# Amicus Curiae Brief — J. Aron & Co. v. Haviland > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386011_0230%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Amicus Curiae Brief - **Published:** January 1, 1992 - **Citation:** 504 U.S. 930 ## Text QS a ov Qe AY No. 91-1355 ie? | IN THE Supreme Court of the United States OCTOBER TERM, 1991 J. ARON & COMPANY. Petitioner, Vv. LEO HAVILAND, Respondent. ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT S ceieemennnnientioan See, e.g., Gilmer v. Interstate/Johnson Lane Corp., 111 S. Ct. 1647, 1654 (1991); Rodriguez de Quijas v. Shearson/American Express, Inc., 490 U.S. 477, 481 (1989); Shearson/American Express Inc. v. McMahon, 482 U.S. 220, 226 ( 1987); Dean Witter Reynolds, Inc. y. Byrd, 470 U.S. 213, 221 (1985). * As Judge Walker argued below, 947 F.2d at 609 (Walker, J., dissenting) (A20), the Second Circuit’s narrow interpretation of Rule 600(a) squarely conflicts with that of the D.C. Circuit. See Pearce v. E.F. Hutton Group, Inc., 828 F.2d 826, 830-31 (D.C. Cir. 1987). In addition, other circuits have expressly held that the strong federal policy favoring arbitration requires that NYSE rules be construed literally and that any uncertainty or ambiguity be resolved in favor of arbitration. See McGinnis v. E.F. Hutton & Co., 812 F.2d 1011, 1013 (6th Cir.), cert. denied, 484 U.S. 824 (1987); Zolezzi v. Dean Witter Reynolds, Inc, , 789 F.2d 1447, 1449 (9th Cir. 1987); Barrowclough v. Kidder, Peabody & Co. , 752 F.2d 923, 937-38 (3d Cir. 1985); Morgan v. Smith Barney, Harris Upham & Co., 729 F.2d 1163, 1165 (8th Cir. 1984). The Second Circuit failed to follow the plain language of Rule 600(a), see 947 F.2d at 611 (Walker, J., dissenting) (A17), and, in any event, did not follow the law of the other circuits that any uncertainty or ambiguity be resolved in favor of arbitration. See, e.g., Zolezzi, 789 F.2d at 1450-51; Morgan, 729 F.2d at 1167. Argument The facts and applicable law are fully stated in J. Aron’s petition and will not be recanvassed here. We wish only to emphasize the national importance to the securities industry of the issue raised by this petition and to direct this Court’s attention to the following points. 1. For many years, employment-related disputes in the securities industry have been the subject of NYSE arbitration. The Second Circuit’s decision has upset the settled expectations of NYSE members and their employees with respect to the arbitrability of such claims. Prior to the Second Circuit’s decision, NYSE Rule 600(a) was widely understood in the securities industry to require registered representatives of NYSE member firms to arbitrate employment-related disputes against the non-member affiliates of those firms. 2. Because more than fifty NYSE members, including all of the major firms, have non-member affiliates (see A42-A43), we fear that the Second Circuit’s decision will result in many instances in which employees of NYSE member firms seek to avoid NYSE arbitration by bringing employment-related claims in federal or state court against the non-member affiliates of their employers, even though the same claims against member firms must be arbitrated. We believe that this shift of cases from NYSE arbitration to federal and state courts will substantially increase the litigation costs borne by member firms without resulting in the more just resolution of employees’ claims. Indeed, it is possible that the high cost of litigation in court — as compared to arbitration — might force firms to settle unmeritorious claims. 3. The securities industry is highly specialized, and arbitrators are particularly suited to decide the complicated issues that can arise out of employment disputes in the industry. As Judge Walker emphasized in his dissent below, NYSE “arbitrators would be well-qualified to resolve 5 Haviland’s dispute with J. Aron and the issues of responsibilities to clients, information exchanges in the energy futures and options markets, and the employment conditions imposed by J. Aron’s [alleged] co-conspirator Goldman.” 947 F.2d at 611 (A25). This observation is likely to be equally true with respect to almost any employment-related claim brought against an NYSE member firm. 4. The highly respected NYSE arbitration procedures protect the interests of both employers and employees in the securities industry. Thus, in rejecting the claim that NYSE arbitration was somehow unfair, this Court in Gilmer v. Interstate/Johnson Lane Corp., 111 S. Ct. 1647, 1654-55 (1991), emphasized that NYSE arbitration rules “protect[] against biased panels,” provide for generous discovery and require arbitrators to issue written decisions. 5. NYSE arbitrators resolve many employment-related claims in the securities industry every year. We are concerned that the Second Circuit’s decision will result in a substantial— and completely unnecessary—increase in the caseload of federal and state courts as employees increasingly engage in forum shopping. We believe that scarce judicial resources Should not be wasted in this manner. The Second Circuit’s decision may also result in the uneconomical situation of an NYSE member firm being required to defend itself in arbitra- tion, while its non-member affiliate must defend against the same claim in federal or state court. Conclusion For the reasons stated in the petition and herein, SIA urges that certiorari be granted to review the judgment of the United States Court of Appeals for the Second Circuit. Respectfully submitted, WILLIAM J. FITZPATRICK Senior Vice President and General Counsel Securities Industry Association 120 Broadway New York, New York 10271 (212) 608-1500 Counsel for Securities Industry Association, Amicus Curiae GERARD J. QUINN Associate General Counsel Securities Industry Association Of Counsel February 27, 1992 i vy g a --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386011_0230%3A2. Public record. Not legal advice.