Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Tuesday, November 1, 2011

Ninth Circuit Confirms Debt Award Against Challenge to Arbitrability

In an opinion marked "not for publication," Wang v. Bear Stearns & Co. (Oct. 31, 2011)Download Wang.103111[1], the Ninth Circuit rejected a customer's efforts to resist confirmation of an adverse arbitration award by claiming that the claim was not arbitrable because her claim was encompassed by a putative class action. 

Bear Stearns had brought the FINRA arbitration proceeding to collect payment for completed stock purchases pursuant to the customer's agreement.  Wang asserted that a pending class action alleging that the broker-dealer committed fraud in the sale of the stock meant that she did not have to submit to arbitration.  The court, however, rejected her argument because "the essential elements of the claims are distinct and bear little relation to each other....It is axiomatic that Bear Stearns cannot assert a counterclaim for monetary damages in the pending class action where Wang is not a named party."  Accordingly, the appellate court affirmed the trial court's confirmation of the award in favor of Bear Stearns.

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