ASSOCIATION AS AMICUS CURIAE IN
SUPPORT OF DEFENDANT-APPELLEE
WARREN BOONE
*Admitted,
~~~
U.S.
Court
of
Appeals
for
the
5th
Circuit.
CERTIFICATE
The undersigned
following
this
case.
Judges
or
listed
of
OF INTERESTED
counsel
persons
of record
Court
certifies
have an interest
These representations
this
PERSONS
in
are made in
may evaluate
possible
that
the
the
outcome
order
that
disqualification
recusal.
The parties
Smith
are as follows:
Barney Shearson,
Inc.
Warren Boone, Individually
and as Trustee
Watercol Profit
Sharing Plan, Dated l/7/80
Scott
G. Sherman
The Public Investors
Arbitration
appearing and submitting
a brief
Attorneys
for
for
the parties
Bar Association
is
as amicus curiae
are as follows:
C.W. Flynn
Susan L. Karamanian
Bradley W. Foster
Locke Purnell Rain Harrell
(A Professional
Corporation)
2200 Ross Avenue, Suite 2200
Dallas,
Texas 75201
ATTORNEYSFOR PLAINTIFF-APPELLANT
SMITH BARNEY SHEARSONINC.
Tracy Pride Stoneman
Mills,
Presby & Anderson,
3102 Maple Avvenue, Suite
Dallas,
Texas 75201
L.L.P.
220
ATTORNEYSFOR DEFENDANT-APPELLEE
WARRENBOONE
1
of
the
Jonathan
T. Suder
Friedman,
Young & Suder
500 Throckmorton,
16th Floor
Fort Worth,
Texas
76102
Ronald A. Schy
Daniel
J. Becka
Biegel,
Schy, Lasky,
Cohen, Rifkind
311 South Wacker Drive,
Suite
6500
Chicago,
Illinois
60606
& Hennessey
ATTORNEYS FOR DEFENDANT-APPELLEE
SCOTT G. SHERMAN
Appearing
on behalf
of the Public
Bar Association
as amicus curiae
Defendant-Appellee
Boone:
Investors
in support
Michael
P. Gilmore
John E. Lawlor
Law Offices
of John E.
1461 Franklin
Avenue
Garden City,
New York
Esq.
Lawlor,
Arbitration
of
11530
L. Jerome Stanley
Law Offices
of L. Jerome Stanley
7909 Wrenwood Boulevard,
Suite
C
Baton Rouge, Louisiana
70809
[,[$i
/
L. Jehme
Stanley
LAW OFFICES OF L.
JEROME STANLEY
PUBLIC INVESTORS BAR ASSOCIATION
AS AMICUS CURIAE IN SUPPORT OF
DEFENDANT-APPELLEE
WARREN BOONE
ii
TABLE
OF CONTENTS
Page
Certificate
of
Interested
Table
of
Contents
Table
of
Authorities
Brief
of
PIABA
. . .
Argument
Point
Point
. .
.
of
the
II.
.
Point
III.
IV.
V
.
viii
.
viii
viii
1
and Descent
. . . . .
.
or Securities
. . . . . . .
.
Arbitration
Act Mandates
of This
Controversy
. . . .
of
Act
The FAA Mandates
the Terms of the
.
.
. . .
Applicability
Arbitration
.
iii
Curiae
The Federal
Arbitration
B.
. .
. . .
l
The Ascent
Arbitration
A.
Point
Curiae
Amicus
i
. .
. . .
. . . . .
. . . .
I.
. . .
as Amicus
Introduction
Interest
Persons
.
.
.
the Federal
. . . . .
Strict
Parties'
.
. . .
Adherence
to
Agreement
.
l
.
Under the FAA Timeliness
and Eliaibilitv
Issues
Are For the Arbitrators
to
Decide
. . . . . . . . . . . . . . .
The Fifth
Circuit
Has Liberally
Arbitration
Clauses
Consistent
FAA Mandate
. . . . . . . . .
.
.
-
i
.
Read
With the
. . . . .
10
15
Point
V.
The Second,
Fourth,
Eighth,
Ninth
and
Eleventh
Circuits
Have Construed
Arbitration
Clauses
Liberally
and in
Keeping With the Dictates
of the FAA . . 17
Point
VI.
The FAA is Controlling
Despite
a
New York Choice
of Law Provision
in an Arbitration
Agreement
. . .
-iii-
. . .
18
Conclusion
Certificate
.....................
of
Service
19
...............
-iv-
20
TABLE
OF
AUTHORITIES
P
CASES
AT&T Technologies,
Communications
475 U.S. 643
Inc. v.
Workers
(1986)
Ackerberg
v. Johnson,
892 F.2d 1328 (8th
of
.
.
Cir.
America,
.
l
.
l
1989)
l
. . .
. . 7,
.
. .
. .
Appalachian
Regional
Healthcare
v.
Group, Architects,
Beyt I Rish Robbins
963 F.2d 373 (6th Cir.
1992)
. . .
Austin
Mun. Securities
v. Nat. Ass?
of Securities
Dealers,
Inc.,
757 F.2d 676 (5th Cir.
1985)
. .
. .
Barbier
Belke
v. Shearson
Lehman Hutton,
Inc.
752 F.Supp.
151 (S.D.N.Y.
1990) .
. .
l
Services,
Inc.
v. Philipp
1222 (2d Cir.
1980)
. x,
of Durham v. Richards
742 F.2d 811 (4th Cir.
l
FSC Securities
Corp. v. Freel,
811 F.Supp 439 (D.Ct.Minn
l
l
. .
1993)
.
. . .
. .
.
. .
& Lion,
9, 10,
. .
v. T. Kakiuchi
& Co.,
840 (2d Cir.
1987) . . . . .
In
Constr.
Corp.,
922 (4th Cir.
1981)
.
. .
.19
. . .
.19
16,
17
. . x,
18
. .
. .
. .
. . . .
. .
18
12,
14
. . x,
17
.
.
2,
. . x,
. .
. .
. .19
. . x,
11,
. . .
. . .
Genesco,
Inc.
815 F.2d
Re Mercury
656 F.2d
10
v.
& Associates,
1984).
. . . . .
Dean Witter
Reynolds,
Inc.
v. Byrd,
470 U.S. 213, 105 S.Ct.
1238,
84 L.Edo2d
158 (1985)
.
9,
15,
v. Merrill
Lynch,
Pierce,
Fenner & Smith,
693 F.2d 1023 (11th Cir.
1982).
. . . . . .
Conticommodity
613 F.2d
County
. .
. . . 6,
Automotive
Petroleum
and Allied
Industries
Town and Country
Ford,
709 F.2d 509 (8th Cir.
1983).
