Galey v. World Mktg. All., 510 F.3d 529 (5th Cir. 2007). · Go Syfert
Galey v. World Mktg. All., 510 F.3d 529 (5th Cir. 2007). Cases Citing This Book View Copy Cite
“absent the availability of the chosen forum, there is no other fo 265 rum to which the court may send the parties to arbitrate.”
27 citation events (27 in the last 25 years) across 6 distinct courts.
Strongest positive: PoolRe Insurance v. Organizational Strategies, Inc. (ca5, 2015-04-07)
Treatment trajectory · 2012 → 2026 · click a year to view as-of
2012 2019 2026
Top citers, strongest first. 10 distinct citers. How cited ↗
examined Cited as authority (verbatim quote) PoolRe Insurance v. Organizational Strategies, Inc. (3×) also: Cited as authority (rule), Cited "see, e.g."
5th Cir. · 2015 · signal: see also · quote attribution · 1 verbatim quote · confidence high
absent the availability of the chosen forum, there is no other fo 265 rum to which the court may send the parties to arbitrate.
discussed Cited as authority (rule) Hammond v. United States Fire Insurance Company (Delaware)
S.D. Tex. · 2023 · confidence medium
The Fifth Circuit has held that “clauses . . . providing for arbitration ‘in accordance with’ a particular set of rules should be interpreted as forum selection clauses.” Galey v. World Marketing Alliance, 510 F.3d 529, 532 (5th Cir. 2007).
discussed Cited as authority (rule) Nationwide Mutual Fire Insurance Company v. Interface Security Systems, L.L.C.
S.D. Miss. · 2023 · confidence medium
All., 510 F.3d 529, 532 (5th Cir. 2007) (citing United Miss.
discussed Cited as authority (rule) Noble Capital Fund v. US Capital Global
5th Cir. · 2022 · confidence medium
All., 510 F.3d 529, 531 (5th Cir. 2007). 5 9 U.S.C. § 3 . 6 See JAMS Rule 6(c) (“If, at any time, any Party has failed to pay fees or expenses in full, JAMS may order the suspension or termination of the proceedings.”). 7 See Tillman v. Tillman, 825 F.3d 1069 , 1072–74 (9th Cir. 2016) (holding that arbitration had been had where arbitration was terminated after the plaintiff was unable to pay her portion of the arbitration fees); Pre-Paid Legal Servs., Inc. v. Cahill, 786 F.3d 1287 , 1293–94 (10th Cir. 2015) (affirming the lift of a stay of judicial proceedings after a party failed to…
discussed Cited as authority (rule) Bonsmara Natural Beef Company, LLC and George Chapman, Individually v. Hart of Texas Cattle Feeders, LLC, James Michael Hayes, Individually, Lynn Landrum, Individually, and Henry O. Pickett II, Individually (2×)
Tex. · 2020 · signal: cf. · confidence medium
Cf. Galey, 510 F.3d at 533 (explaining “it is apparent that [NASD’s membership rule] was adopted to serve [the] critical purpose” of protecting customers from arbitration award non-payment).
discussed Cited as authority (rule) Shirley Cotton v. GGNSC Batesville, L.L.C.
5th Cir. · 2016 · confidence medium
All, 510 F.3d 529, 532 (5th Cir.2007) (holding that clauses providing for arbitration "in accordance . with" a particular set of rules should be interpreted as. exclusive forum-selection clauses), In re Salomon.
examined Cited as authority (rule) James Alford v. Kuhlman Corporation (4×) also: Cited "see, e.g."
5th Cir. · 2013 · confidence medium
Alliance, 510 F.3d 529, 532 (5th Cir. 2007) (citing United Miss.
discussed Cited as authority (rule) Ronay Family Limited Partnership v. Tweed
Cal. Ct. App. · 2013 · confidence medium
(See Provencio v. WMA Securities, Inc. (2005) 125 Cal.App.4th 1028, 1032-1033 [ 23 Cal.Rptr.3d 524 ] [petition to compel arbitration of dispute between customer and former NASD member properly denied under substantively identical NASD rule when customer had not executed postdispute written agreement to arbitrate]; Galey v. World Marketing Alliance (5th Cir. 2007) 510 F.3d 529, 533-534 (Galey) [same].) Ronay also relies on the rules that under a contract an agent “is not entitled to any greater right than his principal” (Berman v. Dean Witter & Co., Inc. (1975) 44 Cal.App.3d 999, 1004 [ 119…
cited Cited as authority (rule) James v. Conceptus, Inc.
S.D. Tex. · 2012 · confidence medium
Alliance, 510 F.3d 529, 533 (5th Cir.2007) (internal quotation marks omitted).
discussed Cited "see, e.g." Bedard v. Brewer Financial Services, LLC
Mass. Super. Ct. · 2012 · signal: see also · confidence low
Other courts have looked to the particular terms of the arbitration provision, to determine whether incorporation of the rules of FINRA, or another identified organization, is integral to the agreement, or is merely an “ancillary logistical concern.” Brown v. ITT Consumer Financial Corp, 211 F.3d 1217 , 1222 (11th Cir. 2000); see Reddam v. KPMG LLP, 457 F.3d 1054 (9th Cir. 2006); Branch v. Sickert, 2011 WL 796783 at *5 (N.D.Ga. 2011); see also Galey v. World Marketing, supra 510 F.3d at 533 , citing Nat’l Iranian Oil Co. v. Ashland Oil Co., 817 F.2d 326, 333 (5th Cir. 1987).
Retrieving the full opinion text from the archive…
Harold Donald GALEY; Margaret M. Galey, Plaintiffs-Appellees,
v.
WORLD MARKETING ALLIANCE; World Marketing Alliance Securities, Inc., Defendants-Appellants
06-60715.
Court of Appeals for the Fifth Circuit.
Dec 12, 2007.
510 F.3d 529
2007 U.S. App. LEXIS 28660
2007 WL 4323610
Preston Davis Rideout, Jr. (argued), Albert Lee Abraham, Jr., Abraham & Ride-out, Greenwood, MS, for Harold and Margaret Galey., Robert Engelbrecht Haubereg, Jr., Clarence Lee Lott, III (argued), Bradley S. Clanton, Baker, Donelson, Bearman, Caldwell & Berkowitz, Jackson, MS, for Defendants-Appellants.
Jolly, Davis, Wiener.
Cited by 11 opinions  |  Published
E. GRADY JOLLY, Circuit Judge:

World Marketing Alliance and World Marketing Alliance Securities (collectively “WMAS”) appeal the district court’s denial of their motion to compel arbitration and to stay judicial proceedings pursuant to the Federal Arbitration Act (“FAA”), 9 U.S.C. § 3. [1] WMAS argues that the dis[*531] trict court should have granted its motion as the language of the arbitration agreement at issue unambiguously compels arbitration. For the reasons presented below, we AFFIRM the district court’s denial of the motion to compel arbitration and DISMISS this appeal.

I.

Harold Donald Galey and Margaret M. Galey filed suit against WMAS in Mississippi state court. The Galeys presented causes of action for negligence and breach of fiduciary duty, maintaining that WMAS caused them to suffer losses in allegedly unsuitable investments. WMAS removed the suit to the United States District Court for the Northern District of Mississippi, Greenville Division. WMAS then filed a motion to compel arbitration and to stay judicial proceedings pursuant to the arbitration agreement signed by the Ga-leys when they opened their WMAS account.

The arbitration agreement provides that “any controversy arising out of or related to my (our) accounts, the transactions with WMAS, its officers, directors, agents ... shall be settled by arbitration in accordance with the rules then in effect of the National Association of Securities Dealers, Inc. (NASD). Such arbitration shall follow the procedures as set forth by a national arbitration committee of the NASD.” The agreement further provides that “I (we) understand that: (1) ARBITRATION IS FINAL AND BINDING ON THE PARTIES (I.E., YOU AND WMAS). (2) YOU AND WMAS ARE WAIVING RIGHTS TO SEEK REMEDIES IN COURT, INCLUDING THE RIGHT TO JURY TRIAL.”

