# Petition for Writ of Certiorari — Ronwin v. Smith Barney, Harris Upham & Co. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386004_0672%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 1993 - **Citation:** 510 U.S. 945 ## Text 93-25% No. IN THE SUPREME COURT OF THE UNITED STATES OCTOBER TERM, 1993 EDWARD RONWIN, Petitioner, vs. SMITH BARNEY, HARRIS UPHAM & CO., INC., and JOHN SPAUSTAT, Respondents. PETITION FOR WRIT OF CERTIORARI TO THE UNITED SZATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT Edward Ronwin P.O. Box 88746 Sioux Falls, SD 57105 (507) 673-2581 Petitioner pro se and Attorney at Law (Iowa) QUESTION FOR REVIEW Were this Court's decisions in Rodriquez de Quijas v. Shearson/American Express,Inc., 490 U.S. 477, 109 S.Ct. 1917 (1989) and Shearson/American Express,Inc. v. McMahon, 482 U.S. 220, 107 S.Ct. 2332 (1987), reh. den. 483 U.S. 1056, warrants to securities brokers to deny customer statutory rights to choose a judicial forum and to confine customers to arbitration only of customer/ broker disputes? ii TABLE OF CONTENTS Question for Review Table of Contents Table of Authorities Opinions Below Jurisdiction Statutory Provisions Involved Statement of the Case Reasons for the Writ Importance of the Case Conclusion Appendix TABLE OF AUTHORITIES Cases Boyd v. Grand Trunk Western R.Co., 338 UeSe 263, 70 S.C. 26, 94 L.Ed. 55 (1949) Ernst & Ernst v. Hochfelder, 425 U.S. 185, 96 $.Ct. 1375, 47 L.Ed.2d 668 (1976), reh. den. 425 U.S. 986 Harrison v. Springdale Water & Sewer Com., 780 F.2d 1422 (8th Cir. 1986) 12,13 La ‘2 iii TABLE OF AUTHORITIES —- CONT'D. Page Kennett v. Chambers, 55 U.S. 38, 13 14 L.Ed 316 (1852) Rodriquez de Quijas v. Shearson/ i,4,6,9, American Express, Inc., 490 11,12,16 Ronwin v. Smith Barney, Harris Upham & Co, 807 F.Supp. 87 ea (D. Neb. 1992) y Shearson/American Express, Inc. Ve McMahon, 482 UeSe 220, 107 oo 2332 (1987), reh. den. 483 (4,6 U.S. 1056 boli Se 14,16 Simmons v. Dickhaut, 804 F.2d 182 13 (lst Cir. 1986) United Housing Foundation, Inc. Wilko v. Swan, 346 U.S. 427, 4,14 74 S.Ct. 182 (1953) ; United States Constitution First Amendment 13 Fifth Amendment | 13 Fourteenth Amendment 13 United States Code 9 U.-S.-Ce, Sec. l, et seq. 9 iv TABLE OF AUTHORITIES-CONT'D. Page LS U.8.€.; Sec. 77a 7 Sec. 77n 7 Sec. 77v 2:;4,5,114713 Sec. 78a 7 Sec. 78aa 3,4,5,2ai27ih0 Sec. 78cc 7,14 28 DeBeGee Sec. 1254(1) 2 Sec. 1291 10 Sec. 1294 10 Sec. 1331 > Sec. 1332 5 Sec. 1337 > Sec. 1367 5 No. IN THE SUPREME COURT OF THE UNITED STATES OCTOBER TERM, 1993 EDWARD RONWIN, Petitioner, VS. SMITH BARNEY, HARRIS UPHAM & CO., INC., and JOHN SPAUSTAT, Respondents. PETITION FOR WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT OPINIONS BELOW On June 24, 1993, the U.S. Court of Ap- peals for the Eighth Circuit entered an unpublished Opinion, and a separate Judgment affirming the district court's Opinion: See Appendix, A-1l, A-2. On or about June 30, 1993, Petitioner, ("RONWIN") filed a timely Petition for Rehearing and the court of appeals entered a denial of same on July 21, 1993, A-3. On Octeber 29, 1992: ths V.2, Die*rtct Court for the District of Nebraska entered a Judgment, A-16, and a separate Order and Memorandum, ("DIST CT OPINION"), A-3, et seg... DIST CT OPINION has been published at 807 F.Supp. 87 (D.Neb. 1992). JURISDICTION This Petition for Writ of Certiorari is being filed within 90 days after the court of appeal's denial of RONWIN's Petition for Rehearing entered July 21, 1993. The rehearing was requested on the court of appeal's Opinion, A-l and Judgment, A-2, both entered on June 24, 1993. This Court's jurisdiction is invoked under 28 U.S.C., Sec. 1254(1). STATUTORY PROVISIONS INVOLVED United States Code, Title 15, Sec. 77v(a) The district courts of the United States, IBEST AVAIL --e-Shall have jurisdiction of offenses and violations under this subchapter, and concurrent with State and Territorial courts, of all suits in equity and actions at law brought to enforce any liability or duty created by this subchapter. United States Code,Title 15, Sec. 78aa The district courts of the United States --e-Shall have exclusive jurisdiction of violations of this chapter...and of all ss Suits in equity and actions at law brought to enforce any liability or duty created by this