Summary
In Jordan, an arbitration decision was revisited in a Title VII action by the claimant who initiated the arbitration proceeding, and only after he had received an adverse decision in the arbitration.
Summary of this case from In re Worldcom, Inc. Securities LitigationOpinion
No. 03 Civ. 4110 (SAS).
August 3, 2004
Peter G. Eikenberry, Esq., New York, New York, for Plaintiff Kenneth Jordan.
Joseph C. O'Keefe, Esq., Steven Yarusinsky, Esq., PROSKAUER ROSE L.L.P., Newark, New Jersey, for Defendant MetLife.
OPINION AND ORDER
Kenneth Jordan brings this action against Metropolitan Life Insurance Company ("MetLife"), alleging retaliation in violation of Title VII of the Civil Rights Act of 1964 ("Title VII"). On March 8, 2004, an arbitration panel (the "Panel") of the National Association of Securities Dealers ("NASD") issued an arbitral award (the "Award") largely in favor of Jordan. MetLife moved for summary judgment, arguing that the preclusive effect of the Award barred Jordan's pending Title VII claim. In an oral ruling, this Court denied that motion on July 13, 2004, and MetLife now moves for reconsideration. For the reasons set forth below, the July 13 Order is vacated, and MetLife's motion for summary judgment is granted.
42 U.S.C. § 2000e to e-17.
See NASD Arbitration Award, Ex. G to Declaration of Joseph C. O'Keefe, counsel to MetLife, in Support of Motion to Confirm NASD Arbitration Award ("O'Keefe Decl.").
I. BACKGROUND
A. Facts
In 1982, MetLife hired Jordan as a Financial Service Representative at the Jersey Shore Financial Group located in Tinton Falls, New Jersey. Jordan worked in that capacity until September 27, 2002, at which time MetLife terminated his employment. The parties dispute the reason for termination. Jordan asserts that it was in retaliation for his having provided assistance to a co-worker in connection with her charge of discrimination against MetLife, while MetLife contends that it stemmed from Jordan's unethical conduct.
See Complaint ("Compl.") ¶ 3.
See id. ¶ 23.
See id. ¶ 50.
See Affidavit of Christopher Riddle, Managing Director for the Jersey Shore Financial Group, in Support of MetLife's Motion for Summary Judgment, ¶ 11.
1. NASD Form U-4
To sell variable life insurance, annuities, and mutual funds, a dealer must register with the NASD. To register, the dealer must initially and every year thereafter file a Uniform Application for Securities Industry Registration or Transfer form, which is typically referred to as Form U-4. Form U-4 contains a mandatory arbitration provision that provides that the dealer will arbitrate "any dispute, claim or controversy that may arise between you and your firm. . . ." However, "a claim alleging employment discrimination . . . in violation of a statute is not required to be arbitrated under NASD rules."
See Compl. ¶ 5.
See id. ¶¶ 6-7.
Disclosure to Associated Persons when Signing Form U-4, NASD Manual Conduct Rule 3080(1) ("Rule 3080").
Id. § 2.
2. NASD Form U-5
When a company regulated by the NASD terminates an NASD-registered employee, the company must file a Form U-5 with the NASD, stating the reason for termination. On October 2, 2002, MetLife filed a Form U-5 stating that Jordan's employment was terminated for "misrepresentation of client policy values and policy options."
See Compl. ¶ 25.
Id. ¶ 24.
B. Procedural History
On June 4, 2003, Jordan submitted four claims to arbitration: (1) defamation; (2) retaliation in violation of the New Jersey Conscientious Employee Protection Act ("CEPA"); (3) age discrimination in violation of the Age Discrimination in Employment Act ("ADEA"); and (4) retaliation in violation of Title VII. On that same day, Jordan brought this suit against MetLife in which he sought a preliminary injunction under all four of the above causes of action. This Court denied Jordan's motion on July 30, 2003.
