Petition for Writ of Certiorari — Dillard v. Security Pacific Corp.

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Komen O89 sus CLERK

IN THE a .

SUPREME COURT OF THE UNITED STATES

October Term, 1992

CARVEL GORDON DILLARD,

Petitioner

versus

SECURITY PACIFIC CORP. ;

MERRILL LYNCH, PIERCE FENNER & SMITH, I!

SECURITIES INDUSTRY ASSOCIATION, INC.:;

SECURITY PACIFIC BROKERS, INC.;

FINANCIAL CLEARING & SERVICES CORPORATION;

JENKINS & GILCHRIST (A PARTNERSHIP); and

JENKINS & GILCHRIST (A PROFESSIONAL CORP.)

Respondents

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUI

PETITION

Carvel Gordon Dillard, pro se

903 SW Central

Grants Pass, OR 97526

(503) 479-0098

STATEMENT OF QUESTIONS PRESENTED

Whether this court should overturn the

appeals court's ruling that illegal

denial of the fundamental

onstitutional right to judicial trial

remedied by award of economic damages

¢ ¢ - -

demand specifi performance

tw! } + bh - 5 ~r\1) ~ +) tr _— }

Whether this irt should overturn the

| on ) + © ry 1) + hh + +

appeals cour S ruling that he

arbitration contract is still binding

and enforceable even if it is proven

that it was an adhesion demand

compelled by the duress of an illegal

ry . ~) 4 (7 - - m > -

monopolisti restraint »f trade.

Whether this court should enjoin

defendants and their co-conspirators

from uniformly adopting and agreeing to

ise, and in using exclusively, margin

and option account contracts which

contain provisions for the

—d

— ]

determination of al aims and

controversies arising under said

contracts in arbitration.

Whether this court should find that the

S court made error by allowing

the district court to ignore requests

under F.R.C.P. 52 for findings of fact

and conclusions of law concerning

injunction and issue of illegal

arbitration contract.

Whether this court should declare it to

be an abuse of discretion in violation

OF F.mcG. Ps: & (E} t consolidate the

three actions and then for the appeals

court to declare that for some but not

all purposes of the mandate the appeals

court was pretending that it was

ignorant of the related actions instead

of considering the three actions as

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whole

Whether it 1S error that the appeals

ads

— | i a * — . .-S-%

court ruled that although Dilla

pleaded that he

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—

)

a7)

Sonal

arrested and imprisoned for illegal

ulterior motives such facts lf proven

to be true created no Lolat n ft nis

s ers 7 = 7 +

a oe a thts under fae >. 4 f

ier it 1S error that the appeals

irt's ruling that there was n«

private right f action under the Hobbs

Act 18 U.S.C. Section 1951 and it's

ruling that there is no private right

of action under the RICO Act Le Use.

section 1961 et seq. for a violation f

t ne Hobbs Act

8. Whether it is error that the appeals

irt ruled that there is no private

oc a & ~ = - * . 2 + i ee |

the securities Act f >

‘e , : °

9. Whether incorrect or misleading

Statements in the appeal court ’s

)

Tv,

Shows that the court of appeals has

1gnored the district Oourts departure

from the accepted and usual course of

judicial proceedings in so far a manner

is to all for an exercise of this

court's power of supervisior

shall this urt affir the rule

f law by reviewing this petition or

Shall this court ratify the rule

of men by al OW1NG t he ] We?! Cour? t¢

The district court at Houston often

iagqnceres the obvious in order to

Suppress pro se litigation. The

precise allegations which would

CoO pel trial Oo} the legalityv of the

arbitration lause that the Fifth

Circuit stated were missing are in

fact exhibited in the record appendixed

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TABLE OF AUTHORITIES

Cases

tna Insurance Co. v. Kennedy,

U.S. 389, 393, 37 &. Ct. 609. 81 L.

Ed. 1177 (1937)

American Airlines, Inc. v.

Louisville & Jefferson County Ai

Board, 269 F. 2d 811, 816 (6th Cir.

1959) 16

American Safety Equipment Corp. v.

J.P. Maguire & Co. 391 F.2d at

62)

)

Ames v. Merrill Lynch, Pierce,

Fenner & Smith, Inc. 567 F.2d 117

1178 (2nd Cir 1977) 14

Atlas Roofing Co., 430 U.S at 455 20

Atlas Roofing Co. v. Occupational

Safety and Health Review Commissior

430 U.S. 442, 449 (1977) Z 19,20

AT&T Technologies v. Communications

Workers of America, 475 U.S. 643

Bal 1] ey V e Central Ve rmont R. er.

319 US 350 87 L ed 1444 62 ¢ Cr

1062 a

Baylis v. Traveler's Insurance Co.

i i . .

