Summary
dismissing for lack of subject matter jurisdiction where it could not "be determined whether jurisdiction would lie based on diversity of citizenship since [there were] no allegations as to the citizenship of the parties"
Summary of this case from Philippe v. N.Y.C. Dep't of Educ.Opinion
00 Civ. 1335 (RWS)
September 26, 2000
MEMO OPINION
By petition filed February 22, 2000, Petitioner Jonathan Hakala ("Hakala") seeks to vacate an arbitration award rendered in an arbitration between him and then-Respondent BT Securities Corporation ("BT Securities"), now Deutsche Bank (formerly Banker's Trust Corporation) and Deutsche Bank Alex Brown, Inc. (formerly BT Securities, Inc.) (collectively, "Deutsche Bank"), pursuant to the Federal Arbitration Act ("FAA"), 9 U.S.C. § 10 (a), and on the ground that the arbitrators rendered their decision in manifest disregard for the law. The petition is opposed by Deutsche Bank.
BT Securities and Bankers Trust Corporation merged with Deutsche Bank subsequent to the arbitration.
For the reasons set forth below, this petition will be dismissed for lack of subject matter jurisdiction.
BT Securities hired Hakala to head its high yield bond trading desk in July 1989, — and terminated him in August 1991. On or about August 14, 1997, Hakala filed a Statement of Claim with the National Association of Securities Dealers ("NASD"), to commence arbitration of his claims that (1) BT Securities had terminated him in retaliation for his opposition to its fraudulent income reporting practices, and (2) BT Securities had breached its agreement to pay him certain compensation and stock. Under the NASD Rules of Arbitration Procedure, a panel of three arbitrators was appointed to resolve Hakala's claims.
BT Securities moved before the arbitrators to dismiss the breach of contract claim on the ground that it was time barred under NASD regulations and New York law, and to dismiss the wrongful discharge claim on the ground that it was time barred or, in the alternative, on the ground that it was not cognizable under New York law. The arbitrators denied this motion on June 12, 1998. Arbitration hearings commenced on October 27, 1998 and concluded on October 13, 1999. On November 22, 1999, the arbitration panel rendered its award, in which Hakala's claims were denied in their entirety.
Oral argument was heard regarding the instant petition on May 31, 2000, at which time the matter was deemed fully submitted.
Deutsche Bank has not contested subject matter jurisdiction but, instead, addresses only the merits of Hakala's petition under the FAA and the `manifest disregard for the law' standard. This Court, however, raises the issue of subject matter jurisdiction on its own motion. See Fed.R.Civ.P. 12(h)(3).
The fact that a petition to vacate an arbitration award is filed pursuant to the FAA does not give rise to subject matter jurisdiction in federal court. See Greenberg v. Bear, Stearns Co., 220 F.3d 22, 26 (2d Cir. 2000). Thus, petitions to vacate arbitration awards, like petitions to compel arbitration, "must be brought in state court unless some other basis for federal jurisdiction exists, such as diversity of citizenship or assertion of a claim in admiralty." Id. at 26 (quoting Westmoreland Capital Corp, v. Findlay, 100 F.3d 263, 268 (2d Cir. 1996).
Hakala's papers contain no jurisdictional allegations. With respect to possible independent bases for jurisdiction, the underlying dispute is, of course, neither a matter of admiralty law nor a collective bargaining dispute. See Greenberg, 220 F.3d at 25 (listing circumstances under which federal courts have jurisdiction to hear petitions to vacate arbitrations). Another independent basis would arise if Hakala sought to vacate the award "primarily on the ground of manifest disregard by the arbitrators of federal law." Id. at 25. Hakala has raised manifest disregard of the law as a ground for vacating the arbitration award. However, Hakala not only fails to assert that the arbitrators disregarded federal law but, indeed, expressly disavows federal law as a basis for his claims, stating that "his claim [is] a New York common law contract claim, which halls] nothing to do with either the [New York] Labor Law or Title vii." Finally, it cannot be determined whether jurisdiction would lie based on diversity of citizenship since are no allegations as to the citizenship of the parties. See 28 U.S.C. § 1332.
is unclear whether Hakala is referring to his wrongful discharge claim, his breach of contract claim, or both. What is clear is that he not only fails to assert a federal law claim but states affirmatively that he is not doing so. Hakala also states that his wrongful discharge claim "can be reduced to the question, `why did Bankers Trust fire [Hakala]?". of course, that question does not give rise to subject matter jurisdiction in this Court.
Therefore, the instant petition is dismissed without prejudice for lack of subject matter jurisdiction. In light of this ruling, the Court will not reach the merits of Hakala's petition.
It is so ordered.