Caselaw

Judgment on UpFront Loan Set Aside
Ohio Court Rules Finds that Firm Should Have Arbitrated Its Claims, Despite Confession of Judgment4/3/2002

Fraud In Execution of Arbitration Agreement is Defense to Confirmation of Award#http://Fraud In Execution of Arbitration Agreement is Defense to Confirmation of Award
Even if the appellant did not move to vacate or object to the arbitration proceeding.4/3/2002

FAA Preempts State Code Unless Arbitration Clause Incorporates the Code.
Arbitration therefore mandatory for signatories and third party beneficiaries4/3/2002

To Compel Arbitration, Must Prove Knowing Acceptance of the Agreement
This time, merely proving that the agreement was signed was not enough.4/3/2002

Award Vacated As Irrational
Awarding Individuals Damage for Harm Done to A Corporation Results in Vacature of the Award4/3/2002

Arbitrators Cannot Sanction Counsel
After nearly 4 years, a Court vacates a $700,000 arbitrator sanction against trial counsel4/3/2002

Investigative Transcripts are not Confidential in Private Litigation
Kirkland vs. Superior Court of LA County, 2002 Ca. App. Lexis 105 (Cal. App., 2Dist., 1/9/023/3/2002

Non-customers in Selling Away Case Can Compel Arbitration by Firm
Vestax Securities Corporation vs. McWood, No. 00-1936 (6th Cir., 2/14/02)3/3/2002

Disqualification of Counsel to be Decided by Arbitrators
Benasra vs. Mitchell, Silberberg & Knupp, No. B147537 (Cal. App., 2/13/02)3/3/2002

State Law Governs Enforceability of Agreement; Federal Law the Arbitrability of the Agreement
Mercuro vs. Superior Court, No. B153355, 202 Cal. App. Lexis 1593 (Cal. App. 2Dist, 2/13/023/3/2002

Section 20 Liability Discharged in Bankruptcy
Arbitrator Award Against Supervisors is Insufficient to Bar Bankruptcy Discharge for Fraud2/8/2002

State Laws Aimed At Arbitration Contracts Preempted
BRADLEY v. HARRIS RESEARCH, INC., No. 00-16021 (9th Cir., 12/28/01)2/8/2002

Broad Arbitration Agreement Covers All Accounts by Owner
White v. Salomon Smith Barney, Inc., 2001 Cal. App. LEXIS 2844 (Cal. App., 1Dist., 11/30/01)2/8/2002

Clearing Firm's Arbitration Agreement Includes Claims Against Introducing Firm and Broker
Customer’s fraud claims against introducing broker, including claims under Florida Securities Act, are subject to arbitration under broad arbitration clause in clearing broker agreement signed by customer2/8/2002

Court Compels Arbitration Without Direct Account Relationship With Customer
If selling broker is associated person, and claimant is his customer, BD compelled to arbitrate.1/5/2002

Arbitration Agreement Does Not Cover All Future Dealings
Court applies standard analysis to determine coverage of agreement1/5/2002

Refusal to Hear Evidence is Misconduct Only if Prejudice to Fair Hearing Results
Woodlyn vs. Acerbic, Pollack & Richardson, Inc., Case NO 01-8489-CIV (SD Fla. 11-14/01)1/5/2002

Disclosure of Mediation Communications Does Not Disqualify Judge
Enterprise Leasing Co. vs. Jones, No SC00-219 (Fla.Sup.Ct. 7/5/01)9/8/2001

Manifest Disregard of the Law, Again
Failure to Provide Citations in Award Explanation Is Not Evidence of Manifest Disregard of the Law8/5/2001

NFA Arbitrators Award $43 Million
Commodities Claimants Collectively Win award in Consolidated Cases, with Common Counsel on All Sides8/5/2001

AAA Abitration Clauses Mean AAA Arbitration
Court Upholds AAA Selection Clause, and Forces Investor to Arbitration at the AAA. MAGGIO V. WINDWARD CAPITAL MGMT. CO., No. B134322 (Calif. App., 2Dist., 5/23/006/7/2000

Halligan vs. Piper Jaffray, ___F.3d ___, (2d Cir. 1998)
Arbitrator Awards can be reversed for manifest disregard of the law - or of the evidence.8/8/1998

Matter of D.H. Blair & Co. v. Massimi, Sup.Ct., New York Co., NYLJ 4/9/98, Justice Bransten
Arbitration not stayed for brokerage facing criminal inquiry7/25/1998

Prudential Securities Incorporated v. Brigianos, 1st Dept 9/30/97 (NYLJ 10/2/97)
Arbitration subpoena served on non-party held to violate his Fifth Amendment privilege against self-incrimination and is quashed. By Sullivan, J.P.; Nardelli, Williams and Tom, JJ.7/25/1998

Matter of Alpha Bytes Computer Corp. v. Slaton, Sup.Ct., New York Co., NYLJ 5/1/98, Justice York.
Punitive damages award is upheld. "If the parties to an arbitration contract agree to refer punitive damages claims to the arbitrator, the FAA ensures that their agreement will be enforced according to its terms even if a rule of state law would otherwise exclude such claims from arbitration."7/25/1998

Montes vs. Shearson Lehman Brothers. Inc., ___ F.3d ___ (11th Cir. 1997)
Manifest disregard of the law can be a basis for overturning an arbitration award7/1/1998

New York State Arbitration Decisions
The vast majority of securities arbitration cases are decided under New York law. Here is a collection of the most recent decisions from the New York Courts.3/8/1998

Federal Courts

Federal Arbitration Decisions
Full text of opinions from the federal courts relating to arbitration.1/1/1998

NASAD Form of Order on Request for Permanent Injunction (PDF)
The Order on Request for Permanent Injunction is completed by arbitrators to record the arbitrators' decision on a party's request for permanent injunction in intra-industry cases.10/4/2003

Scheduling Order (PDF format 86 KB)
The panel Chairperson has the responsibility to use the Scheduling Order to record the agreements reached during the Initial Prehearing Conference. The Chairperson should submit the Scheduling Order to NASD Dispute Resolution within 48 hours of the conference by electronic mail or facsimile transmission.10/4/2003

Arbitrator's Script (PDF format 137 KB)
The Arbitrator's Script sets forth the procedures for the Initial Prehearing Conference. In the discretion of the panel, these procedures may be varied to allow all parties a full and fair opportunity to present their respective positions.10/4/2003

Claimant(s) Uniform Submission Agreement (PDF)
The NASD's Uniform Submission Agreement for use by Claimants in NASD Arbitrations10/4/2003

NASD Form of Order of Production (PDF)
For use in an NASD arbitration, this form is used to compel a party or a member firm, or an associated person to produce documents in an NASD arbitration.10/4/2003

NASD Form of Order of Appearance (PDF)
For use in NASD Arbitrations, this form is used to have an NASD member, or associated person appear and testify an an arbitration hearing.10/4/2003

Arbitrator Update Form (PDF)
If you are already an arbitrator on the NASD roster, use this online form to update NASD Dispute Resolution of any new or revised information about your status.10/4/2003

NASD's Oath Of Arbitrator (PDF)
Review the Oath of Arbitrator that must be taken by all NASD-approved arbitrators. The oath must be executed by NASD arbitrators for each case on which they serve.10/4/2003

Respondent(s) Uniform Submission Agreement (PDF_
The NASD's Uniform Submission Agreement for use by Respondents in NASD arbitrations10/4/2003

Arbitrator Application (PDF)
Become an arbitrator at the NASD! They always need public arbitrators, and actually need industry arbitrators in parts of the country. This form starts the process10/4/2003

NASD Form of Arbitration Subpoena (PDF)
For use in NASD Arbitrations, to unregistered third parties.10/4/2003

General Information

Dispute Resolution Statistics
For 2006, new case filings were at 4,614, compared to 8,201 for 2004, turnaround time is at 16.6 months.1/15/2007

NASD Dispute Resolution Establishes New Hearing Location in Hartford, Connecticut
NASD announced today that its Dispute Resolution division has established a new hearing location in Hartford, Connecticut to service arbitration and mediation claims. The Hartford location will add to the options that investors and arbitrators will have in Connecticut to conduct arbitration and mediation hearings. In 2002 there were 89 cases involving Connecticut claimants and currently the available pool of arbitrators for Hartford is 190. The new hearing location will also help reduce the traveling time required for all participants to convene a hearing.3/31/2004

