Morgan Keegan & Company, Inc. v. William Hamilton Smythe, III
2013 Tenn. LEXIS 428
| Tenn. | 2013Background
- Smythe pursued a FINRA arbitration claim against Morgan Keegan regarding RMK fund losses.
- An arbitration panel, later with a replaced chair, included two members with disclosed conflicts raised by Morgan Keegan.
- Morgan Keegan moved to vacate the award alleging evident partiality; Smythe did not file a separate petition to confirm but did respond requesting confirmation.
- The trial court vacated the award and remanded for a new arbitration, without expressly denying confirmation.
- The Court of Appeals dismissed the appeal for lack of jurisdiction; Smythe sought permission to appeal.
- The Tennessee Supreme Court held the trial court order is an appealable order under Tenn. Code Ann. § 29-5-319(a)(3) and reversed/remanded to address merits.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the appeal falls under Tenn. §29-5-319(a)(3) or FAA §16 | Smythe argues FAA §16 applies for appellate review of arbitration orders. | Morgan Keegan contends UTAA governs and preempts FAA in Tennessee post-arbitration appeals. | Tennessee §29-5-319(a)(3) applies; order is appealable under state act. |
| Whether the March 16, 2010 order constitutes an order denying confirmation | Smythe contends the order implicitly seeks confirmation by vacating and remanding. | Morgan Keegan argues there was no explicit denial of confirmation in the order. | Order denied confirmation by vacating and remanding; appellate review available. |
| Whether a separate petition to confirm is required when vacatur is pursued | Smythe could be understood to include a request for confirmation in response to vacatur. | Morgan Keegan argues separate cross-petitions are required. | Not required; confirmation may be sought in response to a vacatur petition. |
| Relation of post-arbitration appeals to pre-arbitration authorities and preemption | FAA preemption should be read to allow broader appellate review. | Uniform Act procedures are procedural and not preempted; post-arbitration appeals align with FAA goals. | FAA and UTAA apply; FAA does not preempt Tennessee procedural appeal provisions. |
Key Cases Cited
- Volt Info. Sciences, Inc. v. Board of Trustees of Leland Stanford Junior University, 489 U.S. 468 (1989) (FAA does not preempt all arbitration-field regulation; promotes enforceability of arbitration agreements)
- Citizens Bank v. Alafabco, Inc., 539 U.S. 52 (2003) (commerce scope of arbitration; broad federal power)
- New York State Conf. of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645 (1995) (preemption considerations and implied preemption principles)
- Arnold v. Morgan Keegan & Co., 914 S.W.2d 445 (Tenn. 1996) (principal authority on Tennessee arbitration review and enforcement)
- Pugh’s Lawn Landscape Co. v. Jaycon Dev. Corp., 320 S.W.3d 252 (Tenn. 2010) (purpose of arbitration acts; enforceability of private agreements)
- First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995) (federal policy favoring arbitration; scope of review)