F I L E D United States Court of Appeals Tenth Circuit UNITED STATES COURT OF APPEALS FEB 19 1999 FOR THE TENTH CIRCUIT PATRICK FISHER Clerk
OLDE DISCOUNT CORPORATION,
Plaintiff-Appellant,
v. No. 98-3179 (D.C. No. 98-MC-205-EEO) JULIAN HUBBARD, (D. Kan.)
Defendant-Appellee.
ORDER AND JUDGMENT *
Before BRORBY , EBEL , and LUCERO , Circuit Judges.
After examining the briefs and appellate record, this panel has determined
unanimously to grant the parties’ request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument.
* This order and judgment is not binding precedent, except under the doctrines of law of the case, res judicata, and collateral estoppel. The court generally disfavors the citation of orders and judgments; nevertheless, an order and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3. OLDE Discount Corporation (OLDE) appeals from the district court’s
denial of its petition to compel arbitration and its entry of summary judgment
in favor of Julian Hubbard (Hubbard). Our jurisdiction arises under 28 U.S.C.
§ 1291, and we affirm.
I. Relevant undisputed facts
Upon accepting employment with OLDE in January 1996, Hubbard signed
an employment agreement and a Uniform Application for Securities Industry
Registration or Transfer, Form U-4. Both agreements contained clauses wherein
Hubbard agreed to arbitrate any disputes or claims against OLDE, including those
controversies arising out of his employment or termination that were required to
be arbitrated under the rules of the New York Stock Exchange (NYSE) and the
National Association of Securities Dealers (NASD). OLDE terminated Hubbard’s
employment in July 1996, and Hubbard filed a discrimination charge against
OLDE with the Equal Employment Opportunity Commission. In February 1998
Hubbard offered to settle his claims against OLDE, stating that if no settlement
was reached, he would file a class action suit for racial discrimination in federal
district court in Kansas City, Kansas. See Appellee’s App. at 2. On March 3,
1998, OLDE filed a petition in the Kansas City, Kansas federal district court
requesting an order to compel Hubbard to arbitrate his dispute with OLDE
pursuant to the employment and U-4 agreements. See Appellant’s App. at 1. On
-2- March 12, 1998, Hubbard filed a class action suit in the federal district court for
the Western District of Missouri in Kansas City, Missouri. See Appellee’s App.
at 5. As a defense to arbitration, Hubbard argued in a motion to dismiss OLDE’s
petition that his claims were not within the scope of the arbitration agreement
because they were filed as a class action and therefore fit within an express
exclusion to arbitration under both the NYSE and NASD rules. 1 Finding that
NASD Code of Arbitration Procedure Rule 10301(d)(2) (and the correlative
NYSE rule) applied to exclude Hubbard’s claims from the scope of the arbitration
agreement, the district court denied OLDE’s petition for an order to compel
arbitration, treated Hubbard’s motion to dismiss as one for summary judgment,
and granted summary judgment in favor of Hubbard. See Order, Appellant’s App.
at 46, 48.
II. Issues raised
Although OLDE’s brief initially states that the issue raised on appeal is
that “the district court erroneously failed to compel [defendant Julian] Hubbard
to abide by his agreement with OLDE to arbitrate any claims related to his
employment,” Appellant’s Br. at 2, it later emphasizes that the point of the appeal
1 Because the rules are substantively identical, and the parties have focused on the NASD rule, we will quote and apply only the NASD rules in this order and judgment.
-3- is not “that the District Court should have interpreted the procedures to apply only
to a pending class action . . . [but] that the District Court should not have decided
the class-action dispute at all” under the second paragraph of Rule 10301(d)(2).
See id. at 10. By its emphasis, OLDE has all but waived its argument that the
court misinterpreted and misapplied Rule 10301(d). We will, however, rule on
that issue as well as addressing OLDE’s jurisdictional argument.
III. Standard of review
We review the denial of a motion to compel arbitration de novo , applying
the same legal standards the district court employed. See Armijo v. Prudential
Ins. Co. , 72 F.3d 793, 796 (10th Cir. 1995). Because the material facts are
undisputed, we also review the grant of summary judgment de novo , determining
if the district court correctly applied the substantive law. See Kaul v. Stephan ,
83 F.3d 1208, 1212 (10th Cir. 1996).
IV. Discussion
Rule 10301(d)(1) states:
A claim submitted as a class action shall not be eligible for arbitration . . .
Rule 10301(d)(2) states:
Any claim filed by a member . . . of a putative or certified class action is also ineligible for arbitration . . . if the claim is encompassed by a putative or certified class action filed in federal or state court.
-4- ....
Disputes concerning whether a particular claim is encompassed by a putative or certified class action shall be referred by the Director of Arbitration to a panel of arbitrators in accordance with Rule 10302 or Rule 10308, as applicable. Either party may elect instead to petition the court with jurisdiction over the putative or certified class action to resolve such disputes.