NASD Arbitration Fee Calculator
The fees do get a bit confusing. The NASD has created a form which when completed online, will calculate the appropriate filing fee12/10/2000

Become an NASD Arbitrator
Information from the NASD regarding qualifications and appointments of arbitrators1/29/2000

Information and Lists

New Surveys Show Attorneys Favor Use of Alternative Dispute Resolution
The National Arbitration Forum recently collaborated with both the General Practice Solo and Small Firm Division (GPSolo) and the Tort Trial & Insurance Practice Section (TIPS) of the American Bar Association (ABA) to conduct surveys to assess the usage and preferences regarding negotiation, mediation and other forms of alternative dispute resolution (ADR). Survey respondents from both ABA member groups report an increasing support of ADR.11/5/2006

Arbitration Clinics in New York and Pennsylvania
Investors with limited income or with small dollar claims may find it difficult or impossible to hire a lawyer. Several law schools in New York and one in Pennsylvania have established securities arbitration clinics to provide legal representation to investors who cannot hire a lawyer to handle their arbitration claims.5/11/2002

NASD Arbitration Information
From the NASD, an overview of the process and procedures.4/15/2000

Filing a Customer Complaint
The NASD's guide to filing a customer complaint. The NASD recommends that you first communicate your concerns to your broker, then to the manager of your broker's office, and ultimately to the NASDR if you do not receive a satisfactory response from the firm.3/8/1998

Arbitration Procedures for Investors
The NASD's guide to the process.3/8/1998

Beginners' Guide to Alternative Dispute Resolution
From the American Arbitration Association, an introduction to the process.3/8/1998

Securities Arbitration Procedures
Introductory material on the arbitration process, written by the Securities Industry Association.3/8/1998

Securities Arbitration Forums
Names, addresses and telephone numbers of the administrators of the various securities and commodities arbitration forums across the country, with links to the home pages of the forums that are on the Web.3/8/1998

Introduction to NASD Mediation
The NASD's introduction to its mediation program, an alternate means of resolving disputes with securities brokers.1/1/1998

Nolo's Legal Encyclopedia- Courts and Mediation
Take control of your legal troubles: mediate disputes, deal with your lawyer, represent yourself in court & more.1/1/1998

A Style Index for Mediators
The Mediator Classification Index (MCI) is designed to assist in understanding the approach or style a mediator tends to use during the mediation process. The MCI is a valuable tool which you may ask prospective mediators to complete as part of the mediator selection process.1/1/1998

NASDR Information and Services Directory
Complete telephone, address, and internet address listing for the offices and departments of NASDR.11/23/1997

Injunctions by Arbitrators? Injunctive relief
Injunctive relief was once reserved for the Courts, but two years ago, the NASD gave that power to its securities arbitrators. Results have been mixed, and there have been some abuses. Now NASD Regulation, Inc. is seeking comments on the procedures for obtaining injunctive relief and expedited proceedings under Rule 10335 of the Code of Arbitration Procedure. The text of the request is available online, and the comment period ends November 31, 1997.11/1/1997

Arbitration Procedure
Important information on resolving disputes against stockbrokers.1/1/1997

NASDR Notices to Members

07-13 SEC Approves Amendments to NASD Code of Arbitration Procedure Concerning Subpoenas and Payment of Arbitrators
The Securities and Exchange Commission (SEC) has approved amendments to the subpoena rule as set forth in Rule 10322 of the NASD Code of Arbitration Procedure (Code)1 to allow only arbitrators to issue subpoenas, whether for discovery in arbitration or for appearance at a hearing before the arbitrators.2 The SEC also approved an amendment to the payment of arbitrators rule as set forth in IM-10104 to provide for the payment of a $200 honorarium per case for each arbitrator who considers contested motions for the issuance of subpoenas3/3/2007

07-07 SEC Approves Revision of Customer and Industry Portions of NASD Code of Arbitration Procedure; Effective Date: April 16, 2007
The Securities and Exchange Commission (SEC) has approved the NASD Codes of Arbitration Procedure for Customer and Industry Disputes (hereinafter referred to as the Customer and Industry Codes, respectively, or new Codes).2/16/2007

06-64 SEC Approves Amendments to Rule 10308 Regarding the Classification of Arbitrators
The Securities and Exchange Commission has approved amendments to the arbitrator classification criteria set forth in Rule 10308 of the NASD Code of Arbitration Procedure (Code) to ensure that individuals with significant ties to the securities industry may not serve as public arbitrators in NASD arbitrations11/18/2006

06-60 SEC Approves Amendments to Rule 2340 Requiring Customer Account Statements to Include a Statement Reminding Customers to Report Inaccuracies in Their Accounts in Writing
The SEC has approved amendments to Rule 2340 requiring customer account statements to include a statement advising customers to promptly report any inaccuracy or discrepancy in their account to the introducing firm and clearing firm (where these are different firms) and to re-confirm any oral communication in writing10/16/2006

06-49 NASD to Close Mid-Atlantic Dispute Resolution Office October 6, 2006
Effective October 6, 2006, NASD will close its Mid-Atlantic Dispute Resolution Office. All arbitration cases currently assigned to the Mid-Atlantic Region will continue to be administered by that office until parties are notified in writing that the case has been reassigned.9/7/2006

06-10 NASD Revises Sanction Guidelines
NASD is amending the quality of markets guidelines and the guidelines for violations of Municipal Securities Rulemaking Board (MSRB) Rules G-36 and G-37. The new guidelines are effective as of March 31, 2006, and apply to all actions as of that date, including pending disciplinary cases.3/10/2006

05-85 SEC Approves a Proposed Rule Change to Revise the Mediation Rules of the NASD Code of Arbitration Procedure; Effective January 30, 2006
Changes were made to simplify the language and to reorganize these rules into a separate code for mediations1/3/2006

05-82 SEC Approves Amendments to Arbitration Fees Applicable to Certain Statutory Employment Discrimination Claims
Under the new fee schedule, a current or former associated person who brings a statutory employment discrimination claim that is subject to a predispute arbitration agreement will pay no more than a $200 filing fee at the time that the claim is filed. The member that is a party to such a statutory employment discrimination arbitration proceeding will pay the remainder of the filing fee, if any, as well as all forum fees.12/16/2005

05-55 SEC Approves Amendments to IM- 10104 to Provide Payment to Arbitrators for Deciding Discovery-Related Motions
The SEChas approved an amendment to Interpretive Material (IM) 10104 of the NASD Code of Arbitration Procedure (Code) to provide payment to arbitrators for deciding discovery-related motions without a hearing session.8/27/2005

05-36 SEC Approves New Interpretive Material to Rule 10308 Regarding Arbitrators Who Also Serve as Mediators; Effective Date: May 6, 2005
The SEC has approved a new IM to Rule 10308 of the NASD Code of Arbitration Procedure relating to mediators who also serve as arbitrators. The amendments clarify that (1) fees for service as a mediator are not included in determining whether an attorney, accountant, or other professional derives 10 percent of his or her annual revenue from industry-related parties; and (2) service as a mediator is not included in determining whether an attorney, accountant, or other professional devotes 20 percent or more of his or her professional work to securities industry clients.5/9/2005

05-35 SEC Approves Amendments to IM- 10104 and Rule 10315 to Permit Arbitrations in Foreign Hearing Locations; Effective June 6, 2005
The Securities and Exchange Commission (SEC) has approved amendments to IM-10104 and Rule 10315 of the NASD Code of Arbitration Procedure (Code) to permit parties to have their hearings in a foreign hearing location, and to allow the director of arbitration to authorize a higher or additional honorarium for the use of a foreign hearing location.5/7/2005

05-10 NASD Amends Rule Governing Time Limits for Submission of Arbitration Claims
The amendments clarify that arbitrators, and not courts, determine whether a claim is ineligible for arbitration under the rule; make clear that dismissal of a claim on eligibility grounds in arbitration does not preclude a claimant from pursuing the claim in court; provide that, by requesting dismissal of a claim under the rule, the requesting party is agreeing that the claimant may withdraw all related claims without prejudice and may pursue all of the claims in court; and state that the six-year time limit on the submission of claims does not apply to any claim that is directed to arbitration by a court of competent jurisdiction upon request of a member or associated person.2/2/2005