113 U.S. 316 es

Bernhardt v. Polygraphic Co f

America, 350 U.S. 198, 203 (1956) 18,22

Commodity Putures Tra ling Commissi

v. Schor, 478 U.S. 833, 848, 853-855

(1 986) “a ‘e} “ L) —

Dean Witter Reynolds Inc., 470 U.S.

at 218-219

De Filippo v. Ford Motor Co. (1975,

CA3 Pa) 516 F2d .1313, cert den 423

US 912, 46 L Ed 2d 141, 96 S Ct 216

D.H. Overmyer Co. v. Frick Co., 405

U.S. at 183

Eastern Marine Corporation v. Fukaya

Trading Co., 364 F. 2nd 80 (Fifth

Circuit 1966)

Elmore v. McCammon 640 F. Sup. 905

(S.D. Tex. 1986)

Fuentes v. Shevin, 407 U.S. 67, 32

L. ed 2nd 556, 92 § Ct. 1983

Geldermann, Inc. v. Commodity

Futures Trading Commission, 836 F.2d

310, 316 (7th Cir. 1987), cert.

denied, S. Ct. 54 (1988)

Heine v. Wright, 76 Cal App 338, 244

Pr. 355, 356

Heyman v. Kline, 456 F. 2nd 123, 129

(2nd Cir. 1972), cert denied, 409

Wises O87, 93-5. Ct. 33, 34 4. B84.

2nd 88 (1972)

Hodges v. Easton, Wis. 1882, 1S.

Ct. 307, 106 U.8. @412, 27 LL. 84 169

Jacob v. City of New York, 315 U.S.

752, 86 L. Ed 1166, 62 S. Ct. 854

Johnson v. Zerbst, 304 U.S. 458, 58

Ct. 1019, 82 L. Ed. 1461 (1938)

Keystone Shipping, 855 F. 2d at 3

VIII.

K.M.C. Co. v. Irving Trust Co. 757 F

2nd at 756

Lervic v. White Top Cabs, La. App.,

10 So. 2nd 67, 68, 73

May v. Lakeland Highlands Canning

Co.,; 307 0.5. 310,°326, 60 §. C€t.

517, 520, 84 L.Ed 774, 779

Mitsubishi Motors v. Soler Chrysler-

Plymouth, Inc., 473 U.S. 614, 627

(1985)

National Equipment Rental Ltd. v

Hendrix, 565 F. 2nd 255, 258 (2n

cir. 1977)

Paramount Famous Lasky v. United

States 34 F. 2nd 984, 282 U.S. 30

Perry v. Thomas, 107 S. Ct. at 2527

a. 3

Pierson v. Dean, Witter, Reynolds,

anc. (624 F.2G@ 334, 3339 (7th Cir...

1984)

Prima Paint Corp. v. F

MrG., 366 U.S. 3395 (19

Robert Lawrence Co. v. Devonshire

Fabrics, Inc. C.A. N.Y. 1959 271 F.

2nd 402 Certiorari Dismissed 81 S.

Ct. a2, 264 U.S. $01, SL Bd. 2nd 37

Shearson/American Express, Inc. v.

McMahon, 107 S. Ct. at 2337

Jy \¢

U.S. v. Huck Co. 214 F Supp. at page

U.S. v. First National Pictures

Inc. 282 U.S. 44 Supp. at page

Ik.

, 36

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yn and demanded jury tria

nn for anti-trust injunction.

acific then made criminal charge

llard claiming theft of Dillard's

aiming it as their own. Security

tained a default judgement in H-

e to the harsh application of

> : | = o ~ 7

hich Dillard was ignorant

) c - on $ -

ed Security Pacific for

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and secur les fraud ncerning

la ot “ Se a — =

Short sale ss and for

‘.

nspiracy false swear J

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i-86-3251 was dismissed and appealed

and overturned and remanded: the dismissal

of the $50,000 negligence and securities

fraud claim was upheld due to the prior

default but the dismissal of the one ee, et

and all other charges stemming from the

Criminal prosecution was reversed.

upplemental complaint to H-86-3251 was

filed naming Merrill Lynch and Jenkins &

llchrist as defendants and co-conspirators

and naming the parent corporation, Security

Pacific Corp. as defendant and adding

additional charges of malicious

prosecution, abuse of process, and anti-

trust violations to the complaint;

Securities Industry Association was added

as an anti-trust defendant. The

Supplemental complaint was stricken.

H-88-2848 was filed in place of the

Stricken supplemental complaint in order to

be sure that the new causes of action could

not be lost to statute limitations. H-88-

2848 charged violation of the Sherman Act,

Clayton Act, R.I.C.0. Act. Hobbs act,

ee OO

pee

—

malicious prosecution

defamation and securi

Orders of dismissal a

entered in H-88-2848

Arbitration

appeal

4135 and the action w

Order of dismissal an

entered in H-8&8-2848

i a 2781 Sid ie mae

H-86-3251 was Yr

in amended complaint.

abuse of process,

ties fraud claims.

nd abatement were

and were vacated

was ordered in H-8

as finally dismis

d abatement was agai

ey)

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peal with

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complaint included violat I cP aee a

Act, 18 U.S.C. Section 1961 t eq.