NASD Manual - Code of Arbitration Procedure Rule 10301(d) (emphasis added).
In order to avoid application of Rule 10301(d)(1) to Hubbard’s claims,
OLDE argued in district court that it was “‘not seeking to compel arbitration of
a class action, but merely to force Hubbard to submit[] his claims, as agreed, to
arbitration.’” See Order, Appellant’s App. at 46. Implicit in this argument is the
assumption that Hubbard’s claims did not qualify as “a claim submitted as a class
action.” Rule 10301(d)(1). The court could have properly concluded that
OLDE’s distinction was a false one (because, by filing suit, Hubbard “submitted”
his claims as a class action) and held that Hubbard’s claims were not eligible for
arbitration under Rule 10301(d)(1). Instead, the court accepted OLDE’s
characterization of Hubbard’s claims as individual claims and found that those
individual claims were encompassed within Hubbard’s newly filed class action.
The court then properly concluded that under Rule 10301(d)(2), Hubbard’s
individual claims were also precluded.
On appeal, OLDE focuses on the language in the second paragraph of
Rule 10301(d)(2), arguing that the court erred by answering a Rule 10301(d)(2)
-5- question that, in its view, could be answered only by the court with actual
jurisdiction over the class action or by an arbitration panel. OLDE cites no
authority for this proposition, relying solely on the express language of the rule.
Hubbard objects that OLDE didn’t raise that issue in the trial court and has
thus waived its claim of error. See Appellee’s Br. at 4. OLDE responds that it
Free access — add to your briefcase to read the full text and ask questions with AI
F I L E D United States Court of Appeals Tenth Circuit UNITED STATES COURT OF APPEALS FEB 19 1999 FOR THE TENTH CIRCUIT PATRICK FISHER Clerk
OLDE DISCOUNT CORPORATION,
Plaintiff-Appellant,
v. No. 98-3179 (D.C. No. 98-MC-205-EEO) JULIAN HUBBARD, (D. Kan.)
Defendant-Appellee.
ORDER AND JUDGMENT *
Before BRORBY , EBEL , and LUCERO , Circuit Judges.
After examining the briefs and appellate record, this panel has determined
unanimously to grant the parties’ request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument.
* This order and judgment is not binding precedent, except under the doctrines of law of the case, res judicata, and collateral estoppel. The court generally disfavors the citation of orders and judgments; nevertheless, an order and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3. OLDE Discount Corporation (OLDE) appeals from the district court’s
denial of its petition to compel arbitration and its entry of summary judgment
in favor of Julian Hubbard (Hubbard). Our jurisdiction arises under 28 U.S.C.
§ 1291, and we affirm.
I. Relevant undisputed facts
Upon accepting employment with OLDE in January 1996, Hubbard signed
an employment agreement and a Uniform Application for Securities Industry
Registration or Transfer, Form U-4. Both agreements contained clauses wherein
Hubbard agreed to arbitrate any disputes or claims against OLDE, including those
controversies arising out of his employment or termination that were required to
be arbitrated under the rules of the New York Stock Exchange (NYSE) and the
National Association of Securities Dealers (NASD). OLDE terminated Hubbard’s
employment in July 1996, and Hubbard filed a discrimination charge against
OLDE with the Equal Employment Opportunity Commission. In February 1998
Hubbard offered to settle his claims against OLDE, stating that if no settlement
was reached, he would file a class action suit for racial discrimination in federal
district court in Kansas City, Kansas. See Appellee’s App. at 2. On March 3,
1998, OLDE filed a petition in the Kansas City, Kansas federal district court
requesting an order to compel Hubbard to arbitrate his dispute with OLDE
pursuant to the employment and U-4 agreements. See Appellant’s App. at 1. On
-2- March 12, 1998, Hubbard filed a class action suit in the federal district court for
the Western District of Missouri in Kansas City, Missouri. See Appellee’s App.
at 5. As a defense to arbitration, Hubbard argued in a motion to dismiss OLDE’s
petition that his claims were not within the scope of the arbitration agreement
because they were filed as a class action and therefore fit within an express
exclusion to arbitration under both the NYSE and NASD rules. 1 Finding that
NASD Code of Arbitration Procedure Rule 10301(d)(2) (and the correlative
NYSE rule) applied to exclude Hubbard’s claims from the scope of the arbitration
agreement, the district court denied OLDE’s petition for an order to compel
arbitration, treated Hubbard’s motion to dismiss as one for summary judgment,
and granted summary judgment in favor of Hubbard. See Order, Appellant’s App.
at 46, 48.
