How later opinions annotate it (1 example)
- on other grounds
See Belke v. Merrill Lynch, Pierce, Fenner & Smith, 693 F.2d 1023, 1028 (11th Cir. 1982), abrogated on other grounds by Dean Witter Reynolds, Inc., 470 U.S. at 217 , 105 S.Ct. 1238 .
— William Jones v. Waffle House, Inc., 866 F.3d 1257 (11th Cir. 2017)
A party does not waive the right to arbitrate by failing to move at the outset if the claims were inextricably intertwined and a motion would have been futile.
A brokerage firm sued for securities violations and common law mismanagement failed to move for arbitration until after federal claims were dismissed. The district court held the firm waived its right to arbitrate by not filing a motion at the outset, despite counsel's belief that the claims were inextricably intertwined and a motion would be futile. The appellate court addresses whether a party waives arbitration rights by delaying a motion until claims become severable. Applying the federal preference for arbitration, the court rules that a district court must first determine if an earlier motion would have been futile due to non-severability before finding waiver. Because the claims shared a common nucleus of facts regarding scienter, the court finds the initial motion would have been futile and the later motion timely, reversing the lower court's denial of arbitration.
At page 1025 Waiver of arbitration right requires heavy burden of proof56 citing cases“any party arguing waiver of arbitration bears a heavy burden of proof.”
- Lamonaco v. Experian Info. Solutions, Inc., No. 6:23-cv-01326 (M.D. Fla. Apr. 19, 2024).“because federal law favors arbitration”
- Kevin Johnson v. Walmart, Inc., No. 1:20-cv-01360 (E.D. Cal. July 30, 2021).Becker Paribas Inc., 791 F.2d 691, 694 (9th Cir. 1986) (quoting Belke v. Merrill Lynch, 7 Pierce, Fenner & Smith, 693 F.2d 1023, 1025 (11th Cir. 1982)). 8 DISCUSSION 9 Defendant argues that the court must compel arbitration of plaintiff’s…
- Pitman v. Macy's West Stores, Inc., No. 1:20-cv-01259 (E.D. Cal. July 1, 2021).Id. (citing Belke v. Merrill Lynch, Pierce, Fenner & Smith, 693 F.2d 1023, 1025 (11th Cir. 18 1982)).
- Jackson v. Aliera Companies Inc, No. 2:19-cv-01281 (W.D. Wash. Oct. 6, 2020).To 16 this end, the “party arguing waiver of arbitration bears a heavy burden of proof.” Fisher, 791 17 F.2d at 964 (quoting Belke v. Merrill Lynch, Pierce, Fenner & Smith, 693 F.2d 1023, 1025 (11th 18 Cir. 1982). 19 A party seeking to pro…
- Roybal v. Cmty. Options, Inc., No. 1:18-cv-00055 (D.N.M. Feb. 21, 2020).“A party asserting a waiver of arbitration has a heavy burden of proof.” Peterson v. Shearson/American Express, Inc., 849 F.2d. at 466 (quoting Belke v. Merrill Lynch, Pierce, Fenner & Smith, 693 F.2d 1023, 1025 [11th Cir. 1982]). “[A]ny d…
- Salvador Calzadillas v. Wonderful Co., No. 1:19-cv-00172, 2019 WL 5448308 (E.D. Cal. Oct. 24, 2019).Becker Paribas Inc., 791 F.2d 691, 694 (9th Cir. 1986) (quoting Belke v. Merrill Lynch, 7 Pierce, Fenner & Smith, 693 F.2d 1023, 1025 (11th Cir. 1982)).
- Arredondo v. Sw. & Pac. Specialty Fin., Inc., No. 1:18-cv-01737, 2019 WL 4596776 (E.D. Cal. Sept. 23, 2019).Becker Paribas Inc., 791 F.2d 691, 694 (9th Cir. 1986) (quoting Belke v. Merrill Lynch, 27 Pierce, Fenner & Smith, 693 F.2d 1023, 1025 (11th Cir. 1982)); see also Martin v. Yasuda, 829 28 F.3d 1118, 1124 (9th Cir. 2016). 1 In contrast, an…
- Price v. Comcast Cable Commc'ns Mgmt., LLC, No. 1:18-cv-00978 (D.N.M. Aug. 22, 2019).“A party asserting a waiver of arbitration has a heavy burden of proof.” Peterson, 849 F.2d at 466 (quoting Belke v. Merrill Lynch, Pierce, Fenner & Smith, 693 F.2d 1023, 1025 (11th Cir. 1982)).
- Paige Martin v. Gary Yasuda, 829 F.3d 1118 (9th Cir. 2016).publishedBecause waiver of the right to arbitration is disfavored, “any party arguing waiver of arbitration bears a heavy burden of proof.” Id. (quoting Belke v. Merrill Lynch, Pierce, Fenner & Smith, 693 F.2d 1023, 1025 (11th Cir. 1982)).
- Ortiz v. Hobby Lobby Stores, Inc., 52 F. Supp. 3d 1070 (E.D. Cal. 2014).publishedBecker Paribas Inc., 791 F.2d 691, 694 (9th Cir.1986) (quoting Belke v. Merrill Lynch, Pierce, Fenner & Smith, 693 F.2d 1023, 1025 (11th Cir.1982)).