~ 1Q : S

Act is U.S.C Section 195] jefamat

abuse of process, and

prosecution. Titl

violations charging f

imprisonment were add

charge was

aoe :

maiiciou

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“tr

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aLne arres

ed and the briber

were ne as 1Y lt

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CW le tT) 1a i a.

l was dismissed and appealed and was

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peals et

t ppres

ates tha

nstituti

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aft 4 fin

illegal

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lt has not gone : far as t nterpret th

Federal Arbitration Act (FAA) t require

arbitrat nm in Sie ibsence f nsent Nor

has it given license for ss rities

servi s firms to use ¢« essive ¢ nomi

power to force consumers intc Signing away

their judicial remedies in favor of

arbitration. On the contrary, the court's

recent cases are premised on the assumption

))

faa

itration is voluntary and

Judicial forum by Slgning arbitration

agreements involuntarily. However, the law

1S that there can be no involuntary waiver

The proposed injunction will correct this

inomalous contradiction. Small investors

have no choice but to accept pre-dispute,

Standard-form, brokerage arbitration

lauses in order to invest in Securities.

ongress enacted the AA in order tx«

- ; : me - 2 n

ensure the enforceability of valid

arbitration agreements. The Act and its

OT)

legislative

that Congres

voluntary ar

enforced, an

‘ontained in

the product

Arbitra

walver of th

right toa j

This co

agreements o

consumer con

consistent w

adhesion con

history demonstrate, however

S was concerned that only

bitration agreements be

d not agreements that are

adhesion contracts which are

of excessive bargaining power.

tion agreements involve the

e€ important constitutional

ury trial

urt must place arbitration

n the same footing as other

tracts generally and must be

ith common law principles on

tracts

Dillard does not ask to limit the use

of the arbitration process Rather he asks

that fair arbitration be promoted by

enhancing the integrity of the process and

if arbitration is to have integrity it must

be entered by the choice of the nsumer

The goal f the FAA was not t achieve

is much arbitration as possible but rather

t assure that arbitration contracts had

5] «c 7 +h ——. ‘ ~

equal standing with any Contract. The

and

Commission (SEC) demonstrates the growing

trend by brokers to require arbitration

agreements for all accounts.

The SEC surveyed the use of

arbitration agreements at sixty-five firms

(all Securities Industry Association

members) that account for approximately

ninety percent of all customer trading

accounts in the United States, including

the twenty-five largest New York Stock

Exchange member firms. Ninety percent

required arbitration agreements for margin

accounts, and ninety-five percent required

agreements for option accounts. Twenty of

the sixty-five responding firms said that

they intended or were considering expanding

the number of accounts for which an

arbitration clause would be required.

That brokerage firms uniformly requiré

arbitration agreements and do not of

arbitration-less accounts even at higher

prices suggests a classic market failure.

Investors do not shop for brokerage firms

on the basis of arbitration clauses because

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14.

With a customer unless. inter alia, the

agreement is not a condition for the

customer to utilize the services of the

broker, and it contains cautionary language

in large bold-face type, which must be

Separately endorsed by the customer that

enumerates the customer's rights and the

legal effect of the agreement. 17 CFR

The CFTC regulations were promulgated

"to assure that the investor's agreement to

compulsory arbitration [of disputes arising

out of commodity futures transactions] is

‘truly voluntary on the part of the

customer'" Wotkyns v. D.E. Jones

Commodities, Inc., 791 F.2d 749, 750 (9th

Cir. 1986); see also Ames

Merrill Lynch,

Pierce, Fenner & Smith, Inc. 567 F.2a ure,

1178 (2nd Cir 1977) "It .. . became

apparent [to the CFTC] that in many cases

arbitration was not undertaken voluntarily

by customers, but that customers were

compelled to agree to predispute

age

arbitratio

doing busi

While

to the

contracts,

of the pur

ensure that voluntar

agreements

Reynolds I

expresses

arbitratio

of any oth

intent to

resolution

n en

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Act was d

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ne.-,

n clauses

ness.

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pose of

are en

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n agree!

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acting

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Congress intended was mere y to overrule }

legislation long-standing judicial

precedent, which declared agreements [t

arbitrate] contrary to public policy, on

Grounds that enforcement f such agreements

would oust the courts of their

Jurisdiction." American Airlines, ne.

The authors of the FAA emphasized that

the arbitration agreements to be enforced

under the Act were limited to voluntary

agreements. The FAA "was passed to ensure

that courts would honor the contractual

agreements of parties who choose to resolve

their disputes by means of the informal

arbitration procedure." Keystone Shipping,

855 F. 2d at 3 (emphasis added). The

Senate report refers to “the great value of

voluntary arbitrations" and the "practical

justice in the enforced arbitration of

disputes where written agreements for that

Purpose have been voluntarily and solemn]

nay

nae

| Si t

While expanding the scope of

art it able laims this durt has

emphasized the need for courts to be

vigilant in policing the savings clause

see Mitsubishi Motors v. Soler Chrysler-

Plymout}! Inc 473 U.S. 614, 627 (1985)

-~ —h — = j

“courts should remain attuned to well-

Supported laims that the agreement t

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OY OVerwnhneiming Sconoma€ powe} nat WOU1LGA

loanl

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aed

“4

contract”; Shearson/American Express, 107

S.Ct. at 2337 (emphasis added}.

Congress -oncern that only voluntary

arbitrat n agreements be enforced was

based nm part on constitutional ncerns

because arbitration necessarily entails

relinquishment of one's Seventh Amendment

right to a jury trial (see Bernhardt v.