subchapter... STATEMENT OF THE CASE On January 15, 1992, RONWIN executed a customer agreement with SMITH BARNEY, HARRIS UPHAM & CO., INC., ("SB," which will include as the use implies SB's Omaha office manager, JOHN SPAUSTAT, ("SPAUSTAT")), for a cash only securities account. Prior to entering the agreement, RONWIN objected to the pre-dispute 4 arbitration clause and SB's representative agreed to delete same. That is an essential distinction between this case and the facts in Rodriquez de Quijas v. Shearson/American Express, Inc., 490 U.S. 477, 109 S.Ct. 1917 (1989), and in Shearson/American Express, Inc. ve McMahon, 482 U.S. 220, 107 S.Ct. 2332 (1987), where the customers signed agreements containing predispute arbitration clauses and, after a dispute erupted, urged that arbitration clauses were prohibited by the 15 U.S.C., Secs. 77v and 78aa, and this Court's decision in Wilko v. Swan, 346 U.S. 427, 74 S.Ct. 182 (1953); See, Rodriquez, 107 S.Ct. @ 1918-19, and McMahon, 482 U.S. @ 222-226, 107 S.Ct. @ 2335-2337. Later that day, Jan. 15, 1992, SPAUSTAT reversed SB's position and, after further interaction between SB and RONWIN, SB refused service to RONWIN and unilaterally closed the account. | On May 6, 1992, RONWIN filed a four-Count Complaint: Count I [unenforce- able] contract of adhesion; Count II, violation of Securities Acts; Count III, breach of contract and Count IV, breach of fiduciary duty. The jurisdictional bases pled were: 15 U.S.C, Secs. 77v, 78aa;: 28 U.S.C., Secs. 1331, 1332, 1337 ana LaG7 « SB met the Complaint with a motion to dismiss and to strike and RONWIN filed a motion for partial Summary judgment. October 29, 1992, the district court entered Judgment and the separate DIST cT OPINION, A-3 et seg-, dismissing all Counts. The district court's reasons for said dismissal is of import to this Petition. As to Count II, DIST CT OPINION contended that, A=-9 to A-10; 807 F.Supp. @ 89: The essence of Ronwin's contention is that these Acts, at Sec. 22 of the Securities Act of 1933 (15 U.S.C., Sec. 77v) and at Sec. 27 of the Securities Exchange Act of 1934 (15 U.S.C., Sec 78aa), vest exclusive jurisdiction for violations of the 6 respective Acts in the district courts of the United States; the pre- dispute arbitration clause, Ronwin argues, constitute a waiver of compliance with those respective provisions... and, the district court added (correctly) that McMahon rejected that argument, hake. Based upon the quoted contention, the district court dismissed Count II, A-1l; 807 F.Supp. @ 90. The district court's contention was not only incorrect, but utterly contrary to RONWIN's stated position as found in [RONWIN's] Brief in Support of [RONWIN's] Response to Defendants’ Motions to Dismiss and to Strike, p. 9: Thus, the element central to both McMahon and Rodriquez reduced to a question of whether the arbitration clause accepted by the customers in each case could be enforced to require the customer-claimants to arbitrate the disputes each had with the broker/ dealer, (the same firm in both cases), and which arose in each case subse- quent to the execution of the respec- tive customer agreements or whether the right to a judicial forum provided EEE Ee 7 an 13 GU.8.6., See. Pia, et seq., and 15 U.S.C., Sec. 78a, et seq., excluded arbitral forums pursuant to the provisions of 15 U.S.C., Sec. 77n and 15 u.S.c., Sec. 78cc, respectively. That question is not an_issue, central or otherwise, in this action. (emphasis added). Not only did RONWIN Clearly inform the district court that the posture on Count II which said court ascribed to RONWIN was inaccurate, but the district court's contention, upon which it dismissed Count II, is nowhere to be found in the record below. An analogous situation occurred as to Count I. DIST CT OPINION alleged and dismissed Count I on the following grounds, A-8; 807 F.Supp. @ 89: _Ronwin has made no allegation of un- conscionability separate from the general assertion that the predispute arbitration clause is a contract of adhesion, and the apparent, albeit erroneous, presumption that all such clauses are inherently unconscionable. Count I of the complaint must accordingly be dismis- sed for failure to state a claim. 