Show 42 more citing cases
- Repwest Ins. v. Praetorian Ins., 890 F. Supp. 2d 1168 (D. Ariz. 2012).publishedHowever, we have emphasized that “waiver of the right to arbitration is disfavored because it is a contractual right, and thus ‘any party arguing waiver of arbitration bears a heavy burden of proof.’ ” Id. at 758 (quoting Belke v. Merrill…
- Krinsk v. SunTrust Banks, Inc., 654 F.3d 1194 (11th Cir. 2011).published Hutton & Co., 898 F.2d 1542, 1543 (11th Cir. 1990) (per curiam) (quoting Belke v. Merrill Lynch, Pierce, Fenner & Smith, 693 F.2d 1023, 1025 (11th Cir. 1982), overruled on other grounds by Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213 ,…
- CitiBank, N.A. v. Stok & Assocs., P.A., 387 F. App'x 921 (11th Cir. 2010).unpublishedHutton & Co., 898 F.2d 1542, 1543 (11th Cir.1990) (quoting Belke v. Merrill Lynch, Pierce, Fenner & Smith, 693 F.2d 1023, 1025 (11th Cir.1982), overruled on other grounds by Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213 , 105 S.Ct. 1238…
- United States v. Park Place Ass'n, No. 05-56235 (9th Cir. Apr. 22, 2009).publishedHowever, we have emphasized that “waiver of the right to arbitration is dis- favored because it is a contractual right, and thus ‘any party arguing waiver of arbitration bears a heavy burden of proof.’ ” Id. at 758 (quoting Belke v. Merril…
- United States v. Park Place Assocs., Ltd., 563 F.3d 907 (9th Cir. 2009).publishedHowever, we have emphasized that “waiver of the right to arbitration is disfavored because it is a contractual right, and thus ‘any party arguing waiver of arbitration bears a heavy burden of proof.’ ” Id. at 758 (quoting Belke v. Merrill…
- Home Quality Mgmt., Inc. v. Ace Am. Ins., 381 F. Supp. 2d 1363 (S.D. Fla. 2005).published“Because federal law favors arbitration, any party arguing waiver of arbitration bears a heavy burden of proof”
- Homestake Lead Co. of Missouri v. Doe Run Resources Corp., 282 F. Supp. 2d 1131 (N.D. Cal. 2003).publishedBelke v. Merrill Lynch, Pierce, Fenner & Smith, 693 F.2d 1023, 1025 (11th Cir.1982).
- Arriaga v. Cross Country Bank, 163 F. Supp. 2d 1189 (S.D. Cal. 2001).publishedHowever, “any party arguing waiver of arbitration bears a heavy burden of proof.” Van Ness Townhouses v. Mar Industries Corp., 862 F.2d 754, 758 (9th Cir.1988) (quoting Belke v. Merrill Lynch, Pierce, Fenner & Smith, 693 F.2d 1023, 1025 (1…
- Kenworth of Dothan, Inc. v. Bruner-Wells Trucking, Inc., 745 So. 2d 271 (Ala. 1999).published The arbitration agreement in Belke covered not only disputes arising out of the agreement, but also, in the disjunctive, "any controversy between [the parties] arising out of [their] business." 693 F.2d at 1025, n. 4 .
- Steele v. Lundgren, 935 P.2d 671 (Wash. Ct. App. 1997).publishedBecker Paribas, Inc., 791 F.2d 691, 694 (9th Cir. 1986) (quoting Belke v. Merrill Lynch, Pierce, Fenner & Smith, 693 F.2d 1023, 1025 (11th Cir. 1982)); accord Price v. Drexel Burnham Lambert, Inc., 791 F.2d 1156, 1158 (5th Cir. 1986).
- Miami Dolphins, Ltd. v. Cowan, 601 So. 2d 301 (Fla. 3d DCA 1992).publishedCorp., 460 U.S. 1, 24-25 , 103 S.Ct. 927, 941 , 74 L.Ed.2d 765 (1983); Belke v. Merrill Lynch, Pierce, Fenner & Smith, 693 F.2d 1023, 1025 (11th Cir.1982); Labor Management Relations Act § 203(d), 29 U.S.C. § 173 (d).
- Southside Internists Grp. PC Money Purchase Pension Plan v. Janus Capital Corp., 741 F. Supp. 1536 (N.D. Ala. 1990).publishedBelke v. Merrill Lynch, Pierce, Fenner & Smith, 693 F.2d 1023, 1025 (11th Cir.1982).