Polygraphic Co. of America, 350 U.S. 198

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Occupational Safety and Health Review

Commission, 430 U.Ss 442 449 (1977)

Article TIT extends the judicial power

f the United States to "all cases in Law

and Equity.” U.S. Constitution, art ITI,

2 "(Al ‘private’ right for which state

law provides the role of decision ... is

a claim of the kind assumed to be at

the 'core' of matters normally reserved to

)

a III courts.” Commod

ity Futures

Trading Commission v. schor, 478 U.S. at

853 Analysis under the Seventh Amendment

and Article IIT is similar when considering

whether Congress nay assian the

adjudication of certain Claims to a non-

judi Saas Fors See Atlas R oofing Co 430

U.S. at 455 and Article IIT Implications

for the Applicability of the Seventh

Amendment to Federal Statutory Actions, 95

Yale L.J. 1459 (1986)

During the hearings on the FAA,

Congress was assured that "* {tlhe

constitutional right to jury trial is

adequately safeguarded’ by the Act.

Paint, 388 U.S. at 413 (Black J.,

dissenting).

Mr Cohen, the American Bar

Association's draftsman of the bill,

assured the members of Congress that

Act would not impair the right to a

trial, because it deprives a person

right

certain disput

added)

The arbit

here (90-2722,

would necessar

inder nstitu

Overmyvyer C J

myer Co.

more than con

ff constitutic

Irving Trust C

arbitrat I a

desir

than

WS)

bails

only when he has voluntarily and

it by agreeing to submit

-s to arbitration (empha:

at1 oF contract 1n gues

page 202-203 paragr

ional waiver analys

Fr Toh Xe A405 ? ie

ract law involved ir

al rights) ee, ee

77>! © .2a at T36

be = | Mer Ally

oa it«¢ r , ) 3 10} 2

lan es and > ften

litigation because

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er of

e when

argaining

Bernhardt v

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benefit of judicial instruction on the law;

they need not give their reasons for their

results: the record of their proceedings is

not as complete as it 1S 1n a court trial;

limited than udicial review of a trial

poe 350 U.S at 203 These

characteristics remain accurate today See

Shearson/American Exp., Inc. v. McMahon

107 S.ct. at 2354 (Blackmu J

Jissenting). Loss f property in an

arbitration proceeding compelled without

consent where mistake of law is no grounds

for reversal is a violat n of the

Fourteenth Amendment wherein it states "Nor

shall any state deprive any person of

property without due process f law 7

This court has indicated that

"Excessive economic power moow ild or Jide

qrounds for the revocatior f al

i an rat Y agreement cnears AmMmerical}l

Express, Inc. v. McMahon, 107 S. Ct. at

23437 rls Perry v Thomas Cie ae my it

2527 n 9 (sending ur ns nability clain

back to lower court). But the Fifth

Circuit has ruled in the instant action

that use of excessive economic power is not

unfair nor is it unconscionable.

By ensuring that broker-customer

arbitration agreements are voluntary, the

injunction will enhance the integrity of

the arbitration process and minimize the neec

for judicial enforcement arbitration

agreements and awards.

The injunction thus serves to protect

against claims "that the agreement to

arbitrate resulted from the sort of fraud

overwhelming economic power that would

provide grounds ‘for the revocation of any

contract.'" Mitsubishi Motors 2s Corp. -

soler Chrysler-Plymouth, Inc., 473 U.S.

614, 627 (1985) (quoting 2 of the Act).

With the option of not Signing and still

opening an account, securities customers

who refuse arbitration will again have

access to the options and margin account

market which access is currently totally

denied by the defendant's group boycott

See White and White v. American Hospital

Supply 540 F. Supp. at 958 wherein “it is

. >.

: :

sufficient to establish illegal boycott

> ,. _ _ .

if members of boycott have collective

p _—

Capacity to deny their victims acce

The proposed injunction has many

1eed

beneficial effects. The anti-competitive

. ~ a] rs ae ae os =

effect of uniform denial of services t

a } J

force arbitration upon consumers who a t

want to arbitrate 1s prohibited Services

can not be denied on the basis of reject r

—_

junction forces compliance with the n

) } - imr tox, ' Smt —_

consent no waiver imperative which 1s

° a a 4 4 rs

integr 3 | t ) the in ent ( fF the rAR

5 | . ™ - + 1 +

The defendants have not denied the

1 7 a — >

existence f the nonon | nsteaad a J

+ 7 = ) + -, - 9 7

their rebuttal 1s directed ward refuting

4 7 9 + v= —— x + 7 ,

ne 4 begation Di ACY t t

} } c . 5

TH ¢ 1 Y YY + } > & { na t a T 5% T) a

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: 74 + -

Jas yr) aw, ident + =~ mn t eda] rs +

1 2 1 ’ 2 ~ ~

they an re rne pron on Bi ons Ll? FT gD ta H&S

-s a -

rcu 1

4 s that

ti-trust

Sider tha

nan adhe

nm contra

instant act

established

adopted by

tha

nent might be considered

the Fifth Circuit remanded

action for trial but refused

t there is any difference

S1o0r ntract (1 and an

t llegally compelled by

ade by monopoly (2) ge

» 79)

ly power when adopted by

80% of the market" U.S. v.

