Document Type

Article

Publication Date

2-8-2008

Abstract

Plaintiffs-appellants, Elizabeth H. Rich and her husband, Donald Rich (the "Riches"), appeal from a judgment entered in the United States District Court for the Southern District of New York (Cote J.) vacating an award made in their favor by an arbitration panel established under rules adopted by the National Association of Securities Dealers ("NASD"). See In re Worldcom Sec. Litig., No. 02-3288, 2006 WL 709101 (S.D.N.Y. Mar.21, 2006). The award was made against defendant-appellee Salomon Smith Barney, Inc. ("SSB"), now known as Citigroup Global Markets, Inc. ("Citigroup"), and against Philip L. Spartis and Amy Jean Elias, stockbroker representatives employed by SSB. Id. at *1. Spartis and Elias cross appeal from the judgment insofar as it confirms the arbitration panel's dismissal of their cross claims for indemnity against Citigroup. The District Court determined, inter alia, that the arbitration award was solely for losses sustained by the Riches that were released by a court order approving settlement of a class action. See In re Worldcom Sec. Litig., 2006 WL 709101, at *1. Accordingly, the District Court concluded that "the award of damages to the Riches must be vacated on the ground that the arbitrators exceeded their authority when they granted damages to the Riches...." Id. at *4. As to the arbitration panel's dismissal of the cross-claim, the District Court concluded that Spartis and Elias failed to show any basis for vacating the arbitration panel's decision. Id. We find that the District Court could not have determined that the arbitration award relied solely on WorldCom losses based on the record before us. We remand to the District Court to order the arbitration panel to clarify the award.

Comments

516 F.3d 75 (2008)

Elizabeth H. RICH and Donald Rich, Plaintiff-Appellants, v. Phillip L. SPARTIS and Amy Jean Elias, Defendants-Appellees-Cross-Appellants, Salomon Smith Barney, Inc., Formerly Known as Citigroup Global Markets, Inc., Defendants-Appellees.

Docket Nos. 06-1723-cv (L), 06-1814-cv (XAP).

United States Court of Appeals, Second Circuit.

Argued: September 18, 2007.

Decided: February 8, 2008.

New York Law School location: File #3612, Box 152

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