8 The district court's allegation is at odds with the record below. Under Count I, RONWIN pled, Para. XVII, pp. 5-6: The actions of the Defendants in de- manding as a condition for the pro- vision of their Federal and State regulated services...[{that] RONWIN and any other prospective customer unconditionally accept said pre-dis- pute arbitration clause, and thereby denying RONWIN...the free choice of whether or not to agree to said pre- dispute arbitration clause, whether for a cash or a margin account, and denying to RONWIN...the right to seek redress of grievances...in the Courts of the United States and/or in the Courts of the several states, constitute a contract of adhesion and/or an impermissible demand for same, and said action by SB is against public policy, unenforceable and an unconscionable business tactic. Contrary to the district court's conten- tion, RONWIN certainly did not plead that all broker/customer agreements containing predispute arbitration clauses are "contracts of adhesion" and, consequently, “inherently unconscionable"; rather, RONWIN pled that the reason the predispute arbitration clause in SB's customer agreement becomes | a "contract of adhesion" and an "unconscion- able business tactic" is that, as RONWIN had pled, SB refuses service to RONWIN unless RONWIN "unconditionally accepts said predispute arbitration clause." There was no pleading by RONWIN, apparent or otherwise, of an "albeit erroneous, presumption that all such (predispute ar- bitration] clauses are inherently unconsci- Oonable." In (RONWIN's] Brief in Support of [RONWIN's] Response to ([SB's] Motions to Dismiss and to Strike, pP.- 7, RONWIN told the district court: --TO emphasize the point: The complaint does not challenge the provisions of the Federal Arbitration Act, 9 U-+S.C., Sec. 1, et seq.; and agrees that an arbitral forum can re lace a statutoril rovided judicial forum i ln the oe TEER ET. area, as in other ——__ fields, but, the Complaint insists in line with Rodriquez that the agreement to arbitrate must be an unfettered choice of the customer and not required as a non=negotiable demand by the broker/dealers... (emphasis supplied). 10 As to Counts III and IV, the district court found that diversity jurisdiction existed, A-13; but dismissed both Counts, A-13. Count III was dismissed on the grounds that SB allegedly could breach its contract at will, A-13,A-14; 807 F.Supp. @ 90, and Count IV was dismissed because the other Counts had been dismissed, as failing to state a claim, A-14,A-15; 807 F.Supp. @ 90-91. It is pertinent that SB's forcing of predispute arbitration clauses on customers was found by the district court to be an industry-wide practice, A-7; 807 F.Supp. @ 89. A timely notice of appeal was filed on November 30, 1992. Jurisdiction in the court of appeals was based on 28 U.S.C., Secs. 1291 and 1294. The Court of Appeals for the Eighth Circuit entered both a brief Opinion, A-l, and a separate Judgment, A=-2, on June 24, 1993. The brief Opinion ee 1l merely states the court of appeal's approval of the entire district court opinion. On or about June 30, 1993, RONWIN filed a timely Petition for Rehearing. On July 21, 1993, the court of appeals denied the petition without comment, A-3. REASONS FOR THE WRIT In justification of this Court's expansion of the terms of 28 U.S.C., Secs. 77v and 78aa, to allow arbitral forums, this Court wrote in Rodriquez, 490 U.S. @ 482-483, 109 S.Ct. @ 1921: --to advance the objective of allowing buyers of securities a broader right to select the forum for resolving disputes, whether it be judicial or otherwise... Placing the right to select the forum, judicial or arbitral, in the customer's lap is consistent with this Court's repeated recognition that the Securities Acts of 1933 and 1934 were enacted for the benefit of, and protection of, customers, as noted in Rodriquez, 490 U.S. 12 @ 484, 109 S.Ct. @ 1921: This avenue of relief is in harmony with the Securities Acts' concern to protect buyers of securities by re- moving 'the disadvantages under which buyers labor' in their dealings with sellers [citing] Wilko, 346 U.S. @ 435, 74 S.Ct. @ 187... Accord: Ernst & Ernst v. Hochfelder, 425 U.S. 185, 194-195, 96 S.Ct. 1375, 1381-1382, 986; United Housing Foundation, Inc. v. Forman, 421 U.S. 837, 849, 95 S.Ct. 2051, 2059, 44 L.Ed.2d 621 (1975), reh. den. 