- Bernice Barbour Raiford, Morgan B. Raiford v. Buslease Inc., Merrill Lynch, Pierce, Fenner & Smith, Inc., & Thomas F. Morris, Morgan B. Raiford v. Merrill Lynch, Pierce, Fenner & Smith, Inc., Bernice B. Raiford v. Merrill Lynch, Pierce, Fenner & Smith, Inc., Thomas F. Morris, Defendants, 745 F.2d 1419 (11th Cir. 1984).published
- Nancy E. Dimenstien, Plaintiffs-Counter v. Arnold D. Whiteman, Bear, Stearns & Co., Defendant-Counter Rhoda A. Abrams, Plaintiff-Counter v. Arnold B. Whiteman, Bear, Stearns & Co., a Georgia Corp., Defendant-Counter Plaintiff- Jane L. Kaufman, Plaintiff-Counter v. Arnold B. Whiteman, Bear, Stearns & Co., a Georgia Corp., Defendant-Counter Plaintiff, 759 F.2d 1514 (11th Cir. 1985).published
- Fisher v. A.G. Becker Paribas Inc., 791 F.2d 691 (9th Cir. 1986).published
- Harry R. Conover v. Dean Witter Reynolds, Inc., 794 F.2d 520 (9th Cir. 1986).published
- Louis L. Phillips & L.L. Phillips Charities, Inc. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., & Ben M. Sirianni, 795 F.2d 1393 (8th Cir. 1986).published
- Frederick J. Wolfe, & Heather B. Wolfe, His Wife v. E.F. Hutton & Co., Inc., & Peter Panos,defendants-Appellants. Joseph Gorman v. Merrill Lynch, Pierce Fenner & Smith, Inc., a Foreign Corp., Defendant- Micah Hollander, Michael Strauss, 800 F.2d 1032 (11th Cir. 1986).published
- Cancanon v. Smith Barney, Harris, Upham & Co., 805 F.2d 998 (11th Cir. 1986).published
- Benoay v. Prudential-Bache Sec., Inc., 805 F.2d 1437 (11th Cir. 1986).published
- Richard D. Driscoll v. Smith Barney, Harris, Upham & Co., Richard Shalla, Edward J. Adrian, Ruth C. Adrian v. Smith Barney, Harris, Upham & Co., Inc., a Delaware Corp., Morton L. Annis, Jr., Albert Roberts, III, 815 F.2d 655 (11th Cir. 1987).published
- Norman E. Peterson v. Shearson/Am. Express, Inc., 849 F.2d 464 (10th Cir. 1988).published
- Van Ness Townhouses v. Mar Indus. Corp. Shearson Lehman Bros., 862 F.2d 754 (9th Cir. 1989).published
- Federated Dep't Stores, Inc. v. J.V.B. Indus., Inc., 894 F.2d 862 (6th Cir. 1990).published
- Cyril Stone v. E.F. Hutton & Co., 898 F.2d 1542 (11th Cir. 1990).published
- Victor v. Dean Witter Reynolds, Inc., 606 So. 2d 681 (Fla. 5th DCA 1992).published
- D.M. Ward Constr. Co v. Elec. Corp. of Kan. City, 803 P.2d 593 (Kan. Ct. App. 1990).published
- Kinsey v. Bradley, 765 P.2d 1329 (Wash. Ct. App. 1989).published
- Brown v. EF Hutton & Co., 610 F. Supp. 76 (S.D. Fla. 1985).published
- Preston v. Kruezer, 641 F. Supp. 1163 (N.D. Ill. 1986).published
- Rojas Cancanon v. Smith Barney, Harris Upham & Co., 612 F. Supp. 996 (S.D. Fla. 1985).published
- Redshaw Credit Corp. v. Ins. Professionals, Inc., 709 F. Supp. 1032 (D. Kan. 1989).published
- Arent v. Shearson/Am. Express, Inc., 633 F. Supp. 770 (D. Mass. 1985).published
- Brown v. Dean Witter Reynolds, Inc., 601 F. Supp. 641 (S.D. Fla. 1985).published
- Ilan v. Shearson/Am. Express, Inc., 632 F. Supp. 886 (S.D.N.Y. 1985).published
- Ross v. Mathis, 624 F. Supp. 110 (N.D. Ga. 1985).published
- Prescott Architects, Inc. v. Lexington Ins., 638 F. Supp. 2d 1317 (N.D. Fla. 2009).published
- Lane v. E.F. Hutton & Co., 515 So. 2d 693 (Ala. 1987).published
- Raiford v. Buslease Inc., 745 F.2d 1419 (11th Cir. 1984).published
- Dimenstien v. Whiteman, 759 F.2d 1514 (11th Cir. 1985).published
- Wolfe v. E. F. Hutton & Co., 800 F.2d 1032 (11th Cir. 1986).published
- Driscoll v. Smith Barney, Harris, Upham & Co., 815 F.2d 655 (11th Cir. 1987).published
At page 1028 Arbitration clauses covering business disputes are broad28 citing cases“any controversy between us arising out of your business”
- La Frontera Ctr., Inc. v. United Behavioral Health, Inc., 268 F. Supp. 3d 1167 (D.N.M. 2017).published(An arbitration clause covering disputes arising out of the contract or business between the parties evinces a clear intent to cover more than just those matters set forth in the contract.)