05-09 NASD Amends Rule Governing Predispute Arbitration Agreements with Customers
The SEC has approved changes to NASD Rule 3110 that require firms to modify their predispute arbitration agreements with customers to provide enhanced disclosure about the arbitration process. The amendments also: require members to provide copies of predispute arbitration agreements and relevant arbitration forum rules to customers upon request; clarify the use of certain limiting provisions; and require firms seeking to compel arbitration of claims initiated in court to arbitrate all of the claims contained in the complaint if the customer so requests. Firms must use the new language, and comply with the rule amendments for all agreements executed after May 1, 2005. Questions regarding these changes may be addressed to Mark Astarita 2/1/2005

04-62 SEC Approves New Rule 10334 To Allow Direct Communication Between Parties and Arbitrators
The SEC has approved new Rule 10334 of the NASD Code of Arbitration Procedure to permit direct communication among arbitrators and the parties to the arbitration (through their counsel) where all parties and arbitrators agree, and to establish guidelines for such direct communication. The rule will be effective on September 30, 2004.8/20/2004

04-61 SEC Approves Amendments to Rule 10308 Regarding the Time for Chairperson Selection
The Securities and Exchange Commission has approved amendments to Rule 10308 of the NASD Code of Arbitration Procedure to reduce the time allotted for the selection of a chairperson in an arbitration proceeding.8/19/2004

04-60 SEC Approves Increase to the Arbitrator Panel Training Fee
The SEC has approved an NASD proposal to increase the fee for arbitrator panel training from $100 to $125.1 The fee change is effective on September 16, 2004.8/18/2004

04-57 NASD Extends Jurisdiction to Suspend Formerly Associated Persons Who Fail to Pay Arbitration Awards
The SEC has approved two amendments to the NASD By-Laws that further strengthen NASD's ability to prevent formerly associated persons from re-entering the securities industry if they have failed to pay awards or settlements relating to arbitrations or mediations submitted under NASD Rules.8/11/2004

04-56 SEC Approves Amendments to Rule 10314 to Implement the Online Arbitration Claim Filing System
The SEC has approved amendments to Rule 10314 of the NASD Code of Arbitration Procedure to allow parties to complete part of the arbitration claim filing process through the Internet. The amendments will be effective on August 5, 2004 and will apply to any arbitration claims commenced using the system on or after August 5, 2004.8/8/2004

04-53 SEC Approves Amendments to IM-10104 and Rules 10306 and 10319 Regarding "Last Minute" Adjournments of Arbitration Hearings
The SEC has approved amendments to IM-10104 and Rules 10306 and 10319 of the NASD Code of Arbitration Procedure to impose a $100 per arbitrator fee on "last minute adjournments" and provide an arbitrators' honorarium when hearings are postponed, canceled, or settled on short notice.7/4/2004

04-49 SEC Approves Amendments to Rules 10308 and 10312 Regarding Arbitrator Classification, Disclosures, and Challenges
Amendments relating to arbitrator classification will apply to arbitrator lists sent out according to Rule 10308(b)(5) on or after July 19, 2004, and to arbitrators appointed by the Director of Arbitration under Rules 10308(c)(4)(B), 10308(d)(3), and 10313 when an insufficient number of names remain on the consolidated list. The amendments to the standard for deciding challenges for cause under Rule 10308(d) and Rule 10312(d) will apply to challenges for cause made on or after July 19, 2004.6/25/2004

04-44 Impermissible Confidentiality Provisions and Complaint Withdrawal Provisions in Settlement Agreements
The purpose of this Notice is to remind members that the use of certain provisions in settlement agreements with customers or other persons that impede, or have the potential to impede, NASD investigations and the prosecution of NASD enforcement actions violates NASD Rule 2110, which requires members to observe high standards of commercial honor and just and equitable principles of trade in the conduct of their business. Specifically, some member firms continue to use confidentiality provisions that prohibit or restrict the customer or other person from disclosing the settlement terms and the underlying facts of the dispute upon inquiry to NASD or other securities regulators, despite repeated NASD communications cautioning members against this practice.1 In addition, some member firms require customers to withdraw complaints filed with NASD or other securities regulators as a condition to settlement, or require customers to provide false or misleading affidavits that repudiate or otherwise contradict earlier factual claims made by such customers, in contravention of NASD rules. Accordingly, members and their associated persons are reminded that the use of such confidentiality provisions or complaint withdrawal provisions, or compelling customers or other persons to provide false or misleading affidavits, violates Rule 2110.6/9/2004

04-43 Members’ Use of Affidavits in Connection with Stipulated Awards and Settlements to Obtain Expungement of Customer Dispute Information under Rule 2130
On December 16, 2003, the SEC approved Rule 2130 governing the expungement of customer dispute information from the CRD As described in further detail in this NTM, Rule 2130 applies to any request made to a court of competent jurisdiction to expunge customer dispute information from the CRD system that has its basis in an arbitration or civil lawsuit filed on or after April 12, 2004. This Notice addresses members' obligations under Rule 2130 regarding the use of affidavits in connection with settlements that are incorporated into stipulated awards to obtain expungement of customer dispute information from the CRD system under Rule 2130.6/8/2004

04-41 NASD Announces Nominees for Regional Industry Member Vacancies on the National Adjudicatory Council
The purpose of this Special Notice to Members is to announce the nominees for the National Adjudicatory Council (NAC) from the Midwest and South Regions. The nominees, nominated for a three-year term beginning in January 2005, are listed in this NTM, and will be proposed to NASD's National Nominating Committee unless an additional candidate comes forward within 14 calendar days from the date of this Special Notice.6/1/2004

04-16 NASD Adopts Rule 2130 Regarding Expungement of Customer Dispute Information From The Central Registration Depository
The SEC approved new Rule 2130 concerning the expungement of customer dispute information from the CRD system. Rule 2130 will apply to any request made to a court of competent jurisdiction to expunge customer dispute information from the CRD system that has its basis in an arbitration or civil lawsuit filed on or after April 12, 2004. All requests to expunge customer dispute information from the CRD system arising from arbitrations or civil lawsuits filed before April 12, 2004, including any settlements arising therefrom, will continue to be subject to the terms of the moratorium in effect as of January 19, 1999.3/4/2004

04-11 NASD Reminds Members and Associated Persons of Their Duty to File Uniform Submission Agreements
NASD's Code of Arbitration Procedure (Code) requires respondents in NASD arbitrations to serve an answer and an executed Uniform Submission Agreement (USA) at the time the answer to the Statement of Claim is due. NASD has learned that some members and associated persons named as respondents in arbitration proceedings are neglecting or refusing to submit a signed USA in a timely manner. Failing to sign and submit the USA may cause confusion, lead to ancillary litigation, and undermine the enforceability of arbitration awards. The purpose of this Notice is to remind members and associated persons named as respondents that, absent a specific jurisdictional challenge, submission of a USA is mandatory, and that failure to comply may result in sanctions or disciplinary action.2/24/2004

03-70 NASD Reminds Members of Their Duty to Cooperate in Arbitration Discovery Process
Once again showing its distain for the industry, the NASD "reminds" firms to comply with the discovery process in arbitration proceedings, despite no evidence that firms are ignoring the discovery process, or that discovery issues are any more frequent with firms than with customers.11/6/2003

03-25 Waiver Program for Parties in California Arbitration Proceedings has Been Extended to September 30, 2003; New Waiver Agreement Form Effective March 31, 2003
SEC has approved an extension to a pilot program in IM-10100 of the NASD Code of Arbitration Procedure governing Failure to Act Under Provisions of Code of Arbitration Procedure. The pilot program provides that members and associated persons involved in NASD arbitration proceedings in the State of California are required to waive application of California Ethics Standards for Neutral Arbitrators in Contractual Arbitration to their arbitration proceedings upon the request of investors or, in industry cases, upon the request of associated persons with claims of statutory employment discrimination, for a pilot period ending September 30, 2003 (or until pending litigation has resolved the question of whether or not the California Standards apply to NASD arbitration). The waiver agreement form has been revised as of March 31, 2003.5/15/2003

03-23 SEC Approves Amendment to Rule 3070 to Require Filing with NASD of Criminal and Civil Complaints and Arbitration Claims
On March 3, 2003, the SEC approved SR-NASD- 2002-112, a proposal to amend NASD Rule 3070 to require members promptly to file with NASD copies of certain criminal and civil complaints and arbitration claims that name a member or an associated person as defendant or respondent.5/12/2003

03-20 Technical Changes to the NASD Registration Rules Effective Immediately
NASD filed with the SEC changes to the NASD Registration Rules. The changes are technical in nature and include, among other things, removing references to old NASD forms and registration categories, deleting provisions regarding outdated grandfathering clauses, deleting duplicative provisions, and combining certain provisions to eliminate redundancies in the rule language.4/15/2003

