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Shearson Hayden Stone Inc. v. Scrivener

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT


February 18, 1982; As Amended.

SHEARSON HAYDEN STONE, INC., PLAINTIFF,
v.
SUSAN SCRIVENER, DEFENDANT AND THIRD-PARTY PLAINTIFF-APPELLEE, V. LOEB RHOADES HORNBLOWER & COMPANY, THIRD-PARTY DEFENDANT, DEAN WITTER REYNOLDS INC., THIRD-PARTY DEFENDANT-APPELLANT.

On Petition for Rehearing

Before: WATERMAN, OAKES*fn* and MESKILL, Circuit Judges.

Per Curiam:

Susan Scrivener petitions for rehearing, contending primarily that we have misconstrued the issue presented in this case. Our focus to this point has been on whether a brokerage firm which has yet to handle a customer's commodities account should be subject to the arbitration regulations of the Commodities Futures Trading Commission (CFTC), 17 C.F.R. ยง 180.1 et seq. (1981). We answered this question negatively in our earlier opinion. In doing so, we examined whether the CFTC regulations were intended to apply where a brokerage firm has failed to open a customer's account. Scrivener argues in her petition for rehearing that she had actually opened a commodities account at DWR (i.e., she completed the necessary customer forms and documents) and that DWR had subsequently failed to effect a transfer of her commodities positions from another firm. However, the fact remains that DWR never handled Scrivener's commodities account in any manner. We clearly held in our earlier opinion that "where a brokerage firm has yet to handle a customer's commodities account, the CFTC arbitration regulations are inapplicable." Slip op. at 660-61. We are not persuaded otherwise by Scrivener's petition for rehearing.

In addition, Scrivener reasserts her position that the arbitration clauses relied on in this case are unenforceable under the regulations of the Securities and Exchange Commission. In SEC Release No. 34-15984, 44 Fed. Reg. 40462, 40464 (1979), the Commission stated its view that "[c]ustomers should be made aware prior to signing an agreement containing an arbitration clause that such a prior agreement does not bar a cause of action arising under the federal securities laws." We find this policy inapplicable to the present case, however, because Scrivener has alleged no "cause of action arising under the federal securities laws."

Finally, we address Scrivener's claim that the arbitration clauses are too narrow to cover the instant dispute. The clause in the Customer Agreement provides for arbitration of "[a]ny controversy between you and the undersigned arising out of or relating to this contract . . . ." We find it difficult to imagine a broader arbitration clause.

Petition for rehearing denied.


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