op. at page 7

it has been conclusively

tf we have an agreement

firms enjoying 95% of the

opt ions account

dispute with

Cy) YN Yr

mon ]

wate

any

Sherman

TY ¢

ylizat

IS trading

"an

Act

Lons

market and the underlying

ferrill Lynch occurred in an

account. Options accounts

rt of the trade or

d as such are covered under

proscriptions against

and restraints and an

identical situation of a tr

adopting a uniform arbitrat

imposing it on consumers by

services has been found t¢t

of the Sherman Act by this

Paramount Famous Lasky v. U

+ OA non , In =

F. 2nd 984, 282 U.S. 0

First National Pictures, In

Even if the arbitrati

fair, there was still no c

arbitrate since the essenti

c-onsent is missing from the

contract. Adhesion contrac

A they are not compelled b

cenpulsion by monopoly is u

inconscionable and an adhes

compelled by monopoly is

void. Therefore the decisi

arbitrat 10Nn panel must He

order to arbitrate wa ade

r ar y bindir Jj mrtra +

art trat r and er the

of Dillard wt 1¢ and } 7 }

determination ff the disput

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restrain themselves to elimination of large

damages and to maintaining a capacity to

control which they exert to controlled

advantage.

Dillard did not consent to arbitrate.

Dillard has raised issue of illegal]

arbitration contract in the pleadings of H-

an q 5 - sm |

Aika ‘. Cit ys

Appendix) Plaintiffs Motion for Trial by Jury

Restricted to Specific Issue of

Arbitration Agreement) and in Compl

ae)

H-88-2848 (see 90-2761 item 33 page

In both the motion and complaint the

pleading of Dillard is identical: "Assen

ict

was not voluntary, it was coerced by the

advantage of defendants which was

unlawfully exercised. Unlawful advantage

of defendants consisted of threat to

prohibit trade of plaintiff in securities.

The threat constituted duress which induced

MHMlaintiff to c ae the "“ontract ~ HAtrarv +

plaintiff's will and to plaintiff's

jetriment. Defendants' threat of restraint

of plaintiff's trade overcame plaintiff's

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if free from such influence.

liberty of discretion to such an

s to influence plaintiff to act in

at plaintiff's judgement and

Merrill tynch never filed any

> the complaint and they neglected

to deny the allegation of duress

aint of trade in the motion this

ist consider that for purposes of

eal that every allegation in the

ed quotation is proven.

re was no consent and without

there is no waiver of right to

remedy. The arbitration must be

to be null and void. The

i10n waS improperly and illegally

d under the terms of an alleged

10on contract which because of the

conditions under which it was

ohibiting monopolization of two

would condemn and prompt him n:

»t

33.

securities markets: options accounts and

margin accounts by defendants and their co-

conspirators by their adopting and agreeing

to use, and in using exclusively, as a

precondition of any trading, margin and

option contracts which contain provisions

requiring the determination of all claims

and controversies arising under said

contracts in arbitration.

In failing to make findings and

conclusions on the injunction and on the

material issue of the legality of the

arbitration contract, the trial court in H-

85-4135 violated Rule 52(a) of the Federal

Rules of Civil Procedure. Rule 52(a)

provides in pertinent part that "[i]n al

actions tried upon the facts without a jury

or with an advisory jury, the court shall

find the facts specially and state

separately its conclusions of law thereon,

and in granting or refusing interlocutory

injunctions the court shal Similarly set

forth the findings of fact and conclusions

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of law which constitute the grounds of its

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3 and National

ment Renta! Ltd. v. Hendrix, 565 F.

a oh += ry o la ‘A

nd c 5? ond CaAk 1977)

Le od 2 7

t is elementary that the Seventh

is fundamental

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tad

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ang it’s protection can only be

relinquished knowingly and voluntarily",

see: Johnson v. Zerbst, 304 1 , =e

‘a A fan n° 7 in

t. 1019, & 1. Ed. 1461 (1938) Heyman v

L. Ed. 2nd 8& (1972). Indeed, a

presumption exists against it's waiver.

see Aetna Insurance Co. v. Kennedy, 301

U.S. 389, 393, $37 8. Ct. 866. 6. 1.

1177 (1937). "In the civil no less than

the criminal area, courts must indulge

every reasonable presumption against waiver

]

of fundamental rights. Fuentes v. Shevin

407 U.S. 67, 32 &. ef Bnd 556,

1983. The Fifth Circuit has ruled

contradictorily in the instant action that

a presumption exists for a waiver.

In order to prove the lawfulness of

their arbitration clause defendants must

show that Dillard voluntarily agreed to

waive his Seventh Amendment rights. They

must show that he gave his consent without

duress, indeed that he had a choice between

arbitration and jury and that he

voluntarily consented to arbitration. Is

that what they have shown? Quite to the

contrary they make no allegation that he

had any choice Tn the brief f Securities

Tndustry Association T! if pF Y appeal

€ He-Q22-D9R4R + Sth Ciy + #29-25282 page 6

line 3 it states “While Dillard ay not

nave a4 I lce fF for [betweer Jury and

arbitration! that lack f choice does not

establish tangible econo MIME

Dillard submits t the irt that he ;

certainly economically damaged for the

purpose of establishing right ft lamage

jer + } f ede y >] art 1-tyr c+ , + = + \

right t .* t fut 1a] juarant }

r t rest \y t f f i Jury LOF

pon prt f that de 2] wa iT iS iable

38.

and that the alleged waiver of his right to

jury trial rests solely upon defendants

providing proof of his voluntary, informed,

consent. Defendants show no such proof

instead they admit apparent “lack of

choice". If there is no choice there is no

Waiver. This no choice no waiver

imperative should be declared by injunction

to restore Dillard's Constitutional rights

and to restore the Constitutional rights of

the investing public and to alleviate the

damage being done to Dillard and to many

others like him as a direct result of the

broker's unrestrained monopoly.