- Cruz v. Jimenez Constr. LLC, No. 2020-1978 (D.D.C. Apr. 21, 2023).publishedSee also Zink v. Merrill Lynch Pierce Fenner & Smith, 13 F.3d 330, 332 (10th Cir. 1993)(arbitration clause stating “any controversy between [the parties] arising out of [plaintiff's] business or this agreement” was “clearly broad enough to…
- Southland Health Servs., Inc. v. Bank of Vernon, 887 F. Supp. 2d 1158 (N.D. Ala. 2012).publishedWe have enforced such a clause before because it “evince[d] a clear intent to cover more than just those matters set forth in the contract.” Board of Trustees of City of Delray Beach Police and Firefighters Retirement System v. Citigroup G…
- Nanosolutions, LLC v. Prajza, No. 2010-1741 (D.D.C. June 22, 2011).publishedSee also Zink v. Merrill Lynch Pierce Fenner & Smith, 13 F.3d 330, 332 (10th Cir. 1993) (arbitration clause stating “any controversy between [the parties] arising out of [plaintiff’s] business or this agreement” was “clearly broad enough t…
- Nanosolutions, LLC v. Prajza, 793 F. Supp. 2d 46 (D.D.C. 2011).publishedSee also Zink v. Merrill Lynch Pierce Fenner & Smith, 13 F.3d 330, 332 (10th Cir.1993) (arbitration clause stating “any controversy between [the parties] arising out of [plaintiffs] business or this agreement” was “clearly broad enough to…
- Bd. of Trs. of the City of Delray Beach Police & Firefighters Ret. Sys. v. Citigroup Global Markets Inc., 622 F.3d 1335 (11th Cir. 2010).published “evince[d] a clear intent to cover more than just those matters set forth in the contract”
- Betkowski v. Kelley Foods of Alabama, Inc., 697 F. Supp. 2d 1296 (M.D. Ala. 2010).published(overturned on other grounds by Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213 , 105 S.Ct. 1238 , 84 L.Ed.2d 158 (1985))
- Kansas City Urology, P.A. v. United Healthcare Servs., 261 S.W.3d 7 (Mo. Ct. App. 2008).publishedSee Zink v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 13 F.3d 330, 332 (10th Cir.1993) (clause saying “‘any controversy between [the parties] arising out of [plaintiffs] business’ ” was clearly broad enough to cover more than just dispu…
- Rust v. Carriage Servs. of Ok, Inc., 2007 OK CIV APP 125, 173 P.3d 805.published “(a)n arbitration clause covering disputes arising out of the contract or business between the parties evinces a clear intent to cover more than just those matters set forth in the contract”
- Watson Wyatt Corp. v. SBC Holdings, Inc., 438 F. Supp. 2d 746 (E.D. Mich. 2006).publishedThe Tenth Circuit opinion cited the decision of Belke v. Merrill Lynch, Pierce, Fenner & Smith, 693 F.2d 1023, 1028 (11th Cir.1982), which the Supreme Court overruled in part on other grounds, for support as to its conclusions on temporali…
Show 17 more citing cases
- Tucker v. Fireman's Fund Agribusiness, Inc., 365 F. Supp. 2d 821 (S.D. Tex. 2005).publishedSee Paine-Webber, 921 F.2d at 512-513 ; Durham County v. Richards & Assocs., Inc., 742 F.2d 811, 815 (4th Cir.1984); Belke v. Merrill Lynch, Pierce, Fenner, & Smith, 693 F.2d 1023, 1028 (11th Cir.1982); O’Neel v. Nat’l Ass'n of Sec.
- Leonard J. Klay v. All, 389 F.3d 1191 (11th Cir. 2004).publishedSpecifically, HMOs argue that our decision in Belke v. Merrill Lynch, Pierce, Fenner & Smith, 693 F.2d 1023, 1028 (11th Cir.1982) compels us to order arbitration even for claims which arose either before or after the execution of arbitrati…
- Rogers v. Comcast Corp., 341 F. Supp. 2d 42 (D. Mass. 2004).published “arising out of your business”
- Orkin Exterminating Co. v. Larkin, 857 So. 2d 97 (Ala. 2003).published(finding that the appellee's claims, which occurred before the arbitration agreement was executed, were arbitrable because "[b]y its own terms the contract between the parties covers not only disputes arising out of the…)
- Beneficial Nat'l Bank, U.S.A. v. Payton, 214 F. Supp. 2d 679 (S.D. Miss. 2001).published In Belke v. Merrill Lynch, Pierce, Fenner & Smith, 693 F.2d 1023, 1028 (11th Cir.1982), overruled on other grounds by Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213 , 105 S.Ct. 1238 , 84 L.Ed.2d 158 (1985), the parties’ arbitration agree…
- Kenworth of Dothan, Inc. v. Bruner-Wells Trucking, Inc., 745 So. 2d 271 (Ala. 1999).published The arbitration agreement in Belke covered not only disputes arising out of the agreement, but also, in the disjunctive, "any controversy between [the parties] arising out of [their] business." 693 F.2d at 1025, n. 4 .
- Coddington Enter., Inc. v. Werries, 54 F. Supp. 2d 935 (W.D. Mo. 1999).publishedBelke v. Merrill Lynch, Pierce, Fenner & Smith, 693 F.2d 1023, 1028 (11th Cir.1982).
- Indep. Ass'n of Cont'l Pilots v. Cont'l Airlines, 155 F.3d 685 (3d Cir. 1998).publishedId. at 1028.
