# Opposition Brief — Richards v. Lloyd's of London

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 1998
- **Citation:** 525 U.S. 943

## Text

Supreme Court, Us. |
No. 97-1779 FILED
JUN 2 1998
IN THE | OFFICE OF THE CLERK

Suprene Court of the nited States

OCTOBER TERM, 1997

>

ALAN RICHARDS, et al.,
Petitioners,

—vV a ed
LLOYD’S OF LONDON, et ai.,

Respondent.

ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE NINTH CIRCUIT

BRIEF OF RESPONDENT LLOYD’S

IN OPPOSITION
Dean Hansell Harvey L. Pitt*
LEBOEUF, LAMB, GREENE Michael H. Rauch
& MACRAE, L.L.P. Debra M. Torres

725 S. Figueroa Street FRIED, FRANK, HARRIS,
Los Angeles, California 90017 SHRIVER & JACOBSON
(213) 955-7300 One New York Plaza

New York, New York 10004

(212) 859-8000

Attorneys for Respondent Lloyd's

* Counsel of Record

PARTIES TO THE PROCEEDING

Respondent Lloyd’s, sued herein as Lloyd’s of London,
an unincorporated association, and The Corporation of Lloyd’s,
a/k/a The Society of Lloyd’s, a/k/a The Society and Council of
Lloyd's, is not a publicly held corporation, has no parent
corporation, and has no subsidiaries that are not wholly owned.

TABLE OF CONTENTS

Page
PARTIES TO THE PROC EBIOIINGS oon... s.ccccccccccscicsenscese cscs: i
py A ge, SE: emer eae eee ul
TABLE OF AUTHORITIES .............. id asa ata ee
OPPOSITION TO PETITION FOR
A WRIT OF CERTIORARI... Seabee
STATEMENT OF THE CASE ......... bite MOSER
Procedural History..................... eRe e 6
REASONS FOR DENYING THE PETITION ae
| THE NINTH CIRCUIT PROPERLY
HELD THAT PLAINTIFFS COULD
NOT AVOID THE CHOICE CLAUSE
MERELY BY ALLEGING CLAIMS
UNDER THE FEDERAL SECURITIES LAWS... i2

A. The Choice Clause Is Presumptively
Enforceable Under Bremen And Scherk ................. 12

il

Page
B. Scherk Is Controlling And Requires
Enforcement Of The Choice Clause... 14
1. The Anti-Waiver Provisions Do Not
Bar Enforcement Of An International
PUI ore 14
2. The Choice Clause Is A “Truly
International” Agreement..................0.0..0......... 17
3. Scherk Does Not Require That The
Chosen Forum Will Enforce The
Federal Securities Laws .............. Pac Rae 19
C. Petitioners Have Adequate Remedies
For Their Claims In The English Courts ........... ee
{1 THE NINTH CIRCUIT PROPERLY
HELD THAT THE CHOICE CLAUSE
WAS NOT PROCURED BY FRAUD... 24
A. The Ninth Circuit Properly
Applied Prima Paint And Scherk 24

B. The Ninth Circuit’s Application
Of Prima Paint Is Consistent

With Moseley ... .25
ie EET EIST Gt Re ecg ee a 28
oe on. See IEEE SE aor eects CSE OE oe Stat Se Rl

TABLE OF AUTHORITIES

Cases Page(s)

Alberto-Culver Co. v. Scherk,
484 F.2d 611 (7th Cir. 1973),

Be, WEF Ee FARTS ci desss cccstinsovsncnensonsisies 15, 18

Allen v. Lloyd’s of London,
94 F.3d 923 (4th Cir. 1996),

mandamus denied, US. __,
CS oe eet ee a 1 nl, 23

Bonny v. Society of Lloyd’s,
3 F.3d 156 (7th Cir. 1993), cert. denied,

PEO Se. SORE (eich iano niuaienes passim
C iell Ltd. v. iti Italia S.p.A.,
BET We te Oe Gs BOE aici ccisseticcsensticscccseceseanens 26

B.S. Employees Fed. Credit Union v.
Donaldson, Lufkin & Jenrette,
DIZ F208 1563 GO Cir, FOG insane cscsscccsoesny 26

121 F.3d 956 (Sth Cir. 1997),
cont. demied, US.
fog es Re a | a eer er _ passim

Hi v. Vv iting Ltd...
No. 89-2563 (Sth Cir. May 31, 1990),
cert. denied, 498 U.S. 981 (1990)... 13

Cases Page(s)

Alliance Missi

oe Cae Perce Ge. S991) oo ee 0)

itsubishi M v.
ler Ch r-P} Inc.,

Wid Ue DIC 11, 21
Moseley v. El issil

Facilities, Inc.,

PPO te. FO Coin a ee eS 25, 26

kab EE | ; Papen aRORn Oe Meta PERE meN eee passim
Pri _V % oR

es a Se
Reidel’s Inc. v. General Elec. Co.,

498 F.2d 95 (Sth Cir. 1974).............................. 22 n.16

Vv. ,
135 F.3d 1289 (9th Cir. 1998)
(en banc) (cited herein as “Pet. App.
pe a iat: passim

>

107 F.3d 1422 (9th Cir. 1997),

withdrawn, 135 F.3d 1289 (9th Cir. 1998)

(en banc) (cited herein as “Pet. App.

WO NS se 4,7n.7, 8, 10n.10

Cases Page(s)

No. 94-1211-IEG (POR),

1995 WL 465687 (S.D. Cal. May 1, 1995),
aff'd, 135 F.3d 1289 (9th Cir. 1998)

(en banc) (cited herein as “Pet. App.

ey loss sas ondtc elite vese untae cenroe 26n.17

eee ay ioe Lid
969 F.2d 953 (10th Cir.),
cert. denied, 506 U.S. 1021 (1992)... passim

Roby v. Corporation of Lloyd's,

996 F.2d 1353 (2d Cir.),

cert. demied, 510 U.S. 945 (1993)... passim
Rodriguez de Quijas v. Shearson/Am.