II. Issues raised
Although OLDE’s brief initially states that the issue raised on appeal is
that “the district court erroneously failed to compel [defendant Julian] Hubbard
to abide by his agreement with OLDE to arbitrate any claims related to his
employment,” Appellant’s Br. at 2, it later emphasizes that the point of the appeal
1 Because the rules are substantively identical, and the parties have focused on the NASD rule, we will quote and apply only the NASD rules in this order and judgment.
-3- is not “that the District Court should have interpreted the procedures to apply only
to a pending class action . . . [but] that the District Court should not have decided
the class-action dispute at all” under the second paragraph of Rule 10301(d)(2).
See id. at 10. By its emphasis, OLDE has all but waived its argument that the
court misinterpreted and misapplied Rule 10301(d). We will, however, rule on
that issue as well as addressing OLDE’s jurisdictional argument.
III. Standard of review
We review the denial of a motion to compel arbitration de novo , applying
the same legal standards the district court employed. See Armijo v. Prudential
Ins. Co. , 72 F.3d 793, 796 (10th Cir. 1995). Because the material facts are
undisputed, we also review the grant of summary judgment de novo , determining
if the district court correctly applied the substantive law. See Kaul v. Stephan ,
83 F.3d 1208, 1212 (10th Cir. 1996).
IV. Discussion
Rule 10301(d)(1) states:
A claim submitted as a class action shall not be eligible for arbitration . . .
Rule 10301(d)(2) states:
Any claim filed by a member . . . of a putative or certified class action is also ineligible for arbitration . . . if the claim is encompassed by a putative or certified class action filed in federal or state court.
-4- ....
Disputes concerning whether a particular claim is encompassed by a putative or certified class action shall be referred by the Director of Arbitration to a panel of arbitrators in accordance with Rule 10302 or Rule 10308, as applicable. Either party may elect instead to petition the court with jurisdiction over the putative or certified class action to resolve such disputes.
NASD Manual - Code of Arbitration Procedure Rule 10301(d) (emphasis added).
In order to avoid application of Rule 10301(d)(1) to Hubbard’s claims,
OLDE argued in district court that it was “‘not seeking to compel arbitration of
a class action, but merely to force Hubbard to submit[] his claims, as agreed, to
arbitration.’” See Order, Appellant’s App. at 46. Implicit in this argument is the
assumption that Hubbard’s claims did not qualify as “a claim submitted as a class
action.” Rule 10301(d)(1). The court could have properly concluded that
OLDE’s distinction was a false one (because, by filing suit, Hubbard “submitted”
his claims as a class action) and held that Hubbard’s claims were not eligible for
arbitration under Rule 10301(d)(1). Instead, the court accepted OLDE’s
characterization of Hubbard’s claims as individual claims and found that those
individual claims were encompassed within Hubbard’s newly filed class action.
The court then properly concluded that under Rule 10301(d)(2), Hubbard’s
individual claims were also precluded.
On appeal, OLDE focuses on the language in the second paragraph of
Rule 10301(d)(2), arguing that the court erred by answering a Rule 10301(d)(2)
-5- question that, in its view, could be answered only by the court with actual
jurisdiction over the class action or by an arbitration panel. OLDE cites no
authority for this proposition, relying solely on the express language of the rule.
Hubbard objects that OLDE didn’t raise that issue in the trial court and has
thus waived its claim of error. See Appellee’s Br. at 4. OLDE responds that it
had no opportunity to do so because the court recognized the issues that created
a dispute under Rule 10301(d)(2) and ruled on them at the same time. See
Appellant’s Reply Br. at 5. OLDE ignores, however, that the court recognized the
issue precisely because OLDE characterized Hubbard’s claims as individual
claims instead of class claims--thus, OLDE implicitly invited the court to rule
on its argument. On this basis alone, we could refuse to review OLDE’s
jurisdictional complaints. See Brown v. Presbyterian Healthcare Servs. , 101 F.3d
1324, 1332 (10th Cir. 1996) (“[A]n appellant may not generally complain on
appeal of errors he has himself induced or invited.”). There are additional
reasons why we reject its arguments.
The language that OLDE claims precluded the district court from making
a factual finding on whether Hubbard’s individual claims are encompassed
within his class claims is permissive; it also addresses the procedures the parties
may elect to follow and not the jurisdiction of a particular court. See
Rule 10301(d)(2). At least one other court has found that this rule is procedural
-6- and not substantive, and can therefore be waived by the parties. Cf. D.E. Frey &
Co., Inc. v. Wherry , 27 F. Supp. 2d 950, 951 (S.D. Tex. 1998). We hold that the
district court did not exceed its jurisdiction by making a ruling under
Rule 10301(d)(2) after being invited to do so by appellant. We also find, for the
reasons stated in the district court’s May 13, 1998 Memorandum and Order, that
the court properly denied OLDE’s petition to compel arbitration.
The judgment of the United States District Court for the District of Kansas
is AFFIRMED.
Entered for the Court
Wade Brorby Circuit Judge
-7-