511 F. App'x 453
6th Cir.2013Background
- Murray, a former financial advisor for Smith Barney, appeals a district court decision denying his motion to vacate/modify a FINRA arbitration award in Citigroup's favor.
- FINRA awarded Citigroup $40,153 plus 10% interest; Murray received $25,705.95 on counterclaims.
- Murray argued the panel exceeded its authority by contradicting the loan agreement's plain language and by exceeding the scope of arbitration agreements.
- The district court found only manifest-disregard of the law as a potential ground, denied it, and Murray appealed.
- Murray forfeited his first two arguments for not challenging the panel's scope in district court, and his manifest-disregard claim failed for lack of a reasoned award; the court affirmed.
- FINRA rules allowed a reasoned award, but Murray did not obtain one, dooming his manifest-disregard claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did the panel exceed authority by contradicting contract terms? | Murray argues panel contradicted loan agreement. | Citigroup contends forfeiture; panel stayed within authorization. | Forfeited; affirmed district court. |
| Did the panel exceed authority beyond arbitration scope? | Murray claims award beyond agreements' scope. | Citigroup maintains forfeiture; within scope. | Forfeited; affirmed district court. |
| Was there manifest disregard of the law? | Murray asserts manifest disregard of the law. | Citigroup posits lack of reasoned award prevents review. | No vacatur due to absence of a reasoned award; affirmed. |
Key Cases Cited
- Jolivette v. Husted, 694 F.3d 760 (6th Cir. 2012) (forfeiture when issue raised for first time on appeal)
- Dawahare v. Spencer, 210 F.3d 666 (6th Cir. 2000) (manifest-disregard requires a clearly defined principle and disregard by arbitrators)
- Jaros v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 70 F.3d 418 (6th Cir. 1995) (two-part test for manifest disregard: clear principle and refusal to heed)
- Green v. Ameritech Corp., 200 F.3d 967 (6th Cir. 2000) (absence of reasoned award hampers manifest-disregard review)
- Donelson v. Electric Data Sys. Corp., 473 F.3d 684 (6th Cir. 2007) (absence of explanation impedes manifest-disregard analysis)