N.J.S.A. §§ 34:19-1 to -8.
29 U.S.C. § 621-634.
See Jordan's Statement of Claim filed with the NASD, Ex. C to O'Keefe Decl., at 1, 9-10.
See Compl. ¶¶ 1, 9-11. The NASD does not issue preliminary injunctions. To seek one, a party submitting claims to arbitration must file an action in "a court of competent jurisdiction." NASD Code of Arbitration Procedures § 10335.
See Jordan v. Metropolitan Life Ins. Co., 280 F. Supp.2d 104 (S.D.N.Y. 2003).
On August 1, 2003, Jordan filed an Amended Statement of Claim with the NASD, withdrawing his ADEA and Title VII claims. These two claims remained before this Court on the basis of federal-question jurisdiction while the arbitration was pending.
See Jordan's Amended Statement of Claim ("Amended Claim"), Ex. F to O'Keefe Decl., at 1, 10.
Jordan proceeded to arbitration on his defamation and CEPA claims. Neither Jordan nor MetLife ever argued that Jordan's CEPA claim was procedurally deficient, and that issue was not presented to the Panel for its consideration. On March 8, 2004, the Panel found for Jordan on the basis of his defamation claim but denied his CEPA claim.
See Transcript of NASD Proceedings ("NASD Tr."), unmarked exhibit to O'Keefe Decl., at 2276 (Jordan's counsel agreeing with Panel that it was ruling only on his defamation and CEPA claims and making no mention that the Panel was ruling as a threshold matter whether Jordan's retaliation claim under CEPA was even actionable).
See Award at 4.
On March 30, 2004, at a conference before this Court, Jordan withdrew his ADEA claim. Thus, although Jordan has never officially amended his Complaint, only his Title VII retaliation claim remains.
See Transcript of March 30, 2004 Conference at 8.
II. APPLICABLE LAW
A. Standard of Review for Motion for Reconsideration
Motions for reconsideration are governed by Local Civil Rule 6.3 and are committed to the sound discretion of the district court. Reconsideration is an "extraordinary remedy to be employed sparingly in the interests of finality and conservation of scarce judicial resources."
See ATT Corp. v. Microsoft Corp., No. 01 Civ. 4872, 2004 WL 309150, at *1 (S.D.N.Y. Feb. 19, 2004).
In re Health Mgmt. Sys., Inc. Secs. Litig., 113 F. Supp.2d 613, 614 (S.D.N.Y. 2000) (quotation marks and citation omitted). See also Range Road Music, Inc. v. Music Sales Corp., 90 F. Supp.2d 390, 392 (S.D.N.Y. 2000) ("The . . . limitation on motions for reconsideration is to ensure finality and to prevent the practice of a losing party examining a decision and then plugging the gaps of the lost motion with additional matters.") (quotation marks and citation omitted).
Under Local Civil Rule 6.3, "the moving party must demonstrate controlling law or factual matters put before the court on the underlying motion that the movant believes the court overlooked and that might reasonably be expected to alter the court's decision." The standard for granting a motion for reconsideration is strict so as to prevent repetitive arguments on issues that have been thoroughly considered by the court. But the court may grant a motion for reconsideration to "correct a clear error or prevent manifest injustice."
Montanile v. National Broad. Co., 216 F. Supp.2d 341, 342 (S.D.N.Y. 2002), aff'd, 2003 WL 328825 (2d Cir. Feb. 13, 2003) (unpublished).
See In re Houbigant, Inc., 914 F. Supp. 997, 1001 (S.D.N.Y. 1996).
Doe v. New York City Dep't of Social Servs., 709 F.2d 782, 789 (2d Cir. 1983).
A motion for reconsideration is not a substitute for appeal. Nor is it a vehicle "to reargue those issues already considered when a party does not like the way the original motion was resolved." Accordingly, the moving party may not "advance new facts, issues or arguments not previously presented to the Court."
