Case ID: f-supp-3d_347/html/0104-01.html
Source: Caselaw Access Project
Author: {"author": "Patti B. Saris, Chief United States District Judge", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Giovanni LANZA and Mariantonia Lanza, Plaintiffs, v. FINANCIAL INDUSTRY REGULATORY AUTHORITY (FINRA), Defendant.
    Civil Action No. 18-10859-PBS
    United States District Court, D. Massachusetts.
    Signed November 13, 2018
    Robert D. Loventhal, Newport, RI, for Plaintiffs.
    Ian D. Roffman, Nutter, McClennen & Fish, LLP, Boston, MA, for Defendant.
    ORDER
   Patti B. Saris, Chief United States District Judge

Plaintiffs' motion for reconsideration of the Court's order allowing FINRA's motion to dismiss (Docket No. 36) is DENIED. Plaintiffs first argue that the doctrine of arbitral immunity does not apply here because they are not attacking the substance of the arbitrators' decision. But arbitral immunity extends beyond such challenges to immunize an arbitral forum for administrative tasks "integrally related to the arbitration." New Eng. Cleaning Servs., Inc. v. Am. Arbitration Ass'n, 199 F.3d 542, 545 (1st Cir. 1999). Here, the arbitrators' decision to issue an award without a reasoned decision is an administrative task integrally related to the arbitration and thus protected by arbitral immunity.

Second, Plaintiffs argue that the FINRA rules gave the arbitrators discretion to issue a reasoned decision even if only one party requested it and that the arbitrators violated Plaintiffs' reasonable expectations by refusing to do so. Although Plaintiffs are correct about the discretion the FINRA rules afforded the arbitrators, their choice not to issue a reasoned decision did not violate the covenant of good faith and fair dealing. When a contract grants one party sole discretion to make a decision, the implied covenant of good faith and fair dealing does not create rights that are not in the contract. See A.L. Prime Energy Consultant, Inc. v. Mass. Bay Transp. Auth., 479 Mass. 419, 95 N.E.3d 547, 561 (2018) ; Eigerman v. Putnam Invs., Inc., 450 Mass. 281, 877 N.E.2d 1258, 1265-66 (2007). While Plaintiffs are correct that FINRA must comply with a duty of good faith, there is no evidence that simply exercising its contractual right not to issue a reasoned decision is a breach of that duty.

SO ORDERED.