The right of jury trial in civil cases

is a basic and fundamental feature of

federal jurisprudence which is protected by

the Seventh Amendment to the Constitution

of the United States. See Bailey v.

Central Vermont R. Co. 319 US 350, 87 L ed

1444, 63 S.Ct. 1062.

Right to trial by jury is a right

which is justly dear to the American people

and right to trial by jury should be

jealously guarded by the courts. See Jacob

V. City of New York, 315 U.S. 752, 86 L. Ed

1166, 62 S. Ct. 8654.

Any curtailment of this right should

be scrutinized with the utmost care. See

Baylis v. Traveler's Insurance Co. 113 U.S.

316. The standard set by this court in the

Baylis case was that right to trial by jury

was absolute and inviolate unless there was

waiver of the right “by consent of the

parties".

Consent means voluntary agreement.

But signing the adhesion contract which

demanded compulsory arbitration in lieu of

jury indicated only submission to the

duress of the threat of restraint of the

trade by the Securities Industry

Association's monopoly.

There is a big difference between

consenting and submitting. Every consent

involves a submission; but a mere

Submission does not necessarily involve

consent.

Si.

arbitration contract; they did not deny the

concert of action of the association in

using a standard form adhesion contract

compelling arbitration.

They did deny that the monopoly was

created by conspiracy but conspiracy is a

jury question.

What they fail to realize is that it

does not matter if the monopoly was created

legally. Even if it was created by an act

of God, if it's result is monopolization of

any part of the trade or commerce and if it

restrains trade or if it serves to nullify

a Constitutional right of the U.S. public;

that monopoly must be broken. Dillard has

so proposed starting with preliminary

injunctive relief.

Right to trial by jury is nullified and

made worthless by the concerted actions of

substantially all of the providers of

securities brokerage services. You have

right to trial by jury unless you consent

to sign that right away but you must sign

the right away or the brokers monopoly

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The industry-wide standard forn

arbitration clause in the contract wit}

Merrill Lunch was forced upon Dillard lest

he could have no service and a similar

ause was refused by him at

Drexel, Burnham, Lambert, Incorporated, and

that nowhere could he find any provider of

margin and option account services which

would provide the services without

compulsory arbitration. Both the refused

and accepted under duress contracts have

been entered as Exhibits in H-85-4135.

Securities Industry Association admits

that "all securities brokers customers

trading contracts contain arbitration

» "

clauses..." and in its pleading Merrill

Lanch admits the same fact. Plaintiff

Submits to the Court that it should take

Judicial notice of this admission of

accomplished monopoly.

n short: defendants' conduct and the

resulting monopoly are per se violations of

45.

substantive federal law and nothing can

save then. Even when group boycotts or

concerted refusals to deal operated to

lower prices or temporarily tc stimulate

competition, they are banned by the Sherman

Act. The rule of per se violations as to

group boycotts or concerted refusals to

deal has been based by the courts on the

ground that such agreements, no less than

those to fix minimum prices, cripple the

freedom of traders and thereby restrain

their ability to do business in accordance

with their own judgement; De Filippo v.

Ford Motor Co (1975, CA3 Pa) 516 F2d 1313,

Without the imposition of judicial

restraints every powerful combination could

exempt itself from the rule of law by

exerting the economic power of adhesion

demand upon threat of restraint of trade.

The renters of most of the supply of

motion pictures in the late 1920's did

exactly what the brokers have done 69 years

later. The motion picture monopoly was

prohibited by injunction by this court from

compelling adhesion arbitration -- and this

court must hold the broker's monopoly to

the same standard as the Paramount case 24

F. 2nd 984, 282 U.S, 405

Asserting Dillard's rights under

federal antitrust law should be likened to

a private Attorney General who protects the

public's interest. See Waldron v. Cities

service Co., 361 F.2d 671 673 (2d Cir.

1966), cert. granted, 385 U.S. 1024. 87 S.

Ct. 743, 17 L. Ed, 2d 672 (1967). Dillera

has made request for declaration of class

action under F.R.C.P. 23.

In American Safety Equipment Corp v.

J.P. Maguire & Co. 391 F.2d at 825, the

court recognized that [a] claim under the

antitrust laws is not merely a private

matter’, because private antitrust actions

are an integral part of the effort of the

antitrust laws ‘to promote the national

interest in a competitive economy." 391

47.

F.2d at 826.

The instant action claim under the

antitrust laws is not merely a private

matter; it affects thousands of investors

who are cheated of staggering sums by the

concerted action of the brokerage monopoly.

on, attempt to monopolize

Monopolizat

and conspiracy to monopolize are separate

offenses and the instant complaint charges

all three. Please see: Mt. Lebanon Motors,

Inc. v. Chrysler Corp. 283 F. Supp 453

iD.¢ Pa 1968

Dillard asked the district court and

the Fifth Circuit for a summary judgement

against defendants on violation of

monopolization restraints under Section 2

of the Sherman Act Dillard asked the

district court for a pre] nary junct if

and for a permanent injunction and Dillard

asked the Fifth Cir t for *

prel ary injunction pending tr | eg

Dillard now asks this rt for = ry

judgement and an appropriate injunctior

prohibiting ntinued polizat

48.

