Moyett v. Lugo-Sánchez

321 F. Supp. 3d 263
CourtUnited States District Court
DecidedJune 27, 2018
DocketCivil No. 18–MC–394 (FAB)
StatusPublished
Cited by1 cases

This text of 321 F. Supp. 3d 263 (Moyett v. Lugo-Sánchez) is published on Counsel Stack Legal Research, covering United States District Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Moyett v. Lugo-Sánchez, 321 F. Supp. 3d 263 (usdistct 2018).

Opinion

BESOSA, District Judge.

Before the Court is petitioners Luis Moyett ("Moyett"), Ludida PR, Inc. ("Ludida"), and DDL Jerico SE ("Jerico")'s motion to enforce subpoenas issued to respondents David Lugo-Sánchez ("Lugo") and Miguel Ferrer-Bolívar ("Ferrer") by the Financial Industry Regulatory Authority ("FINRA") arbitration panel in the matter of Luis Moyett v. UBS Fin. Servs., Inc., FINRA Case No. 15-1833. (Docket No. 1.) For the reasons set forth below, *265the petitioners' motion to enforce the arbitral subpoenas is GRANTED .

I. Background

UBS Financial Services Incorporated and UBS Financial Services Incorporated of Puerto Rico (collectively, "UBS") provided financial consulting services to the petitioners. (Docket No. 1, Ex. 2.) The petitioners and UBS agreed that "any claim or issue in any controversy which may arise between [the petitioners] and [UBS] ... shall be determined by arbitration." (Docket No. 11, Ex. 1 at p. 9.) Furthermore, the petitioners and UBS stipulated that the Federal Arbitration Act ("FAA"), 9 U.S.C. § 1 et seq. , would govern any arbitration arising between them. Id.

On July 21, 2005 Moyett, Ludida, and Jerico commenced a FINRA arbitration action against UBS. (Docket No. 1, Ex. 1 at p. 1; see FINRA Case No. 15-1833.) FINRA appointed a three-member panel to adjudicate petitioners' claims against UBS. (Docket No. 1, Ex. 1 at pp. 2-3.) The FINRA arbitrators issued Lugo and Ferrer subpoenas to testify before the panel on July 9, 2018 and July 30, 2018, respectively. (Docket No. 1, Exs. 10 and 11.)1 The subpoena directs Lugo and Ferrer to appear at the El Telégrafo Building, 1314 Ponce de León in San Juan, Puerto Rico. Id. 2 Counsel for Lugo and Ferrer informed the petitioners that their clients intend to disregard the subpoenas. (Docket No. 1, Ex. 1 at p. 3.) The petitioners request that the Court compel Lugo and Ferrer to comply with the subpoenas. (Docket No. 1.) Ferrer, however, maintains that this Court lacks jurisdiction to enforce the arbitral subpoenas, and that testifying before the arbitration panel is unduly burdensome. (Docket No. 3 at p. 2.)3 Ferrer's arguments are unavailing.

II. The FAA Grants the Court Jurisdiction to Enforce the Arbitral Subpoenas

In opposing the petitioners' motion, Ferrer argues that this Court lacks jurisdiction to enforce FINRA-issued subpoenas. (Docket No. 3.) The FAA establishes the validity and enforceability of *266written arbitration agreements. See Torres-Rosario v. Marriot Int'l, 872 F. Supp. 2d 149 (D.P.R. 2012) (Besosa, J.).4 According to section 7 of the FAA, arbitrators may summon any person to appear before them as a witness. 9 U.S.C. § 7. Section 7 provides that:

If any person or persons so summoned to testify shall refuse or neglect to obey said summons, upon petition the United States district court for the district in which such arbitrators, or a majority of them, are sitting may compel the attendance of such person or persons before said arbitrator or arbitrators, or punish said person or persons for contempt in the same manner provided by law for securing the attendance of witnesses or their punishment of neglect or refusal to attend the court of the United States.

Id. (emphasis added); see Sec. Life Ins. Co. of Am. Duncanson & Holt, Inc., No. 99-799, 1999 U.S. Dist. LEXIS 23385, at *8 (D. Minn. July 1, 1999) (compelling a non-party to comply with the arbitrators' subpoena duces tecum because the court had "the power to enforce the arbitrators subpoena" pursuant to the FAA).

Ferrer grounds his opposition on a false premise, asserting that the arbitrators are "sitting" in the Northern District of Georgia. (Docket No. 3 at p. 7.) Because the arbitrators sit in the Northern District of Georgia, Ferrer argues, only the United States District Court for the Northern District of Georgia may compel Ferrer to comply with the arbitral subpoena. Id. The Court disagrees.

Ferrer posits that the physical location of the arbitrators dictates the location of the arbitration hearing. Id. In their respective arbitrator disclosure reports, each panel member revealed that they reside within the Northern District of Georgia. (Docket No. 1, Ex. 4 at pp. 1, 5 and 9.) Without citing to the record, Ferrer states that "the arbitrators would be physically located and presumably hear Mr. Ferrer's proposed testimony via video conference." (Docket No. 3 at p. 8.) Ferrer's motion is devoid of any authority standing for the proposition that the geographic location of the arbitrators govern which court may enforce subpoenas issued pursuant to section 7 of the FAA.5

The Court's analysis commences with the arbitration agreement between the petitioners and UBS. See Hopkinton Drug, Inc., v. CaremakerPCS, LLC, 77 F.Supp.3d 237, 250 (D. Mass. 2015) (holding that "[a]s a starting premise, arbitration clauses are interpreted pursuant to normal contract interpretation standards") (citation omitted). The arbitration agreement is silent regarding the location of the arbitrators' seat, stating only that any arbitration "shall be governed by the rules of the organization convening the panel." (Docket No. 11, Ex. 1 at p. 9.)

According to FINRA Code of Arbitration Rule 12213, the "[FINRA] Director will select the hearing location closest to the customer's residence at the time of the *267events giving rise to the dispute."6 The petitioners reside in Puerto Rico, and the events underlying the FINRA claim occurred in Puerto Rico. See Docket No. 1, Ex. 1 at p.

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Bluebook (online)
321 F. Supp. 3d 263, Counsel Stack Legal Research, https://law.counselstack.com/opinion/moyett-v-lugo-sanchez-usdistct-2018.