03-06 NASD to Refund Arbitration Member Surcharge Under Certain Circumstances
For arbitration claims filed on or after January 13, 2003, NASD will refund the member surcharge paid by each member firm named as a party (or where its present or former associated person has been named as a party) in an arbitration filed by a customer in which the arbitration panel: (1) denies all of the customer's claims; and (2) allocates all of the forum fees against the customer.1/16/2003

03-04 NASD Solicits Vote on Amendments to the NASD By-Laws Concerning the Definition of Disqualification and Failure to Pay Arbitration Awards; Last Voting Date: February 10, 2003
The first amendment would make the definition of "disqualification" in the NASD By- Laws consistent with the definition of "statutory disqualification" in Section 3(a)(39) of the Exchange Act. The second amendment would permit NASD to suspend for failure to pay an arbitration award former associated persons who terminated their registration before the award was entered. The amendment would provide that NASD can take such action for a period of two years after the award is entered. The third amendment would clarify that NASD may suspend the association, and not just the registration, of any person who fails to pay an arbitration award.1/15/2003

03-03 NASD Dispute Resolution Relocates Its New York City Headquarters and Regional Office
NASD Dispute Resolution Inc. is moving its NYC Headquarters1/2/2003

03-02 NASD Dispute Resolution Establishes a New Hearing Location in Puerto Rico
NASD Dispute Resolution has established San Juan, Puerto Rico as an additional hearing location, effective January 1, 2003.1/2/2003

02-83 NASD to Deduct Unpaid Mediation Filing Fees from CRD Accounts
Effective February 14, 2003, NASD will begin to deduct unpaid mediation filing fees owed by member firms from members' Central Registration Depository (CRD) accounts. NASD will use the same procedures as are now used to collect delinquent arbitration fees owed by members.12/16/2002

02-68 SEC Approves Rule Change to IM-10100
Industry parties in California arbitration proceedings must waive contested California arbitrator disclosure standards if all parties who are investors, or associated persons with claims of statutory employment discrimination, have executed waiver agreements10/7/2002

02-59 SEC Approves Amendment to Rule 10314 Regarding Specificity of Answers; Effective October 14, 2002
The SEC has approved amendments to Rule 10314 of the NASD Code of Arbitration Procedure to conform Rule 10314(b) to the current minimum standard applicable to claims, so that Answers need only specify relevant facts and available defenses to the Statement of Claim submitted.9/16/2002

02-58 SEC Approves Default Procedures Regarding Suspended or Terminated Respondents Who Fail to Answer Arbitration Claims; Effective October 14, 2002
The SEC has approved amendments to Rule 10314 of the NASD Code of Arbitration Procedure to provide default procedures for situations in which a suspended, terminated or otherwise defunct member or associated person fails to answer in an arbitration proceeding, and the claimant nevertheless elects to pursue arbitration.9/15/2002

02-13 SEC Approves Permanent Injunctive Relief Rule
The SEC has approved amendments to Rule 10335 of the NASD Code of Arbitration Procedure governing injunctive relief in intra-industry disputes. The amendments, which substantially modify the existing pilot rule and make it a permanent part of the Code, will apply to all claims filed on or after March 25, 2002. Under the new rule temporary injunctive relief will no longer be available in arbitration. Parties in intra-industry cases may seek temporary injunctive relief in a court of competent jurisdiction. If a court orders temporary injunctive relief, the permanent rule requires an expedited hearing in arbitration on the underlying dispute before a panel of three arbitrators.3/3/2002

01-70 SEC Approves Increases To Member Surcharges And Process Fees In NASD Arbitration Proceedings, And Other Amendments To Fee-Related Provisions Of The NASD Code of Arbitration Procedure
For claims filed on or after November 19, 2001, member surcharges and hearing process fees will increase by an aggregate of 10 percent. In addition, the incremental prehearing process fee payments currently paid by member firms we increased to $750. The cap on adjournment fees is raised to $1,500 and the requirement that the fee be paid in advance has been removed.10/28/2001

01-13 SEC Approves Amendments To Director's Authority To Remove Arbitrators For Cause
The SEC has approved the amendments to NASD Rules10308 and 10312 to provide authority for the Director of Arbitration to remove arbitrators for cause after hearings have begun. The Code of Arbitration Procedure presently provides that the authority of the Director to remove an arbitrator for cause ceases after the earlier of the first pre-hearing conference or the first hearing. The amendments eliminate this restriction, and allow the Director or the President of NASD Dispute Resolution, Inc. non-delegable authority to remove an arbitrator for cause at any time and, if the challenge is raised after the initial pre-hearing or hearing session, to require that it be based on information not known to the parties when the arbitrator was appointed.2/6/2001

01-03 SEC Approves Early Expiration Of Large And Complex Cases Rule
The SEC has approved amendments to NASD rules that revise Rule 10334 to accelerate the expiration of the large and complex cases rule from August 1, 2002 to December 31, 2000. The reason for the expiration was the lack of use of the procedures.1/6/2001

00-63 NASD Regulation Provides Guidance On The Use Of Installment Payments To Satisfy Arbitration Awards
9/30/2000

00-64 SEC Approves Rule Changes To Amend Mediation Fee Structure; Effective Date: November 1, 2000
9/30/2000

00-22 SEC Approves New Voluntary Single Arbitrator Pilot Program For A Two-Year Period
The new rule—Rule 10336—will be entitled Single Arbitrator Pilot Program and will be effective for a two-year period. The Pilot Program is voluntary and will allow parties with claims of $50,000.01 to $200,000 to select a single arbitrator to hear their cases, rather than the panel of three arbitrators they would otherwise select.4/5/2000

99-100 SEC Approves Creation Of Dispute Resolution Subsidiary And Related By-Laws And Rule Changes
12/10/1999

99-96 SEC Approves New Arbitration Disclosure Rule And Procedures For Employment Arbitration
New rules that create a new Rule 10210 Series, containing special rules applicable to the arbitration of employment discrimination claims; add a new Rule 3080, which contains a model disclosure statement to be given to persons who are signing the Form U-4 to apply for registration; and make conforming changes to Rules 10201 and 10202.112/6/1999

99-95 NASD Announces Changes To The By-Laws Associated Person Definition
Current definitions will be amended to expanded to encompass those who hold a five percent or greater interest in the member firm and to include explicitly a person who has applied for registration on Form U-4.12/5/1999

99-90 NASD Regulation Announces New Discovery Guide To Be Used In Arbitration Proceedings
12/1/1999

NASD Notice to Members 99-23 - SEC Approves New Arbitration Fees; Effective March 18, 1999
NASD Notice to Members 99-23 -Arbitration fees for customers and members are increased. In some instances, member fees will double, and even triple.3/30/1999

Online Publications

Arbitrator Update Form
INASD arbitrators can use this online form to update NASD Dispute Resolution of any new or revised information about their status.12/10/2000

The Neutral Corner - November 2000
NASDR's quarterly newsletter for arbitrators. Topics include a discovery guide update, the new mediation rules, arbitrator disclosure and oath changes.12/10/2000

The Neutral Corner - July 2000
The NASD's quarterly publication for arbitrators. This issue's topics include new mediation fees, mediation contacts and session locations, an update on Injunctive Relieve, tools for conducting an effective prehearing conference, arbitrator disclosure, and arbitration statistics9/1/2000

The Neutral Corner
The Neutral Corner is published by the NASD Regulation Office of Dispute Resolution. This newsletter's target audience is NASD Regulation neutrals (arbitrators and mediators). It is published three times a year.3/28/1999

Publications

NASD Member Alert - The NASD Needs Industry Arbitrators
In an unusual member alert, the NASD notifies the industry that it needs qualified industry arbitrators. Something worth considering.2/29/2004

General Information And Forms For Arbitration Cases - Parties
From NASD Dispute Resolution, a consolidated packet of important information and forms that parties need in the arbitration process. The packets contain general information about NASD and the arbitration process, tips for contacting staff in the five regional offices by e-mail, and important mediation matters.10/4/2003

NASD Dispute Resolution Arbitration Procedures Brochure
This brochure provides an overview of the arbitration process from filing the claim through the arbitration hearing and award.10/4/2003

How To Find An Attorney
From the NASD, thishis memo provides information about legal referral services to help find an attorney for an arbitration proceeding10/4/2003

