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Nature of Suit Code: 370
Nature of Suit: Other Fraud
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 10, 2005 Decided December 30, 2005

No. 03-7024

THERESA B. BRADLEY

APPELLANT

v.

NATIONAL ASSOCIATION OF SECURITIES DEALERS DISPUTE

RESOLUTION, INC., ET AL.,

APPELLEES

Appeal from the United States District Court

for the District of Columbia

(No. 01cv02047)

Theresa B. Bradley, pro se, argued the cause and filed the

briefs for appellant.

Christopher J. Carney, appointed by the court, argued the

cause as amicus curiae in support of appellant. With him on the

briefs was Warren A. Fitch.

Douglas R. Cox argued the cause for appellees. With him

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on the brief were Jeffrey A. Wadsworth and Terri L. Reicher. F.

Joseph Warin, Michael J. Edney, and William M. Jay entered

appearances.

Before: SENTELLE, RANDOLPH and ROGERS, Circuit Judges.

Opinion for the Court filed by Circuit Judge ROGERS.

ROGERS, Circuit Judge: Theresa Bradley pro se appealsthe

district court’s dismissal under Fed. R. Civ. P. 12(b)(6) of her

complaint against the National Association of Securities Dealers

Dispute Resolution, Inc. (“NASD”) as time-barred under the

three-year statute of limitations of D.C. Code § 12-301(8).

Bradley sued NASD, which administers a dispute resolution

program for the National Association of Securities Dealers, after

an arbitration panel in Florida had dismissed her arbitral

complaint against her stock brokerage company with prejudice.

Aided by amicus on appeal, Bradley contends that Wagner v.

Sellinger, 847 A.2d 1151 (D.C. 2004), which was decided after

the district court dismissed her complaint, demonstrates that the

three-year statute of limitations did not begin to run until

February 24, 1999, when she first learned the reason her arbitral

complaint was dismissed. We conclude that Wagner did not

change District of Columbia law on inquiry notice, and therefore

we affirm.

I.

According to the complaint, Bradley opened an investment

account with Dean Witter Reynolds, Inc. (“Dean Witter”) on

February 26, 1992. The account consisted of her thirty years of

professional earnings and life savings and was her sole source

of income. Over the next eight months, until the account was

closed on October 16, 1992, Dean Witter made unauthorized and

unsuitable investments on her behalf, destroying her entire

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$750,000 stock and bond portfolio. 

On October 24, 1994, Bradley initiated arbitration

proceedings against Dean Witter, alleging violations of the

Securities Exchange Act and internal compliance standards,

churning, fraud, and misrepresentation. She selected NASD as

the sponsoring organization for the arbitration after receiving

assurances that NASD conducted its proceedings pursuant to the

Uniform Code of Arbitration and that the hearings would take

place in Atlanta, Georgia where Bradley lived. After Bradley

paid the $300 filing fee and $700 deposit fee for the final

hearing in Atlanta, she and Dean Witter entered into pretrial

discovery. She submitted 3,000 pages of documents,

comprising eight years of financial records from her bank and

investment accounts, as well as personal tax returns for the same

period (1985-1992). Dean Witter had requested all of her

financial records through the time of the arbitration hearing.

However, the chairman of the arbitration panel ruled on July 25,

1995 that no documents dated beyond November 30, 1992 need

be produced by either party. Dean Witter did not file any

objections to this ruling within the allotted time and hence all

discovery requests and pretrial matters were complete. The

arbitration panel scheduled a final hearing for November 1995

in Atlanta.

Dean Witter twice requested and was granted postponement

of the final hearing. Then, on January 6, 1996, over Bradley’s

objections, Dean Witter was granted a change of venue from

Atlanta to Fort Lauderdale, Florida. With the change in venue,

a new panel of arbitrators was selected. For the next two years,

Dean Witter filed exactly the same pretrial discovery requests

that had been ruled on by the Atlanta arbitration panel, including

requests for documents that had already been produced. NASD

forwarded Dean Witter’s discovery requests to the new

arbitrators in Florida without informing them of the prior ruling

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of the Atlanta panel cutting off further discovery. NASD also

denied Bradley access to her case file in Fort Lauderdale in June

1997.

On January 7, 1998, the new arbitration panel dismissed

Bradley’s complaint. She challenged the dismissal in a Florida

state court, which remanded the case for the panel to explain the

basis of its dismissal. On February 24, 1999, the panel amended

its order of dismissal to cite the correct rule, namely Rule 10305

of the NSAD Code of Arbitration Procedure, which authorizes

dismissal for failure to comply with orders of the panel, here for

additional discovery sought by Dean Witter. Having produced

thousands of pages of documents, spent over $30,000 over the

course of five years in attempting to obtain a fair hearing as part

of what she had contemplated would be a quick, efficient, and

inexpensive arbitration, Bradley sued NASD and certain of its

employees in the federal district court on September 26, 2001.

She sought compensatory damages on account of alleged

professional negligence, fraud, abuse of process, and intentional

infliction of emotional distress. NASD moved to dismiss the

complaint under Fed. R. Civ. P. 12(b)(2) & (6). The district

court dismissed the complaint on the ground that Bradley’s

claims were time barred under D.C. Code § 12-301(8), see

Bradley v. Nat’l Ass’n of Sec. Dealers Dispute Resolution, Inc.,

245 F. Supp. 2d 17, 19 (D.D.C. 2003), and she appeals.

II.

