Fed. Sec. L. Rep. P 95,610 Joe Goldberg v. Bear, Stearns & Co., Inc., and Michael S. Gorinsky
912 F.2d 1418
11th Cir.
1990
Check Treatment

*1 being Miami where it was modified to bet- transport drugs. Thus, ter we hold that sufficient evidence demonstrates Frink's

knowledge of the essential elements of the

conspiracy supports Frink's conviction conspiracy. for

Because we affirm Frink's convic conspiracy,

tion of the evidence is suffi "[T]he cient as to the two other counts. substantive crimes committed a member conspiracy of a co-conspirators are attributable to other reasonably if the crimes are necessary

foreseeable as a or natural con sequence agreement." of the unlawful Gualdado, United States v. (11th Cir.1986), denied, 1535 1101, cert.

Possession of cocaine with the intent to

distribute it and violation of the Travel Act clearly foreseeable crimes that other conspirators would commit.

CONCLUSION

Callier and Frink's convictions are af-

firmed.

AFFIRMED. GOLDBERG, Plaintiff-Appellee,

Joe

BEAR, CO., INC., STEARNS & and Mi Gorinsky, chael S. Defendants-Appellants.

No. 89-8573. Appeals,

United States Court of Eleventh Circuit. Sawicki, Sept. 26, Paul W. Stivers and Theodore J. Rogers Hardin, Atlanta, Ga., for defen- dants-appellants. Jay Sawilowsky, Augusta, Ga., M. plaintiff-appellee. *2 ANDERSON, Before Judge, Goldberg provided that all controversies *, MORGAN and RONEY Senior Circuit parties, between the federal, state and Judges. should be arbitrated. He concluded that unless the agreement to arbitrate federal PER CURIAM: invalid, claims was required Defendants Bear Stearns & Co. Mi- and arbitration. .The court, however, chael Gorinsky appeal S. the district court’s rejected the recommendation of magis- denial compel of to motion arbitration trate and held that the final sentence of the of the plaintiffs federal claims. agreement specifically excluded all federal ground We affirm the that the contract claims from the reach of the compulsory between parties preserves the custom- arbitration clause. The predi- district court pursue er’s to such claims in federal cated its decision on the explicit language court. Agreement: Customer This case turns on the of Agreement “this to specifi arbitrate ... in the Customer cally prohibit does not you pursu Agreement plaintiff, which the Joe ing any claim or arising under the Goldberg, signed in December when federal securities any laws in court of opened he an investment account with Bear competent jurisdiction.” (emphasis add Stearns. The form set out the ed). A federal court may compel by method which would settle anof issue if the terms aof disputes. pertinent part, it read: private agreement require Any controversy arising out orof relat- arbitrate that issue. See Volt Informa account in connection with Sciences, tion Inc. v. Board Trustees of pursuant transactions between us or the Leland Univ., Junior of Stanford Agreement or the breach thereof 468,] [489 1254 [103 shall settled You arbitration.... Although mag 488] Agreement understand that this to arbi- analysis istrate’s of the arbitrability of trate does not constitute a of waiver securities law unassailable, issues is your right judicial to a forum where such plaintiff nevertheless is required would be waiver void under the securities arbitrate his securities law claims be specifically does not cause the arbitration clause the par any from pursuing claim or claims 7, 1985, ties’ agreement specif December under arising the federal securities laws ically permits plaintiff judicial to select a competent of jurisdiction. forum for his securities law claims. In August Goldberg brought an The court denied the defendants’ motion action against Bear alleging Stearns viola- compel plaintiff’s arbitration as to the tions Exchange Securities Act of federal securities claims. various Only claims. state proper forum for Agreements the federal securities to arbitrate are essen here, is issue having tially Goldberg creatures of Although contract. agreed that his state claims should sub- there is a in favor of arbitra mitted to arbitration. The tion, see H. Moses Cone Hospi whether the last sentence of the Customer tal Mercury Constr. 460 U.S. Agreement quoted all above removed fed- 24-25, S.Ct. 74 L.Ed.2d eral claims from the ambit the otherwise (1983), required will not be binding arbitration agreement, whether or to arbitrate when not an to arbitrate federal do so. Sciences, See Volt Information claims would be valid. Inc. v. Board Trustees Leland Stan Magistrate States 468, -, United University, to whom Jr. 489 U.S. ford assigned the case was determined that the S.Ct. 103 L.Ed.2d agreement between Bear Stearns and courts not to twist the * 2(b), See Rule Appeals Rules of the U.S. Court of Eleventh Circuit. 34— McMahon, Express, Inc. son/American the contract to achieve result