. . .
8,
.
. . x,
5,
6
18
6
18
McDonnell
Douglas
Finance
Power & Light
Co.,
858 F.2d 825 (2d Cir.
Merrill
Merrill
Miller
v.
Pa.
1988)
. .
Lynch v. Noonan,
1992 WL 196741 (S.D.N.Y.
1992)
.
Lynch,
Pierce,
Fenner
& Smith v. Shaddock,
822 F.Supp 125 (S.D.N.Y.
1993)
.
v. Prudential
884 F.2d 128
(4th
Bathe
Cir.
Securities,
1989)
.
Mitsubishi
Motors
Corp. v.
Solar
Chrysler-Plymouth,
Inc.
473 U.S. 614, 105 S.Ct.
3346,
87L.Ed.2d
444 (1985)
. . . .
Moses
Necchi
O'Neel
H. Cone Hospital
v.
Mercury
Constr.
Corp.,
460 U.S. 1, 103 S.Ct.
74 L.Ed.2d
765 (1983)
927,
a . .
S.p.A.
v. Necchi
Sewing
Machine
Sales Corp.,
348 F.2d 693 (2d Cir.
1965)
.
Ruff
S.A.
. .
l
.
. .
6,
. .
. .
. .
. .
.
. .
13
11,
14,
19
. .
7,
. .
. .
11,
Cir.
v. Boosier
Medical
952 F.2d 138 (5th
Center
Cir.
1992)
1992)
Mineracao
da Trindade-Samitri
Utah Int'l,
Inc.,
745 F.2d 190, (2d Cir.
1984)
-vi-
. .
16,
7
17
. .
. . .
. 8
. . .
. . x,
18
. . .
. x
. .
l
. . .
. . .
. . .
17
5,
. .
. . . x
Finance
Corp. v. Harrisons
& Crosfield,
366 (2d Cir.
1953) . . . . . . . . . . 9,
& Co. v. Kassab,
981 F.2d 894 (6th
11
. .
. .
. .
. . 8,
. .
.
. .
l
. . .
1989)
.
l
5,
.
. .
Inc.
. .
x,
PaineWebber,
Inc. v. Hartmann,
921 F.2d 507 (3rd Cir.
1990)
Reconstruction
204 F.2d
. . .
. . .
v. National
Association
of
Securities
Dealers,
Inc.,
667 F.2d 804 (9th Cir.
1982)
PaineWebber,
Inc.
v. Farnam,
870 F.2d 1286 (7th Cir.
Roney
. .
. .
l
.
. .
. . .
11
. x
. . . . 6
v.
l
. . .
. .
. . . .
. 7
Shearson
American
Express,
482 U.S. 220 (1987)
Inc.
v. McMahon,
0 0 0 . . . . .
.
Shearson
Lehman Hutton,
Inc.
v. Wagoner,
944 F.2d 114 (2d Cir.
1991) . . . .
Smith
v. Merrill
Lynch,
Pierce,
Smith Incorporated,
575 F. Supp 904 (N.D. Tex.
Tehran-Berkeley
Civ & Env.
Tippetts-Abbett,
816 F.2d 864 (2d Cir.
Shipyards
943 F.2d
Corp.
1056,
Trafalgar
Shipping
Milling
Co.,
401 F.2d 568
1983)
v.
.
1 (1984)
Eng.
1987)
Volt
14
16,
17
. .
.
. .
. .
. . .
. .
Ltd.,
. . . .
(2d Cir.
1968)
.
. . . .
v. Dean Witter
Reynolds,
Inc.,
606 So.2d 681 (Fla.
5th DCA 1992)
. . . 9,
. .
. . .
. .
. .
. . .
. .
. .
. .
Information
Sciences
Inc.
v. Board of
Trustees
of the Lleland
Stanford,
Jr. U.,
489 U.S. 468, 109 S.Ct.
1248,
103 L.Ed.2d
488 (1989)
. . . . . . .
v. Swan,
346 U.S. 427,
74 S.Ct.
182,
12,
. 4
12
19
International
l
Wilko
2
10,
. .
. . . . .
Transcontinental
Gas Pipeline
Corporation
v. Dakota Gasification
Co.,
782 F.Supp 336 (S.D. Tex 1991)
. .
Victor
9,
1,
v.
v. Cunard Line,
(9th Cir.
1991)
Co.
x,
. .
Fenner
Southland
Corp. v. Keating,
465 U.S.
1,
104 S.Ct.
852, 79 L.Ed.2d
Todd
e .
l
98 L.Ed.2d
l
268
-vii-
(1953)
. .
11,
. .
12
16
. . .
. . 3
.
7,
. . .
5,
. .
18
. 5
BRIEF OF THE PUBLIC INVESTORS
ARBITRATION BAR ASSOCIATION AS AMICUS CURIAE
PRELIMINARY
This
Brief
arbitration
as amicus
involved
to
in
such
et
ano.,
entitled,
Smith
directs
of
that
(Fifth
Circuit
prominent
the
attorneys
investors.
country.
The official
To promote
securities
Inc.
this
in
v.
to
Court
the
Warren
Case No.
herein
Bar
corporation.
from
Boone,
9309174),
the
and
facts
and
in
all
field
representing
represent
securities
the interests
arbitration
PIABA
the
protecting
public
in the arbitration
investors
process;
(2)
making
and
arbitration
securities
as members
public
of
public
around
-viii-
the
is:
public
investor
by:
(1)
is
whom practice
thousands
of
of
has
of
arbitrations
mission
Association
PIABA
38 states,
PIABA members
involved
urges
and Order
Arbitration
arbitration
investors
brokerage
OF THE AMICUS CURIAE
Investors
not-for-profit
securities
arguments
as
case.
INTEREST
The Public
securities
Opinion
Shearson
to
investors
PIABA
Barney
the
referred
against
1993
Investors
public
herein.
