Metro. Life Ins. Co. v. Bucsek
919 F.3d 184
| 2d Cir. | 2019Background
- Bucsek was a MetLife employee and NASD-registered representative who signed a Form U-4 arbitration agreement on joining MetLife.
- MetLife was an NASD member until July 2007; NASD merged into FINRA shortly thereafter and MetLife never joined FINRA.
- Bucsek’s asserted claims (2011–2016) concern compensation and employment matters that occurred well after MetLife left the NASD.
- Bucsek filed a FINRA arbitration in July 2016; FINRA denied MetLife’s letter-motion to dismiss the claims for lack of arbitration obligation.
- MetLife sued in federal court seeking an injunction to bar the FINRA arbitration; the district court granted a preliminary injunction and Bucsek appealed.
Issues
| Issue | Plaintiff's Argument (Bucsek) | Defendant's Argument (MetLife) | Held |
|---|---|---|---|
| Whether Bucsek’s post‑2007 employment claims are subject to NASD/FINRA Code arbitration | The FINRA rule that treats a broker/dealer as a “member” even after termination means MetLife remains bound to FINRA arbitration for any dispute with an associated person | MetLife argues the FINRA/NASD Code does not cover disputes arising from events that occurred after both parties left NASD/FINRA supervision; perpetual coverage is implausible | Court: Claims not arbitrable because they arise years after MetLife’s NASD membership ended; perpetual application would be absurd |
| Whether the question of arbitrability must be decided by the arbitrator or the court | The Code’s provision empowering panels to “interpret and determine applicability” of the Code (FINRA Rule 13413) clearly and unmistakably delegates arbitrability to arbitrators (citing Alliance Bernstein) | MetLife: Even if panels can interpret the Code, the agreement does not clearly and unmistakably delegate arbitrability for disputes that plainly fall outside the Code’s scope | Court: No clear and unmistakable delegation here; court may decide arbitrability because the Code does not reasonably cover these claims |
| Whether Henry Schein requires sending arbitrability to arbitrators despite groundless claims | Bucsek: Henry Schein forbids courts from deciding arbitrability when agreements delegate that question to arbitrators; courts cannot deem an arbitrability claim groundless and keep it | MetLife: Henry Schein does not prevent courts from determining whether the parties clearly and unmistakably delegated arbitrability; it only forbids a "wholly groundless" exception to enforcement when delegation exists | Court: Henry Schein is consistent with requiring courts to first determine whether delegation exists; it does not mandate sending clearly non‑delegated arbitrability questions to arbitrators |
| Whether MetLife showed likelihood of success for a preliminary injunction to stay arbitration | Bucsek: Arbitration forum selection and FINRA’s denial of dismissal weigh against injunction | MetLife: Because the claims are not covered by the Code, MetLife is likely to succeed on the merits and thus is entitled to injunctive relief | Court: MetLife demonstrated likelihood of success on arbitrability; preliminary injunction was appropriate (subject to further evidence at permanent injunction phase) |
Key Cases Cited
- Henry Schein, Inc. v. Archer & White Sales, Inc., 139 S. Ct. 524 (2019) (courts must enforce clear delegations of arbitrability to arbitrators; no "wholly groundless" exception)
- Rent‑A‑Ctr., W., Inc. v. Jackson, 561 U.S. 63 (2010) (parties may contract to delegate arbitrability to arbitrators)
- Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79 (2002) (courts should not assume delegation absent clear and unmistakable evidence)
- First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995) (clear and unmistakable standard for delegating arbitrability)
- Granite Rock Co. v. Int'l Bhd. of Teamsters, 561 U.S. 287 (2010) (questions of arbitrability are typically for courts unless delegation is clear)
- AllianceBernstein Inv. Research & Mgmt., Inc. v. Schaffran, 445 F.3d 121 (2d Cir. 2006) (NASD rule empowering panels supported delegating arbitrability where dispute plainly fell within NASD scope)
- AT&T Technologies, Inc. v. Communications Workers, 475 U.S. 643 (1986) (arbitration is a matter of consent; parties cannot be compelled to arbitrate disputes they did not agree to submit)
- Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7 (2008) (standards for granting a preliminary injunction)