Express, Inc., 490 U.S. 477 (1989) ......... 11, 15n.12, 20

kv. Al ,
Ee SE, TE wai sales cidtinveiientdube osesxiacaoicctanins passim

TL Bg. Rn a 11, 20

Shell y_R.W. Sturge, Ltd.,
os F.36 1227 (Gh Cir. 1995)..................... 70.2, 22, 2

1ety of "SV.
[1995] LRLR 307 (C.A. Nov. 10, 1994)
(LEXIS, Enggen Library, Cases File)......00..............13

vil

Cases Page(s)

810 F.2d 1066 (I Ith Cir. 1987) (en banc),

eS ian eee aimee 16

487 US. 22 (1988)... Bee eek 11, 16

128 F.3d 793 (2d Cir. 1997),

aff'g per curiam 981 F. Supp 808

EOE RE Ola aaa 33, 12, 25
ae rk iiss) Par 11, 22
Wilko v. Swan,

nase 15
Statutes
a es 7
a es 7
WOE Citas oo 6
BUC Ce. Sie Conn nee oe 16
Rules

medsdee\
an

Wd
Wi

0X,

a iy A
Sree an Wig gare
ea Pr he Sas a ew

OPPOSITION TO PETITION
FOR A WRIT OF CERTIORARI

Lloyd's respectfully submits this opposition to the
petition for a writ of certiorari (the “Petition,” cited herein as
“Pet.”) seeking review of a judgment of the United States Court of
Appeals for the Ninth Circuit that requires Petitioners to
adjudicate their claims against Lloyd's in the English courts,
pursuant to English law, as they contractually committed to do.

STATEMENT OF THE CASE

Petitioners are individual underwriting members
(“Names”) of the international insurance market regulated by
Respondent Lloyd’s pursuant to Acts of the British Parliament.
Petitioners have asserted claims against Lloyd’s under, inter alia,
the registration and anti-fraud provisions of the federal securities
laws. There has been no determination — and Lloyd's vigorously
disputes — that Petitioners’ membership of, or underwriting in,
the Lloyd’s market involves the purchase or sale of a “security”
within the meaning of the federal securities statutes
Nevertheless, Petitioners argue that the anti-waiver provisions of
those statutes automatically void their contractual agreement to
litigate disputes relating to their participation in the Lloyd's
market in the English courts, pursuant to English law (the
“Choice Clause”).

Less than two months ago, this Court declined. for the
fifth time, to review a decision of a United States Court of
Appeals enforcing the Choice Clause to dismiss claims under the

federal securities laws. Haynsworth v. Corporation of Lloyd's.
121 F.3d 956 (Sth Cir. 1997), cert denied, US 1185S.

Ct. 1513 (1998).' The petition in Haynsworth. like its

The Court previously declined review in Allen v_ Llovd’s of
London, 94 F.3d 923 (4th Cir. 1996), mandamus denicd, __
US. __. 117 §. Ct. 2497 (1997), Bonny v._ Society of

Footnote continued

2
predecessors, made the same argument advanced by Petitioners
here: that parties to an international forum selection agreement
may avoid their contractual obligation to ‘tigate in the chosen
forum by the simple expedient of asserting claims under the
federal securities laws.

This Court rejected that argument long ago in Scherk v.
Alberto-Culver Co., 417 U.S. 506 (1974). Following its earlier
decision in M/S Bremen v. Zapata Off-Shore Co., 407 U.S. |
(1972), this Court in Scherk enforced an agreement requiring
arbitration of the parties’ dispute in Paris, even though there was
no assurance that the arbitrators would apply the federal
securities laws to the plaintiff's claim of fraud, and even though
plaintiff contended that the anti-waiver provisions contained in the
federal securities laws precluded enforcement.

Following Bremen and Scherk, the Ninth Circuit, on
rehearing en banc in this case, enforced the Choice Clause and
affirmed the district court’s dismissal of the case for improper
venue. Six other Courts of Appeals have done the same.’ Like
the Ninth Circuit, each of the appellate courts that has enforced
the Choice Clause has found that Names can obtain substantial
and meaningful redress for their alleged injuries from the English
courts.

Footnote continued from previous page

Lioyd’s, 3 F.3d 156 (7th Cir. 1993), cert. denied, 510 U.S.
1113 (1994); Roby v. Corporation of Lloyd’s, 996 F.2d 1353
(2d Cir.), cert. denied, 510 U.S. 945 (1993); Riley v. Kingsley
Underwriting Agencies, Lid., 969 F.2d 953 (10th Cir), cert.
denied, 506 U.S. 1021 (1992).

In addition to the cases cited supra at note 1, the Sixth Circuit
affirmed a district court’s dismissai of state securities claims
pursuant to the Choice Clause in Shell v. R.W. Sturge, Ltd,
55 F.3d 1227 (6th Cir. 1995).

3

Supreme Court review is also unnecessary with respect to
the Ninth Circuit’s ruling that Petitioners had failed to
demonstrate that the Choice Clause was unenforceable as the
product of fraud. This Court’s decisions in Scherk and Prima

_vV. FI in Mfg. Co., 388 U.S. 395 (1967),
clearly establish that generalized allegations of fraud in the
inducement of the underlying agreements between the Petitioners
and Lloyd’s are insufficient, as a matter of law, to invalidate the
Choice Clause. Four other Courts of Appeals, including the Fifth
Circuit in Haynsworth, have rejected virtually identical claims
that the Choice Clause was unenforceable as the product of
fraud.*

Factual Background

Respondent Lloyd’s is an English entity incorporated by,
and granted regulatory powers pursuant to, Acts of the British
Parliament. See Appendix for Petitioners (‘“Pet. App.”) 3a.
Specifically, pursuant to Lloyd’s Act 1982. Lloyd’s, through its
governing body the Council of Lloyd’s, is charged with the
authority to regulate an English insurance market, and the
participants in that market (including Petitioners), who reside in
over seventy nations. Lloyd’s regulatory functions must be
exercised in accordance with the Lloyd’s Act 1982 and the
Insurance Companies Act 1982, both English statutes. Lloyd’s is
further subject to direct supervision by Her Majesty’s Treasury.‘
Lloyd’s is not an insurer, and does not underwrite or insure risks,

3

Haynsworth, 121 F.3d at 963-65; Bonny, 3 F.3d at 159-60:
Tufts v. Corporation of Lloyd’s, 128 F.3d 793 (2d Cir. 1997).
aff'g per curiam 981 F. Supp. 808 (S.D.N.Y. 1996): Riley,
969 F.2d at 960.

Lloyd’s was subject to the supervision of the British
Department of Trade and Industry (the “DTI”) until January
5, 1998, when these supervisory functions were transferred to
Her Majesty’s Treasury.

4
accept premiums, or share in the profits or losses of those who
underwrite risks in the Lloyd’s market. Pet. App. 3a, 28a.

