688 F.3d 487
E.D. Mo.2012Background
- Wootten signed a Delaware-governed LOA with Fisher Investments that required arbitration before JAMS for disputes and reserved Delaware law governing substantive rights.
- Fisher assigned Weston as advisor; Weston was unlicensed, and Wootten concentrated his portfolio in equities amid mounting losses.
- Arbitration in 2008–2009 proceeded; in December 2009 the arbitrator dismissed Missouri statutory claims based on the LOA’s Delaware choice-of-law provision.
- In March 2010 the arbitrator denied Wootten’s motion to reconsider and sua sponte prohibited adding a federal securities claim under the Investment Advisers Act.
- In April 2010 Wootten filed a federal suit challenging the LOA’s enforceability and re-alleged dismissed claims; the district court stayed/arbitration; it later dismissed the federal and Missouri claims without prejudice pending arbitration.
- The Eighth Circuit held that the complete arbitration rule applies, requiring Wootten to complete arbitration before seeking judicial review, and affirmed the district court’s dismissal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the district court had jurisdiction | Wootten contends court can adjudicate while arbitration ongoing. | Complete arbitration rule divests court until arbitration completes. | No jurisdiction; complete arbitration rule applies. |
| Whether arbitrator’s Delaware-choice-of-law scope limits permit federal claims in court | Arbitrator limited scope to Delaware claims, allowing non-Delaware claims in court. | Arbitrator’s interim ruling governs; complete arbitration rule controls. | Arbitrator’s interim ruling is appealable only after completion of arbitration; district court正确ly required arbitration first. |
| Whether the LOA’s arbitrability/validity decision was appropriately delegated to arbitration | District court should decide enforceability of arbitration provision. | Rent-A-Center/Narrow delegation to arbitrator; arbitrator should decide enforceability first. | Arbitrator must decide enforceability; district court erred if it ruled on arbitrability. |
| Whether Fisher Investments waived its right to arbitrate | Fisher’s alleged dilatory actions tantamount to waiver. | Fisher continued participation in arbitration; no waiver. | No waiver; actions did not prejudice Wootten to the level of waiver. |
| Whether provisional-remedies clause affects arbitration enforceability | Clause allows court to assess enforceability in light of arbitrator’s orders. | Provisional remedies do not override language requiring arbitrator to decide enforceability. | District court did not err; provisional-remedy clause does not override arbitration clause. |
Key Cases Cited
- Rent-A-Center, West, Inc. v. Jackson, 130 S. Ct. 2772 (S. Ct. 2010) (arbitrability must be decided by arbitrator when parties agree; threshold issue may be delegated)
- Local 36, Sheet Metal Workers Int'l Ass'n. AFL-CIO v. Pevely Sheet Metal Co., 951 F.2d 947 (8th Cir. 1992) (complete arbitration rule factors for finality of award)
- Fallo v. High-Tech Inst., 559 F.3d 874 (8th Cir. 2009) (arbitrability left to arbitrator where clear intent to do so)
- Hooters of America, Inc. v. Phillips, 173 F.3d 933 (4th Cir. 1999) (waiver analysis limited; not persuasive)
- E.E.O.C. v. Woodmen of World Life Ins. Soc'y, 479 F.3d 561 (8th Cir. 2007) (federal statutory rights in arbitration; enforceability considerations)
- Green v. SuperShuttle Int'l., Inc., 653 F.3d 766 (8th Cir. 2011) (deference to arbitrability determinations in stay/compel contexts)
- Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (U.S. 1985) (public policy concerns on antitrust remedies in arbitration)
- Hudson v. ConAgra Poultry Co., 484 F.3d 496 (8th Cir. 2007) (court interpreting arbitration provisions de novo)