- 99 Com. Street, Inc. v. Goldberg, 811 F. Supp. 900 (S.D.N.Y. 1993).publishedSee, e.g., Coffey v. Dean Witter Reynolds, Inc., 891 F.2d 261, 262-63 (10th Cir.1989); Belke v. Merrill Lynch, Pierce, Fenner & Smith, 693 F.2d 1023, 1028 (11th Cir.1982).
- Realco Enter., Inc. v. Merrill Lynch, Pierce, Fenner & Smith Inc., 738 F. Supp. 515 (S.D. Ga. 1990).publishedId. at 1028 (emphasis in original).
- Cnty. of Durham v. Richards & Assocs., Inc., 742 F.2d 811 (4th Cir. 1984).published
- Robert L. Zink v. Merrill Lynch Pierce Fenner & Smith, Inc., 13 F.3d 330 (10th Cir. 1993).published
- Martha Kristian & James D. Masterman v. Comcast Corp. Comcast Mo Grp., Inc. Comcast Cable Holdings, LLC Comcast Cable Commc'ns Holdings, Inc. Comcast Cable Commc'ns, Inc. & Comcast Holdings Corp., at & T Broadband, Jack Rogers & Paul Pinella v. Comcast Corp. & at & T Broadband, 446 F.3d 25 (1st Cir. 2006).published
- Rodriguez Font v. Paine Webber Inc., 649 F. Supp. 462 (D.P.R. 1986).published
- Church v. Gruntal & Co., 698 F. Supp. 465 (S.D.N.Y. 1988).published
- William Jones v. Waffle House, Inc., 866 F.3d 1257 (11th Cir. 2017).published
- Kristian v. Comcast Corp., 446 F.3d 25 (1st Cir. 2006).published
At page 1026 Adoption of the intertwined claims doctrine in arbitration14 citing casesclaims, however, are not arbitrable. Wilko v. Swan, 346 U.S. 427, 74 S.Ct. 182, 98 L.Ed. 168 (1953); Sawyer v. Raymond James & Associates, Inc., 642 F.2d 791,…
- Scroggins v. Andalusia Reg'l Hosp., No. 2:16-cv-00338 (M.D. Ala. Mar. 5, 2021).“The law does not require the futile gesture of asking for arbitration before a claim becomes arbitrable; any delay in seeking arbitration should be measured from the time the claim becomes arbitrable.” Partin, 727 So. 2d at 7 (citing Belk…
- Melanie Garcia v. Wachovia Corp., 699 F.3d 1273 (11th Cir. 2012).published When those lawsuits were filed, “the law of this circuit prohibited arbitration of otherwise arbitrable state claims when arbitrable and nonarbitrable claims were ‘inextricably intertwined.’ ” Benoay, 805 F.2d at 1440 (quoting Belke v. Mer…
- Hallmark Indus., L.L.C. v. First Systech Int'l, Inc., 52 P.3d 812 (Ariz. Ct. App. 2002).publishedSee 9 U.S.C. §§ 2 , 3. ¶7 Following Wilko , in cases involving both non-arbitrable federal securities claims and related, arbitrable state law claims, the Fifth, Ninth, and Eleventh Circuit Courts of Appeals adopted the intertwining doctri…
- Georgia Power Co. v. Partin, 727 So. 2d 2 (Ala. 1998).publishedBelke v. Merrill Lynch, Pierce, Fenner & Smith, 693 F.2d 1023, 1026 (11th Cir.1982), overruled on other grounds, Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213 , 105 S.Ct. 1238 , 84 L.Ed.2d 158 (1985).
- Fisher v. A.G. Becker Paribas Inc., 791 F.2d 691 (9th Cir. 1986).published
- Brown v. Dean Witter Reynolds, Inc., 601 F. Supp. 641 (S.D. Fla. 1985).published
- Lane v. E.F. Hutton & Co., 515 So. 2d 693 (Ala. 1987).published
- Wayne E. Pierson v. Dean, Witter, Reynolds, Inc., 742 F.2d 334 (7th Cir. 1984).published
- William F. Shihadeh v. Dean Witter Reynolds, Inc., 766 F.2d 461 (11th Cir. 1985).published
- Sabates v. Int'l Med. Centers, Inc., 450 So. 2d 514 (Fla. 3d DCA 1984).published
Show 2 more citing cases
- Hammerman v. Peacock, 607 F. Supp. 911 (D.D.C. 1985).published
- Groeneveld Co. v. M.V. Nopal Explorer, 587 F. Supp. 136 (S.D.N.Y. 1984).published
At page 1027 Futility of early arbitration motions due to intertwined claims11 citing casesa motion to compel arbitration of common law claims at the outset of the litigation, prior to dismissal of the federal claims, would have been futile due to the intertwining doctrine
- Roney & Co. v. Sam Kassab Akram Semaan, 981 F.2d 894 (6th Cir. 1992).publishedId. at 512 (citing County of Durham v. Richards & Associates, Inc., 742 F.2d 811, 815 (4th Cir.1984); Belke v. Merrill Lynch, Pierce, Fenner & Smith, 693 F.2d 1023, 1027-28 (11th Cir.1982); O’Neel v. National Association of Securities Deal…
- PAINEWEBBER Inc. v. Willard S. HARTMANN, 921 F.2d 507 (3d Cir. 1990).published See County of Durham v. Richards & Associates, Inc., 742 F.2d 811, 815 (4th Cir.1984); Belke v. Merrill Lynch, Pierce, Fenner & Smith, 693 F.2d 1023, 1027-28 (11th Cir.1982); O'Neel v. National Association of Securities Dealers, Inc., 667…
- Fisher v. A.G. Becker Paribas Inc., 791 F.2d 691 (9th Cir. 1986).published
- Brown v. Dean Witter Reynolds, Inc., 601 F. Supp. 641 (S.D. Fla. 1985).published
- Lane v. E.F. Hutton & Co., 515 So. 2d 693 (Ala. 1987).published
- Com. Park at DFW Freeport v. Mardian Constr. Co., 729 F.2d 334 (5th Cir. 1984).published
- Fairview Cemetery Ass'n of Stillwater v. Eckberg, 385 N.W.2d 812 (Minn. 1986).published
- Ex parte McKinney, 515 So. 2d 693 (Ala. 1987).published
- Murray, East & Jennings v. J & S Const. Co., 607 F. Supp. 45 (S.D. Miss. 1985).published
- Girard v. Drexel Burnham Lambert, Inc., 644 F. Supp. 52 (S.D. Tex. 1986).published
v.