Petitioners are Names resident in the U.S., each of whom
acts as an individual insurer in the Lloyd’s market. They, and not
Lloyd’s, are paid premiums by policyholders, are contractually
liable to policyholders for the imsurance risks they have
underwritten, and earn profits or incur losses on their
underwriting. As required by English law, individual Names,
such as Petitioners, are personally liabie to policyholders on the
risks they insure to the full extent of their personal wealth. Pet.
App. 3a-4a. However, under English law (see Lloyd’s Act 1982
§ 8(1)), a Name’s liability is several, not joint; a Name bears no
responsibility for the underwriting obligations of other Names,
and has no right to share in the underwriting profits of other
Names. Id.; see also Pet. App. 4a.

English statutes require that for an individual to
underwrite insurance in the United Kingdom he must become a
member of Lloyd’s. Insurance Companies Act 1982 §§ 2(1)-(2).
Lloyd’s establishes regulatory requirements, financial and
otherwise, that prospective Names must meet to qualify for
underwriting membership in the Lloyd’s market. Before
admission to the market, Names must travel to London to meet
with a representative of the Council of Lloyd’s to acknowledge,
among other things, their awareness of the risks of underwriting,
including the unlimited nature of their personal liability. Pet.
App. 3a.

5

Names are resident in over seventy countries worldwide.
In order to become or remain an underwriting member of the
Lloyd’s market, each Name, wherever resident, must enter into a
simple two-page agreement with Lloyd’s called the “General
Undertaking.” Pet. App. 3a. Each of the Petitioners has executed
the General Undertaking. In so doing, Petitioners expressly
agreed to comply with all English statutes relating to their
underwriting in the Lloyd’s market and with all regulations
promulgated by the Council of Lloyd’s pursuant to the regulatory
authority granted by Parliament. Respondent’s Appendix (“Resp.
App.”) Rl (General Undertaking executed by Petitioner Alan
Richards) € 1.

Consistent with their agreement to comply with English
insurance statutes and to subject themselves to Lloyd’s regulatory
authority, Petitioners agreed in the General Undertaking to
adjudicate any disputes they might have relating to their
membership of or underwriting in the Lloyd’s market in English
courts pursuant to English law. Specifically, paragraph 2.1 of the
General Undertaking states:

The nights and obligations of the parties arising
out of or relating to the Member’s membership
of, and/or underwriting of insurance business at,
Lloyd’s and any other matter referred to in this
Undertaking shall be governed by and construed
in accordance with the laws of England.

Resp. App. R2. Paragraph 2.2 (id.) states:

Each party hereto irrevocably agrees that the
courts of England shall have _ exclusive
jurisdiction to settle any dispute and/or
controversy of whatsoever nature arising out of
or relating to the Member’s membership of,
and/or underwriting of insurance business at,
Lloyd’s and that accordingly any suit, action or
proceeding (together in this Clause 2 referred to

6

as “Proceedings”) arising out of or relating to
such matters shall be brought in such courts and,

to this end, each party hereto irrevocably agrees
to submit to the jurisdiction of the courts of
England and irrevocably waives any objection
which it may have now or hereafter to (a) any
Proceedings being brought in any such court as is
referred to in this Clause 2 and (b) any claim that
any such Proceedings have been brought in an
inconvenient forum and further irrevocably
agrees that a judgment in any Proceedings
brought in the English courts shall be conclusive
and binding upon each party and may be
enforced in the courts of any other jurisdiction.

Petitioners do not contend that the Choice Clause is _
unclear or inconspicuous, nor do they dispute that it covers the
claims asserted in this action.

Procedural History

District Court Proceedings. Petitioners commenced the
Richards action in the Southern District of California on
August 1, 1994, asserting federal and state statutory claims and
state common-law claims against Lloyd’s. The statutory claims
included four causes of action under the registration and anti-
fraud provisions of the Securities Act of 1933 (the “*33 Act”) and
the Securities Exchange Act of 1934 (the “‘34 Act”). Petitioners
also asserted claims under RICO, 18 U.S.C. § 1961 et seq.
While Petitioners acknowledged that they acted as individual
insurers in the Lloyd’s market, they also claimed that their
membership of and underwriting in the Lloyd’s market in London
involved the purchase or sale of a security, thereby entitling them
to the remedies provided by federal and state securities laws.
_ Lioyd’s vigorously disputes that any aspect of a Name's
participation in the Lloyd’s market constitutes a security.

7

Lloyd’s moved to dismiss the complaint,’ pursuant to
Fed. R. Civ. P. 12(b)(3), on the ground that the Choice Clause
made venue in the U.S. courts improper, and on the alternative
ground of forum non conveniens.© In response, Petitioners
contended that enforcement of the Choice Clause would be
unreasonable (i) because the Choice Clause had been procured by
fraud or overreaching, and (ii) in light of the anti-waiver
provisions of the federal securities laws, 15 USC.
§§ 77n, 78cc(a). The district court rejected these contentions and
held that the Choice Clause made venue in the U.S. courts
improper. Petitioners appealed the dismissal of the action.’

Ninth Circuit. A panel of the Ninth Circuit unanimously
affirmed the district court’s ruling that the Choice Clause had not

The Norton case was filed after Lloyd’s moved to dismiss the
complaint in Richards. The two actions were consolidated by
order dated November 24, 1995.

Approximately half of the Petitioners have since accepted
Lloyd’s offer of settlement under its Reconstruction &
Renewal Plan, pursuant to which they released Lloyd’s and
certain other parties from all claims relating to their
participation in the Lloyd’s market. Two hundred eighty-
nine of the Petitioners have filed stipulations dismissing their
claims against Lloyd’s with prejudice, as the settlement
agreement requires. Approximately ninety of the Petitioners
have not yet done so.

The Securities and Exchange Commission (the “SEC”) filed a
brief in the Ninth Circuit as amicus curiae supporting
Petitioners’ contention that the Choice Clause should not be
enforced in light of the anti-waiver provisions. The SEC took
no position, however, as to the merits of Petitioners’ claims,
including their allegation that their participation in the
Lloyd’s market involved the purchase or sale of a security.
Pet. App. 40a.

8

been fraudulently procured, and that the Choice Clause required
the dismissal of plaintiffs’ state law claims. See Pet. App. 42a.
However, the panel divided as to whether the Choice Clause was
enforceable with respect to federal securities law claims.