423 U.S. 884. SB's practice of forcing customers or prospective customers to accept a predis- pute arbitration clause in its customer agreements, which is an industry-wide practice: 1. Denied RONWIN's "right to select the forum...whether it be judicial or {[arbitral]," recognized under Rodriquez. A “right to select the forum...is a substan- tial right," Boyd v. Grand Trunk Western aaeaaaaaessiiaiaiaiei caine iad is R. Co., 338 U.S. 263, 266, 70 S.Ct. 26, 28, 94 L.Ed. 55 (1949); which right ultim- ately springs from fundamental constitu- tional rights under the First, Fifth and Fourteenth Amendments, Harrison Ve Springdale Water & Sewer Com., 780 F.2d 1422, 1427-1428 (8th cir. 1986); Simmons ve Dickhaut, 804 F.2d 182, 183 (Se¢ Circ. 1986); and, y Unilaterally- voids the above-quoted terms, 2-3 above, of 28 U.S.C., Secs. 77v and 78aa, which allow the choice of judicial forums; and, 3. Violates the public policy of the United States, Kennett v. Chambers, 95 U.S. 38, 51, 14 L.Ed. 316 (1852); and, 4. Makes SB's predispute arbitration clauses, unenforceable contracts of adhesion. The district court's opinion, approved by the court of appeals, runs diametrically contrary to this Court's decisions as cited and quoted above. 14 A second reason for granting the Writ of Certiorari is that this Court held in 2339-2340: Section 29a, ' 2 ea 78cc(a)] is concerned, not with whether brokers 'maneuver([ed customers] into' an agreement, but with whether the agreement 'weaken[s] their ability to recover under the [Exchange] Act. [Wilko v. Swan], 346 U.S., at 432, 74 $.Ct., at 185. The former is grounds for revoking the contract under ordinary principles of contract law; the latter is grounds for voiding the agreement under Section 29a. (2nd, 3rd and 4th brackets are in the original). Clearly, RONWIN had a common law claim Since the basis for the breach of the RONWIN/SB cash account agreement was RONWIN's refusal to be "maneuvered into" such an agreement if it contained a predispute arbitration clause, along with RONWIN's insistence on the right’ to choose a judicial forum rather than an arbitral forum if a dispute arose; See quotation from Complaint at 8, above. As 15 the district court found that diversity jurisdiction existed under Count III, there were no grounds to dismiss said Count, regardless of the merits, if any, of the district court's dismissal of the other Counts. Importance of this Case This action runs beyond RONWIN's own dispute with SB. Not only are large numbers of SB's_ securities customers equaily and illegally denied constitutional and Statutory rights recog- nized by this Court, but, as an industry- wide practice, millions of Americans are being forced to surrender their right to choose judicial forums rather than arbitral forums, contrary to constitutional right, Statutory right and the decisions of this Court; and as bad, SB's action, and that of its fellow brokers, illegally voids statutes of Congress. 16 CONCLUSION For the foregoing reasons, this Court is urged to grant the Writ sought so that this Court can make clear that it did not replace judicial forums with arbitral forums when it promulgated the Rodriquez and McMahon decisions, but merely enlarged the free choice of buyers cof securities, 1.@., the customers and prospective customers of securities brokerage establish- ments, to choose arbitral or judicial forums for customer/broker dispute resolution. Respectfully submitted Edward Ronwin P.O. Box 88746 Sioux Falls, SD 57105 (507) 673-2581 Petitioner pro se and Attorney at Law (Iowa) Dated: August 17, 1993 (Appendix follows) ESTER PERRET oe ” a a ee be ee i ee > Bas A-1l UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT Appeal from the United States District Court for the District of Nebraska (CAPTION) [ UNPUBLISHED] +e © + + * & Submitted: June 18, 1993 Filed: June 24, 1993 Before McMILLIAN, FAGG, and HANSEN, Circuit Judges. PER CURIAM. Edward Ronwin appeals the district court's order dismissing Ronwin's action for failure to state a claim on which relief can be granted. See Ronwin v. Smith Barney, Harris Upham & Co., 807 F.Supp. 87, 88 (D.Neb. 1992). We have nothing to add to the district court's well-reasoned opinion. Accordingly, we affirm on the basis of the district court's opinion. See 8th