The Galeys opposed WMAS’s motion to compel arbitration and stay judicial proceedings. The Galeys played their only card: WMAS had allowed its membership in the NASD to lapse in 2000, a fact that WMAS could not dispute. This card turned out to be a trump: NASD Rule 10301 provides that a claim involving a member whose membership has been terminated, suspended, cancelled, or revoked shall be ineligible for arbitration under the NASD Code of Arbitration Procedure. The Galeys argued that the claim at issue was ineligible for arbitration and the district court agreed. Thus, the district court denied WMAS’s motion and WMAS has filed this interlocutory appeal.

II.

Before reaching the determinative questions in this appeal, we touch on a few preliminaries. Because the district court denied WMAS’s motion to compel arbitration and to stay judicial proceedings, this court has jurisdiction over this appeal pursuant to 9 U.S.C. § 16(a)(1)(A). [2] See May v. Higbee Co., 372 F.3d 757, 761-62 (5th Cir.2004). We review de novo a district court’s denial of a motion to compel arbitration and to stay judicial proceedings pursuant to the FAA. Tittle v. Enron Corp. 463 F.3d 410, 417 (5th Cir.2006).

Although there are various rules for determining whether to grant a motion to compel arbitration, this case turns on a single and fundamental rule: Arbitration is a matter of contract, and, absent federal law to the contrary, this court must apply the contract law of the particular state that governs the agreement to determine whether the parties agreed to arbitrate the dispute in question. Id. at 419. Both[*532] parties acknowledge that this means Mississippi state law applies here.

A.

WMAS first argues that the arbitration agreement at issue should be interpreted to allow arbitration to proceed in any arbitration forum, including but not limited to the NASD. We have found no Mississippi case that interprets language like that presented in the agreement at issue. However, several federal circuit courts have indicated that clauses — like the one at issue here — providing for arbitration “in accordance with” a particular set of rules should be interpreted as forum selection clauses. See, e.g., In re Salomon Inc. S’holders’ Derivative Litig., 68 F.3d 554, 558 (2d Cir.1995) (holding that language agreeing to arbitration “in accordance with the [NYSE] Constitution and rules” limited the forum of arbitration to the NYSE); PaineWebber Inc. v. Rutherford, 903 F.2d 106, 108 (2d Cir.1990) (holding similar language to be an agreement to arbitrate only before the self-regulatory organizations whose rules were to be applied); Roney & Co. v. Goren, 875 F.2d 1218, 1223 (6th Cir.1989) (same); Luckie v. Smith Barney, Harris Upham & Co., 999 F.2d 509, 514 (11th Cir.1993) (same). We now join these courts of appeals by holding that, absent state law to the contrary, the language of the arbitration agreement at issue, requiring “arbitration in accordance with the rules then in effect of the National Association of Securities Dealers, Inc. (NASD),” constitutes a forum selection. Under the arbitration agreement, the parties have agreed that the NASD is the only appropriate forum for this dispute. Here, then, the principal question is whether we should order arbitration before the NASD.

B.

In order to determine this question, we must first consider whether the parties are bound to arbitrate under the NASD rules. The resolution of this question depends on whether these rules are incorporated into the arbitration agreement.

Under Mississippi law, if a contract incorporates another document by reference, then both documents must be read together to give full effect to the intent of the parties. See United Mississippi Bank v. GMAC Mortgage Co., 615 So.2d 1174, 1176 (Miss.1993). The agreement at issue provides' for “arbitration in accordance with the rules then in effect of the National Association of Securities Dealers, Inc. (NASD). Such arbitration shall follow the procedures as set forth by a national arbitration committee of the NASD.” We hold that this language incorporates the NASD rules by reference. Indeed, we believe this point is beyond dispute.

This conclusion means that NASD Rule 10301, which provides that a claim involving a member whose membership has been terminated, suspended, cancelled, or revoked shall be ineligible for arbitration under the NASD Code of Arbitration Procedure, is incorporated into the arbitration agreement. It is undisputed that WMAS is no longer a member of the NASD. There remains for determination, then, whether, given Rule 10301 and the fact that WMAS is no longer an NASD member, it is appropriate for this court nevertheless to compel arbitration.

