DAVID T. HAGGERTY, Plaintiff,
MICHAEL J. BOYLAN, Defendant.
DECISION and ORDER
LAWRENCE E. KAHN, District Judge.
Defendant Michael J. Boylan ("Defendant") sought to implead Plaintiff David T. Haggerty ("Plaintiff") into an arbitration proceeding before the Financial Industry Regulatory Authority ("FINRA") by filing a "third-party claim" against Plaintiff in that proceeding. Dkt. No. 1, Ex. B. Plaintiff, in response, brought this action seeking both a declaration that Defendant's third-party claim is not subject to arbitration and injunctive relief to that effect. Dkt. No. 1. The Court granted Plaintiff's request for a temporary restraining order ("TRO") on April 5, 2013, and issued a preliminary injunction on May 3, 2013. Dkt. Nos. 11 ("April 5 Order"); 32 ("May 3 Order").
On August 8, 2013, Plaintiff filed a Motion for summary judgment along with a supporting Memorandum and Statement of material facts. Dkt. Nos. 39 ("Motion"); 39-1 ("Memorandum"); 39-2 ("SMF"). On August 26, Defendant, proceeding pro se, filed a Response stating that the underlying FINRA arbitration claim had been withdrawn,  that he agreed not to pursue any claims in this matter before FINRA going forward, and that he therefore did not object to Plaintiff's Motion. Dkt. No. 41 ("Response") at 1. Plaintiff filed a Reply requesting that his Motion be granted as unopposed in light of Defendant's Response. Dkt. No. 42 ("Reply") ¶ 4. For the following reasons, the Court grants Plaintiff's Motion.
II. LEGAL STANDARD
To prevail on a motion for summary judgment, the movant must "show that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(a). The movant bears the burden of demonstrating the absence of a question of material fact. In making this determination, the Court must view all facts "in the light most favorable" to the non-moving party. Celotex Corp. v. Catrett , 477 U.S. 317 (1986); see also Holcomb v. Iona Coll. , 521 F.3d 130, 132 (2d Cir. 2008). To survive a summary judgment motion, the opposing party must establish a genuine issue of fact by "citing to particular parts of materials in the record." FED. R. CIV. P. 56(c)(1); see also Wright v. Goord , 554 F.3d 255, 266 (2d Cir. 2009). Only disputes over "facts that might affect the outcome of the suit under the governing law" will preclude a grant of summary judgment. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248 (1986). In determining whether there are genuine issues of material fact, the Court is "required to resolve all ambiguities and draw all permissible factual inferences in favor of the party against whom summary judgment is sought." Johnson v. Killian , 680 F.3d 234, 236 (2d Cir.2012) (citing Terry v. Ashcroft , 336 F.3d 128, 137 (2d Cir.2003)). "Even when a motion for summary judgment is unopposed, the district court is not relieved of its duty to decide whether the movant is entitled to judgment as a matter of law." Vt. Teddy Bear Co. v. 1-800 Beargram Co. , 373 F.3d 241, 242 (2d Cir. 2004).
In his Reply, Plaintiff argues that the withdrawal of the underlying FINRA claim does not moot this action because Ms. McDowell could reassert that claim in the future, at which point Defendant could change course and reassert his claim for indemnification against Plaintiff before FINRA. Reply ¶¶ 4-6.
"As a general rule, in a case involving an allegation that defendant has engaged in illegal activity, a court's power to hear and decide the matter is not terminated when defendant voluntarily ceases its illegal conduct." Desiderio v. Nat'l Ass'n of Sec. Dealers, Inc. , 191 F.3d 198, 202 (2d Cir. 1999). Rather, mootness is demonstrated only where: "(1) it can be said with assurance that there is no reasonable expectation... that the alleged violation will recur, ... and (2) interim relief or events have completely and irrevocably eradicated the effects of the alleged violation.'" Id . (quoting Los Angeles Cnty. v. Davis , 440 U.S. 625, 631 (1979)).
Here, nothing in the record suggests that the reassertion of Defendant's third-party claim against Plaintiff before FINRA has been irrevocably foreclosed. Accordingly, this action is not moot and the Court can reach the merits of Plaintiff's claim.
B. Merits of Plaintiff's Claim
The Court has considered the merits of this case on two previous occasions. In both the April 5 and May 3 Orders, the Court found that Plaintiff was likely to succeed on the merits of his claim. More specifically, the Court found that no portion of the FINRA arbitration rules that compel arbitration-i.e., neither the "Customer Arbitration Code" nor the "Industry ...