Cir. R. 47B. A true copy. Attest: CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT. UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT No. 92=-3788NEO * (CAPTION) ,Appeal from the United States ,District Court for the District ,of Nebraska * JUDGMENT This appeal from the United States District Court was submitted on the record of the district court and briefs of the parties. After consideration, it is hereby ordered and adjudged that the judgment of the district court in this cause is affirmed in accordance with the opinion of this Court. June 24, 1993 A true copy. ATTEST: /s/ Michael E. Gans CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT. MANDATE ISSUED 7/28/93 es UNITED STATES COURT OF APPEALS POR THE EIGHTH CIRCUIT No. 92-3788NEO * (CAPTION) *Appeal from the United States *District Court for the District *of Nebraska * The petition for rehearing by the panel is denied. July 21, 1993 Order Entered at the Direction of the Courts: /s/ Michael E. Gans Clerk, U.S. Court of Appeals, Eighth Circuit PT BENET FLIER PSE TEETER RELIED EE 8 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEBRASKA EDWARD RONWIN, d/b/a Plaintiff, 8:CV92-00232 vs. ) ) ) ) SMITH BARNEY, HARRIS eats and UPHAM & Cee INC., ) and JOHN SPAUSTAT, ) ) Defendants. THIS MATTER is before the Court on the Defendants' motion to dismiss and to strike (Filing No. 13). For the reasons A-4 set out below, this action will be dismissed, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, for failure to state a claim. The plaintiff in this acticn, Edward Ronwin, doing business as Index Investments, alleges (Filing No. 1) that he had sought to open a securities account with defendant Smith Barney, Harris Upham & Co., Inc.; defendant John Spaustat is and was, at all times relevant, resident —_———— manager of Smith Barney's Omaha office. Ronwin alleges that he was initially permitted to open a cash account without signing an agreement containing a predis- pute arbitration agreement, but’ that Smith Barney later determined that it would not permit him to have an account without such an arbitration agreement and returned his money. Ronwin further alleges that he was damaged by the defendants' re- fusal to do business with him on his terms. A-5 He seeks to recover compensatory and puni- tive damages and attorney fees, as well as injunctive relief. Jurisdiction is asserted upon the bases of the existence of a federal question (28 U.S.C., Sec. 1331), diversity of citi- zenship (28 U.S.C., Sec 1332), commerce and antitrust regulations (28 U.S.Cc., Sec. 1337), upon supplemental jurisdiction pur- Suant to 28 U.S.C., Sec. 1367, and upon the Securities Act of 1933 (15 U.S.c., Sec. 77v) and the Securities Exchange Act of 1934 (15 U.S.C., Sec. 78aa). The standards for dismissal pursuant to Rule 12(b)(6) are well established. In con- sidering a motion to dismiss under F.R.Civ.P. 12(b)(6), the allegations in the complaint must be viewed in the light most favorable to the plaintiff. Fusco v. Xerox Corp., 676 F.2d 332, 334 (8th Cir. 1982). "TA] complaint should not be dismissed for fail- ure to state a claim unless it appears be- A-6 yond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957) (footnote omitted). "Thus, as a practical matter, a dismissal under Rule 12(b)(6) is likely to be granted only in the unusual case in which a plain- tiff includes some insuperable bar to relief." Jackson Sawmill Co. v. United States, 580 F.2d 302, 306 (8th Cir. 1978), cert. denied, 439 U.S. 1070 (1979). The Court finds this to be such a case. In the first count of his complaint, Ronwin asserts that the defendants' insis- tence that he agree to the predispute arbi- tration clause as a condition of doing business with Smith Barney constitutes an attempt to impose an unenforceable contract of adhesion. He accordingly seeks to have Smith Barney enjoined from requiring such clauses as a prerequisite for accepting accounts, and seeks unspecified compensatory A-7 and punitive damages, as well as attorney fees and costs, This count of the plaintiff's complaint rests upon an erroneous presumption and must therefore be dismissed. The defendants do not deny, and this Court finds, that the contract in questionisa contract of adhesion. Such contracts may be said to exist where, as