language of 220, 107 policy con- by federal but is favored parties. The Rodriguez Quijas de Shear trary (1987), to the intent *3 (FAA) re- Inc., “simply 477, Arbitration Act Express Federal son/American 490 U.S. negotiat- privately to enforce quires courts 1917, (1989). De 109 S.Ct. 104 L.Ed.2d 526 arbitrate, agreements to like other con- ed in that last sentence fendants contend the with their terms.” Id. tracts, in accordance agreement solely com the was inserted -, 1255, 109 103 at S.Ct. at 489 U.S. pre-McMahon Ex ply with a Securities and at 500. change regulation which re Commission notify that the quired brokers to clients case, correctly the district court this agreements they signing were agreement that the discerned right bring their would not waive unmistakably states that federal court. See in securities claims C.F.R. scope not included within the claims are Regardless of the reason 240.15c2-2. § agreement. All the state claims based however, language, for the inclusion of the securities law or the contract either state by they agreed the are bound what itself, not relat- and all other federal claims do, by they have subject not what ing to securities laws are the arbitration, agreement specifically had different at the but the to do if the law been pursu- not the customer from time.1 under the arising claim or claims phrase suggest that the defendants securities laws in court. sentence, beginning used at the of the last ...,” clearly indi- “You understand that argue last The defendants that the cates that the which follows provi a is notice sentence only pro- serves a “notice function” rights confers only sion no right. Assuming that vides no substantive They point that the plaintiff. to the out provision, the last sentence is a “notice” signed period during was ask, might appropriately one notice existing Supreme authority Court when plausible what? The answer is that pre-dispute agreements to arbi held that de- language the notified customers that federal securities claims were invalid. trate spite seemingly language used the absolute Swan, Wilko v. 346 U.S. See S.Ct. agreement, they earlier in the were (1953). 182, 188, 98 L.Ed. 168 Since that required to arbitrate federal securi- time, however, re Supreme the has Court ties claims. The customer needs no sub- position that its and held such versed right litigate the in stantive in contract to agreements are not waivers of a substan right, that unless has court. He has he right granted under the securities laws tive away. it void. See Shear- are not contracted The last sentence of and thus Sons, Inc., F.Supp. majority opinion of circuit court is in dow v. A.G. Edwards & Walker, Ballay Legg (W.D.Ark. 1989) (“no accord. See v. Mason Wood the matter reason ("A Inc., (3rd Cir.1989) cus inclusion, 878 F.2d the for the sentence’s are now reading exclusionary language tomer the could it”); Blinder, by v. bound Amodio Robinson regulatory expected not background aware the (D.Conn.1989) (“[tjhough the to understand that may have included defendant the exclusion may meaningless become with the winds of response regulation it to the ... cannot unilater law.”); change Gooding Leh Shearson ally impose its for the rationale content of Inc., (9th Cir. man Brothers F.2d agreement”); Leonard v. Stuart-James 1989) ("The undisclosed intentions (N.D.Ga.1990) ("[CJases that look immaterial_ are ... The outward manifesta history regulatory persuasive, are controlling.”) expression tion or of assent is specific language ignore the (citations omitted); Coffey Reyn Witter Dean issue, step determining if which is the first olds, Cir.1989) Inc., (10th ("We compelled”). arbitration should be But see Bird reasoning persuaded of those more Inc., Express v. Shearson Lehman/American courts which have treated effect of Rule (2d Cir.), granted F.2d 295 n. 5 cert. requirements, 15c2-2's and of the rule's re vacated, -, judgment - U.S. scission, private rather than contractual public