The panel majority (Noonan, J., with Wiggins, J.) reversed
the district court’s dismissal of the federal securities law claims.
Although the majority merely assumed, without deciding, that
some aspect of a Name’s involvement in the Lloyd’s market fell
within the definition of a “security” under the ‘33 Act or the °34
Act, it concluded that the anti-waiver provisions of those statutes
pose an automatic bar to enforcement of an otherwise-valid
international forum agreement. Pet. App. 32a-33a. In the
alternative, the panel held that even if the anti-waiver provisions
did not pose an absolute bar to enforcement of the Choice Clause,
enforcement would violate U.S. public policy because English
remedies were inadequate. Id. at 40a.

The dissent (Goodwin, J.) would have affirmed the
district court's ruling that the Choice Clause was enforceable to
dismiss the complaints in their entirety. Specifically, the dissent
recognized that this Court’s decision in Scherk controlled the
outcome because in Scherk an international forum agreement was
enforced, based on Bremen, over the plaintiff's contention that the
agreement was void under the anti-waiver provisions of the ‘34
Act.

Lloyd’s_ petitioned the panel for rehearing and
alternatively suggested that the Ninth Circuit grant rehearing en
banc.* The Ninth Circuit granted rehearing en banc and heard
oral argument en banc on October 24, 1997.

: The DTI, on behalf of the Government of the United
Kingdom of Great Britain and Northern Ireland (the “British
Government”) made an amicus curiae submission in support
of Lloyd’s petition. Resp. App. R4. The British Government

Footnote continued

9

On February 3, 1998, the Ninth Circuit en banc withdrew
the panel opinion and affirmed the district court’s dismissal of the
action by a vote of eight to three. The en banc majority
(Goodwin, J.) held that:

We follow our six sister circuits that have ruled
to enforce the choice clauses .. . because we
apply Scherk and because English law provides
the Names with sufficient protection.

Pet. App. 9a (citations omitted). In so holding, the majority
rejected the contention that the anti-waiver provisions
automatically prohibit enforcement of a forum clause in an
international commercial agreement simply because the federal
securities laws are alleged to apply. Id. at 7a. The majority
likewise rejected the contention that the Choice Clause violated
public policy because the remedies available in the English courts
are not identical to those provided by the federal securities laws.
Id. at 1la-13a. In addition, the en banc majority followed Roby,
as well as existing Ninth Circuit precedent, to affirm dismissal of
the RICO claims. Id. (citing Roby v. Corporation of Llovd’s, 996
F.2d 1353, 1366 (2d Cir.), cert. denied, 510 U.S. 945 (1993), and

Lockman Found. v. Evangelical Alliance Mission, 930 F.2d 764.
768-79 (9th Cir. 1991)).°

Footnote continued from previous page

explained that the panel majority’s decision was “detrimental
to [the] regulatory regime approved by Parliament... .” Id.
at RS.

Although Petitioners mention the dismissal of the RICO
claims in their statement of the questions presented, Pet. i, the
Petition does not otherwise discuss the Ninth Circuit’s
affirmance of the dismissal of the RICO claims, or present
any reasons why that ruling was incorrect.

10

The dissent (Thomas, J., with Pregerson and Hawkins,
JJ.) agreed with the view of the withdrawn panel opinion that the
anti-waiver provisions constituted a “per se rule” against
enforcement of international forum selection clauses when the
federa! securities laws are alleged to apply. Pet. App. 16a.

The en banc Ninth Circuit unanimously affirmed the
district court’s rejection of Petitioners’ assertion that the Choice
Clause was void as the product of fraud.'® Pet. App. 14a.
Finding Prima Paint controlling on the question of when a forum
selection clause may be avoided on grounds of fraud, the en banc
Ninth Circuit held that Petitioners’ allegations did not relate
specifically to the inclusion of the Choice Clause in the General
Undertaking, but instead related to the underlying contract as a
whole. Id.

On May 4, 1998, Petitioners submitted the Petition to this
Court.

REASONS FOR DENYING THE PETITION

There is no compelling reason for this Court to grant
review of the Ninth Circuit’s en banc decision. The issues
presented by the Petition have already definitively been resolved
by this Court in Scherk and Pmma Paint. The appellate courts
have censistently applied Scherk and Prima Paint to reject the
same arguments advanced here by Petitioners.

In Scherk, this Court rejected the contention that a
commitment contained in an international agreement to adjudicate
claims relating to the agreement in a foreign tribunal may be
vitiated simply by alleging that the federal securities laws apply to

= The panel had unanimously affirmed this aspect of the district
court’s opinion. Pet. App. 32a. The dissent from the en banc
opinion does not address this issue.

Le aT ah ee ee Fe

1]

such claims. The Ninth Circuit properly found that Scherk
“resolve[d] the question whether public policy reasons allow the
Names to escape their ‘solemn agreement’ to adjudicate their
claims in England under English law.” Pet. App. lla. Six other
appellate courts have reached the same result, and this Court has
declined to review five of these decisions, most recently in

Haynsworth."’

Nor is the Ninth Circuit’s ruling inconsistent with other
decisions of this Court, as Petitioners contend. Sce Pet. 16-21
(citing Vimar Seguros y Reaseguros, S.A. v. M/V Sky Reefer,
515 U.S. 528 (1995), Rodriguez de Quijas_v. Shearson/Am.
Express, Inc., 490 U.S. 477 (1989), Stewart Org.. Inc. v. Ricoh
Corp., 487 U.S. 22 (1988), Shearson/Am. Express. Inc. v.
McMahon, 482 U.S. 220 (1987), and Mitsubishi Motors Corp. v.
Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985)). In none of

these cases was there any uncertainty or dispute as to whether, in
the absence of a forum agreement, the federal statutes invoked by
the plaintiff would have applied to claims arising from an
international agreement. Only in Scherk did this Court confront
such uncertainty. The cases relied upon by Petitioners are thus
inapposite and in no way modify or limit Scherk’s holding that, in
the international context, the anti-waiver provisions do not bar
enforcement of the parties’ agreement to litigate in a foreign
forum simply because the purchase of a “security” is alleged.

There is also no compelling basis for this Court to review
the Ninth Circuit’s rejection of Petitioners’ claim that their assent
to the Choice Clause was procured by fraud. Scherk and Prima
Paint make clear that Petitioners’ allegations of fraud are
insufficient, as a matter of law, to invalidate the Choice Clause.
The Ninth Circuit’s decision on this issue is consistent with that
of the four other courts of appeals that have addressed, and

" The plaintiffs in Shell did not petition this Court for review of
the Sixth Circuit’s ruling enforcing the Choice Clause.

12
rejected, identical allegations of fraud in the procurement of the
Choice Clause. See supra note 3. This Court recently declined to
review the Fifth Circuit's rejection of identical allegations in
Haynsworth.