General Information And Forms For Arbitration Cases - Arbitrators
NASD Dispute Resolution consolidated into a single packet a host of important information and forms that arbitrators need to complete their assignments. The packets contain general information about NASD, tips for contacting staff in the five regional offices by e-mail, important information about your duties and obligations, managing the discovery process, conducting the initial pre- hearing conference and the hearing, the importance of peer evaluations, and guidance on disciplinary referrals and expungement requests, among other things.10/4/2003

NASD's Arbitrator's Manual
A guide for arbitrators developed SICA to supplement and explain the Uniform Code of Arbitration.10/4/2003

NASD Dispute Resolution Uniform Forms Guide
This Guide provides instructions on how to file an arbitration claim and contains the forms necessary to begin the process.10/4/2003

NASD Mediation: An Alternate Path to Resolving Securities Disputes
This brochure contains a general discussion of mediation as an alternative means to resolve disputes and provides a comparison of arbitration and mediation.10/4/2003

The NASD Neutral Corner - March 2002
Topics covered are injunctions, default procedures, customer surveys and other items of interest to arbitrators and arbitration participants.4/3/2002

The NASD Neutral Corner - March 2002
Topics covered are injunctions, default procedures, customer surveys and other items of interest to arbitrators and arbitration participants.4/3/2002

Arbitrator's Reference Guide
An NASD Dispute Resolution publication, the Arbitrator's Reference Guide is used for training purposes in instructing potential arbitrators12/10/2000

Alternative Dispute Resolution Fact Sheet
From the NASD, an overview of arbitration and mediation.12/10/2000

Arbitrator's Manual
Published by the Securities Industry Conference on Arbitration (SICA), this document serves as a guide of procedures and policies for arbitrators.12/10/2000

How To Start An Arbitration
Information from the NASD to help start an arbitration, with PDF files, forms and guides10/28/2000

How To Start A Mediation
The NASD's guide to mediation, and how to commence one.10/28/2000

The Neutral Corner - November 1999
This issue - Dispute Resolution Briefs - Task Force Initiatives Approved - Duty To Disclose - Expungements -Arbitration Statistics12/15/1999

NASD Arbitration Discovery Guide
The NASD has introduced a Discovery Guide for use in all customer arbitrations, in an effort to streamline the discovery process.11/6/1999

ADR Currents-The Newsletter of Dispute Resolution Law and Practice
From the American Arbitration Association - "This newsletter for the legal community tracks and explores the news and issues in all areas of ADR practice, sharing the perspectives of advocates, neutrals, judges, legislators and others. ADR Currents also includes digests of court decisions and a report on new programs and issues of interest to the courts. The "Lawyers' Letter" feature treats key legal issues in depth.7/25/1998

Dispute Resolution Journal Online
Articles of Interest on Mediation and Arbitration, from the AAA.3/8/1998

Arbitration and Case Evaluation
By Atlanta Commercial Mediation1/1/1998

Arbitration and ADR News
From LJX, a collection of articles relating to arbitration1/1/1997

Recent Court Decisions

Can The Parties Expand the Scope of Judicial Review?
The Ninth Circuit refused to enforced a provision in an arbitration clause that gave the federal district court the power to vacate, modify, or correct the arbitrator's award where the arbitrator's conclusions of law are erroneous. The court said that the clause was invalid because it expanded the Federal Arbitration Act. Sounds like they got this one wrong, since arbitration is a creature of contract, and there are any number of decisions that hold that the parties to an arbitration have the ability to fashion whatever remedies they can agree upon.6/4/2008

"No attorney fees" clause unconscionable
From Arbitration Law Memo, athe Ohio Court of Appeals holds that an arbitration clause was substantively unconscionable because it deprived an employee of his rights to recover attorney fees.6/4/2008

Arbitration agreement did not cover post- discharge claim of tortious interference.
This one has an interesting impact on securities employment litigation - the Kansas Supreme Court refused to compel arbitration of claims based on an employment agreement, when the claims arose from events after the termination. The "events" were defamation relating to the reason for the employee's termination.6/1/2008

Arbitrator Exceeded Authority by Awarding More Than Amount Requested
The North Carolina Court of Appeals held that a trial court erred in modifying an arbitration award on the basis that the arbitrator exceeded his powers by awarding $2,629,224 to a claimant who paid the filing fee for a claim not exceeding $1,000,000. As the Court noted, where an arbitrator exceed his powers, there is a basis for vacating, not modifying, the award.9/23/2006

Texas Supreme Court Upholds Arbitration Agreement Even Though Employee Claimed He Never Received a Copy of the Agreement
Showing its support for arbitration as a means for resolving employment disputes, the Texas Supreme Court enforced an arbitration provision in a recent case involving the termination of employment. Although the employee alleged that he had not received a copy of the agreement, the Court found that a document summarizing the agreement “unequivocally” provided him with notice.8/7/2006

Eighth Circuit Enforces Arbitration Agreement Against Employee Who Refused to Sign Acknowledgment Form
The Eighth Circuit Court of Appeals enforced an arbitration agreement against an employee who refused to sign an acknowledgment form, finding that she accepted the agreement through her continued employment.7/30/2006

Eighth Circuit Enforces Arbitration Agreement Against Employee Who Refused to Sign Acknowledgment Form
The Eighth Circuit Court of Appeals enforced an arbitration agreement against an employee who refused to sign an acknowledgment form, finding that she accepted the agreement through her continued employment.6/29/2006

Wisconsin Supreme Court Holds There is a Presumption of Arbitrator Impartiality, But Parties Can Agree to a Non-Neutral Arbitrator
In an unusual decision, the Wisconsin Supreme Court has held that there is a presumption that arbitrators are to be neutral, but the presumption can be overcome by an express agreement of the parties. Furthermore, evident partiality is not overcome simply because the arbitrator discloses the relationship then declares himself impartial.6/28/2006

Second Circuit Holds That FAA Does Not Authorize Nationwide Service of Process
The Second Circuit Court of Appeals held that Section 7 of the Federal Arbitration Act (“FAA”) does not authorize nationwide service of process, noting that "not even the strong federal policy favoring arbitration can lead to jurisdiction over a non- party without some basis in federal law."6/27/2006

In a Clash of the Titan Fund, Seventh Circuit Reminds Litigants that the FAA Permits Only Limited Judicial Review of Arbitrator Misjudgment
The Seventh Circuit Court of Appeals upheld an arbitration award where lack of evidence was the sole basis for challenging the award, explaining that the Federal Arbitration Act instead limits judicial review to improper arbitrator conduct enumerated in the FAA or violative of the parties’ agreement.6/22/2006

Connecticut Supreme Court Says Parties Can Create Body of Arbitration Precedent Through Contractual Language
The Connecticut Supreme Court refused to vacate an award involving the interpretation of a contract provision that had been interpreted differently in an earlier arbitration, holding that an arbitrator is free to apply or reject the doctrine of claim preclusion unless the parties agree otherwise.6/22/2006

North Carolina Court Enforces Class Waiver Clause in Arbitration Agreement, Reaching the Same Conclusion as Many Other Courts
The North Carolina Court of Appeals found that an arbitration agreement containing a class action waiver was fair because there was no evidence that the waiver rendered the agreement unconscionable. Noting that the Fourth Circuit had already “explicitly rejected” plaintiff’s argument, the Court found that the plaintiff’s ability to recover attorney’s fees and costs defeated any unconscionability argument.6/20/2006

North Carolina Court Rejects Consumer’s “Apples to Oranges” Argument About the Costs of Arbitration Compared to Litigation
Addressing an argument that has been tried by customers to avoid securities arbitration, this decision rejects the argument that arbitration is unfair because the costs are too high. Advocates of the position often look solely at filing fees, which is a misguided argument, as it ignores the significant other costs involved in traditional litigation6/17/2006

New Jersey Court Reminds Parties They Can Agree to Require Arbitrator to Follow the Law
A New Jersey court properly denied a motion to vacate an arbitration award based on an arbitration panel’s alleged failure to follow New Jersey law, where the parties’ arbitration agreement had not required the arbitrators to follow the law.6/16/2006