See RMED Int'l, Inc. v. Sloan's Supermarkets, Inc., 207 F. Supp.2d 292, 296 (S.D.N.Y. 2002).
In re Houbigant, Inc., 914 F. Supp. at 1001.
Morse/Diesel, Inc. v. Fidelity and Deposit Co. of Maryland, 768 F. Supp. 115, 116 (S.D.N.Y. 1991).
B. Summary Judgment Standard
Summary judgment is appropriate if the evidence of record "show[s] that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." "An issue of fact is genuine `if the evidence is such that a jury could return a verdict for the nonmoving party.'" "A fact is material for these purposes if it `might affect the outcome of the suit under the governing law.'"
Overton v. New York State Div. of Military and Naval Affairs, 373 F.3d 83, 89 (2d Cir. 2004) (quoting Anderson v. Liberty Lobby, 477 U.S. 242, 248 (1986)).
Id. (quoting Anderson, 477 U.S. at 248).
The movant has the burden of demonstrating that no genuine issue of material fact exists. In turn, to defeat a motion for summary judgment, the non-moving party must raise a genuine issue of material fact. To do so, it "must do more than simply show that there is some metaphysical doubt as to the material facts," and it must "come forward with `specific facts showing that there is a genuine issue for trial.'" In determining whether a genuine issue of material fact exists, the court must construe the evidence in the light most favorable to the non-moving party and draw all inferences in that party's favor.
See Powell v. National Bd. of Medical Examiners, 364 F.3d 79, 84 (2d Cir. 2004).
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986).
Powell, 364 F.3d at 84 (quoting Aslanidis v. United States Lines, Inc., 7 F.3d 1067, 1072 (2d Cir. 1993)).
See Williams v. R.H. Donnelley, Corp., 368 F.3d 123, 126 (2d Cir. 2004).
C. Res Judicata
Res judicata, also referred to as claim preclusion, is a doctrine that was designed to protect "litigants from the burden of relitigating an identical issue with the same party or his privy and [to promote] judicial economy from needless litigation." To prevail on a motion for summary judgment premised on res judicata, the movant bears the burden of showing that "the earlier decision was (1) a final judgment on the merits; (2) by a court of competent jurisdiction; (3) in a case involving the same parties or their privies; and (4) involving the same cause of action," which is to say that both actions arise from the same common nucleus of operative fact.
Parklane Hosiery Co., Inc. v. Shore, 439 U.S. 322, 326 (1979).
In re Teltronics Servs., Inc., 762 F.2d 185, 190 (2d Cir. 1985).
III. DISCUSSION
In the alternative, MetLife seeks remand of the Award to determine the Panel's basis for rejecting Jordan's CEPA claim. See MetLife's Memorandum of Law in Support of its Motion for Reconsideration ("Def. Recon. Mem.") at 7.
On July 13, 2004, I held that because it was possible that the Panel denied Jordan's CEPA claim on procedural grounds, summary judgment must be denied. In its motion for reconsideration, MetLife raises three issues that it claims the Court overlooked: (1) the parties did not submit to the Panel the issue of whether the CEPA claim was procedurally deficient; (2) the New Jersey Supreme Court effectively resolved the New Jersey courts' prior opposing holdings as to whether an individual retaliation claim is cognizable under CEPA; and (3) where the basis for an arbitration panel's award is ambiguous, there is a presumption that the panel considered all of the submitted claims on the merits.
See Transcript of July 13, 2004 Conference at 7.
See Def. Recon. Mem. at 1-2.
Jordan counters by arguing that because "Metlife has presented no evidence that controlling decisions have been overlooked, MetLife's motion for reconsideration should be denied." However, this "evidence" is only available to the Court. In fact, as demonstrated below, controlling law was overlooked. Because the issues in this motion to reconsider were not previously addressed, the July 13, 2004 Order is vacated and reconsideration is granted.