"Every person who shall monopolize..

or combine... with any other person or

persons, to monopolize any part of the

trade or commerce... shall be deemed

guilty of a felony" - Sherman Anti-

Trust Act.

The monopoly is defined as pervasive

in two markets: (1) in margin accounts

contracts and (2) in option accounts

contracts, within the United States. The

monopolists are defined as the members of

Securities Industry Association who offer

margin accounts or options accounts only if

the customer signs standard compulsory

arbitration agreement.

There is no genuine issue of material

fact about the existence of the monopoly or

of exclusionary and coercive conduct by the

monopolists. Merrill Lynch calls the

monopoly's concerted refusal to deal

“conscious parallelism". Dillard calls it

a group boycott. But regardless of what

you call it there is no doubt that the use

of monopoly power to contravene the Tth

Amendment (by forcing compulsory

arbitration) is a violation of the Section

2 provision of the Sherman Act proscribing

monopolization.

Specific illegal intent is not

necessary for a violation of Section 2.

All that matters for Section 2 purposes is

the fact of a restraint of trade by

monopolistic practice which is obviously

clearly demonstrated and is not at issue.

Therefore Dillard moves that this court

declare monopoly proven and that this court

issue order restraining the monopolists

from restraining trade. This can be done

by injunction prohibiting attempts by the

monopolists to enforce upon Dillard and

upon the American public generally,

adhesion contracts mandating compulsory

arbitration.

Huge sums are lost to the public as a

result of the monopoly indemnifying itself

against court ordered damage awards and the

restraints imposed upon those who resist 15

harmful to trade and commerce. te: a6

common knowledge and it is admitted by the

defendants that those who resist are

excluded from trading. Restraint of trade

1S injurious to a healthy economy.

Therefore we have all the elements

necessary for injunction to issue:

Monopoly

Exclusionary Behavior

Fact of Resultant Damage

WOH

Immediate injunction is requested

because of the irreparable damage being

done to the consumers of securities

brokerage services and the Clear violations

of both constitutional and anti-trust law

as well as violation of traditional

Standards of equity.

This court should overrule the Fifth

Circuit and uphold by injunction the fair

Standard of the strict enforcement of

voluntary when made arbitration contracts

and the prohibition of enforcement of

involuntary when made, compulsion by

monopoly, arbitration contracts. Legally

that is the current standard, but it is not

well known or defined since compulsion by

monopoly in the making of the agreement to

arbitrate has not been plead since the

Paramount Famous Lasky case 34 F. 2nd 984,

482 U.S. 3G. Such a standard conforms to

all previous legal decisions of this court.

Please see different Paramount Gase:

United States v. Paramount Picture, Inc

(2366) 33264 U8. 13k, -362-66 2... CT Bis,

921, 92 L. ED. 2D 1260, 1285 wherein it

Shows that "In granting an injunction under

federal anti-trust acts equity may enjoin

conduct which is not illegal per se. ‘s

The greatest assault upon the

institution of trial by jury since the

founding of the Republic is made by

Securities Industry Association by reason

of its organization of monopoly power and

mas

group boycott which has as its goal and

as its natural and unavoidable consequence

to deny Americans their Constitutional

rights to trial by jury.

Securities Industry Association and

its fellow monopolists are expanding the

number and type of accounts that employ

adhesion arbitration upon pain of no

services. The monopolists have total

control of the defined market: margin and

option accounts. This is a classic

monopoly as defined by the Sherman Anti-

Trust Act.

The pleadings have evidenced the facts

of the illegal contract and defendants have

failed to even deny the key fact which is

compulsion by monopoly in the making of the

agreement to arbitrate.

Section 4 of the Federal Arbitration

Act provides that: "If the making of the

arbitration agreement... be in issue, the

court shall proceed summarily to the trial

thereof."

Under Section 4, Dillard, by motion in

the one action, H-85-4135, and in original

complaint in the other action, H-88-2848,

demanded trial of the issue of illegal and

_void arbitration contract due to the duress

of restraint of trade and due to illegal

compulsion by monopoly in the making of the

agreement to arbitrate. The motion has

been ignored and the complaint has been

abated and arbitration has been ordered

without proper adjudication of the contract

dispute in either action. Or, if there was

an adjudication then Rule 52 motion for

findings of fact and conclusions of law on

that adjudication was improperly denied.

The district court order in H-85-4135

states that there was no contract issue

because the complaint did not include

pleadings attacking the contract to

arbitrate. The contract issue had not yet

become an issue at the time the complaint

in H-85-4135 was drafted. Only when

defendant Merrill Lynch attempted to

compel arbitration of the complaint did

arbitration become an issue. The federal

rules provide for objections to an

arbitration contract to be made by motion

under the provisions of F.R.C.P. 7,8,10,

and 12. The facts showing no contract were

well pleaded in the motions as an issue

preliminary and incidental to the proper

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are arbitrable."; and Robert Law) ence Cc

Vv evonshire Fabrics, In C.A.N.Y. 1959

271 F. 2nd 402 Certiorari dismissed 81 S.

Ct. 27, 364 U.S. 801 5 L Ed. 2nd 37. oe es

arbitration clause itself was induced by

illegality, there can be no arbitration and

there must be judicial trial of that

question before stay can issue pending

arbitration."