Arbitrator May Compel Nonparty to Produce Documents Before Hearing, Says Federal Court in Georgia
A continuing controversy in securities arbitration is whether the parties can obtain pre-hearing discovery from third parties. The issue revolves around the question of whether arbitrators (or parties) have the ability to issue discovery subpoenas. Most state court civil procedures do not permit the service of discovery subpoenas, only trial subpoenas. In this decision, the Federal District Court in Georgia hed that the Federal Arbitration Act impliedly permits the arbitration panel to order document discovery prior to a hearing. The Third Circuit Court of Appeals came to the opposite conclusion in a recent case, Hay Group, Inc. v. E.B.S., Acquisition Corp., 360 F.3d 404 (3d Cir. 2004) (holding that the FAA “restricts an arbitrator's subpoena power to situations in which the non-party has been called to appear in the physical presence of the arbitrator and to hand over the documents at that time."6/15/2006

Connecticut Supreme Court Vacates Arbitration Award Because Moving Party Was "Substantially Prejudiced" by Arbitrator’s Evidentiary Ruling
In a ruling that is remarkably at odds with prior court decisions, the Connecticut Supreme Court held that an arbitrator’s refusal to consider evidence "substantially prejudiced" the moving party and thus justified the trial court’s order vacating the award under Connecticut law.6/13/2006

"Binding Mediation" Confused? So Was the Court
The California Court of Appeals refused to enforce a settlement agreement when neither the Court nor the parties could understand a material term - dispute resolution by "binding mediation."6/8/2006

Wisconsin Supreme Court Requires Mutuality for Enforceable Arbitration Agreements
The Wisconsin Supreme Court held that an arbitration provision carving out a judicial remedy solely for the drafter was both procedurally and substantively unconscionable6/1/2006

Limited Arbitration Clause in Partnership Agreement Cannot Be Enforced Against Partnership’s Receiver
A receiver that is attempting to collect capital contributions from limited partners on behalf of a limited partnership cannot be required to arbitrate its claims where the subscription agreement the receiver is attempting to enforce is not sufficiently related to the partnership agreement containing the arbitration clause, according to the Third Circuit Court of Appeals.5/27/2006

Party to Arbitration Agreement Can Require Non-Signatory to Arbitrate Claims
A United States District Court in North Carolina has established a test to determine whether non-signatories to an arbitration agreement can be compelled to arbitrate claims under the agreement, and applied the test to compel arbitration of such a non-party.5/26/2006

Texas Court Reaffirms Arbitral Immunity and Rebuffs Attempt to Circumvent its Protections
The Texas Court of Appeals firmly upheld the general principle that arbitrators and their sponsoring organizations are immune from civil liability for bias or the failure to disclose a possible source of bias and readily rejected a challenge to the doctrine of arbitral immunity.5/23/2006

Payment of Invoices Containing Arbitration Clause as Part of Terms and Conditions Constitutes Agreement to Arbitrate
We would really like to know more about this one -a company that paid several invoices containing an arbitration clause in its terms and conditions is bound to arbitrate its dispute over the goods and services purchased, a U.S. District Court in Michigan has held.5/19/2006

In Massachusetts, Out-of-State Lawyers May Represent Parties in Arbitration Without Creating Grounds for Vacating the Award
Without deciding whether an attorney is “practicing law” for licensing purposes when representing clients in arbitration, the Massachusetts Supreme Court has held in two cases that such circumstances do not constitute grounds for vacating an award.4/23/2006

New Jersey Court Refuses to Interfere With Arbitration Provider's Selection of Rules
A court will not interfere with an arbitration provider's decision regarding what rules will govern an arbitration, absent one of the narrow grounds supporting judicial interference with the arbitration process, according to the Appellate Division of the Superior Court of New Jersey.4/23/2006

Party That Skips Arbitration Hearing Cannot Later Attack Award And Must Live with the Consequences
The Ninth Circuit has confirmed an arbitration award that went beyond the scope of the parties' arbitration agreement, because the party challenging the award failed to attend the arbitration, thus waiving its right to object on procedural grounds.4/23/2006

Court Applies Recent Buckeye Precedent Rejecting Void/Voidable Distinction and Requires Arbitrator – Not a Judge – To Decide Validity
Under Second Circuit precedent, an arbitration provision was void and unenforceable if the underlying contract is void. However, the U.S. District Court applied the recent U.S. Supreme Court decision in Buckeye Check Cashing v. Cardegna to reject this distinction between void and voidable contracts to hold that the arbitrator decides the enforceability of an arbitration agreement.4/23/2006

Waiver is Not All or Nothing: Parties Can Be Estopped from Arbitrating Certain Issues While Retaining the Right to Arbitrate Others
A party to an arbitration agreement is collaterally estopped from arbitrating issues that the party previously litigated in court, even if the remainder of the parties' dispute is proceeding to arbitration, the Alabama Supreme Court has held.4/23/2006

Seventh Circuit Declares that Arbitrator, not a Court, Decides Whether to Conduct Consolidated Arbitration
The Seventh Circuit Court of Appeals has ruled that an arbitrator, not the court, should decide whether an arbitration agreement prohibits consolidated arbitration. According to the Court, the issue is a question of procedure rather than a question of arbitrability.4/23/2006

Arbitration Agreement Does Not Cover Factual Dispute Arising After the Agreement Terminated, Sixth Circuit Holds
A formal wear company cannot compel arbitration of a former sales representative's claim, where the claim is based on conduct that occurred two years after the parties' arbitration agreement expired, the Sixth Circuit has held.4/23/2006

No Signature? No Problem, Says the Texas Supreme Court
According to the Texas Supreme Court, when an employer institutes an arbitration program for its existing employees, an at-will employee who receives written notice of the program and remains employed accepts the new terms of employment, regardless of whether the employee signs an acknowledgement form.4/23/2006

Ignoring an Employment Agreement's Unambiguous Language Constitutes Manifest Disregard of the Law
When an arbitrator ignores unambiguous contract provisions, the courts will vacate the award for manifest disregard of the law, according to the Fourth Circuit Court of Appeals3/31/2006

Court Confirms Construction Arbitration Award, Saying to Delinquent Party: You're Too Late to Object
A party that waits until a confirmation hearing to object to the timing of an arbitrator's award waives the right to challenge the award on that basis, according to the Superior Court of New Jersey.3/30/2006

Party Seeking to Confirm Arbitration Award Can Proceed in Federal Court Regardless of Where Its Initial Complaint Was Filed
By filing an initial complaint seeking to compel arbitration in state court, a party to arbitration does not waive its right to later seek confirmation of an award in federal court, according to the Ninth Circuit Court of Appeals. In Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Moore, 2006 WL 466652 (9th Cir. 2006)(Westlaw registration required), a federal district court confirmed an arbitration award in favor of Merrill Lynch. Moore appealed, arguing that the federal court lacked jurisdiction because Merrill Lynch had “waived diversity” by filing its initial action in Arizona state court3/25/2006

In California, Mediation Confidentiality Statute Does Not Prevent Settlement Agreement From Being Admitted in Enforcement Proceedings
A settlement agreement reached through mediation can be admitted into evidence in subsequent proceedings to enforce the agreement if the parties waived their statutory right to confidentiality, according to the California Court of Appeals2/28/2006

U.S. Supreme Court Reaffirms Its Strong Support of Arbitration
The Supreme Court's recent decision upholding the use of arbitration to resolve consumer/business disputes will leave a very favorable mark on the dispute resolution landscape for decades to come. The court held that the arbitrators, not the courts, are to decide whether an agreement is valid.2/25/2006

Court Refuses to Stay Action That Does Not Fall Within Scope of Arbitration Agreement
The Ohio Court of Appeals recently denied a party's motion to stay litigation pending arbitration where the parties' agreement stated that the arbitrators lacked authority to decide claims exceeding $100,000, and plaintiff sought over $200,000 in damages2/24/2006

North Dakota Court Refused to Hear Untimely Challenge to Arbitration Award
The failure to challenge an arbitration award within the time allotted by statute bars a defense on the merits in a confirmation proceeding, according to the North Dakota Supreme Court2/20/2006

Mississippi Supreme Court: Arbitration Agreements Should be "Rigorously Enforced"
Mississippi's top court acknowledged that the FAA requires courts to rigorously enforce arbitration agreements.2/16/2006

ERISA Claims Are Arbitrable, But Plan Participant Not Bound By Arbitration Agreement Between Plan and Its Investment Advisor
According to the Ninth Circuit Court of Appeals, although general contract or agency principals can bind a non-signatory to an arbitration agreement, these principals do not support binding a passive participant in an ERISA plan to an agreement between the plan and its investment advisor.2/15/2006

Eighth Circuit Reaffirms That Only Exceptional Arbitration Cases Will be Vacated for Manifest Disregard for the Law
2/13/2006