C.

WMAS argues that, even if the NASD rules are incorporated into the agreement, the parol evidence rule prohibits consideration of the fact that WMAS’s NASD membership has terminated. The argument’s centerpiece is that an unambiguous contract must be enforced as written, without resort to parol evidence to ascertain the parties’ intent or vary the[*533] terms of the agreement. This premise of course is true, but the argument does not fit here.

The parol evidence rule is intended to “prohibit the admission of evidence which is offered for the purpose of contradicting the plain unambiguous terms of a writing.” Thornhill v. Chapman, 748 So.2d 819, 823 (Miss.App.1999) (noting that the “terms of the writing may not be varied or contradicted by evidence of any prior written or oral agreement”). Considering WMAS’s membership status only serves to apply the referenced NASD rules and so does not in any way vary the terms of the agreement. Accordingly, considering WMAS’s NASD membership status does not violate the parol evidence rule.

D.

We have thus far held: that the parties agreed that the NASD is the only appropriate forum for this dispute; that the NASD rules are incorporated into the agreement; and that the parol evidence rule does not preclude consideration of WMAS’s NASD membership status. We now turn to consider WMAS’s final argument: that NASD Rule 10301 is severable from the remainder of the arbitration agreement. The focus of this argument is the contention that NASD Rule 10301 is a minor consideration that should be severed in favor of the controlling intent of the parties to settle any and all disputes through arbitration.

It is true that this court has noted that a provision of an arbitration agreement is severable if the intent of the parties at the time of the agreement demonstrates that “the essence, the essential term, of the bargain was to arbitrate, while the” provision at issue “was merely a minor consideration.” Nat’l Iranian Oil Co. v. Ashland Oil. Co., 817 F.2d 326, 333 (5th Cir.1987). NASD Rule 10301, however, is not a minor consideration of the arbitration agreement at issue. This conclusion is clear from the policy that motivated the adoption of Rule 10301. In approving the rule, the Securities Exchange Commission explained that the rule was designed to protect customers from “terminated, suspended, barred, or otherwise defunct firms [that] have a significantly higher incidence of non-payment of arbitration awards than do active firms.” Order Approving Proposed Change to NASD Rule 10301, 66 Fed.Reg. 19267-01 (Apr. 13, 2001) (emphasis added). In the light of this policy, it is apparent that Rule 10301 was adopted to serve a critical purpose and that it is an essential term of the arbitration agreement at issue. Rule 10301 protects customers; it is not simply a minor logistical consideration ancillary to the arbitration agreement; and so it is not severable from the remainder of the arbitration agreement at issue.

III.

To review: The arbitration agreement at issue indicates the NASD is the only appropriate arbitration forum for this dispute and that the parties are bound to arbitrate under the NASD rules. Further, WMAS’s argument that the parol evidence rule prohibits consideration of WMAS’s NASD membership status fails, as the NASD rules are incorporated by reference into the agreement and as consideration of WMAS’s NASD membership status only serves to apply the incorporated rules. Finally, WMAS’s argument that NASD Rule 10301 should be severed from the agreement also fails, as Rule 10301 is not merely a minor consideration ancillary to the agreement.

There is therefore no reason not to enforce the forum selection provision of the arbitration agreement. Moreover, under NASD Rule 10301, which was incorporated[*534] into the arbitration agreement by reference, the chosen forum is no longer available, as WMAS allowed its NASD membership to lapse. Absent the availability of that exclusive forum, there is no other forum to which the court may send the parties to arbitrate. Accordingly, and for the reasons given above, we AFFIRM the district court’s denial of the motion to compel arbitration and DISMISS this appeal.

1

. Title 9, Section 3 provides: “If any suit or proceeding be brought in any of the courts of the United States upon any issue referable to arbitration under an agreement in writing for such arbitration, the court in which such suit is pending, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration under such am agreement, shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of[*531] the agreement, providing the applicant for the stay is not in default in proceeding with such arbitration.”

2

. Title 9, Section 16(a)(1)(A) provides: "(a) An appeal may be taken from — (1) an order— (A) refusing a stay of any action under section 3 of this title .... ”