Tt is of exceptional importance for

this court to find that the monopoly should

be restrained by permanent injunction or in

the alternative by preliminary injunction

pending the trial and for this court to

issue an injunction. Dillard does so move

the court.

The injunction can be quite Simple.

It should include a finding that contracts

for margin accounts and option accounts

provided by brokerage and securities

Services companies to the public for trade

and commerce in stocks, bonds and options

can not require acceptance of an

arbitration provision as a pre-condition to

aes

trade and commerce in stock, bonds and

options; this order being necessitated by a

finding that in excess of 90% of the

providers of these financial services have

made acceptance of an arbitration provision

a precondition to trade and commerce in

stocks, bonds and options within said

margin and option accounts.

Therefore their mutual action has

resulted in adhesion arbitration having

monopoly power which is a monopolization as

proscribed by Section 2 of the Sherman Act;

this irresistible economic power robs the

public of consent and without consent any

agreement allegedly waiving the fundamental

Constitutional right of trial by jury,

under the Seventh Amendment guarantee, must

be void.

Therefore the arbitration agreement in

this action is void as are all 1ike

arbitration agreements which have similarly

been imposed by the monopoly by restraint

fF the trade o f those who refuse to agree

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construed as to dad Substantial justice"

wh } y + } ls instance neans that al] the

complaints should be nsidered as a whole.

The rime f false prisonment is

well pleaded and it is a substantial

violation of civil rights under Title 42

although the Fifth Circuit improperly

affirmed dismissal of the civil rights

complaint for failure to sta

te a claim.

The Fifth Circuit did not review

dismissal of Dillard's extor

under the Hobbs Act because

did not raise the issue but

raise the issue on page 5 of

which

the permission of the Fifth

Dillard complained that: ".

complaint, Extortion Complai

tion complaint

nt, Abuse

Process by Extortion Complai

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plead." If indeed there wer

right of action it could not

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des the circuits.

the Second Circuit

te right of action

in the opinion of

The i nj

The stock was

Dillard had paid

lars

Lynch including the purchase of guaranty

insurance to absolutely guarantee the

delivery.

The Fifth Circuit's allegation of a

deficit of $5,000 in Dillard's Merrill

Lynch account is not an agreed fact -

Dillard has stated that the account should

have had a $250,000 positive balance at

time he attempted to transfer funds.

Merrill Lynch never even answered the

complaint and nowhere in the record of any

action does Merrill Lynch allege a $5,000

deficit. The status of that account is at

issue and there has been no discovery and

no adjudication. Tt 1s a defamatory abuse

for the Fifth Circuit to state this "fact

in the record.

The Fifth Circuit states a failure tc

buy as the basis for certain f Dillard's

alms against Security Pacific The Fifth

Circuit knows but neglects t lisclose that

the order t buy was a short sal er 5

Under the law Secur Cy Pacif > was

absolutely required to buy: if Dillard

ordered it or if the account were not

properly margined@ since a buy was

absolutely required in any event for

elimination of the short position. These

Statements of "fact" are in violation of

normal standards of fairness and judicial

restraint.

This court should study the original

records of the instant actions which

clearly show improper ex parte contact

between the court at Houston and the

defendants. At Houston normal rules of

fairness are often ignored to the injury of

pro se litigants and the pleading standards

demanded of pro se litigants are more

stringent than for members of the bar. Pro

se litigation is unconscionably delayed or

Summarily dismissed - it never comes to

trial. This court needs the entire record

of the instant actions for proper analysis

- but an analysis of the docket sheets

alone will give some indication of the

problem. The docket sheets are the wrong

63.

Size to be bound in this booklet so 40

copies have been sent to your clerk, in

the separate appendix, and should be

available upon request.

The chief judge at Houston encourages

abrogation of the rules in order to "do

something" to suppress pro se litigation

generally which he regards as a total waste

of time. Please see: Elmore v. McCammon

640 F. Sup. 905 (S.D. Tex. 1986). The 1985

ana 1986 actions were on his docket for a

time until Dillard complained about

unconscionable delay and ex parte contact

and he removed himself as judge.

The Fifth Circuit has refused to take

any supervisory action on Dillard's

complaints that the United States District

Court for the Southern District of Texas,

Houston Division is denying pro se

litigants their federally guaranteed right

of effective court access.

~ 2

Dillard has brought to your attention

a few problems with parts of the judicial

64.

system over which you have control. He

urges you to remember that it is bad form

to kill the messenger. Although that is a

way to hear only good news; it is unhealthy

for the system because problems are hidden

rather than remedied. Please understand

that Dillard has the greatest respect for

the federal judicial system; indeed, the

bulk of his complaint pleads for protection

of our Constitutionally guaranteed judicial

System from being supplanted by private

arbitration compelled by irresistible

economic power.

For any or all the foregoing reasons

this Supreme Court of the United States

should grant Writ of Certiorari.

Dated: Grants Pass, Oregon

August 12, 1992

Respectfully Submitted,

PU MEL

Carvel Gordon Dillard, pro se

903 SW Central

Grants Pass, OR 97526

(503) 479-0098

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.