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February 1, 1991


The opinion of the court was delivered by: Sweet, District Judge.


Defendant New York Stock Exchange ("NYSE") moves to dismiss the complaint on the grounds that the action is time-barred by the statute of limitations. For the following reasons, the motion is granted.

The Parties

NYSE is a New York corporation which operates as a securities exchange, providing a market for the trading of securities. Plaintiff William J. Higgins ("Higgins") is a member of NYSE who operates as an independent broker, executing orders on the floor of NYSE as an agent for others.

The Facts

In 1981, Higgins sought permission from NYSE to install an unrestricted business telephone line in his booth on the NYSE floor. At the time, NYSE allowed only restricted lines on the NYSE floor, ostensibly for the purpose of preventing large institutional investors from being able to tie up any direct phone lines to the floor and thereby gain an edge over smaller investors. Higgins alleges that such a phone line would have allowed him to communicate directly with non-NYSE-members, thereby allowing him to compete with other members for their customers. In keeping with its then policy, NYSE denied Higgins request.

In 1984, Higgins again sought permission to have an outside line connected to his booth. This time, Higgins also requested permission to have the new line connected to a cordless telephone, which he could carry with him while he was away from his booth on the trading floor. Again NYSE rejected Higgins' request. Higgins appealed this decision to NYSE's board of directors, which affirmed the rejection on March 7, 1985.

Higgins next sought review before the Securities and Exchange Commission ("SEC"), which vacated NYSE's decision in May, 1987, on a finding that NYSE had no specific rules which prevented it from approving Higgins' request. NYSE responded by proposing a rule to prohibit portable telephones on the trading floor; the rule was approved by the SEC in 1988, and the decision was affirmed on appeal in Higgins v. SEC, 866 F.2d 47 (2d Cir. 1989).

On June 15, 1990, Higgins filed this action alleging that NYSE's denials of his requests for a telephone in his booth constituted a conspiracy to violate the Sherman Act, 15 U.S.C. § 1. The alleged conspiracy involves the efforts of NYSE and various NYSE members to prevent Higgins from competing with other NYSE members by preventing him from communicating with non-member customers from his booth. Higgins also contends that an object of the conspiracy was the fraudulent concealment of the fact that NYSE had no intention of giving fair consideration to any of Higgins requests for a telephone line in his booth. Higgins seeks treble damages under § 4 of the Clayton Act, 15 U.S.C. § 15.


1.  The statute of limitations was not tolled by the SEC

NYSE moves to dismiss on the grounds that Higgins action is barred by the four-year statute of limitations applicable to an action under the Clayton Act, contained in § 4B, 15 U.S.C. § 15b. NYSE contends that, because Higgins' complaint deals with events which occurred prior to June 15, 1986 — four years before the filing of the complaint — his action is time-barred. Higgins counters that his instigation of the administrative proceedings with the SEC tolled the statute until those proceedings were completed in 1987.

Higgins relies on Ricci v. Chicago Mercantile Exchange, 409 U.S. 289, 93 S.Ct. 573, 34 L.Ed.2d 525 (1973) and Mt. Hood Stages, Inc. v. Greyhound Corp., 616 F.2d 394 (9th Cir.), cert. denied, 449 U.S. 831, 101 S.Ct. 99, 66 L.Ed.2d 36 (1980) to support his contention that the statute of limitations was tolled during the pendency of the SEC proceedings. In Ricci, the Supreme Court held that antitrust proceedings against the defendant Chicago Mercantile Exchange should be stayed pending administrative proceedings before the Commodity Exchange Commission ("CEC"), because certain issues were within the CEC's jurisdiction and its resolution of those issues was essential to the antitrust claim. 409 U.S. at 304-05, 93 S.Ct. at 581-82. In Mt. Hood, the Ninth Circuit held that where an administrative proceeding was a prerequisite to the plaintiff's antitrust suit the statute of limitations would be tolled during the proceeding. Higgins argues that Ricci implies that his SEC proceeding was in fact a prerequisite to his antitrust claim, and that Mt. Hood therefore provides that the limitations period was tolled during the SEC proceeding.

However, in Ricci the plaintiff had filed a timely antitrust action and the defendant had moved to dismiss. This motion was denied, but the case was stayed pending the outcome of the CEC proceedings. Because the defendant had timely notice of the plaintiff's claims, there was little prejudice from delaying the suit while the CEC ruled on the dispute. In the present case, on the other hand, NYSE had no knowledge or reason to know that Higgins intended to bring an antitrust suit until well after the limitations period had expired. Higgins cannot avail himself of the ...

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