Jordan's Opposition to MetLife's Motion for Reconsideration ("Pl. Recon. Opp'n") at 2.
B. Res Judicata
Jordan argues that he "did not waive his right to have his Title VII claim heard in this Court." But MetLife makes no such argument. Instead, MetLife argues that because Jordan made the "strategic decision to submit his retaliation claim under CEPA to the Panel," the elements of res judicata are met such that Jordan is now barred from pursuing his Title VII claim in this Court.
Jordan's Opposition to MetLife's Motion to Summary Judgment ("Pl. Opp'n") at 5.
MetLife's Memorandum of Law in Support of its Motion for Summary Judgment ("Def. Mem.") at 22.
1. Judgment on the Merits
In an attempt to cast doubt on whether the Panel rejected his claim on the merits, Jordan asserts that it is "unclear as to whether Jordan could even allege discrimination under CEPA," and cites two decisions from the United States District Court of New Jersey that have contradictory holdings. This argument fails for at least three reasons.
Pl. Opp'n at 10-11.
Compare Sandom v. Travelers Mortgage Servs., 752 F. Supp. 1240, 1244 (D.N.J. 1990) (holding that a discrimination claim could properly be brought under CEPA) with Smith v. Travelers Mortgage Servs., 699 F. Supp. 1080 (D.N.J. 1988) (holding that there is no private right of action alleging discrimination under CEPA).
First, the New Jersey Supreme Court in subsequent decisions resolved the issue by ruling that an individual can bring a retaliation claim under CEPA. In an attempt to discount the holdings of these decisions, Jordan contends that because "New Jersey courts have not relied upon Sandom," the opposing holdings in Sandom and Smith remain unresolved. But it is not necessary for the New Jersey Supreme Court to rely on a federal district court decision when its rulings clearly hold that a private claim of retaliation is cognizable under CEPA. Second, the issue of whether Jordan's claim was cognizable under CEPA was never submitted to the Panel. Jordan responds by arguing that the "Court should not accept MetLife's guess as to the basis for the panel's decision." While this may be true, it is entirely beside the point. Because this issue was not raised in the arbitration, Jordan cannot defeat summary judgment by suggesting that the CEPA claim was rejected on procedural grounds. Third, after the Award described the issues submitted for consideration, it stated that "[a]fter considering the pleadings, and the testimony and evidence presented at the hearing, the Panel has decided in full and final resolution of the issues submitted for determination." This language supports the conclusion that the Panel rejected Jordan's claim on the merits.
See Def. Recon. Mem. at 5 (citing Mehlman v. Mobil Oil Corp., 707 A.2d 1000, 1011 (N.J. 1998); Flaherty v. The Enclave, 605 A.2d 301, 304 (N.J. 1992)).
Pl. Recon. Opp'n at 6.
See Mehlman, 707 A.2d at 1013 ("[T]he core value that infuses CEPA is the legislative determination to protect [employees] from retaliatory discharge. . . .").
See Def. Recon. Mem. at 3-4; Pl. Opp'n at 3-4; Def. Mem. at 19-22.
Pl. Recon. Opp'n at 5.
See Pike v. Freeman, 266 F.3d 78, 90 (2d Cir. 2001) ("collateral attacks of an arbitration procedure on grounds not raised before the arbitrators" are prohibited) (quotations omitted); Cook Indus., Inc. v. C. Itoh Co. (America) Inc., 449 F.2d 106, 107-08 (2d Cir. 1971) ("Appellant cannot remain silent, raising no objection during the course of the arbitration proceeding, and when an award adverse to him has been handed down complain of a situation of which he had knowledge from the first."); see also Marino v. Writers Guild of Am. East, Inc., 922 F.2d 1480, 1484 (9th Cir. 1993) ("a party may not sit idle through an arbitration procedure and then collaterally attack that procedure on grounds not raised before the arbitrators when the result turns out to be adverse."); Porush v. Lemire, 6 F. Supp.2d 178, 182 (E.D.N.Y. 1998) ("arbitration is not a trial run in which an arbitral respondent may sit idly by . . . and if the result turns out unfavorably, seek judicial relief."); Carina Int'l Shipping Corp. v. Adam Maritime Corp., 961 F. Supp. 559, 567 (S.D.N.Y. 1997) (holding that party waived objection to arbitration proceeding by failing to raise the issue before arbitration panel).
