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Sayre v. JP Morgan Chase & Co.

United States District Court, S.D. California

February 26, 2018

BRADLEY SAYRE, Petitioner/Plaintiff,
v.
JP MORGAN CHASE & CO.; JP MORGAN CHASE SECURITIES, LLC; and DOES 1-10, Respondents/Defendants.

          ORDER (1) DENYING PETITION TO VACATE ARBITRATION AWARD; (2) GRANTING MOTION TO DISMISS (17-CV-2285, ECF NO. 1; 17-CV-449, ECF NO. 8)

          HON. JANIS L. SAMMARTINO UNITED STATES DISTRICT JUDGE.

         Presently before the Court are two pending motions in two related cases. The Court will first address Petitioner Bradley Sayre's (“Mr. Sayre”) Petition to Vacate or Modify Arbitration Award in Sayre v. J.P. Morgan Securities LLC, 17-CV-2285, (“Petition, ” ECF No. 1). Respondent J.P. Morgan Securities LLC (“JMPS”) filed a Response to the Petition, (“Petition Opp'n, ” ECF No. 7), and Mr. Sayre filed a Reply in Support of the Petition, (“Petition Reply, ” ECF No. 10).

         Pending in Sayre v. JP Morgan Chase & Co., 17-CV-449 is Defendants JPMorgan Chase & Co. and J.P. Morgan Securities LLC's (“Defendants”) Motion to Dismiss or to Stay Plaintiff's First Amended Complaint, or, in the Alternative, Motion for Summary Judgment, (“MTN, ” ECF No. 8-1). Mr. Sayre filed an Opposition to the Motion, (“Opp'n, ” ECF No. 10), and Defendants filed a Reply in Support of the Motion, (“Reply, ECF No. 12). Defendants also requested leave to file supplemental briefing in support of their Motion, which the Court granted. (See ECF Nos. 14, 17.) Defendants filed their supplemental brief, (“Supp. Brief, ” ECF No. 17), Mr. Sayre filed an Opposition, (“Supp. Opp'n, ” ECF No. 18), and Defendants filed a Reply, (“Supp. Reply, ” ECF No. 21).

         The Parties have requested the pending Motion and pending Petition be heard together. (See 17-cv-2285, ECF No. 5.)

         PETITION TO VACATE ARBITRATION AWARD; 17-CV-2285

         BACKGROUND

         Mr. Sayre worked for JPMS as a financial advisor. (Petition 3.)[1] He argues JPMS wrongfully terminated his employment on March 4, 2014 after he complained about policies and protocols he contends were unlawful. (Id. at 4.) On March 4, 2015, Mr. Sayre filed an arbitration case against JMPS with the Financial Industry Regulatory Authority (“FINRA”). (Id.) The Parties worked to settle the case, and the arbitration hearing was continued several times at the request of JPMS. (Id.) The Parties appeared at the arbitration hearing on July 18, 2017. On this day, the Parties participated in arbitration in the morning. (Petition Opp'n 7.) After lunch, Mr. Sayre's counsel, Mr. Mirch, became ill and needed to go to the doctor. Given that Mr. Mirch and Mrs. Mirch (his wife and law partner) confirmed that no other attorney at the firm could competently represent Mr. Sayre, they requested the arbitration panel continue the hearing to the next day. (Petition 5.) The Panel granted the motion. (Id.) The next morning, Mrs. Mirch appeared and requested a continuance because neither Mr. Mirch nor Mr. Sayre could be present. (Petition Opp'n 8.) Mr. Mirch was to be absent due to his health and Mr. Sayre was to be absent because his wife was about to have a baby. (Id.)[2] The Panel requested Mrs. Mirch present them with a doctor's note for Mr. Mirch and a statement of availability for Mr. Sayre. (Petition 5; Petition Opp'n 9.) Mrs. Mirch returned with an email from Mr. Sayre stating his request to postpone the hearings and that he intended to take 12 weeks of personal time to support his family. (Petition Opp'n 9.) Mrs. Mirch also presented a note from an urgent care physician stating Mr. Mirch was placed off work through July 21, 2017 and needed to go to the emergency department. (Id. at 10; Petition 5.) Mr. Mirch was in the emergency room. (Petition 6.) The Panel denied the motion to continue the hearing. (Id.) The hearing concluded on the afternoon of July 19, 2017. (Petition Opp'n 11.) The Panel found in favor of JPMS. (Petition 8.) Mr. Sayre requests the Court vacate the arbitration award.