Court Enforces Misplaced Arbitration Agreement
We litigated this same issue years ago, to a surprising result where arbitration was compelled. Now the Fifth Circuit joins the SDNY and finds that a party who cannot produce a written arbitration agreement can use parol evidence to satisfy its burden on a motion to compel arbitration.2/1/2006

California Court Enforces Class Action Waiver in Employment Agreement
In the context of an employment agreement, courts will enforce a provision excluding class action claims from an arbitration clause, according to the California Court of Appeal.2/1/2006

Alito Says Automatic Stay in Bankruptcy Halts Pending Arbitration
Supreme Court Justice Samuel Alito recently wrote an opinion of the Third Circuit Court of Appeals ruling that an arbitration panel should halt its proceedings if an award might negatively impact the estate of a debtor protected by the bankruptcy code.1/31/2006

Arbitrators, Not Courts, Decide How Many Arbitrators Should Hear a Case
The Fourth Circuit Court of Appeals ruled that the question of whether an arbitration agreement provides for a single arbitrator or a panel is a procedural question that should be resolved by the arbitral forum, not by a court.1/28/2006

California Appeals Court Enforces Choice of Law Provision in Arbitration Case
The California Court of Appeal ruled that the Federal Arbitration Act (FAA) and a South Dakota choice-of-law provision prevented a party who had agreed to arbitrate future disputes from bringing a lawsuit alleging violations of the California Consumer Legal Remedies Act (CLRA).1/27/2006

New York Court Declines to Enforce Mandatory Arbitration in Architectural Service Contracts
A New York Court has held that architectural services in connection with home construction are "consumer goods" within the definition of aNew York General Business Law § 399-c, which prohibits the use of mandatory, pre- dispute arbitration clauses in specific consumer contracts. The Court failed to address whether the Federal Arbitration Act (FAA) preempted § 399-c. In Doctor's Associates v. Casarotto, 517 U.S. 681 (1996), the U.S. Supreme Court held that § 2 of the FAA preempts state laws that impose restrictions on arbitration clauses if the restrictions do not apply to contracts generally. The only basis for non-preemption in Ragucci would be if the contract services only involved intrastate, and not interstate, commerce.1/24/2006

Federal Courts Lack Independent Subject Matter Jurisdiction Under the FAA to Review Arbitral Awards
The Federal Arbitration Act (FAA) does not create an independent federal question allowing a U.S. district court to confirm or vacate an arbitral award. Instead, the rights asserted under an arbitration agreement are based only on the agreement to arbitrate, which is ultimately governed by state courts, according to a U.S. District Court in Michigan. The court relied on Moses H. Cone Mem'l Hosp. v Mercury Constr. Corp., 460 U.S. 1 (1983, and serves as a reminder that if you are looking to confirm or vacate an award in federal court, you need to have an independent basis for federal jurisdiction.1/24/2006

Bankruptcy Court Cannot Deny Enforcement of Arbitration Provision
The Third Circuit Court of Appeals recently held that a Bankruptcy Court lacks the authority and discretion to deny enforcement of an arbitration provision because the Federal Arbitration Act (FAA) mandates enforcement of arbitration unless Congressional intent to the contrary is established.1/19/2006

"Amount in Controversy" Not Determined by Amount of Initial Award
The Eleventh Circuit ruled that a party seeking to vacate a zero dollar arbitration award meets the amount in controversy requirement for federal subject matter jurisdiction if the party would claim more than $75,000 in damages at a new hearing.1/18/2006

Federal Court in Kansas Cannot Enforce Agreement to Arbitrate in New York
When an arbitration agreement identifies where the arbitration will take place, only a court in that jurisdiction has the authority to compel arbitration, according to the Tenth Circuit Court of Appeals.1/14/2006

Ninth Circuit Upholds Power of Arbitrators and Pro-Arbitration Public Policy
Where an arbitration clause grants arbitrators broad discretion and allows them to "abstain from following the strict rules of law," a reviewing court has very little ability to reverse arbitral awards on public policy grounds or for "manifest disregard of the law."12/16/2005

Appellate Court Unable to Vacate Arbitration Award With an Insufficient Record
Once again a court has confirmed that if an arbitration proceeding is not transcribed, a reviewing court may not be able to determine from the record whether the arbitral award should be vacated. Brockman v. Tyson, No. 01-03-01335-CV, 2005 WL 2850128 (Tex. App. 2005),11/20/2005

Confidential Arbitration Award Not Discoverable In Subsequent Litigation
The amount of damages awarded in a previous confidential arbitration hearing involving the same defendant was not discoverable, absent extraordinary circumstances, ruled a New York U. S. District Court.10/9/2005

Employment Arbitration Clause Enforced and Improper Term Severed
An arbitration provision in an employment agreement is not void simply because a different provision in the agreement is illegal, as long as the agreement contains a valid severability clause. The severability clause will permit the court to sever the illegal provision and enforce the remainder of the agreement, according to the Eleventh Circuit Court of Appeals applying Georgia law.10/9/2005

E-Mail Arbitration Agreements Are Valid If Done Properly
To obtain an employee's consent to an arbitration policy disseminated via e- mail, the form must refer to the arbitration provision in order to be binding. Having employees sign a "Receipt and Agreement" form was not enough to establish an agreement to arbitrate, according to a New Jersey U.S. District Court.10/9/2005

Limit on Punitive Damages Stricken, Arbitration Compelled
When a patient and his responsible party willingly, knowingly and voluntarily agree to settle disputes via arbitration, their agreement will be upheld. However, one-sided limits on actual or punitive damages can be severed from the otherwise enforceable agreement, according to the Mississippi Supreme Court.10/9/2005

Both Principal and Agent Bound By Arbitration Agreement
An arbitration agreement between a buyer and seller applies to claims against the seller's agent when the agent was acting within the course and scope of her agency relationship, according to the North Carolina Court of Appeals10/2/2005

Non-Signatories Can Enforce Arbitration Agreements
A non-signatory can enforce an arbitration clause against a signatory when the signatory relies on terms of the agreement and when the relationship between the parties is “sufficiently close,” according to the Eighth Circuit Court of Appeals.10/1/2005

Arbitrators Have The Same Immunity Judges Have
Arbitrators - acting within their capacity and performing quasi-judicial functions - have the same immunity as judges do when performing judicial functions within their jurisdictional powers, according to the District of New Jersey and long standing legal precedent.10/1/2005

Orange County Choppers, Inc. v. Goen Technologies Corp., 2005 WL 1538216 (S.D.N.Y., 2005)( - Broad Arbitration Clause Presumes Arbitrability
Interpretation of a contract with broad language in the arbitration agreement is a matter for the arbitrator, not the courts, according the Southern District Court of New York.7/18/2005

Pennington, et al. v. Frisch's Restaurants, Inc., 2005 WL 1432759 (6th Cir. June 27, 2005) - You're Bound by What You Sign
When you sign an arbitration agreement or an acknowledgement of receipt of an arbitration agreement, whether you've read it or not, you've manifested assent to the agreement, according to the Sixth Circuit Court of Appeals.7/18/2005

Johnson v. Long John Silver's Restaurants, Inc., 2005 WL 15798727 (6 th Cir. 2005) - Sixth Circuit Upholds Arbitration Clause Agreed to by Conduct and Implication
When a signed arbitration agreement cannot be produced, an agreement to participate in a dispute resolution program involving arbitration can be implied-in-fact when a party knew about the program, had access to the program materials, and even explained the program to others, according to the Sixth Circuit Court of Appeals.7/17/2005

Hamilton v. Sirius Satellite Radio Inc., 2005 WL 1538218 (S.D. N.Y. June 28, 2005)( - Another Decision Showing Deference to Arbitral Awards
An arbitration award supported by evidence cannot be reviewed by the courts for manifest disregard of the law, according to the Southern District of New York. In Hamilton v. Sirius Satellite Radio Inc., 2005 WL 1538218 (S.D. N.Y. June 28, 2005)(Westlaw registration required), Hamilton sued Sirius for wrongful discharge in violation of the Family Medical Leave Act. The arbitrator granted Sirius's motion for summary judgment and Hamilton appealed to vacate the arbitration award for ‘manifest disregard of the law.' Hamilton argued that the arbitrator disregarded the law because he did not extend the ‘constructive discharge' standard to this case where severance pay was offered as an alternative to termination. According to the Court, vacating an arbitration award for ‘manifest disregard of the law' is appropriate only in “those exceedingly rare instance where some egregious impropriety on the part of the arbitrators is apparent.” Therefore, an arbitration decision must be confirmed if there is “even a barely colorable justification for the outcome reached.”7/14/2005