6,
7:93-W-146-K
circumstances
on behalf
Appellant
December
Public
(hereinafter
claims
the
specifically
a Texas
by the
curiae
arbitrating
as the
affirm
action
submitted
Bar Association
(llPIABAJ1)
firms
is
STATEMENT
from
just
abuses
and
fair:
in
222
in
(3)
creating
investor
PIABA
judicial
a level
playing
field
for
in securities
arbitration.
submits
brief
intervention
inflexible
effect
of
Securities
with
and,
vagaries
of
investors,
would
by members
of
the
the
provide
legal
precisely
what
As a bar
interests
of
this
case
discussed
in
the
mold
arbitration
public
the
previous
Court
to
look
to
the
Court
of
the
United
before
PIABA
impact
it
could
States
of
all
the
in
Court.
and
in
This
an
is
prevent.
representing
recognizes
the
the
importance
have
on the
issues
The
amicus
urges
and decisions
favor
Barney")
by casting
to
authority
-ix-
weigh
process
the
paragraph.
controlling
to
("Smith
industry
attorneys
investors
and the
field
To decide
was designed
of
by
arbitrators
arbitration
securities
association
allow
Inc.
this
issue
as the
and securities
Shearson,
the
in
industry.
decision.
away at
the
proceeding
knowledge
industry,
the
occasioned
securities
to
have
as well
losses
expertise,
Barney
to
from
claims
their
and ii)
each
securities
an impartial
whittle
impunity
inflexible
their
securities
Smith
be to
the
will
investors
was designed
upon
render
of Appellant
rule"
of
based
the
legitimate
in
i)
Self-Regulatory
all
expertise
that:
of
some or
arbitration
concern
process:
of
otherwise
recover
transgressions
issues
of
public
arbitration
thousands
with
possessed
the
application
depriving
to
out
(SRO) "eligibility
arbitration
chance
in
judicial
Organization's
of
this
the
this
of
the
Supreme
from
five
other
United
States
District
Circuit
Court's
Courts
decision.
given
in
this
Court
of
Appeals
(and
bound
by Second
Circuit
with
the
There
is
contrary
brief
issues
the
to
before
espoused
decisions
would
with
of
a lesser
of
extent
which
tribunal
law
legitimate
affirming
that
has
herein.
(2)
the
attention
the
Second
District
has
been
taken
the
However,
based
thousands
of
investors
claims
in
arbitration.
is
Circuit
the
on numerous
to make a determination
deprive
in
Considerable
decisions
this
to
that
Appeals
precedent)
body
that
proceeding
to
(1)
a small
submitted
of
Courts
confronted
occasions.
position
it
is
on these
from
See, e.g.,
Moses H. Cohen Memorial
Hospital
v.
(1)
Mercury
Construction
Corp.,
460 U.S. 1, 103 S.Ct.
927,?4
L.Ed.2d
765 (1983);
Conticommoditv
Serv.
v. Philipp
& Lion,
613 F.2d 1222 (2d Cir.
1980);
Shearson
Lehman Hutton-v.
Waqoner,
944 F.2d 114 (2nd Cir.
1991);
O'Neel
v. National
Association
of Securities
Dealers,
Inc.
667 F.2d 804 (9th
Cir 1982);
Bzke
v. Merrill
Lynch Pier&
Fenner
& Smith
693
F.2d 1023 (11 Cir.
1982);
County of Durham v. Richards
i
Associates,
742 F.2d 811 (4th Ci.r71984),
I<Re
MercuryConstr.
Corp.,
656 F.2d 922 (4th Cir.
1981);
Automotive,
Petroleum
and Allied
Industries
v. -Town -and Country
Ford,
709
F.2d 509 (8th Cir.1983),
FSC Securities
Corp. v. Freel,
811
F.Supp.
439 (D.Minn.
1993).
(2)
1286 (7th
(3rd Cir.
(6th Cir.
See, e.g.
PaineWebber,
Cir.
1989);
PaineWebber
1990);
and Roney -& Co.
1992).
Inc.
v. Farnam,
870 F.2d
v. Hartmann,
921
F.2d 507
v.Kassab,
981 F.Supp.
894
The Fifth
will
have
Circuit's
a nationwide
importance
of
believes
being
that
the
dictates
with
the
Thus
it
"eligibility
parties'
is
rule
chilling
of
the
propounded
effect
Federal
urged
as urged
of
and PIABA
on this
agreement
respectfully
rule"
impact
heard
the
an unwarranted
determinaticn
vital
recognizes
Barney
on arbitration,
is
Act,
that
by Smith
their
this
Court
Barney.
before
it
the
PIABA
by Smith
arbitrate
-xi-
issue
issue.
Arbitration
to
the
will
have
contrary
and inconsistent
disputes.
reject
the
to
ARGUMENT
POINT
I.
THE
ASCENT
Since
decision
U.S.
in
220,
all
been
United
claims
arbitrated.
Smith
Most
the
organizations
(lfSROsgt),
of
Dealers,
Securities
("NYSE")
rules
of
, and/or
each
of
the
these
the
Court
McMahon,
(1987),
of
firms
the
firms
that
containing
pre-
brokerage
the
place
accounts.
one at
either
482
virtually
brokerage
including
industry
v.
result
when opening
take
Supreme
brokerage
agreements
shall
the
185
and other
agreements,
of"
Inc.
retail
is
customer
arbitration
rules
This
clauses
customer
that
against
ARBITRATION
States
96 L.Ed.2d
Barney
execute
SECURITIES
Express,
(3)
arbitration
Vnder
1987,
investor
clients
provide
June,
2332,
of
dispute
OF
Shearson/American
requirement
their
DESCENT
107 S.Ct.
public
have
the
AND
issue,
**before'*
or
self-regulatory
including,
Inc.
("NASD"),
American
Stock
the
National
New York
Exchange
Association
Stock
Exchange
(VMEXV1).
The
SROs provide:
No dispute,
claim
or controversy
shall
be
eligible
for submission
to arbitration
under
this
Code where six
(6) years have elapsed
from
the occurrence
or event giving
rise
to the act or
dispute,
claim
or controversy.
This section
shall
not extend
applicable
statutes
of limitations,
nor
shall
it apply to any case which
is directed
to
arbitration
by a court
of competent
jurisdiction.
(4)
In that
case, the Supreme Court ruled
that
he
(3)
arbitration
clause
found in the standard
customer
agreements
were binding
on the customers.
(4)
NASD Code Section
15;
NYSE Rule
-l-
603;
AMEX Rule
605.
Smith
of
the
Barney
securities
"eligibility
investments
date
on which
With
increasing
argument
is
rule.
to
for
In
the
in
158
This
Court
so,
the
the
gain
a collateral
investor
place.
or
was imposed
.Byrd. / 470 U.S.
the
her
upon
supra;
213,
by
investors
with
his
McMahon,
court
eligibility
causes
defend
that
these
advantage
conjunction
to
same VighP
of
the
industry
in
the
rule
each
of
of
before
eligibility
In
fees
date9
arbitration.
courts.
to
this
years
for
application
first
that
six
the
and members
"purchase
a claim
however,
legal
vA
argue
than
securities
the
Barney")
court
llrightll
them
by
see also
105 S.Ct.
1238,
(1985).
can and should
industry
collateral
advantage.
should
more
files
seek
the
the
securities
at
are
Reynolds
84 L.Ed.2d
case
issue
judicial
the
Dean Witter
in
where
additional
industry
stated
claims
firms
by forcing
industry
bars
made to
strict
arbitrate;
the
general
investor
being
("Smith
in
frequency,
doing
expend
actions,
to
at
brokerage
arguing
Inc.
industry
rule"
the
cases,
Shearson,
as a whole
Having
be made to
a Florida
deny
case
the
in
facts
Barney
opportunity
made their
sleep
with
Smith
it.
similar
and the
to
bed,
the
gain
such
securities
As was eloquently
to
those
in
bar:
For its own purposes,
Dean Witter
[a nationwide
brokerage
firm]
chose to draft
customer
agreements
requiring
customers
to submit
to arbitration
any
controversy.