1. THE NINTH CIRCUIT PROPERLY HELD THAT
PLAINTIFFS COULD NOT AVOID THE CHOICE
CLAUSE MERELY BY ALLEGING CLAIMS
UNDER THE FEDERAL SECURITIES LAWS

A. The Choice Clause Is Presumptively
Enforceable Under Bremen And Scherk

In M/S Bremen vy. Zapata Off-Shore Co, 407 US. |
(1972), this Court firmly established that forum selection clauses
contained in international agreements merit a strong presumption
of enforceability. Accordingly, such clauses must be “specifically
[enforced] unless the party resisting enforcement could clearly
show that enforcement would be unreasonable and unjust, or that
the clause was invalid for such reasons as fraud or overreaching.”
Id. at 15. Just two years after deciding Bremen, this Court held in
Scherk_ v. Alberto-Culver Co., 417 U.S. 506 (1974), that the
principles set forth in Bremen also governed the enforceability of
a “truly international” forum agreement in a case in which the
plaintiff alleged that the federal securities laws applied to the
dispute. 417 U.S. at 509, 514-15.

The strong presumption of enforceability derives not only
from a general respect for contract but from the specific needs of
international commerce. As the Court stated in Bremen:

We cannot have trade and commerce in world
markets and international waters exclusively on
our terms, governed by our laws, and resolved in
our courts.

407 U.S. at 9. In Scherk, the Court further recognized that

13
[a] contractual provision specifying in advance
the forum in which disputes shall be litigated and
the law to be applied is...an almost
indispensable precondition to achievement of the
orderliness and predictability essential to any
international business transaction.

417 US. at 516.

The presumption of enforceability accorded to an
international forum agreement applies with even greater force in
this case, because the General Undertaking is not just a
commercial agreement. By executing the General Undertaking,
Petitioners agreed to comply with both the English statutes, and
the rules and regulations promulgated by Lloyd’s, that govern
their ability to conduct underwriting business in an international
insurance market located and operating in England. The Choice
Clause is critical to Lloyd’s ability to regulate the marketplace —
which includes Names from over seventy different countries —
effectively and consistently. As an English court has explained

The clear and simple purpose of this agreement,
aptly called an undertaking, was to ensure that on
his becoming a Name [defendant] became subject
to the regulatory regime of Lloyd’s. The clauses
governing choice of law and venue were ancillary
to that object.

Society of Lloyd’s v. Clementson, [1995] LRLR 307 (C.A. Nov.

10, 1994) (LEXIS, Enggen Library, Cases File). See also Resp
App. R4.

Claims by Names arising from their underwriting or
membership in Lloyd’s “aim{] at the heart of the unique self-
regulatory mechanism within Lloyd’s, which is a product of
complex English legislation.” Hirsch _v. Oakeley Vaughan

Underwriting Ltd., No. 89-2563, slip op. at 7 (Sth Cir. May 31,
1990), cert. denied, 498 U.S. 981 (1990). It would be completely

14

anomalous to allow U.S. courts applying U.S. law to adjudicate
disputes between U.S. Names and Lloyd’s when the regulatory
relationship at the heart of the dispute was created by, and is

governed by, English law.

B. Scherk Is Controlling And Requires
Enforcement Of The Choice Clause

Petitioners claim that the “anti-waiver” provisions make
the Bremen presumption of enforceability inapplicable to the
Choice Clause because these provisions represent a “legislative
command[]” that international forum selection agreements may
not be enforced in cases alleging securities transactions. Pet. 16-
18. That argument, however, was precisely the one considered
and rejected by this Court in Scherk, which held that anti-waiver
provisions did not preclude dismissal of claims asserted under
section 10(b) of the “34 Act in favor of the contractually chosen
forum in Paris. 417 U.S. at 509, 514-15. The Ninth Circuit thus
properly decided to “enforce the choice clause[] ... . because we

apply Scherk....” Pet. App. 9a. Accord Haynsworth, 121 F.3d
at 969 (stating that Scherk is “directly on point’).

Petitioners advance several arguments in an attempt to
distinguish Scherk. None of these arguments has any merit.

:. The Anti-Waiver Provisions
Do Not Bar Enforcement Of An

International Forum Agreement

Petitioners argue that the courts must view the anti-
waiver provisions as an absolute statutory bar to enforcement of
the Choice Clause because the courts must assume the truth of
their contention that the securities laws apply to their membership
of and/or underwriting in the Lloyd's market. In Scherk,
however, this Court emphatically rejected this reasoning.

The Court expressly declined in Scherk to “reach, or
imply any opinion as to, the question whether the acquisition of

15

Scherk’s business was a security transaction,” 417 U.S. at 514
n.8, even though it left undisturbed the Seventh Circuit’s denial of
a motion to dismiss for failure to state a claim under section 10(b)
of the “34 Act. See Alberto-Culver Co. v. Scherk, 484 F.2d 611,
615 (7th Cir. 1973), rev'd, 417 U.S. 506 (1974). Although the
Court had previously held that the anti-waiver provisions barred
enforcement of an arbitration clause in a purely domestic
securities cas¢, Wilko v. Swan, 346 U.S. 427 (1953), it found
that the international nature of the agreement in Scherk
“involve[d] considerations and policies significantly different than
those found controlling in Wilko.” 417 US. at 515. In
particular, the Court noted that:

In Wilko . . . there was no question but that the
laws of the United States generally, and the
federal securities laws in particular, would
govern disputes arising out of the stock-purchase
agreement. The parties, the negotiations and the
subject matter of the contract were all situated in
this country, and no credible claim could have
been entertained that any international conflict-
of-laws problems-would arise. In this case, by
contrast, in rbitration
provision considerable uncertainty existed at the
time of the agreement, and still exists, concerning
the law applicable to the resolution of disputes

Id. at 515-16 (emphasis supplied).'* Because of this uncertainty,
inherent in any transaction that “touch{es] two or more
countnies,” id, at 516, the reasoning underlying Wilko’s holding
that the anti-waiver provisions barred enforcement of a forum
agreement in a domestic securities case was “sitnply inapposite.”

12

Wilko has since been overruled. Rodriguez de Quijas v

Shearson/Am. Express, inc., 490 U.S. 477, 485 (1989)

16

Id. at 517. The Court thus held that the anti-waiver provisions
did not pose a statutory bar to enforcement of the forum clause.