See Award at 3 (noting that Jordan claimed that MetLife acted in violation of CEPA, while MetLife maintained that "Jordan had failed to prove his claim under CEPA.").
Award at 4.
See Barnes v. Printron, Inc., No. 93 Civ. 5085, 1995 WL 649936, at *2 (S.D.N.Y. Nov. 3, 1995) (precluding claim where the arbitral award language stated "the undersigned arbitrators have decided in full and final resolution of the issues submitted for determination. . . .") (emphasis in original); see also Dalow Indus., Inc. v. Jordache Enters., Inc., 631 F. Supp. 774, 778 (S.D.N.Y. 1985) (precluding claim because award stating that "[a]ll other claims and counterclaims are denied in their entirety" gives rise to a heavy presumption that the arbitration panel addressed all of the claims plaintiff submitted for consideration) (citation omitted). Jordan's attempt to distinguish Dalow is unavailing. See Pl. Recon. Opp'n at 8 (arguing that case only applies if Jordan asserts that arbitrators did not resolve CEPA claim).
For these reasons, I conclude that the Panel's Award constitutes a final judgment on the merits for res judicata purposes.
2. The Same Cause of Action
There is no doubt that Jordan's CEPA claim, which he chose to arbitrate, arose out of the same common nucleus of operative fact as his Title VII claim now pending before this Court. The facts asserted in both the Complaint and the Amended Claim are precisely the same. Moreover, the Title VII and the CEPA claims are pled in virtually identical terms. Finally, Jordan's opening statement to the Panel with regard to the CEPA claim mirrors the facts pled in support of the pending Title VII claim.
See Pl. Opp'n at 10 (stating that Jordan claimed under CEPA that "he was fired in part because he complained of illegal discrimination"). In a letter to this Court, Jordan admitted that he "hope[d] that the result in arbitration [could] lead to resolution of the federal case." 1/13/04 Letter from Jordan to the Court at 1. This suggests that Jordan knew that the CEPA and Title VII claims constituted the same cause of action for res judicata purposes. Clearly, had Jordan been successful on his CEPA claim at arbitration, he would have voluntarily dismissed his Title VII claim.
Compare Complaint ¶¶ 20-22 with Amended Claim ¶¶ 19-21.
Compare Complaint ¶ 50 with Amended Claim ¶ 37.
See NASD Tr. at 67-68.
3. The Remaining Elements
The remaining two elements warrant only brief discussion because they are undisputably met. It is well-settled law that an NASD arbitration panel is a court of competent jurisdiction for res judicata purposes. The parties now before this Court were also before the Panel.
See generally Pl. Opp'n (Jordan does not argue that the remaining two elements are not met).
See Barnes, 1995 WL 649936, at *2 (citing Siegel v. Daiwa Secs. Co, 842 F. Supp. 1537, 1541-42 (S.D.N.Y. 1994)).
See Award at 1.
C. Jordan's Additional Arguments
1. Alexander v. Gardner-Denver
Jordan relies on Alexander v. Gardner-Denver in support of his argument that "[he] did not waive his right to litigate his Title VII claim in this Court." This argument, however, is unavailing. The Supreme Court substantially backpedaled from its position in Gardner-Denver in its subsequent decision in Gilmer v. Interstate/Johnson Corp. In Gilmer, the Court "effectively reversed the Gardner-Denver presumption that arbitration is an unreliable means of resolving claims based on individual rights." In upholding the compulsory arbitration of a claim brought under a federal statute, the Second Circuit, too, held that Gilmer "severely narrowed" the Court's holding in Gardner-Denver by limiting it "to its facts, concerning collective bargaining." Because Jordan's arbitration claims were not brought pursuant to a compulsory arbitration agreement procured through collective bargaining, there is no precedent supporting Jordan's claim that he has the right to litigate the same cause of action under two different statutes in two different fora, where the elements of res judicata are clearly satisfied.