It is not surprising
that,
in
circumstances
like
those presented
in this
case,
Dean Witter
would now prefer
the procedural
and
the
a
substantive
advantages
of a judicial
forum for the
prompt
and dispassionate
application
of such
dispositive
legal
defenses
as the statute
of
limitations.
But Dean Witter
elected
a different,
nonjudicial
forum for resolution
of 'any controversy'
with
its
customers.
Having
provided
for arbitration
in the customer
agreement,
Dean Witter
will
have to
trust
the arbitrators
to do their
jobs properly.
Victor
5th
v.
--
Dean Witter
Reynolds.
Inc.,
606 So.2d
681
(Fla.
DCA 1992).
For
set
forth
appeal.
this
compelling
below,
this
By doing
contribute
to
referring
Court
so,
the
with
and consistent
Court
equitable
mandates
with
for
the
dismiss
would
to
of
a plain
the
the
the
reasons
instant
of
of
justice
arbitrators
Federal
reading
other
meaningfully
administration
questions
the
and
should
this
eligibility
accordance
reason,
the
by
in
Arbitration
Act
parties'
agreements
to
POINT II.
THE FEDERAL ARBITRATION
OF THIS CONTROVERSY
ACT MANDATES ARBITRATION
The Federal
Act
issues
as to
eligibility
as the
arbitrate.
the
Arbitration
timeliness
rules
of
self
NASD or New York
arbitrators.
The distinction
issues
has
Arbitration
Act
particularly
action
provision.
at
bar,
The United
Exchange,
between
less
where
claims,
regulatory
Stock
procedural
the
of
relevance
in
there
States
mandates
arising
Supreme
all
under
the
organizations
such
be determined
substantive
under
the
a broad
Court
by the
and
Federal
a circumstance,
exists
that
such
as in
arbitration
has
considered
issues
relating
governed
to
by the
States
Court
numerous
of
Circuit
Act
in
for
securities
agreement
Circuit
at
and
Courts
of
arbitration
issue,
the
followed
Appeals,
determinations
arbitration
four
to
the
timeliness
to
by the
other
the
Second
Federal
Circuit
arbitrators
of
claims
dispute.
Delaware
New York.
the
Arbitration
referred
corporation,
Appellees
FAA does
Courts,
852,
as the
Smith
with
are
not
Act,
to
Appellant
District
104 S.Ct.
of the Federal
Federal
16 (hereinafter
the
apply
berth.
including
embraced
least
United
a wide
Court
Fifth
Arbitration
relevant
it
the
as provided
in
agreements.
The
While
precepts
and leave
A. Applicability
this
of
this
for
Federal
agreements,
by at
as the
the
light
that
Federal
Appeals
and given
suggested
industry
of
of
decisions,
the
on
arbitration
Court
in
United
has
of
industry
controversies
respectfully
Circuit
effect
effect
agreements
and the
Second
the
the
Court
arbitration
Act,
the
States
considered
Supreme
is
Appeals
on securities
arbitral
States
It
Arbitration
The United
has
of
considered
Act
agreements.
breadth
Federal
occasions
Arbitration
the
its
Southland
79 L.Ed.2d
Act
9 U.S.C.A.,
Sections,
"FAA*')
Barney
is
applicable
(**Smith
Barney")
principal
residents
confer
Arbitration
of
place
the
independent
Corp.
1 (1984),
v.
there
State
of
exists
to
is
a
business
of
in
Texas.
jurisdiction
Keating,
l-
upon
465 U.S.
complete
1,
diversity
in
this
$50,000.00,
over
thus
the
the
2 of
arbitrate
'Iin
evidencing
at
favoring
controversy
exceeds
jurisdiction
Section
of
section
arbitration
agreement
H.
of
103 s.ct.
927,
Sciences
Stanford,
Jr.
(1989);
to
'rSection
Mitsubishi
to
473 U.S.
the
of
Constr.
765
Board
468,
614,
vz
The
any
the
act."
460 U.S.
see also
of
--
1248,
Soler
105 S.Ct.
state
federal
Trustees
109 S.Ct.
Corp.
any
Corp.,
(1983);
of
any
policy
to
of
be
grounds
contrary.
a body
Mercury
to
a
federal
coverage
Motors
of
2 is
the
v.
such
notwithstanding
74 L.Ed.2d
Inc.
. . shall
upon
applicable
within
v.
.
revocation
a liberal
create
U
2 , 489 U.S.
Inc.,
2.
arbitrability,
Cone Hospital
Information
the
policies
is
law
save
for
agreement
a contract
commerce
agreements,
substantive
Plymouth,
equity
or procedural
the
a written
or
involving
in
arbitration
of
that
transaction
declaration
substantive
488
in
had original
and enforceable,
9 U.S.C.
congressional
24,
Court
any maritime
1aw or
contract/'
at
amount
FAA provides
a transaction
as exist
Moses
District
the
irrevocable,
effect
and the
controversy.
Section
valid,
case,
the
1,
Volt
Lleland
103 L.Ed.2d
Chrvsler-
3346,
87 L.Ed.2d
444
(1985).
As stated
815 F.2d
U.S.
427,
840,
431,
in
Genesco,
Inc
L&A
844
(2d Cir.
1987)
74 S.Ct.
182,
v
T-
Kakiuchi
(quoting
184-185,
Wilko
98 L.Ed.
--& Co.,
vA268
Swan,
(1953))
346
the
FAA "reflects
a [congressional]
'desirability
of
arbitration
complications
of
litigation.'1f
for
the
exercise
of
instead
mandates
that
parties
to
arbitration
844
218,
the
Delaware
action
Corporation
1 and 2),
at
bar,
and residents
interstate
the
at
issue.
1,
Securities
at
25,
the
(5)
Inc.,
Mun.
as to
which
676
815 F.2d
470 U.S.
issue,
of
at
213,
between
(see
Texas,
Thus,
H
2
an
(1958)).
the
v.