MERRILL LYNCH, PIERCE, FENNER & SMITH, Frank Utermehle, Nobert Fisher, Edward C. Weizer, G. William Rolls and Leigh Rolls
This case presents the question whether the district court correctly held that appellant waived its right to arbitrate by failing to move for arbitration at the outset of the litigation, despite the fact that at that time counsel for appellant considered such a motion futile. Finding that severance was impossible at the commencement of litigation because the claims were inextricably intertwined, that a motion for arbitration at the start of the litigation would have been futile, and that Merrill Lynch promptly filed for arbitration when the nonarbitra-ble claims were dismissed, we reverse. 518 F.Supp. 602.
I.
Margaret K. Belke (Belke) sued Merrill Lynch, Pierce, Fenner & Smith, Inc. (Merrill Lynch) and various other defendants alleging mismanagement of Belke’s stock portfolio in violation of federal securities laws, stock exchange rules and regulations, and the common law of the State of Florida. All counts shared a common nucleus of operative facts set forth initially in paragraphs 1-34 of the complaint and incorporated by reference in all other counts. A determination of the issue of scienter was central to all claims against defendant Merrill Lynch, although there were various other common questions of fact as well.[1]
[*1025] Belke filed her first discovery requests simultaneously with the complaint. Merrill Lynch answered and began its own discovery. Discovery continued for over a year, at which time Belke amended her complaint to allege diversity jurisdiction in support of her pendent state claims. A month later, on January 25, 1978, Merrill Lynch moved for partial summary judgment alleging that Belke’s federal claims were time-barred. On June 14, 1979 the trial judge granted Merrill Lynch’s motion, thereby eliminating all federal claims. On October 9, 1979 the district court denied plaintiff’s motion for reconsideration of the grant of summary judgment, but allowed Belke to restate two counts of her complaint. Before responding to the amended complaint Merrill Lynch moved, on November 1, 1979, to compel arbitration of the remaining state common law claims, and for a stay of the action in federal court pending arbitration.
The district court denied appellant’s motion for arbitration and a stay, holding that Merrill Lynch' waived its right to arbitration by not raising the issue at the commencement of the litigation. Acknowledging that arbitration might have been impossible at the outset if arbitrable and nonarbi-trable claims were “inextricably intertwined,” the district court declined to discuss the “technicalities” of impossibility, or to determine whether severance would have been impossible in the ease before it. Rather, the court stated that “[t]he correct thing for defendant to have done was to preserve its right to arbitrate early in the suit .... It is not for the litigant to decide that had an earlier motion to arbitrate been made it would surely have been denied and thus was a futile gesture.”
Merrill Lynch appeals this denial of arbitration, arguing it did not waive arbitration as its request for arbitration was timely made. It is appellant’s position that the law does not require the “futile gesture” of filing for arbitration before claims become arbitrable, and that delay in filing should be measured from the time of arbitrability. We agree.[2]
Federal law evinces a clear preference for arbitration over litigation for private dispute resolution. Seaboard Coast Line Railroad Company, Inc. v. Trailer Train Company, 690 F.2d 1343, 1348 (11th Cir.1982); Ultracashmere House, Ltd. v. Meyer, 664 F.2d 1176, 1179-1180 (11th Cir.1981); Seaboard Coast Line Railroad Com pany v. National Rail Passenger Corp., 554 F.2d 657, 660 (5th Cir.1977).[3] Arbitration provides a speedier and less costly method of dispute resolution than does litigation, while relieving congested federal court dockets. Id. Because federal law favors arbitration, any party arguing waiver of arbitration bears a heavy burden of proof. Sibley v. Tandy Corp., 543 F.2d 540, 542 (5th Cir.1976), cert. denied, 434 U.S. 824, 98 S.Ct. 71, 54 L.Ed.2d 82 (1977); General Guaranty Insurance Co. v. New Orleans General Agency, Inc., 427 F.2d 924, 929 n.5 (5th Cir.1970).
