Renard v. Ameriprise Financial Services, Inc.
778 F.3d 563
7th Cir.2015Background
- Renard was an Ameriprise financial adviser under a Minnesota-governed franchise agreement that incorporated a FINRA arbitration clause governed by the Federal Arbitration Act (FAA).
- After Ameriprise terminated Renard for alleged violations (misuse of ETFs, unapproved communications, etc.), four promissory notes became immediately due, totaling roughly $530,000; Ameriprise sought repayment in FINRA arbitration.
- A three-arbitrator panel in Milwaukee awarded Ameriprise $448,200 and dismissed Renard’s counterclaims (including violations of the Wisconsin Fair Dealership Law (WFDL) and several tort claims); the panel issued no written opinion.
- Renard sued in Wisconsin state court to vacate the award; Ameriprise removed to federal court and moved to confirm. The district court confirmed the award and added post-judgment interest.
- On appeal Renard argued (1) the award was procured by fraud, and (2) the arbitrators manifestly disregarded the WFDL and Minnesota tort law; he also challenged the choice of FAA over Wisconsin arbitration law.
Issues
| Issue | Plaintiff's Argument (Renard) | Defendant's Argument (Ameriprise) | Held |
|---|---|---|---|
| Choice of law for reviewing arbitration | FAA should not displace Wisconsin Arbitration Act; applying FAA circumvents WFDL protections | Parties’ arbitration clause expressly selects FAA; FAA preempts inconsistent state rules | FAA governs review; district court correct to apply FAA |
| Manifest disregard of the WFDL | Panel ignored WFDL notice-and-cure requirements and thus exceeded powers | Panel considered WFDL but could reasonably find federal securities law preempts it or that Renard lacked damages | No manifest disregard; mere error or alternative reasonable interpretation insufficient to vacate |
| Manifest disregard of Minnesota tort law | Arbitrators wrongly rejected tort claims (interference, conversion) under Minnesota law | If termination was lawful (e.g., preemption), tort claims fail for lack of unjustified conduct | No manifest disregard; panel could reasonably conclude termination justified and torts lacked merit |
| Fraud in procuring the award | Ameriprise counsel’s closing arguments and case analogies were fraudulent and misrepresented law/evidence | Counsel’s remarks were argument and reasonable inferences from the record; analogies to precedent permissible; no clear, convincing, non-discoverable fraud | No fraud shown under 9 U.S.C. § 10(a)(1); closing arguments and legal analogies do not meet the high fraud standard |
Key Cases Cited
- Publicis Commc'n v. True N. Commc'ns, Inc., 206 F.3d 725 (7th Cir. 2000) (standard of appellate review of arbitral awards)
- Stolt-Nielsen S.A. v. AnimalFeeds Int'l Corp., 559 U.S. 662 (2010) (arbitral error, even serious, does not justify vacatur)
- AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011) (FAA preempts state rules that interfere with arbitration agreements)
- Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (1967) (FAA applies in federal diversity actions)
- Eljer Mfg., Inc. v. Kowin Dev. Corp., 14 F.3d 1250 (7th Cir. 1994) (manifest disregard arises when arbitrator deliberately disregards known law)
- Gingiss Int'l, Inc. v. Bormet, 58 F.3d 328 (7th Cir. 1995) (elements required to vacate an award for fraud)
- Moody v. Amoco Oil Co., 734 F.2d 1200 (7th Cir. 1984) (federal-law preemption arguments involving state dealer statutes)