regulatory perspective.”); see also Ka- therefore, agreement, informs the cus- federal claims would now be un arbitrable that he has not tomer forfeited Supreme der the interpre Court’s current by signing agreement. Although tation of the securities laws. Given the may changed law since the arbitration, in favor of there signed, understanding par- was strong temptation is a to rewrite the con ties has not. tract to achieve that result. See Moses H. Cone Hospital Mercury Several courts compel have refused to 1, 24-25, Constr. arbitration, despite presence of similar 74 L.Ed.2d In language, “notice” provi- when the contract deed, interpreting precise language, clearly sions which follow state that feder- *4 several courts have succumbed to this al securities claims in are not included the temptation. requirement Curry, See Caleel v. No. 87-C-8155 to arbitrate. See Giles v. (N. 2, 1990) Blunt, Loewi, Inc., May (1990 Ellis & 845 F.2d W.L. D.Ill. 71033); (7th Cir.1988)(“I Co., 132 understand ... this Scher Bear Stearns & 723 agreement pur- F.Supp. (S.D.N.Y.1989); ... does not me from 211 bar Karol v. Bear suing solely alleged Co., such claims (N.D.Ill. based Stearns & 1989); violations of the federal securities Co., Reed v. Bear Stearns & laws....”) added); (emphasis Ballay, 878 F.Supp. (D.Kan.1988); Liss, Ryan v. F.2d at 731 n. 1 am aware that this {“I Goldberg Tenner & Securities provision binding is not on me (D.N.J.1988); F.Supp. 480 Wolverine Car any dispute in ... under the federal securi- Employees bide Die Co. Sharing Profit laws”) added). (emphasis ties Co., Trust v. Bear Stearns & No. 88-70384 (E.D.Mich. 5, 1988). May As we have stat The defendants contend that a read ed, however, the does not re ing which excludes federal claims from the quire they to arbitrate when scope agreement of the arbitration have not to do so. See Volt meaningless render the first sentence of Infor Sciences, mation Inc. v. Board Trustees “Any which states that con of University, Leland Jr. troversy arising out of ... account Stanford 468, -, arbitration_” 109 S.Ct. ... shall settled Yet it is not at all uncommon for contracts begin sweeping language to with broad recognize We that of the nine district qualified which is later or narrowed. interpret precise language, courts to this general propositions When in a contract are compelled the six listed above have arbitra qualified by specific provisions, the rule tion, three, including while the court specific provi- of construction is that the below, pre have found that the clause See, in the e.g., sions control. cludes of federal Kelly claims. John Hancock Mutual Insurance Co. Life Co., v. Robert Ainbinder No. & 87-Civ- Co., Power Light Carolina 717 F.2d (S.D.N.Y. 8, 1990) (1990 March W.L. (2d Cir.1983); n. 669-70 8 Waldman 26809); Bear, Goldberg v. Stearns & Dimensions, Inc., New Phone A.D.2d (S.D.Ga. 21, 1989); No. CV188-169 June 487 N.Y.S.2d Corp. v. Creative Securities Bear Stearns essence, (S.D.N.Y.1987), the defendants would & append clarifying phrase (2d Cir.1988). aff'd, have us a to the We are sentence, end of the last that it so would satisfied that our accords read, specifically plain “... and does agreement’s language with the pursuing any from claim or claims the intent of the at the time the arising under the federal language securities laws contract was executed. The competent jurisdiction existing court of where more than inform customers of the law, prohibition incorporated such would be void and unen state of the it the exist agreement. If under the securities laws." The law into the arbitration forceable presumably provide defendants could have written the defendants had wished to for a law, way plaintiffs certainly change they the contract so that in the federal the feder- arising under or any claim claims al- drafted could competent any court al securities the law change as to contract lowed itself reduces That that, jurisdiction.” defen- do Having failed changed. part