(5th
ROA
concerns
a
FAA applies
to
Nat.
Cir.
a
Boone
Cone Hospital,
Securities
757 F.2d
the
New York
State
See Moses
direct
Byrd,
at
in
commerce.
and Austin
Dealers,
of
158
contract
headquartered
in
U.S.
the
but
Genesco,
Inc . v.
1241 84 L.Ed.2d
transaction
dispute
Reynolds
no place
court,
shall
signed/I1
the
leaves
on issues
has been
1238,
Act
courts
the
to
by a district
arbitration
Dean Witter
105 S.Ct.
ll\[T]he
district
to
of
as an alternative
discretion
agreement
(quoting
In
at
proceed
recognition
460
Ass%
of
1985).
(5) Though the District
Court did not consider
the
applicability
of the FAA, as pointed
out by Appellants
at
V3"
of
Appellant's
brief
page
Vonclusions
of law made by
the district
court
are not binding
on the Appellate
Court and
the latter
is free to substitute
judgment
on the law for that
of the court
below/
Ruff v. Boosier
Medical
Center,
952
F.2d 138, 140 (5th Cir.
1992).
Appellee
argued before
the
District
Court for the Applicability
of the FAA at Boone ROA
at 111.
B.
The FAA Mandates
Strict
Terms of the Parties'
Arbitrability
is
subject
of
the
arbitration
agreement.
of
the
arbitration
clause
of
arbitration."
Volt,
Adherence
Agreement
to
to
the
the
specific
ll[A]mbiguities
itself
[must
supra.
as to
be]
In Volt
provisions
the
resolved
the
Court
in
went
scope
favor
on to
state:
These cases [Moses H. Cone Memorial
Hosp.,
supra.
and Mitsubishi
Motors
Corp. v. Soler
ChrvslerPlymouth,
Inc.,
473 u s. 614, 105 S.Ct.
3346, 87
L.Ed.2d
444 (1985)]
0; course
establish
that;
in
applying
general
state-law
principles
of contract
interpretation
to the interpretation
of an
arbitration
agreement
within
the scope of the [FAA],
due regard
must be given
to the federal
policy
favoring
arbitration,
and ambiguities
as to the
scope of the arbitration
clause
itself
resolved
in
favor
of arbitration.
489 U.S.
at
475-76
Cone Hospital,
(citation
supra,
omitted).
460 U.S.
at
As stated
in
Moses
P
24-25:
Any doubts
concerning
the scope of the arbitrable
issues
should
be resolved
in favor
of arbitration,
whether
the problem
at hand is the construction
the contract
language
itself
or the allegation
waiver,
delay,
or a like
defense
to arbitrability.
See also
3354;
Mitsubishi
S.A.
745 F.2d
Mineracao
190,
As noted
held
of
in
matter
194-95
473 U.S.
(1986),
of
that
contract
626,
v.
105 S.Ct.
Utah
of
of
at
IntY,
Inc.,
(2d Cir.1984).
by Appellants,
475 U.S.
at
da Trindade-Samitri
643,
pursuant
United
the
AT & T Technologies,
-w-
America,
648
Motors,
zH
Inc.
648,
to
and a party
v.
States
Communications
106 S.Ct.
the
Supreme
1415,
Workers
1418,
FAA Il[a]rbitration
cannot
be required
Court
89 L.Ed.
is
to
a
submit
to
arbitration
submit.11
any dispute
According
a tfpresumption
to
of
which
the
he has
not
Court
in
Supreme
arbitrability",
agreed
so to
AT & T,
-v-
475 U.S.
at
650,
there
is
and
‘[a]n
order to arbitrate
the particular
grievance
should
not be denied
unless it may be said with
positive
assurance that the arbitration
clause
is not
susceptible
of an interpretation
that
covers
the
asserted
dispute.
Doubts should
be resolved
in favor
of coverage.'
Warrior
& Gulf Navigation,
36 3 U.S. at
582-583.
See also Gateway Coal Co. v. Mine Workers,
supra,
at 377-378.
Such a presumption
is
particularly
applicable
where the clause
is [] broad
.
.
.
(emphasis
added)
"Although
any contract
\[t]he
provision,
parties,'
id.
Machine
Sales
denied,
383 U.S.
the
strong
that
in
favor
of
V
2
Pa.
Appeals
at
193
Carp,,
Power
went
is
(citing
coverage,
id.
-& Light
Co.,
on to
Necchi
86 S.Ct.
as to
at
an arbitration
a question
presumption
doubts
Douglas
of
348 F.2d
909,
federal
dictates
McDonnell
scope
693,
in
the
intent
of
S.p.A
v.
Necchi
Sewinq
favor
858 F.2d
of
832 the
cert
(1966))
I
be resolved
Douglas
(2d Cir.
Second
the
arbitration
McDonnell
825
1965),
664
should
194/
858 F.2d
(2d Cir.
15 L.Ed.2d
arbitrability
at
like
of
696
892,
clause,
1988).
Circuit
Finance
In
Court
state:
In construing
arbitration
clauses,
courts
have at
times
distinguished
between
'broad'
clauses
that
purport
to refer
all
disputes
arising
out of a
contract
to arbitration
and 'narrow'
clauses
that
limit
arbitration
to specific
types
of disputes.
(citations
omitted)
If a court
concludes
that
a
clause
is a broad one, then it will
order
arbitration
and any subsequent
construction
of the contract
and
of the parties'
rights
and obligations
under it are
within
the jurisdiction
of the arbitrator.
(citations
omitted)
Moreover,
as the Supreme Court has noted,
of
the strong
federal
presumption
in favor
of
arbitrability
applies
with
greater
force
when an
arbitration
clause
is a broad one.
See AT
--- & T
Technologies,
Inc.
v. Communications
Workers
of
America,
475 U.S. 643, 650, 106 S.Ct.
1415, 1419,
L.Ed.2d
648 (1986).
In
Shearson
(2d Cir.
the
1991)
determined
that
provided
that
my account,
timeliness
613 F.2d
controversy
trading
contract
Berkeley
Civ
1987)
defined
Contractor
and the
to the Contract
Reconstruction
Finance
816 F.2d
provision
relating
v.
-9.
the
864
the
the
to the
to
of the General
added)."
Harrisons
between
or relating
or other
(emphasis
Corp.
to"
Tehran-
the Contract
Provisions
-&
relating
may arise
of any of the Paragraphs
Philips
stated
arbitration
whether
Consultant
that
one that
arbitration.
that
by
likewise
Tippetts-Abbett,
the disputes
or Technical
or
to
including
vA
court
of
relating
this
issues,
the
which
provision
Serv.
out
to
or
114
Circuit
be settled
provision
as a lVbroadl*
of the works under
Conditions
attached
v.
of
arbitration
Conticommodity
Ens.