here, a standardized form of agreement, Grafted by the party with superior bargain- ing power, is presented to a party on a take it or leave it basis. As the plaintiff points out, and the defendants do not dis- pute, insistence upon such predispute arbi- tration clauses are an industry-wide practice. However, the mere fact that a contract falls under the rubric of the adhesion doctrine does not make it unenforceable. See, e.g. Webb v. R. Rowland & Co., 800 F.2d 803, 807 (8th Cir. 1986) ("the use of a standard form contract between two parties of admittedly unequal bargaining A-8 power does not invalidate an otherwise valid contractual provision. To be invalid, the provision at issue must be unconscion- able"). See also Finkle and Ross vy. A.G. Becker Paribas, Inc., 622 F.Supp. 1505, 1512 (S.D.N.Y. 1985) (holding that such contracts may be considered contracts of adhesion but are nonetheless enforceable in the absence of a showing of "unfairness, undue oppression or unconscion- ability"). Ronwin has made no allegation of uncon- scionability separate from that the (sic) general assertion that the predispute arbi- tration clause is a contract of adhesion, and the apparent, albeit erroneous, presump- tion that all such clauses are inherently unconscionable. Count I of the complaint must accordingly be dismissed for failure to state a claim. In Count II of his complaint, Ronwin al- leges that the defendants’ insistence upon A-9 the predispute arbitration clause was an attempt to impose a condition that violates Sec. 14 of the Securities Act of 1933 (15 U.S.C., Sec. 77n) and Sec. 29(a) of the Securities Exchange Act of 1934 (15 U.S.C., Sec 78cc). Each of those provisions forbids the imposition of "any condition, stipulation or provision binding any person to waive compliance with any provision [of the respective Acts]". Ronwin asserts that the predispute arbi- tration clause falls within those proscrip- tions. In this Count, Ronwin seeks compen- satory and punitive damages, injunctive relief, and an award of attorney fees and costs. The essence of Ronwin's contention is that these Acts, at Sec. 22 of the Secur- ities Act of 1933 {15 U.S.C., Sec. 77v) and at Sec. 27 of the Securities Exchange Act of 1934 (15 U.S.C., Sec. 78aa), vest exclusive jurisdiction for violations of the respective Acts in the district courts A-10 of the United States; the predispute arbitration clause, Ronwin argues, consti- tutes a waiver of compliance with those respective provisions. This argument, in the context of the Securities Exchange Act of 1934, was con- sidered and rejected by the Supreme Court of the United States in Shearson/American Express, Inc. v. McMahon, .482 U.S. 220, 107 S.Ct. 2332, 96 L.~Ed.2d 185 (1987). In McMahon the Court reasoned that The McMahons contend that an agree- ment to waive this jurisdictional provision is unenforceable because Sec. 29(a) voidg the waiver of "any provision" of the Exchange Act. The language of Sec. 29(a), however, does not reach so far. What the anti- waiver provision of Sec. 29(a) forbids is enforcement —of agreements to waive "compliance" with the provi- sions of the statute. But Sec. 27 itself does not impose any duty with which persons trading in securities must "comply." But its terms, Sec. 29(a) only prohibits waiver of the substantive obliga- tions imposed by the Exchange Act. Because Sec. 27 does not impose any statutory duties, its waiver does not constitute a waiver of "compli- ance with any provision" of the Exchange Act under Sec. 29(a). aera eeenenietineaane aarti A-1l 482 U.S. at 228. The Supreme Court expressly adapted that same reasoning to the Securities Act of 1933 in Rodriquez de Quijas v. Shearson/American Express, Inc., 490 U.S. 477, 109 S.Ct. 1917, 104 L.Ed.2d 526 (1989). The predispute arbitration Clause insisted upon by the defendants simply does not contravene the respective Acts; Count II of Ronwin's complaint must accordingly be dismissed for failure to state a claim. The two remaining Counts of the plaintiff's complaint are based upon common law Claims of breach of contract and breach of fiduciary duties. Having dismissed the Counts of the plaintiff's complaint which would have established jurisdiction on the basis of a federal question, securities laws or antitrust