Price v. Ernst & Young, 2005 WL 1562955 (Ga. App. 2005) - Non-Parties Can Compel Arbitration
Even non-signatories to an arbitration agreement can compel arbitration under equitable estoppel when the asserted claim arose out of the underlying contract, ruled the Georgia Court of Appeals.7/13/2005

Booker v. Robert Half Int'l, 2005 WL 1540796 - Arbitration Clause Enforceable, But Punitive Damages Can't Be Restricted
An arbitration clause in an employment contract is enforceable, but a restriction on punitive damages is not, because a D.C. statute specifically allows for them.7/8/2005

Taylor v Van-Catlin Construction - Courts Give Arbitrators Broad Deference to Determine Awards
Even if the arbitrator misread, misapplied or misinterpreted applicable case law or statute, that would have been an error of law, not an act exceeding his arbitral powers, and the award not subject to judicial review, according to the California Court of Appeals.7/5/2005

Doleac v. Real Estate Professionals, 2005 WL 1500271 (Miss. June 16, 2005) - Reference to Private Arbitration Provider Rules Makes Arbitration Clause Binding
An arbitration clause in one document can be applied to other documents that are part of the same transaction and an arbitration clause referencing specific arbitration organization rules requires submission to binding and final arbitration under those rules, according to the Mississippi Supreme Court.7/1/2005

Poweragent, Inc. vs. Electronic Data Systems Corp.
Objections to jurisdiction may be generally decided by the courts, but once the arbitrators rule, the authority cannot be challenged.4/9/2004

Arbitral Supoena Power Does Not Provide for Pre-Hearing Production by Non-Parties
Hay Group, Inc. vs. EBS Acquisition Corp., Third Circuit4/9/2004

Winberg vs. Salomon Smith Barney
Preemption of the California Standards by Federal Legislation Upheld2/29/2004

Luong vs. Circuit City Stores
For Purposes of Determining Diversity Jurisdiction in Vacature Action, the Dollar Threshold Is the Amount of the Award, not the Amount Claimed in the Underlying Controversy2/29/2004

Supreme Court Strikes Excessive Punitive Damages
Punitive damages awards that exceed single-digit ratios, deal with economic transactions, and occur in tandem with compensatory awards with punitive elements are particularly susceptible to a due process challenge6/15/2003

Second Circuit Restricts Manifest Disregard of the Law
On questions of law, arbitrators will be viewed as a blank slate, unless the parties educate the applicable legal principles.6/15/2003

Firm Compelled to Arbitrate With Non-Customers in Selling Away Case
Investors who were customers of an associated person are customers of the NASD member by virtue of their relationship with the associated person.6/1/2003

Court Permits Damage Claim for Holding Stock Based on Fraud
California law recognizes a common law cause of action by persons wrongfully induced to hold stock instead of selling it.5/1/2003

Court Affirms Arbitrator Authority to Dismiss Claims Prior to Hearing
Reed vs. Mutual Service Corp - California - 20033/28/2003

Customer Ratifies Unauthorized Transactions by Failure to Object
John Dawson & Associates, NDIll Bankruptcy Court3/28/2003

Court Refuses To Compel Arbitration Against Customer
Kloss vs. Edward D. Jones & Co., 310 Mont. 123 (6/13/03)3/28/2003

Dispute Between Two Brokers is Subject to Arbitration, Even Without Written Agreement
Court Compels Arbitration Based on NASD Rule 101013/28/2003

Control Person Arbitration Award Vacated - Culpable Participation Required for Liability
Control person liability does not lie unless the controlling person was, in some meaningful sense, a culpable participant in the fraud. General deficiencies in supervision, are insufficient, liability requires culpability regarding specific trades and misrepresentations.2/17/2003

Sawtelle Punitive Damage Award Vacated
Court vacates punitive damage award on constitutional due process grounds as being arbitrary and excessive, labeling the $25 million dollar punitive damage award at "grossly excessive."2/16/2003

CA Arbitration Dispute Allows Claim to Be Filed in Court
Linden vs. American Express Financial advisers - since forcing Claimant to give up her rights under California law, court vacates order compelling arbitration.1/31/2003

Court Stays Arbitration Against Asset Purchaser
Ryan Beck & Co., Inc vs. Campbell1/31/2003

Stay of Non-Arbitrable Claims is Discretionary Where Arbitrable Claims Exist
Baggesen vs. American Skandia Life Assurance Corp.1/28/2003

Unregistered Broker Voids Firm's Ability to Compel Arbitration
Court holds that customer agreement for account with unregistered broker is unenforceable.12/5/2002

Court Compels Arbitration in Selling Away Case
Customer is "customer" of broker, therefore he is a customer of the firm?12/5/2002

U-4 Arbitration Agreement Does Not Supercede Eariler, Broader Agreement
Bailey vs. Chase Securities, Inc., et al, 01-Civ-7222 (AGS), 2002 U.S. Dist. LEXIS 7788 (SDNY 5/1/02)6/2/2002

Futures Account Agreement Does Not Encompass Claims Relating to Separate Agreement
Crotser vs. Smith Barney & Co., Inc., NO 228226 (Mich. App., 4/30/02)6/2/2002

Manifest Disregard Means Knowledge of, and Decision to Ignore, the Law
Getting it "wrong" simply isn't enough. Rosenbaum vs. Imperial Capital, LLC and Rich, 2001 US Dist. LEXIS 17577 (D. Md., 10/29/01)12/8/2001

Limited Grounds Exist for Compelling Non-Signatory to Arbitrate
MAG Portfolio Consult, GmBH vs. Merlin Biomed Advisors, LLC, No. 00-9502 (2d Cir., 10/10/01)12/8/2001

Imperfect Form of Award Does not Make it Less Final
Renfro vs. Dean Witter Reynolds, Inc., 2001 US App. LEXIS 24438 (3rd Cir. 10/5/01) - Letter sent on behalf of panel is final award, and starts time to move to vacate12/8/2001

Dispute Resolution Times
From the American Arbitration Association3/8/1998

Related Sites

Law/Legal Matters; mediation, arbitration and litigation (courtesy of the Cincinnati Network)
2/22/1999

JAMS/Endispute Arbitration Rules for Employment Cases
From JAMS, a private dispute resolution service, the rules for use in employment cases10/17/1998

JAMS/Endispute Commercial Arbitration Rules
From JAMS, the rules and procedures for most commercial arbitrations10/17/1998

American Arbitration Association
"With 35 offices nationwide and cooperative agreements with arbitral institutions in 50 other nations, the American Arbitration Association is the largest full-service provider of dispute resolution services and cutting edge educational programs in the world dedicated to the resolution of disputes through the use of mediation, arbitration, elections and other out-of-court settlement procedures. The Association provides a forum for the hearing of disputes, tested rules and procedures, and a roster of impartial experts of the highest caliber to hear and resolve cases."3/8/1998

GAMA Forms
from the Global Arbitration Mediation Association, Inc.; contains GAMA forms and other business and legal forms1/1/1998

Mediation Information and Resource Center
Includes articles and forums and mediator database.1/1/1998

Employment ADR Synopsis
An overview as well as the advantages and disadvantages of arbitration and mediation of employment disputes.1/1/1998

International Trade Arbitration Documents
UNCITRAL Model Law on International Commercial Arbitration1/1/1998

ABA Section of Dispute Resolution
The American Bar Association is the nation's largest attorney organization. Their ADR Section's site has some excellent general articles on ADR.1/1/1997

Rule Changes and Proposals

Proposed Rule Change for Pre-Hearing Motions to Dismiss
A Proposed Rule Change to Adopt Rule 12504 of the Proposed Code of Arbitration Procedure for Customer Disputes (“Customer Code”) and Rule 13504 of the Proposed Code of Arbitration Procedure for Industry Disputes (“Industry Code”) to Address Motions to Decide Claims Before a Hearing on the Merits.8/1/2006

NASD DR Proposes Restricting Subpoena Power to Arbitrators
In an effort to protect investors and other parties from abuse in the subpoena process and to maintain a uniform rule nationwide, NASD Dispute Resolution announced that it has filed with the U.S. Securities and Exchange Commission (SEC) proposed revisions to the Code of Arbitration Procedure which would permit only arbitrators to issue subpoenas.4/23/2006

NASD Release on Expungement Rules
New Rules Effective April 12, 20044/9/2004