Second
me or
shall
1980)
944 R.2d
agreement
for
on all
be referred
Vl[a]ll
interpretation
thereof
arbitration
& Env.
the
out
you
. . . arising
following:
execution
with
(2d Cir.
as a Itbroad"
I![a]ny
Cir.
1222
for
arising
determinations
In
Wagoner,
customer
was a *lbroadl*
issues.
defined
firm
breach
. . .I1
v.
Appeals
transactions
arbitral
Inc.
controversy
or the
required
of
a brokerage
to
arbitration
Hutton,
Court
"any
authorization
Lion,
Lehman
documents
Finally,
-& Crosfield,
204
(2d
F.2d
366
(2d Cir.
provision
1953)
a contract
claims,
disputes
relation
to
as a "broadI
containing
or
this
defined
the
controversies
contract
following
arising
shall
arbitration
language:
under
be determined
or
"all
in
by
arbitration?
The customer
pertinent
agreements
executed
by Appellees
provide
in
part:
Any controversy
arising
out of or relating
to .
.
my accounts,
to transactions
with
you .
or to
this
agreement
or the breach
thereof
shail'be
settled
by arbitration
. . .
(Boone
ROA at
42-47)
This
is
clearly
read
to
refer
to
under
the
claims
can be said
clause
the
to
is
not
all
III.
state
arbitration
statute--'
at
positive
assurance
of
that
at
Shearson
121
(citing
that
must
Conticommodity
-lO-
Serv.
covers
be referred
ISSUES
stemming
association
Hutton,
it
650.
be addressed
Lehman
timeliness
arbitration
defense--whether
to
can be
"unless
AND ELIGIBILITY
TO DECIDE
arbitration
1s an issue
the
timeliness
475 U.S.
limitations
agreement,
as to
an interpretation
as to
AT&T,
that
Moreover,
UNDER THE FAA TIMELINESS
ARE FOR THE ARBITRATORS
arbitrators."
F.2d
determinations
SRO rules.
questions
"[A3ny
the
provision
relevant
susceptible
arbitrators.
POINT
arbitration
arbitrators
with
dispute"
the
a rrbroadU
rule,
from
or
by the
Inc.
v.
v,
Waqoner,
Phillipp
944
& Lion,
--
613 F.2d
Fin.
at
Corp.
1224-25
v.
(2d Cir.1980);
Harrisons
see
-& Crosfield,
also
Ltd.,
Reconstruction
supra.
[O]nce it is determined
that
parties
to a
contract
have created
an enforceable
arbitration
clause,
then the policies
inherent
in the
Federal
Arbitration
Act dictate
that
'any
doubts
concerning
the scope of arbitrable
issues
should
be resolved
in favor
of
arbitration,
whether
the problem
at hand is
the construction
of the contract
language
itself
or an allegation
of waiver,
delay,
or
a like
defense
to arbitrability.'
McDonnell
831
at
Douglas
(quoting
Moses
24-24).
which
have
be resolved
1968);
Inc.
v.
Shaddock,
before
which
.
between
filing
one year
rise
arising
of
of
to
the
the
the
for
out
claim
1,
relate
to
of
the
. . .
401 F.2d
568
Fenner
1993).
the
issue,
The
of
relating
most
involved
a commodities
())CoMEX1~).
or
(2d
-& Smith,
--& Lion,
arbitration
of
issues
Trafalsar
on the
claim
relevant
"any
to1l
the
The COMEX rules
statement
transaction
or grievance
-ll-
460 U.S.
( S.D.N.Y.,
parties.
of
at
Philipp
Inc.
an arbitration
date
131
arbitration
provided
at
court.11
Pierce,
v.
858 F.2d
arbitration
co.,
decision
Exchange
.
contract
gave
the
Commodities
.
"within
the
Inc.
Circuit
stay
controversy
the
not
125,
agreement
required
to
Millinq
Services
to
which
submit
822 F.Supp.
arbitration
trading
to
Lynch,
Second
the
agreed
Co.,
supra
delay
Merrill
Conticommoditv
an application
of
International
see also
authoritative
-& Light
by arbitrators,
co. v.
Cir.
Pa Power
questions
parties
Shipping
v
H. Cone Mem. Hosp.,
ll[A]ll
the
[must]
Fin
LAP
. .
.I!
of
claim
or
event
The Second
Circuit
in
Conticommodity
bar defenses
should
the
generally
failure,
'making'
must
613 F.2d at 1225.
Enq. v. Tippetts-Abbett,
Trafalqar
Shippinq
rather
to Section
(emphasis
Tehran-Berkeley
Millinq
The Conticommoditv
or
to arbitrate
864 (2d Cir.
International
Civ.
&
1987) and
Co.
Court
than
4 of the
to arbitrate
of one party
(See also
time
agreements
compel arbitration.'1
816 F.2d
Co.
568 (2d Cir.1968)).
Pursuant
or refusal'
the court
of
by the arbitrator
of the agreement
neglect,
in dispute,
added)
be determined
the
validity
"the
of arbitration
613 F.2d at 1225.
FAA Vnless
is
that
to the enforcement
court.11
'the
stated
, 401 F.2d
ultimately
held:
It is undisputed
that there was an agreement to
arbitrate
and that Conti has refused to do so.
The
dispute
instead concerns whether Philipp's
original
demand to arbitrate
its dispute with Conti was timebarred under the one-year provision
in the parties'
private
agreement or under the COMEX rule.
Under the
cases already discussed,
this question
is within
the
exclusive
province of the arbitrator
(citation
omitted).
This does not mean that the one-year
limitation
period in the contract
is meaningless,
since there is no reason to assume that an arbitrator
will
ignore any provision
of the agreements that bind
the parties.
It does mean that the arbitrator,
not
the court,
should determine
the effect
of the oneyear limitation.
Shearson
leading
filed
Lehman Hutton,
Second Circuit
against
("NYSE")
.
controversy
case,
Shearson
The relevant
arising
Inc.
v. Wagoner,
involved
a customer
at the New York Stock
customer
agreement
out of or relating
-12.
supra.,
another
complaint
Exchange
provided
to my account,
'*any
to
transactions
breach
with
thereof,
(Compare
filed
In
in
reversing
with
herein
a petition
the
or
me
this
be settled
language
language
timeliness
for
shall
this
agreement
you
District
questions
were
almost
Boone
Federal
or
by arbitration
the
at
authorization
Court
identical
ROA at
to
stay
the
determination
for
courts,
.'I
customer
42-47.)