415 U.S. 36, 48-49 (1974).
Pl. Opp'n at 5.
500 U.S. 20, 35 (1991).
Lynch v. Pathmark Supermarkets, 987 F. Supp. 236, 241 (S.D.N.Y. 1997).
Desiderio v. National Ass'n Secs. Dealers, 191 F.3d 198, 203 (2d Cir. 1999).
2. Siegel v. Daiwa Securities Co.
Jordan also argues that MetLife's reliance on Siegel v. Daiwa Secs. Co. is misplaced as plaintiff there intended "to abide by the award or lack of award this panel comes up with" and thus "agreed to accept the arbitration process as his sole forum for determining his discrimination claims." By contrast, Jordan asserts, "it was clear that [the] Title VII retaliation claim would be heard in this Court and was not presented to the [Panel] for arbitration."
Pl. Opp'n at 8 (citing Siegel, 842 F. Supp. at 1540).
Id.
This argument is not persuasive for three reasons. First, that the Siegel plaintiff agreed to arbitrate a Title VII claim does nothing to defeat MetLife's showing that the elements of res judicata are met. Second, the Siegel court's reasoning did not rest solely, or even principally, on plaintiff's intention. Rather, the court relied on its finding that the elements of res judicata were met and that plaintiff voluntarily chose to arbitrate his Title VII claim. Third, MetLife only relied on Siegel to the extent that it demonstrated that an NASD arbitration proceeding constitutes a court of competent jurisdiction for res judicata purposes.
See Siegel, 842 F. Supp. at 1540.
See id.
See Def. Mem. at 7-8.
3. NASD Rule 3080
Jordan also attempts to resist summary judgment by arguing that "application of MetLife's theory that Jordan would waive the right to try in Court any CEPA claim he brought or could have brought in arbitration would render the NASD's Rule giving employees access to federal court for litigating Title VII claims meaningless. . . ." This argument misstates MetLife's position. MetLife does not argue that "any" claim asserted under CEPA would satisfy the elements of res judicata. Rather, MetLife argues that res judicata bars Jordan's Title VII claim before this Court because it is factually the same claim as the CEPA claim Jordan arbitrated. Jordan voluntarily chose to arbitrate his retaliation claim under CEPA. This is not a situation in which MetLife successfully moved to compel Jordan to arbitrate, while the Court and the Panel were aware that his Title VII claim remained before this Court.
Pl. Opp'n at 9.
MetLife's Reply to Jordan's Opposition to its Motion for Summary Judgment at 6.
See id.
Jordan's argument also fails because it rests on an overly broad interpretation of Rule 3080. It is true that Rule 3080 states that claims alleging employment discrimination brought under a statute are not required to be arbitrated. But Jordan seeks to construe the Rule in such a way as to afford him the right to bring a statutory claim after voluntarily submitting to arbitration the same claim under a different statute — even though his Title VII claim arises out of the same nucleus of operative fact as his previously adjudicated CEPA claim. Adopting Jordan's interpretation of the Rule would eviscerate the purpose of res judicata — to maximize judicial resources and limit needless litigation.
See Rule 3080(2).
See Shore, 439 U.S. at 326.
IV. CONCLUSION
For the foregoing reasons, the Court's July 13, 2004 Order is vacated, and MetLife's motions for reconsideration and summary judgment are granted. The Clerk of the Court is directed to close this motion [#35 on the docket sheet] and this case.
SO ORDERED.