of quoted to whether by the abide must dants gives it whether provision, notice mere signed. litigate contractual piece may result this Although regardless of the state resolution meal claims. related arbitrability other case, concerns involved issues must compel arbitration asked A not sufficient are economy alone judicial whether first determine binding agree with justify interference dispute. agreed to arbitrate Mo Mitsubishi parties. See ment of de absent from is not policy Federal Chrysler-Plymouth, Corp. v. Soler tors con any other with termination. “[A]s Inc., 473 U.S. control, but intentions tract, parties’ who (1985) (parties 3354, 87 L.Ed.2d construed generously are intentions prevented those agree arbitrate arbitrability.” Mitsubishi scope to issues from the excluding specified *5 Chrysler-Plym v. Soler Corp. free to Motors Individuals agreement). of the Inc., outh, forums U.S. to different subject different Any L.Ed.2d the district Accordingly for resolution. mo the arbitration the defendants’ denying ambiguities court’s order arbitration. favor be resolved compel is should tion Hospital v. Mer H. Cone Moses AFFIRMED. 1, 24- Corp., 460 cury Construction 941-942, Judge, MORGAN, Senior dissenting: inter possible choosing between When majori- with the disagree respectfully I term, the entire ambiguous anof pretations agree- customer that conclusion ty’s the inter and considered should be contract appellee permits case in this issue ment at with accords which best selected pretation securi- of his forego arbitration which, if of the notes, remainder majority theAs law claims. ties con part of the every make will possible, among the authority split in is there Rockwell Inter v. Broad effective. tract the lan- have considered that courts (5th 929, 947 F.2d Corp., cus- national 13 of the paragraph guage involved Construing the arbi banc). Cir.1981) (en cases find I those bar. at tomer whole, with agree I as a clause tration provides hold that last that the have found that courts those claims, state whether all for arbitration with beginning sentence e.g., See reasoned. federal, to be better a mere notice is ...” understand Inc., “[y]ou & v. Bear Stearns Scher right to not a substantive provision and v. Bear Reed (S.D.N.Y.1989); F.Supp. 211 court. securities litigate federal F.Supp. 835 Inc., & Stearns 216. Scher, F.Supp. at e.g., Liss, See Tenner Ryan (D.Kan.1988); Goldberg Securities proper suggests, majority If, (D.N.J.1988). of the last sentence ap- arbitration of is that clause forth is set issue at paragraph op- law claims pellee’s page 1419. supra, at opinion, majority clause, which of the tional, part first concerns be resolved central claims, all the arbitration provides understand “[y]ou clause scope Scher, Accord, meaningless. not would does to arbitrate Agreement 841; at Reed, 216; judi- F.Supp. a waiver constitute con- I Because F.Supp. at 483. Ryan, such waiver forum where cial the contract that the clude specifi- the securities under void appellee a give intend pursuing cally does right to avoid the arbitration of his federal claims, securities law I would reverse the ASSOCIATES, INC., DURANGO

judgement of the district court. Corporation, DND

Plaintiffs-Appellants, REFLANGE, INC., and Climax Manufacturing Company, Defendants-Appellees. No. 90-1348. United States Appeals, Court of ROBINSON, al., Roscoe et Federal Circuit. Plaintiffs-Appellants, Decided July 1990. Unpublished Order July Issued 1990. INTERNATIONAL, INC., HARBERT et Published Order Aug. Issued al., Defendants-Appellees. No. 90-7026

Non-Argument Calendar.

United Appeals, States Court of

Eleventh Circuit.

Sept. 1990. Vowell, Birmingham, Ala.,

J. Scott for

plaintiffs-appellants. Graves, Stiff, III, Selden,

L. Thomas L. Atchison, Ala., Birmingham,

Starnes &

defendants-appellees. FAY,

Before HATCHETT

EDMONDSON, Judges.

PER CURIAM: judgment upon AFFIRMED based Opinion

the Memorandum entered on December

reported at 743