As the Ninth Circuit properly recognized, the Court’s
reasoning in Scherk applies with equal force here. There is
considerable uncertainty in this case, as there was in Scherk,
regarding the application of the federal securities laws to
Petitioners’ participation in the Lloyd’s market. Pet. App. 7a n.2.
Consequently, as in Scherk, the anti-waiver provisions do not
pose a statutory bar to enforcement of the Choice Clause.

Petitioners contend that Stewart Org.. Inc. v. Ricoh
Corp., 487 U.S. 22 (1988), is controlling here because Bremen
and Scherk do not apply “when a statute governs ‘the immediate
issue before the Court.”” Pet. 16 (citing Stewart, 487 U.S. at 28).
Stewart, however, has no relevance to this case. In Stewart,
defendants had moved to transfer a diversity case, pursuant to 28
U.S.C. § 1404, to a New York federal court, the exclusive forum
for dispute resolution designated by the parties. The Eleventh
Circuit had held that the motion should be granted in light of the
enforceability of the forum agreement under Bremen. Stewart
Org.. Inc. v. Ricoh Corp., 810 F.2d 1066, 1070-71 (11th Cir.
1987) (en banc), aff'd, 487 U.S. 22 (1988). This Court affirmed,
but for different reasons. Since the motion to transfer was made
pursuant to section 1404, the Court held that all the criteria set
forth in that statute must be considered in deciding whether to
order transfer. 487 U.S. at 23. While the Court held that the
existence of an otherwise enforceable forum selection agreement
should “figure centrally” in that analysis, it was not dispositive.
Id.

In Stewart, there was no question that 28 U.S.C. § 1404
“govern[ed] the immediate issue before the Court”: whether to
grant a motion to transfer a purely domestic case from one federal
court to another. By contrast, there is considerable uncertainty
here about whether the federal securities laws apply — even in
the absence of the Choice Clause — to the international
agreements between the Names and Lloyd’s. Stewart therefore

17

cannot be read, as Petitioners contend, to make the anti-waiver
provisions “govern” the enforceability of the Choice Clause."

2. The Choice Clause Is A
“Truly International” Agreement

In a further effort to avoid the application of Bremen and
Scherk, Petitioners attempt to characterize their relationship with
Lloyd’s as “predominately domestic” rather than “truly
international.” Pet. 21. The Ninth Circuit properly found,
however, that “[e]ntering into the Lloyd’s market . __ is plainly an
international transaction,” because:

[t]he Names signed a contract with English entities to
participate in an English insurance market and flew
to England to consummate the transaction. That the
Names received solicitations in the United States does

not somehow alter these facts.
Pet. App. 8a. '*
" The other cases cited by Petitioners for the proposition that

the “clear language” of the anti-waiver provisions precludes
“judge-made exceptions,” Pet. 16-17, are equally inapposite.
Each of these cases involved a question of statutory
interpretation in which there was no dispute that the relevant
statute applied

The Fifth Circuit, presented with the same argument by
Names, characterized it as “disingenuous,” because it is:

sufficiently obvious that an agreement is
“international” when it involves an
American Name’s underwriting
international insurance policies in an
English market pooling resources with
other Names from over eighty countries and

Footnote continued

18

Petitioners’ claim that their agreement with Lloyd’s is not
“truly international” flies in the face of both Bremen and Scherk.
In Bremen, this Court reversed a lower court decision holding that
a forum selection agreement requiring litigation in England should
not be enforced because U.S. contacts predominated over any
English contacts. 407 U.S. at 7-8. Likewise, in Scherk, the
Court found the agreement to be “truly international” even though
the foreign defendant had come to the United States to negotiate
the essential terms of the agreement with the American plaintiff.
See Alberto-Culver Co., 484 F.2d at 613-14. The relevant
inquiry is not which country has the most contacts, but whether
the transaction “touch[es] two or more countries, each with its
own set of substantive laws and conflicts of laws rules.” Scherk.
417 US. at 516.

Thus, Petitioners’ effort to obscure the international
nature of their participation in the Lloyd's market by
characterizing their ROTA interviews in London as a “trivial”
foreign contact (Pet. 8, 21) completely misses the point. It defies
reason to suggest that an agreement between the regulator of an
English msurance market and those who underwrite insurance in
that market — and subject themselves to a regulatory regime

Footnote continued from previous page
all the while explicitly agreeing to be bound

by English law.
ey pny re 121 F.3d 956, 967
(Sth Cir. 1997), cert. denied, __ , 118 S. Ct. 1513

(1998). Pritt chang cht to 3 F.3d 156, 159
n.9 (7th Cir. 1993) (“There is no question that the transaction
involved here is truly international.”), cert. denied, 510 U_S.
1113 (1994), Roby v. Corporation of Lloyd's, 996 F.2d 1353,
1362-63 (2d Cir.) cert. denied, 510 U.S. 945 (1993); Riley v.
Kingsley Underwriting Agencies. Lid, 969 F.2d 953, 957
(10th Cir.) (“[The] agreement is truly international.”), cert.
denied, 506 U.S. 1021 (1992).

19
established by English insurance statutes in doing so — has only
an “insignificant and attenuated” relationship with England. See
Pet. 21 (citing Pet. App. 19a).

3. Scherk Does Not Require That The
Chosen Forum Will Enforce

The Federal Securities Laws

Petitioners assert that this Court’s holding in Scherk was
predicated on a ~ © clusion that the federal securities laws would
be applied by the arbitrators in Paris. Pet. 18-19. Based on this
reading of Scherk, they argue that the anti-waiver prcvisions
preclude enforcement of any forum selection agreement that
chooses foreign law or does not otherwise assure the application
of the federal securities laws in the chosen forum. Id. at 19

Petitioners’ argument, however, misreads Scherk. The
choice of law clause requiring the Parisian arbitrators to apply
Illinois law to any disputes, 417 U.S. at 508, did not assure that
the arbitrators would apply the federal securities laws. or even
consider the “34 Act claims, as the dissent pointedly noted. Id. at
532-33 & n.11 (“Even if the arbitration court reads this clause to
require application of Rule 10b-5’s standards, [the] victory would
be Pyrrhic.”) (Douglas, J., dissenting). The majority clearly
contemplated the possibility that the arbitrators would not apply
the federal securities laws:

Thi _. . Drovi is for a ju ent

that only United States laws and United States

courts should determine this controversy in the
face of a solemn agreement between the parties

that such controversies be resolved elsewhere.

20
Id. at 517 n.11 (emphasis supplied).'° Petitioners’ argument
would place on defendants the burden to litigate the question of
whether a “security” was offered or sold before they could
enforce a forum agreement — defeating the very purpose of the
agreement, which is to confine litigation on merits issues to the
chosen forum.

