The Expert's Examiner


SCOTUS DECLINES CERTIORARI IN FIFTH CIRCUIT CASE INVOLVING FINRA’s “NO DO-OVERS” RULE ON MOTIONS TO DISMISS.
May 4, 2020

FINRA’s customer and industry Codes of Arbitration Procedure were amended in early 2017 to add an additional ground for dismissals prior to conclusion of the case-in-chief (see Regulatory Notice 17-02). For example, Industry Rule 13504(a)(6)(C), allows a dismissal where: “[t]he non-moving party previously brought a claim regarding the same dispute against the same party that was fully and finally adjudicated on the merits and memorialized in an order, judgment, award, or decision.” 

Walker v. Ameriprise Financial Services, Inc., No. 18-11641 (5th Cir. Oct. 9, 2019) (per curiam) – covered in SOLA 2019-47 – was a rare case interpreting this Rule. A 2015 FINRA arbitration “resulted in an Award against Walker and in favor of Ameriprise for injunctive relief, compensatory damages and attorney fees.”

Walker filed a new FINRA arbitration against Ameriprise in 2017, “primarily alleging he was improperly enjoined by the 2015 arbitration. He also sought to recover for the allegedly ‘false, fraudulent, and intentional conduct of Ameriprise.’” The latter moved successfully for dismissal under 13504(a)(6)(C), with the Panel holding “that Claimant previously brought the same claims regarding the same dispute against the same party, and the claims were fully and finally adjudicated on the merits and memorialized in the Award entered in FINRA Arbitration Number 15-01325.” Walker later moved without success under the Federal Arbitration Act (“FAA”) to vacate the arbitrators’ dismissal Award, based on misconduct (FAA § 10(a)(3)) and exceeding authority (FAA § 10(a)(3)).

On appeal, the Fifth Circuit affirmed, and on March 23, SCOTUS declined to grant the Petition for Certiorari.      

(ed: *We were with the lower courts all the way on this one. **The SCOTUS case is No. 19-1015, appearing on page 4 of the Court’s Order List.)