In this case Belke plead both Florida common law claims and federal securities law claims. On the face of the complaint, the Florida common law counts are subject to arbitration under the terms of a contract between the parties.[4] Federal securities[*1026] claims, however, are not arbitrable. Wilko v. Swan, 346 U.S. 427, 74 S.Ct. 182, 98 L.Ed. 168 (1953); Sawyer v. Raymond James & Associates, Inc., 642 F.2d 791, 792 (5th Cir.1981); Sibley v. Tandy Corp., supra, 543 F.2d at 543. Thus, the district court was faced with a case involving claims both arbitrable and nonarbitrable.
Generally, when a complaint sets forth a combination of claims the arbitrable claims should be severed from the nonarbitrable ones and the district court should stay judicial proceedings as to the arbitrable claims, thereby allowing arbitration to proceed. Wick v. Atlantic Marine, Inc., 605 F.2d 166, 168 (5th Cir.1979). An exception to this rule exists, however, when the arbitrable and nonarbitrable claims are so related that severance is “impractical if not impossible.” Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Haydu, 675 F.2d 1169, 1172 (11th Cir.1982); Sawyer, supra, 642 F.2d at 793; Sibley v. Tandy Corp., supra, 543 F.2d at 543. When arbitrable and nonarbitrable claims are “inextricably intertwined,” the rule in this circuit is that the district court should deny arbitration as to the arbitrable claims in order, to protect the jurisdiction of the federal court and avoid any possible preclusive effect. Id.5
Our decisions in cases presenting mixed federal securities claims and arbitrable common law claims make it clear that “factual severability of the disputed claims is of central importance. If ‘[a]n arbitrator making a decision on the [arbitrable] claims would have been impelled to review the same facts needed to establish the plaintiff’s securities law claim,’ a district court should not sever the arbitrable claims.” Sawyer, supra, 642 F.2d at 733; Sibley v. Tandy Corp., supra, 543 F.2d at 542. In the instant case counsel for Merrill Lynch examined the complaint filed by appellee and decided, based on the governing law of this circuit, that a motion for arbitration would have been denied because the claims were not severable. Therefore, Merrill Lynch waited until the nonarbitrable claims were dismissed before filing its motion for arbitration. The district court, however, refused to consider whether the initial determination by counsel for appellant was correct. Instead it held that Merrill Lynch had no choice but to file a motion, albeit one it believed futile, so that the district court could make the determination as to sever-ability at the outset of the litigation.
The district court is correct that it has the right to decide whether plaintiff’s arbitrable and nonarbitrable claims are severable. Indeed, the district court is obligated to make this determination. See Sawyer v. Raymond James & Associates, Inc., 642 F.2d 791, 793 (5th Cir.1981) (district court should apply case-by-case test to determine factual severability of claims); Sibley v. Tandy Corp., 543 F.2d 540, 544 (5th Cir.1976) (severance required under Federal Arbitration Act when claims not intertwined), cert. denied, 434 U.S. 824, 98 S.Ct. 71, 54 L.Ed.2d 82 (1977). In the case before us the district court committed error specifically by refusing to address this threshold determination prior to holding Merrill Lynch in default.
Without examining whether the claims were severable, and thus arbitrable, when litigation commenced, the district court held Merrill Lynch in default because of its delay in moving to compel arbitration. We do[*1027] not agree, however, that there would be delay in proceeding with arbitration if the arbitrable claims were not severable until shortly before Merrill Lynch requested arbitration. See Haydu, supra, 675 F.2d at 1172 (court may not sever arbitrable claims and allow arbitration if arbitrable and nonarbi-trable claims inextricably intertwined); Sawyer, supra at 793 (same). Had Merrill Lynch moved to compel arbitration at the commencement of litigation the district court would have denied the motion unless-it determined the claims were severable. The considered judgment of counsel for Merrill Lynch was that Belke’s claims were not severable, and- that until such time as the nonarbitrable federal claims were dismissed a motion for arbitration would be futile.
We emphasize the district court’s ultimate authority as to a determination of severability. Counsel for Merrill Lynch took a clear risk in declining to file the arbitration motion at the outset of litigation. If upon the later filing for arbitration the district court had held the claims sever-able at the outset, the district court properly could have found Merrill Lynch in default as to its right to arbitrate. If Merrill Lynch was correct in its initial determination that the claims were not severable, however, and the motion for arbitration was timely made once the nonarbitrable claims were extinguished, it would be inappropriate to penalize Merrill Lynch for failing to file a'futile motion. We therefore hold that prior to determining that a defendant is in default for failing to file a motion for arbitration at the commencement of litigation, the district court first must determine first whether an earlier motion would have been futile, and second, whether the claim for arbitration was timely made when filed.