         LEGAL STANDARD

         Under the Federal Arbitration Act, a district court may vacate an arbitration award:

(1) where the award was procured by corruption, fraud, or undue means;
(2) where there was evident partiality or corruption in the arbitrators, or either of them;
(3) where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced; or
(4) where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made.

9 U.S.C. § 10(a).[3] “As is apparent from the language, these standards are highly deferential to the arbitrator.” Johnson v. Wells Fargo Home Mortg., Inc., 635 F.3d 401, 414 (9th Cir. 2011). “It is generally held that an arbitration award will not be set aside unless it evidences a ‘manifest disregard for law.'” Todd Shipyards Corp. v. Cunard Line, Ltd., 943 F.2d 1056, 1060 (9th Cir. 1991) (citing United Steelworkers v. Am. Mfg. Co., 363 U.S. 564 (1960)). A court should not reverse an arbitration award “even in the face of erroneous interpretations of the law.” A.G. Edwards & Sons, Inc. v. McCollough, 967 F.2d 1401, 1403 (9th Cir. 1992) (citing Todd Shipyards, 943 F.2d at 1060). But, “the arbitrary denial of a reasonable request for postponement may serve as grounds for vacating an arbitral award.” Sheet Metal Workers Int'l. Ass'n Local Union No. 420 v. Kinney Air Conditioning Co., 756 F.2d 742, 746 (9th Cir. 1985).

         ANALYSIS

         Mr. Sayre argues the Court should vacate the arbitration award because “the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown.” (Petition 9 (citing 9 U.S.C. § 10(a)(3).) Overall, he argues the award must be vacated because the arbitrators' refusal to postpone the hearing when neither he nor his counsel could be present was unconscionable and denied him his right to be heard. (See Petition.)

         In its written opinion, the Panel discussed Mr. Sayre and Mr. Mirch's motion to postpone the hearing. The Panel noted it

discussed if there was sufficient evidence presented by Claimant's counsel, both witness testimony and the written exhibits, to assure that the Panel could make an honest, impartial, and comprehensive evaluation of Claimant's case. The Panel also considered Claimant's memo concerning his voluntary absence from the hearing. By unanimous vote, the Panel affirmed that the Panel could and would make an honest, impartial, and comprehensive evaluation of Claimant's case. The unanimous vote was to deny the request for an indefinite postponement.

(ECF No. 11-5, at 4.)[4] An arbitration award is generally upheld if there was “any reasonable basis” for denying the requested continuance. Cortina v. Citigroup Global Markets, Inc., No. 10CV2423-L RBB, 2011 WL 3654496, at *5 (S.D. Cal. Aug. 19, 2011) (quoting Scott v. Prudential Sec., Inc., 141 F.3d 1007, 1016 (11th Cir. 1998).)

         Here, the Panel cited the “reasonable basis” for its denial of a continuance. The Panel determined it could make an impartial decision with or without Mr. Sayer and Mr. Mirch's presence. The Panel reviewed the evidence submitted by both Parties. The Panel reasonably found an indefinite postponement of the arbitration hearing was unnecessary given there was sufficient evidence available that would allow it to make a fair and impartial decision. The Parties had both made opening statements, Mr. Sayre's first witness had been examined, and both Parties' exhibit books were to be admitted into evidence. (ECF No. 11-5, at 3, 5.) Although the arbitration hearing continued in Mr. Sayre and Mr. Mirch's absence, ...


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