Court's
the
. .
the
Shearson
arbitration.
that
the
Second
Circuit
stated:
'any doubts
concerning
the scope of arbitrable
issues
should
be resolved
in favor
of arbitration
.
[including]
an allegation
of waiver,
delay,
or'a
like
defense
to arbitrability.'
[citing
Moses H. Cone
Memorial
HOSP., supra]
. . . 'doubts
regarding
[the
intent
of the parties]
must also be resolved
in favor
of arbitrability'
[McDonnell
Douglas
Fin.
Corp.,
supra,
858 F.2d at 831)
'Again,
when the contract
contains
a 'broad'
arbitration
clause,
as the one at
issue,
that
purports
to 'refer
all
disputes
arising
out of a contract
to arbitration,'
the strong
presumption
in favor
of arbitrability
applies
with
even greater
force.'
Id. at 832, (citing
AT & T
Technologies,
475 U.S. at 650, 106 S.Ct.
at 1419).
All
issues
as to
arbitrators
at
The
New York
proper
disputes
decisions
the
Federal
has
forum
with
are
timeliness
for
Court
called
upon
determining
great
not
ultimately
referred
to
the
NYSE.
District
been
were
for
to
in
authoritative,
offer
guidance
Noonan,
1992 WL 196741
to
Southern
address
the
eligibility
frequency
and can
the
the
years.
several
are
Court.
(S.D.N.Y.
-13.
In
1992)
.
issue
issues
recent
District
in
the
securities
Though
well
Merrill
Judge
of
of
reasoned
Lynch
Kram
the
stated:
v.
First,
the rules of the various
SROs specifically
provide that this decision
[as to the timeliness
of
claims under the NASD Code] should be left
to the
arbitrators.
Section 35 of the NASD Code of
Arbitration
Procedure,
for example, provides
that
'the arbitrator
shall be empowered to interpret
and
determine the applicability
of all provisions
under
this Code which interpretation
shall be final
and
binding upon the parties.'
Further,
in Shearson
Lehman Hutton,
Inc. v. Wagoner, 944 F.2d 114, 121 (2d
Cir. 1991), the court held that 'any limitations
defense -- whether stemming from the arbitration
agreement,
arbitration
association
rule,
or state
statute
-- is an issue to be addressed by the
arbitrators.'
(citing
Conticommoditv
Serv. v.
Phillip
& Lion, 613 F.2d 1222, 1224-25 (2d zr.
1980)). Since the NASD Code reserves
the right
to interpret
all provisions
under its Code, including
Section 15,
and since the Second Circuit
has mandated that any
limitations
defense is in the province
of the
arbitrators,
this Court compels arbitration
before
the NASD in New York City and defers to the
arbitrator's
judgment on the issue of the timeliness
of respondent's
claims.
In Merrill
1993),
Lynch v.
the Court
Shaddock,
at 822 F. Supp 131 (S.D.N
stated:
There is little
dispute
as to the interstate
nature of the transactions
underlying
this
controversy:
they involve
investors
from
Colorado,
a New York financial
institution,
and the execution
of trades involving
financial
instruments
on a national
exchange.
On this
ground at least,
respondents'
reliance
on the
FAA is unimpeachable.
In Shaddock,
the Court
went on to state:
That the [Federal Arbitration]
Act and
subsequent court decisions
embrace a clear
federal
policy
in favor of arbitration
is now
virtually
axiomatic
and, thus, the numerous
decisions
underscoring
a strong presumption
in
favor of arbitrability
need not be recounted
here at length.
It suffices
to state that
where the agreement contains
a 'broad'
-14.
l
Y
.
arbitration
clause,
such as the one at issue
here,
purporting
to submit
to arbitration
'any
controversy
between us arising
out of'your
business
or this
agreement,'
the strong
presumption
in favor
of arbitrability
has
been held to apply with
even greater
force.
(citations
omitted)
Under this
presumption,
any doubts
as to the arbitrability
of
particular
issues
must be resolved
in favor
of arbitration;
moreover,
statute
of
limitations
defenses
have been specifically
held by the Second Circuit
to be an issue
for
the arbitrators.
Wagoner,
944 F.2d at 121.
The Shaddock
court
ultimately
held:
Rather,
under the clear
direction
of the law
in this
circuit,
these
[time
limitation]
defenses
must be submitted
to the NASD arbitration
panel
for resolution.
Wagoner,
944 F. 2d at 121.
Consequently,
Merrill
Lynch's
motion
for a
permanent
stay of the pending
arbitration
proceedings
is denied.
It
is
respectfully
interpretation
remands
broad
to
arbitral
the
at
determination
of
then
Second
employ
be said
under
issue
should
that
the
If
to
the
Circuit
agreements.
arguably
the
Court
timeliness
arbitration
can even
this
by the
questions
industry
issue
that
FAA utilized
arbitrators
securities
agreement
the
of
suggested
the
require
an
be referred
to
arbitrators.
POINT IV.
THE FIFTH CIRCUIT HAS LIBERALLY READ ARBITRATION
CLAUSES CONSISTENT WITH THE FAA MANDATE
The Fifth
jurisdiction,
have
provisions
such
underlying
the
Securities
v.
Circuit,
given
as the
and the
an expansive
one at
issue
FAA as discussed
National
District
reading
in
herein.
Association
-15-
of
light
Austin
Securities
Courts
to
of
in
arbitration
the
policies
Mun.
Dealers,
this
Inc.,
757 F.2d 676 (5th
Pierce,
Fenner -& Smith
Cir.
Co.,
Austin
against
involved
claims
the NASD.
This
agreement
controversy
arising
by Austin,
Court
that
NASD.
to arbitration,"
required
This
Court
that
Ir\.ny
out of or in connection
or among members and public
Austin
v.
Austin
The issue
to arbitrate
dispute,
claim
with
or others
was whether
his
was
in the NASD
claim
or
the business
or among members;
customers
Dakota
1991).
contained
provided:
of any member . . . (1) between
Lynch,
a member of the NASD,
determined
provision
Merrill
Corporation
782 F.Supp 336 (S.D.Tex.
membership
provision
v2
575 F.Supp 904 (N.D.Tex.
Gas Pipeline
bound by an arbitration
subject
Smith
Incorporated,
1983) ; Transcontinental
Gasification
1985);
(2) between
. . .I
is
the relevant
with
the
stated:
The arbitration
clause is ambiguous, and arguably
covers this dispute
. . . The arbitration
agreement
fails
to clearly
resolve whether the agreement to
arbitrate
encompasses claims that also involve the
NASD itself,
or claims arising
out of the acts of its
officers.