Petitioners also misread Shearson/Am. Express. Inc.
McMahon, 482 U.S. 220 (1987), and Ser em UIE

Shearson Am. Express, Inc., 490 U.S. 477 (1989), as limiting the
application of Scherk to cases in which it is clear that the chosen

forum will apply the federal securities laws. Pet. 18-20.
McMahon and Rodriguez, unlike Scherk, did not involve an
international agreement in which there was uncertainty concerning
the applicable law in the absence of a forum selection and/or
choice of law agreement. Rather, these cases, like Wilko,
involved purely domestic transactions to which the federal
securities laws concededly applied. In McMahon, the question
before the Court was whether to extend Wilko’s ban on
arbitration of ‘33 Act claims to ‘34 Act claims; in Rodriguez, the
Court overruled Wilko altogether. The Court’s consideration of
the extent to which Wilko should apply in the domestic context
had no bearing or impact on this Court’s prior decision, in

o Likewise, in Bremen, this Court rejected the “parochial” view

that U.S. law must govern all disputes arising out of
international agreements. 407 U.S. at 9. The contract at
issue in Bremen did not contain an express choice of law
provision, but this Court recognized that the choice of an
English forum was essentially a choice of English law as
well, as it was “reasonate to conclude that the forum clause
was also an effort to obtain certainty as to the applicable
substantive law.” Id. at 13 n15. Although this Court
explicitly recognized that application of English law would be
outcome determinative and yield results different from those
that would obtain under U.S. law (id. at 8 & r.8), it
nonetheless enforced the forum agreement.

21
Scherk, that Wilko simply did not apply in the international
context.

Petitioners’ reliance on dicta in Mitsubishi Motors Corp.
v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985), is equally

misplaced. Pet. 22-23. Mitsubishi enforced an international
arbitration clause in a case involving anti-trust counterclaims,
overruling a line of lower court decisions holding antitrust claims
to be non-arbitrable. 473 U.S. at 640. The parties had agreed
that, despite a provision requiring the Japanese arbitrators to
apply Swiss law, counterclaims alleging violations of the
Sherman Act would also be submitted for arbitration. The
following footnote was therefore pure dictum:

[I]n the event the choice of forum and choice of
law clauses operated in tandem as a prospective
waiver of a party’s right to pursue statutory
remedies for anti-trust violations we would have
little hesitation in condemning the agreement as
against public policy.

Id. at 637 n.19.

By its terms, the Mitsubishi dictum is limited to the
antitrust context, and even if read broadly does not outweigh
Scherk, as the Ninth Circuit recognized. Pet. App. lla-12a.
Because there is no common law analogue for antitrust claims, an
agreement that chc se both a foreign forum and foreign law could.
like a release, deprive a plaintiff of any remedy for anti-
competitive conduct. See Haynsworth, 121 F.3d at 968. By
executing the Choice Clause, however, Petitioners have not been
left without remedies for alleged fraud by Lloyd’s.'° Like the

is The Court’s concern that causes of action providing redress
for anti-competitive conduct might be unavailable in foreign
jurisdictions is reflected by the cases cited in the Mitsubishi
footnote to support the “prospective waiver” dictum. These

Footnote continued

22

Ninth Circuit, the five other courts of appeal that have considered
whether the Mitsubishi dictum precludes enforcement of the
Choice Clause have held that it does not. Haynsworth, 121 F.3d
at 968: Shell, 55 F.3d at 1230-31; Bonny, 3 F.3d at 160; Roby,
996 F.2d at 1364-65; Riley, 969 F.2d at 959-60.

Petitioners fare no better in their reliance on Vimar
Seguros y Reaseguros, S.A. v. M/V Sky Reefer, 515 U.S. 528
(1995), to support their contention that the federal courts will not
enforce forum agreements which have the effect of “waiving”
statutory claims. Pet. 22-23. In Vimar, this Court overruled a
long line of lower court precedents that had voided forum
agreements under the Carriage of Goods by Sea Act (“COGSA”),
and enforced forum selection and choice of law provisions
requiring arbitration in Japan. COGSA is the implementation of
an international treaty intended to eliminate uncertainty regarding
the law applicable to disputes arising from international bills of
lading by creating uniform nghts and obligations amongst the
signatory nations. Vimar therefore neither displaces nor modifies
Bremen and Scherk, which recognize the needs of parties to
international transactions to eliminate in advance any uncertainty
as to the applicable law. Pet. App. 12a n.5 (“Vimar. however,
does not extend to the instant case as Vimar involved COGSA, a
statute designed to address international transactions.”). See also
Haynsworth, 121 F.3d at 968-69 (“COGSA __ . [embodies] an
international scheme the very nature of which would be frustrated
by permitting parties to opt out of it.”).

Footno‘e continued from previous page

cases do not involve forum selection or choice of law clauses
but instead involve general releases of future claims that
permitted the released party to engage in anti-competitive
conduct with impunity. See, eg., Reidel’s Inc. v. General
Elec. Co., 498 F.2d 95 (Sth Cir. 1974).

23

In sum, United States public policy does not preclude
parties to an international transaction from choosing to resolve
their disputes in foreign courts and/or pursuant to foreign law.
As the Fifth Circuit aptly noted:

It defies reason to suggest that a plaintiff may
circumvent forum selection . . . clauses merely by
Stating claims under laws not recognized by the
forum selected in the agreement. A plaintiff would
simply have to allege violations of his country’s tort
law or his country’s statutory law or his country’s
property law in order to render nugatory any forum
selection clause that implicitly or explicitly required
the application of the law of another jurisdiction. We
refuse to allow a party’s solemn promise to be
defeated by artful pleading.

Haynsworth, 121 F.3d at 969 (quoting Roby, 996 F.2d at 1360)
(emphasis in original).

ee Petitioners Have Adequate Remedies For
Their Claims In The English Courts

The Ninth Circuit correctly determined that the Names
have adequate recourse against Lloyd’s — and other participants
in the Lloyd’s market — in England. Pet. App. 12a-13a. The six
other appellate courts that have enforced the Choice Clause
reached the same conclusion, recognizing that Names have
significant remedies against Lloyd’s for fraud in the English
courts. Haynsworth, 121 F.3d at 969: Allen, 94 F.3d at 929:
Shell, 55 F.3d at 1231; Bonny, 3 F.3d at 161; Roby, 996 F.2d
at 1365-66; Riley, 969 F.2d at 958.

