Ameriprise Financial Services, Inc. v. Beland
2011 U.S. App. LEXIS 22209
| 2d Cir. | 2011Background
- Belands sued Ameriprise in FINRA arbitration for fiduciary duty, contract, fraud, and misrepresentation related to account losses from 1995–2009.
- Belands were class members in In re AEFA; they did not opt out of the 2007 class settlement despite notices.
- SDNY retained exclusive jurisdiction over disputes arising from the class action settlement.
- Defendants sought to enforce the class settlement and enjoin the Belands from arbitration; district court granted enforcement for Released Claims.
- District court determined the Belands’ “Released Claims” barred their arbitration claims, but the Belands had non-Released claims (including suitability) that could proceed.
- Court ultimately remanded to permit non-Released claims to proceed in FINRA arbitration and affirmed the enforceability to the extent of Released Claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the district court could enjoin arbitration under the class settlement | Belands argue settlement carve-out leaves some claims arbitratable | Ameriprise argues all Beland claims fall within Released Claims | Partially yes: court could enjoin Released Claims; non-Released claims proceed |
| Whether Released Claims bar all Beland arbitration claims | Some FINRA claims fall outside Released Claims | All claims within scope are Released | Released Claims barred as to those claims; non-Released claims not barred |
| Scope of Ameriprise’s arbitration consent after settlement | Settlement modified Ameriprise’s broad FINRA arbitration consent | Consent narrowed by Settlement to released/non-released distinctions | Settlement amended scope; non-Released claims still arbitrable; Released Claims not arbitrable |
| Who decides arbitrability and scope after settlement | Disputes about scope should be for arbitrators; court should decide arbitrability | Court retained authority to decide arbitrability due to settlement terms | Question of arbitrability reserved for court; district court properly decided scope |
| District court’s retention of jurisdiction to enforce settlement | All enforcement actions belong to district court | Settlement grants exclusive jurisdiction to district court to enforce | District court retained jurisdiction; enforcement proper but limited to Released Claims |
Key Cases Cited
- AT&T Technologies, Inc. v. Communications Workers of America, 475 U.S. 643 (1986) (arbitrability and broad deference to arbitration terms; gateway issues reserved for court)
- Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1 (1983) (arbitrability framework; policy favoring arbitration; contract interpretation controls scope)
- Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79 (2002) (gateway vs. arbitrability questions; presumption in favor of arbitration)
- Republic of Ecuador v. Chevron Corp., 638 F.3d 384 (2d Cir. 2011) (arbitrability; scope of arbitration agreements; court vs arbitrator)
- Wal-Mart Stores, Inc. v. Visa U.S.A., Inc., 396 F.3d 96 (2d Cir. 2005) (class action releases; adequacy of class notice and opt-out rights)
- PaineWebber Ltd. P'ships Litig., 147 F.3d 132 (2d Cir. 1998) (class action releases; scope of release for settled claims)
- Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 130 S. Ct. 1758 (2010) (limits on arbitrability; contract language controls scope of arbitration)
- Bank Julius Baer & Co. v. Waxfield Ltd., 424 F.3d 278 (2d Cir. 2005) (forum/arbitration clause interpretation; integrated vs. non-integrated readings)
- Riley Manufacturing Co. v. Anchor Glass Container Corp., 157 F.3d 775 (10th Cir. 1998) (settlement merger clauses can extinguish arbitration rights on topics released)