In this case we need not remand for further consideration as the record is developed fully on both issues. In the interest of judicial economy we have examined the record and determine that Merrill Lynch did not waive its right to compel arbitration. Belke’s common law and federal claims, all allege knowing or negligent misconduct (scienter) on the part of Merrill Lynch. In Sawyer v. Raymond James & Associates, 642 F.2d 79 (5th Cir.1981) we held that the mixture of asserted securities and common law claims were not severable. As in Sawyer, we deal here with “a single recitation of facts, revealing an emphasis upon the element of scienter, giving rise to numerous federal and common law claims.” Id. at 793 (citation omitted). Because we believe an arbitrator attempting to evaluate non-federal claims at the outset of this litigation would have been “impelled to review the same facts,” id., as presented to the district court on the securities claims, we find that a motion to compel arbitration at the outset of this litigation, prior to dismissal of the federal claims, would have been futile. We further observe that Merrill Lynch filed its motion to compel arbitration and stay proceedings three weeks after the district court finally determined that the federal securities counts were time-barred. A motion filed three weeks after the claims actually become arbitrable is timely made. Accordingly, we hold Merrill Lynch has not waived its right to compel arbitration.
II.
Belke raises two further issues on appeal that survive resolution of the primary issue.[6] First, she argues that even if arbitration is appropriate Merrill Lynch committed procedural default by failing to serve written notice of the intent to arbitrate “within one year after the cause of action accrued,” as required by the governing contract. Recent arbitration decisions hold that procedural questions such as the timeliness of a request for arbitration under the arbitration agreement are to be resolved by the arbitrator unless the contract expressly provides for resolution by the district court. O’Neel v. National Association of Securities Dealers, 667 F.2d 804, 807 (9th Cir.1982); Conticommodity Services Inc. v. Philipp & [*1028] Lion, 613 F.2d 1222 (2d Cir.1980). The Second Circuit explained in Conticommodity Services Inc. that:
a court could determine only those questions of delay that relate to the two issues it is required to decide under section 4 of the [Federal Arbitration] Act — the making of an arbitration agreement and the failure, refusal, or neglect to arbitrate. “If one of these issues is disputed before the court, and if one party claims that its ability to present proof in relation thereto has been prejudiced through the delay of the other, the court may consider whether it is fair to permit the dilatory party even to invoke its processes under the Act.” Any other questions of delay, unless expressly reserved for court determination by the arbitration agreement, were properly left “to the expertise of the arbitrators.” Id. at 1226 (citations omitted) (emphasis supplied).
We agree with the reasoning of the Second Circuit. In this case the district court and this Court have addressed the question of whether it is fair to permit Merrill Lynch to invoke its processes under the Federal Arbitration Act. Id. Having determined that they may do so we hold the issue of whether a request for arbitration is timely under the terms of the contract to be an issue properly resolved by the arbitrator.
Finally, appellee argues that because certain acts complained of occurred prior to execution of the arbitration agreement those claims are not properly disposed of by submission to an arbitrator. Again, we disagree. By its own terms the contract between the parties covers not only disputes arising out of the agreement, but in the disjunctive includes “any controversy between us arising out of your business.” (emphasis supplied). An arbitration clause covering disputes arising out of the contract or business between the parties evinces a clear intent to cover more than just those matters set forth in the contract. See Seaboard Coast Line Railroad v. Trailer Train Company, supra, at 1348 (scope of arbitration clause question of intent of contracting parties).
Finding appellees’ claims without merit, we remand for proceedings in the district court not inconsistent with this opinion. REVERSED.
For example, based on the facts alleged in the complaint, the propriety of management of the Belke portfolio and the degree of care exercised[*1025] by defendants in managing the Belke funds commensurate with Belke’s stated portfolio goals were also at issue.
The district court recognized that delay alone is insufficient to constitute waiver, but found attendant prejudice resulting from appellant’s invocation of the discovery mechanism prior to the motion for partial summary judgment. Because we hold there was not delay on the part of Merrill Lynch in filing for arbitration, we need not address the issue of prejudice. There was no delay, therefore there could be no prejudice.
The Eleventh Circuit, in the en banc decision Bonner v. City of Prichard, 661 F.2d 1206 (11th Cir.1981), adopted as precedent decisions of the former Fifth Circuit rendered prior to October 1, 1981.
The Customer Agreement in force between Merrill Lynch and Belke requires arbitration in accordance with the terms set forth below:
It is agreed that any controversy between us arising out of your business or this agreement, shall be submitted to arbitration conducted under the provisions of the Constitution and Rules of the Board of Governors of[*1026] the New York Stock Exchange, except however if the controversy involves any security or commodity transaction or contract relating thereto executed on an exchange located outside of the United States then such controversy, at the election of either of us, shall be submitted to arbitration conducted under the constitution and rules of such exchange (and if neither of us so elects, arbitration shall be conducted under the provisions of the Constitution and Rules of the Board of Governors of the New York Stock Exchange). Arbitration must be commenced within one year after the cause of action accrued by service upon the other of a written demand for arbitration or a written notice of intention to arbitrate, naming therein the arbitration tribunal.
The doctrine of intertwining is not the rule in every circuit. See Dickinson v. Heinold Securities, Inc., 661 F.2d 638 (7th Cir.1981) for the views of a Seventh Circuit panel rejecting the Fifth Circuit rule.
Appellee failed to raise either of these two final issues in the court below. Because they are answered easily, we address them here in the interest of judicial economy.