The Ninth Circuit properly rejected the contention that
any specific differences between the remedies available to Names
in England and the remedies that the federal securities statutes
might provide prevent enforcement of the Choice Clause Pet.

24
App. 13a. See also Haynsworth, 121 F.3d at 969-70. Any other
conclusion would be inconsistent with both Bremen and Scherk,
as it would “reflect a ‘parochial concept that all disputes must be
resolved under our laws and in our courts... .” Scherk, 417
U.S. at 519 (citing Bremen, 407 U.S. at 9). As the Fifth Circuit
aptly noted:

The view that every foreign forum’s remedies must
duplicate those available under American law would
render all forum selection clauses worthless and
would severely hinder Americans’ ability to
participate in international commerce.

Haynsworth, 121 F.3d at 969.

Il. THE NINTH CIRCUIT PROPERLY
HELD THAT THE CHOICE CLAUSE
WAS NOT PROCURED BY FRAUD

A. The Ninth Circuit Properly Applied
Prima Paint And Scherk

Petitioners also attack the Choice Clause as the product
of fraud. In Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388
U.S. 395 (1967), and Scherk, this Court held that forum
agreements are unenforceable on grounds of “fraud and
overreaching” only “if the inclusion of that clause in the contract
was the product of fraud or coercion.” Scherk, 417 U.S. at 519
n.14 (emphasis in original) (citing Prima Paint, 388 U.S. at 404
&n.11). As this Court recognized in Scherk, this “does not mean
that anytime a dispute arising out of a transaction is based upon
an allegation of fraud, as im this case, the clause is
unenforceable.” Scherk, 417 U.S. at 519 n.14.

The Ninth Circuit correctly held that “simply alleging
that one was duped into signing the contract is not enough.” Pet.
App. 14a. That is all Petitioners alleged here:

25

The Names never allege . . . that Lloyd’s misled
them as to the legal effect of the choice clauses.
Nor do they allege that Lloyd’s fraudulently
inserted the clauses without their knowledge.
Accordingly, we view the allegations made by the
Names as going only to the contract as a whole,
with no allegations going to the inclusion of the
choice clauses themselves.

Id.

Like the Ninth Circuit, the Second, Fifth, Seventh, and
Tenth Circuits have rejected identical claims of fraud in the
inducement of the Choice Clause. See Tufts v. Corporation of
Lloyd’s, 128 F.3d 793 (2d Cir. 1997), aff'g per curiam 981 F.
Supp. 808, 813 (S.D.N-Y. 1996); Haynsworth, 121 F.3d at 963:
Bonny, 3 F.3d at 160 n.10; Riley, 969 F.2d at 960.

B. The Ninth Circuit’s Application Of
Prima Paint Is Consistent With Moseley

Contrary to Petitioners’ contention, the Ninth Circuit’s
application of Prima Paint is fully consistent with this Court’s
earlier decision in Moseley v. Electronic & Missile Facilities.
Inc., 374 US. 167 (1963). Moseley does not hold that
generalized assertions that a forum selection agreement was part
of a broader fraud concerning the underlying contract suffice to
invalidate the forum agreement. To the contrary, Moseley simply
holds that allegations of fraud in the inducement of a forum
agreement must be assessed by the court in which the suit is
brought prior to deciding whether to enforce the agreement.

In Moseley, the petitioner was party to several contracts
with the respondent that contained clauses requiring arbitration in
New York. After the respondent commenced arbitration,
petitioner sued in a Georgia federal court seeking to enjoin the
arbitration, asserting that, among other things, both the contracts
and the arbitration provisions themselves had been procured by

26

fraud. The district court found arbitration improper on statutory
grounds, but stated, without making any assessment of the
allegations of fraud, that an additional reason for enjoining the
arbitration was that the arbitration clause “if induced by
fraud . . . would be vitiated. . . .” Id. at 169 (emphasis supplied).

Declining to reach the statutory issue, the Court, after
twice noting that “no request had been made [in the federal
action] for the enforcement of the arbitration agreement,” id. at
170, remanded the case to the district court to decide whether the
arbitration clause had been procured by fraud before addressing
any other issues. Ic. at 171. Moseley thus provides no support
for Petitioners’ assertion that a forum selection clause may —
properly be voided without “allegations or evidence of deception
as to the existence or legal effect of the clause.” Pet. 26.

Unlike the district court in Moseley, the district court in
this case has already properly determined, before enforcing the
parties’ agreement to litigate in England, that Petitioners’
allegations and “evidence” concerning fraud in the procurement of
the Choice Clause did not meet the standard set by this Court in

Prima Paint.'’ See iello Im Ltd. v. riti Italia
S.p.A., 117 F.3d 655, 668 (2d Cir. 1997) (holding that Prima
Paint and Moseley require party seeking to avoid a forum

selection clause to do more than allege that the “clause was a part
of the overall scheme to defraud”; a party must also prove “some
nexus between the alleged fraud or misrepresentation and the
arbitration clause in particular”).

Petitioners erroneously assert that C.B.S. Employees Fed.
Credit Union v. Donaldson, Lufkin & Jenrette, 912 F.2d 1563

The district court reviewed voluminous documents submitted
by Petitioners in support of their assertion that the Choice
Clause was the product of fraud and found that they had “no
relevance” to that assertion. Pet. App. 64a, 68a n.20.

27

(6th Cir. 1990), creates a split of appella:: authority as to the
proper application of Prima Paint. Pet. 26. [he Sixth Circuit in
C.B.S. Employees did not hold that allegations that a forum
clause was part of a fraudulent scheme sufficed, by themselves, to
invalidate the clause. Rather, the Sixth Circuit merely remanded
the case to the district court to determine whether, when plaintiffs
had alleged fraud in the procurement of both the underlying
contract and the arbitration clause, plaintiffs could substantiate
any claims of fraud specific to the arbitration clause.

28

CONCLUSION

For all the foregoing reasons, this Court should deny the

Petition for a writ of certiorari.

Dated: June 3, 1998

Dean Hansell
LEBOEUF, LAMB, GREENE
& MACRAE, L.L.P.
725 S. Figueroa Street
Los Angeles, California 90017
(213) 955-7300

Respectfully submitted,

Harvey L. Pitt*

Michael H. Rauch

Debra M. Torres

FRIED, FRANK, HARRIS,
SHRIVER & JACOBSON

One New York Plaza

New York, New York 10004

(212) 859-8000

Attorneys for Respondent
*Counsel of Record

‘
ned
Wi
ae a

as

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386006_1480%3A2. Public record. Not legal advice.