laws, or which would have provided a basis for supplemental jurisdiction, the Court must face the ques- tion of whether diversity jurisdiction re- mains pursuant to 28 U.S.C., Sec. 1332. ill A-12 As further explained below, the Court finds that it does. The burden of proof on a Rule 12(b)(I) motion is upon the party asserting juris- diction. Estate of Blakely v. Asbestos Corp., 766 F.Supp. 721 (E.D. Ark. 1991); 12 Wright and Miller, Federal Practice & Procedure, Sec. 1350 (1990). Ronwin has clearly pled diversity among the parties (Filing No. 1 at Paras. II, III and IV), but has pled damages only "in an amount to be determined at trial" (Filing No. 1 at Paras. XVIII, XXI, XXIV, and the prayer for relief). Although the Court has serious doubts that the plaintiff would recover an amount in excess of Sec. 1332's $50,000 amount in controvery requirement, the Court is also cognizant that "the claim is deemed to have been made in good faith so long as it is not clear to a legal certainty that the claimant could not recover a judgment exceeding the jurisdictional amount." A-13 Id. at 231. Accordingly, the Court holds that diversity jurisdiction exists. Nonetheless, the Court further finds that these remaining two counts should be dismissed for failure to state a claim. Count III is a breach of contract claim in which Ronwin alleges that Smith Barney's refusal to permit Ronwin to participate in an account without a predispute arbitra- tion agreement constituted a breach of the agreement for a cash account. However, it is uncontroverted that Smith Barney returned Ronwin's funds and the account was closed. See, e.g., Complaint (Filing No. 1) at Para. XV. Assuming arguendo that a contract had existed, Smith Barney Clearly had the right to end the contract in the manner it did. Notice to this Supreme Court: The following portion of the decision did not appear on the pages supplied by the District Clerk's office, but was taken A-14 from the published decision at 807 F.Supp. @90: "The general rule is that contracts having no fixed term are terminable at will by either party." Martin v. Equitable Life Assurance Soc. of the United States, 553 F.2d 573, 574 (8th Cir. End of portion missing from the copy of the decision distributed by the District Court Clerk's office. 1977); See also Federal Deposit Insurance Corp. v. Northwood Projects, Inc., 95 Misc.2d 373, 407 N.Y.S.2d 424 (1978) and Muller Enterprises v. Samuel Gerber, Advertising Agency, Inc., 182 Neb. 261, 153 N.W.2d 920 (8th Cir. 1967) (sic). Again, the plaintiff has failed to state a claim upon which relief could be granted. Ronwin's fourth and final Count is pre- mised upon an ulleged breach of fiduciary duty. Assuming arguendo that a fiduciary relationship existed, Ronwin has simply A-15 failed, for the reasons described above, to allege any circumstances that could conceivably constitute a breach of any fidu- ciary duty. This Count, like the others, must be dismissed for failure to state a claim. Accordingly, (1) the motion on to (sic) dismiss (Filing No. 13) is granted; (2) the plaintiff's motion for partial summary judgment (Filing No. 21) 1s denied as moot; and (3) an Order of Dismissal consistent with this Memorandum and Order will be entered this date. DATED this 29 day of October, i992. BY THE COURT: /3/ William G. Cambridge WILLIAM G. CAMBRIDGE, United States District Court Judge A-16 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEBRASKA EDWARD RONWIN, d/b/a (sic)) Plaintiff, 8:CV92-00232 vs. ) SMITH BARNEY, HARRIS proce UPHAM & CO., INC., ) T Defendants. ) 1992) ) In accordance with the Order entered this date, IT IS ORDERED that this matter is dismissed. DATED this 29 day of October, 1992. BY THE COURT: /3s/ William G. Cambridge WILLIAM G. CAMBRIDGE, United States District Court Notice: The portion noted as missing from the District Court Clerk's copy of the Memorandum and Order, as supplied on pages A-12 and A-13, supra, and as found in 807 F.Supp. @90, was officially made part of the record below by an Amendment to Memorandum and Order filed January 20, 1993 by the District Clerk's office. Said Amendment was signed by Judge CAMBRIDGE on January 20, 1993. --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386004_0672%3A1. Public record. Not legal advice.