In light
of the federal
policy
favoring
arbitration,
however, the written
agreement to submit
disputes
to arbitration
should be liberally
construed,
and any doubt as to arbitrability
should
be resolved in favor of arbitration.
Moses H. Cohen
Memorial Hospital
v. Mercury Construction
COG., 460
U.S. 1, 24-25, 103S.ct.
927, 941, 74 L.Ed.2d 765
(1983)
See also Wick v. Atlantic
Marine,
Inc.,
605
F.2d 166, 168 (5th Cir.1979)
('unless
it can be said
with positive
assurance that an arbitration
clause is
not susceptible
of an interpretation
which would
cover the dispute at issue, then a stay pending
arbitration
should be granted.')
l
-160
C
In Austin
this
Court
ultimately
held:
The district
court,
therefore,
lacks discretion
to
decide whether to stay the proceedings,
despite the
presence of any intertwining
nonarbitrable
claims.
The district
court is directed
to compel arbitration
on any arbitrable
issues,
including
the defamation
and intentional
interference
with business relations
claims.
In Smith
provided
Merrill
arising
Merrill
took
place
Smith
any doubts
arbitration
agreements
arbitration."
(citing
therefore
shall
be settled
left
that
its
The court
concerning
Moses H
aMerrill
since
the events
disagreed
and added:
matter
in favor
Cone Hospital.
at
the arbitration
the subject
Lynch's
or the
by
employ,
are to be resolved
denied
agreement
me and any member
Lynch claimed
after
the relevant
out of my employment
was not in force.
llFurthermore,
supra
between
of my employment
arbitration.11
agreement
. .
l
termination
court
Lynch,
"any controversy
organization
issue
V.
of
of
supra.)
application
The
to stay
arbitration.
POINT V.
THE SECOND, FOURTH, EIGHTH, NINTH AND ELEVENTH
CIRCUITS HAVE CONSTRUED ARBITRATION
CLAUSES
LIBERALLY IN KEEPING WITH THE DICTATES OF THE FAA
The Second Circuit
is not alone
interpretation
of the FAA as requiring
in arbitration
agreements
See the Fourth
Circuit
Prudential
1989),
be determined
decisions
Bathe Securities,
County
of Durham
that
V,
Richards
timeliness
issues
by the arbitrators.
including
Inc.
in its
884 F.2d
Miller
v.
128 (4th
-& Associates,
Cir.
742 F.2d
811 (4th
Cir.
1984),
In Re Mercury
--
922 (4th
Cir.
1981);
Eighth
Automotive,
Petroleum
County Ford,
Corp.
v.
Circuit
and Allied
811 F.Supp.
decisions,
of Securities
Pierce,
decisions
Industries
Cir.
vA
656 F.2d
including
v. -Town -and
1983),
O'Neel
Inc.,
Circuit
Corp.,
FSC Securities
439 (D.Ct.Minn.,
including,
Dealers,
and Eleventh
Lunch.
Circuit
709 F.2d 509 (8th
Freel,
Con&r.
4th Div.);
National
667 F.2d 804 (9th
Ninth
Association
Cir.
decisions,
including
Belke vA
Fenner -& Smith,
693 F.2d
1023 (11th
1982);
Merrill
Cir.
1982).
POINT VI.
The FAA is Controlling
Despite a New York Choice
of Law Provision
in an Arbitration
Agreement
Many of the standard
agreements
provide
interpreted
that
Practice
of limitations
The securities
applying
issues
industry
468,
citing
supra.
condemnation
However,
in the Federal
applied
that
supra,
the precepts
arbitrators
that
Courts,
embodying
the
and not the courts
Article
requires
timeliness
issues
Sciences,
including
\
FAA,
Court
courts
under
Inc.,
489
universal
those
in the
of Appeals
and the determination
should
decide
75
that
by the Courts.
this
the Second Circuit
and
provides
has been met with
Second Circuit.
In Wawner,
of New York.
Information
this
customer
be governed
be determined
has argued
Volt
industry
Law and Rules
New York law to determine
the SRO rules,
U.S.
such agreements
by the laws of the State
of the New York Civil
statute
securities
the
,
applicability
of time
existence
limitations
issues,
of a New York choice
despite
of law provision.
Todd Shipvards
Corp.
v. Cunard Line,
Ltd.,
1062 (9th
1991)
(federal
than
rules
Cir.
apply,
though
provision);
Cir.
1989)
prevent
contained
Ackerberq
v. Johnson,
(Minnesota
choice-of-law
arbitration
Minnesota
of claims
law);
Appalachian
Robbins
Group,
1992)
(choice
of law provision
application
of state
vA
Shearson
58 (S.D.N.Y.
implicate
125,
1990)
state
(general
rather
federal
Inca
rules);
(8th
under
under
373 (6th
Bevt,
Cir.
to require
arbitration
law);
752 F.Supp.
provision
on the
1333-34
Inc . v.
does not operate
(choice-of-law
of law
does not
Healthcare,
Lehman Hutton,
discussion
1328,
arbitrable
963 F.2d
than
arbitration
arbitration
New York choice
otherwise
Architects,
1056,
are non-arbitrable
Reqional
Rish,
state
provision
that
See also
943 F.2d
892 F.2d
law where such claims
federal
Barbier
rather
contract
the
151, 1560
does not
and Shaddock,
822 F.Supp.
issue).
CONCLUSION
Based upon the foregoing,
Arbitration
Bar Association
urges
the United
Circuit
affirm
in the alternative
and render
States
conduct
Public
as amicus
Court
the Opinion
a determination
the
curiae
of Appeals
and Order
Investors
for
-19-
under
the Fifth
of the Court
a de novo review
that
respectfully
of that
the precepts
below,
or
decision
of the
Federal
pursuant
issue
Arbitration
to
herein
the
are
Act,
questions
securities
the
of
industry
province
of
timeliness
arbitration
the
Respectfully
of
claims
agreements
at
arbitrators.
submitted,
L. Jerbme Stanley
LAW OFFICES OF L. JEROME
7909 Wrenwood Boulevard,
Suite
Baton Rouge, Louisiana
70809
C
Michael
P. Gilmore
John E. Lawlor
LAW OFFICES OF JOHN E. LAWLOR, ESQ.
1461 Franklin
Avenue
Garden City,
New York 11530
PUBLIC INVESTORS BAR ASSOCIATION AS
AMICUS CURIAE IN SUPPORT OF
DEFENDANT-APPELLANT
WARREN BOONE
-2o-