Because Bradley filed her complaint on September 26,

2001, her claims are time barred under D.C. Code § 12-301(8)

unless they accrued on or after September 26, 1998. Bradley

does not challenge the district court’s choice of law ruling in

determining that D.C. Code § 12-301(8) applies. She also

acknowledges that the statute of limitations began to run when

she was injured and was at least on inquiry notice as to the

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cause. This only happened, she contends, when the Florida

arbitration panel, upon remand from the state court, amended its

order on February 24, 1999 to indicate that the dismissal of her

arbitral complaint was premised on her purported failure to

comply with discovery orders. In view of the fact that she was

proceeding pro se before the Florida arbitration panel and was

denied access to her case file, and in view of the state court’s

inability to understand the basis of the panel’s dismissal order of

January 7, 1998, Bradley maintains that NASD has not shown

that she was on inquiry notice prior to February 24, 1999 when

she became aware of the causal link between NASD’s

mishandling of the arbitration and the dismissal of her

complaint. Our review of the dismissal of her complaint under

Rule 12(b)(6) is de novo. See Cicippio-Puleo v. Islamic

Republic of Iran, 353 F.3d 1024, 1031-32 (D.C. Cir. 2004);

Sparrow v. United Air Lines, Inc., 216 F.3d 1111, 1113 (D.C.

Cir. 2000).

The District of Columbia applies a discovery rule to

determine when the statute of limitations begins to run where the

relationship between the injury and the alleged tortious conduct

is obscure. See Morton v. Nat’l Med. Enters., Inc., 725 A.2d

462, 468 (D.C. 1999). Under the discovery rule, a claim does

not accrue until a plaintiff knows, or by the exercise of

reasonable diligence should know, of (1) an injury, (2) its cause,

and (3) some evidence of wrongdoing. See Bussineau v.

President and Dirs. of Georgetown Coll., 518 A.2d 423, 435

(D.C. 1986). A plaintiff is on such “inquiry notice” of

wrongdoing when “the plaintiff has reason to suspect that the

defendant did some wrong, even if the full extent of the

wrongdoing is not yet known.” Wagner v. Sellinger, 847 A.2d

1151, 1154 (D.C. 2004); Morton 725 A.2d at 468-69. 

The face of the complaint makes clear that each of the

alleged injuries by NASD and its employees occurred prior to

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the January 7, 1998 dismissal of Bradley’s arbitral complaint

with prejudice and that Bradley was aware of these injuries as

they occurred. Bradley alleges that NASD injured her by virtue

of its improper change of venue on January 6, 1996; its

excessive delay of the arbitration and improper grant of Dean

Witter’s pre-arbitral discovery requests from January 6, 1996 to

January 7, 1998; and its improper denial of her right to review

her case records in June 1997. Accordingly, under the discovery

rule, Bradley was on inquiry notice of all of the alleged wrongs

no later than January 7, 1998, when her arbitral complaint was

dismissed. This is more than three years before she filed her

complaint in the present suit. Her claims are barred under the

discovery rule. 

The District of Columbia has adopted an exception to the

discovery rule in legal malpractice suits – the continuous

representation rule. Under this rule, “when the injury to the

client may have occurred during the period the attorney was

retained, the malpractice cause of action does not accrue until

the attorney’s representation concerning the particular matter in

issue is terminated.” R.H.D. Communications, Ltd. v. Winston,

700 A.2d 766, 768 (D.C. 1997) (quoting Weisberg v. Williams,

Connolly & Califano, 390 A.2d 992, 995 (D.C. 1977)). Thus,

even if, according to the discovery rule, a plaintiff was on

inquiry notice of an attorney’s malpractice more than three years

prior to filing suit, the statute of limitations will not begin to run

until the attorney’s representation is terminated.

The analogy between legal malpractice claims and arbitral

malpractice claims is tenuous and therefore it is not obvious that

District of Columbia courts would borrow the continuous

representation rule from legal malpractice cases and apply it to

arbitral malpractice suits. The court in Winston explained that

“the [continuous representation] rule is based on respect for the

attorney/client relationship and the desire, if the client so

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chooses, to avoid unnecessarily disrupting the representation in

which the error occurred.” Id. at 768. Indeed, under the rule

“[t]he attorney has the opportunity to remedy, avoid or establish

that there was no error or attempt to mitigate the damages.” Id.

There is no relationship of trust and confidence between

arbitrators and the complainant comparable to that between an

attorney and the client or a doctor and the patient. Cf. Anderson

v. George, 717 A.2d 876, 878 (D.C. 1998).

On the other hand, one reason the District of Columbia

adopted the continuous representation rule is the consequences

clients would face without it. The Winston court explained:

[I]f we rejected the continuous representation rule, we

would force the client into one of two scenarios. If the

client chooses to retain the attorney, he risks the

possibility that during such representation the statute of

limitations would expire (because the client

“discovered” the alleged negligence and three years

passed) and thus he risks foregoing redress of his legal

rights. If the client chooses not to stay with his

original attorney he must sue that attorney for

malpractice . . . thus causing a major disruption to the

underlying case. . . .

Id. at 773. These same consequences are likely in arbitral

malpractice claims without the continuous representation rule.

Forcing an injured party in an arbitration proceeding to mount

a challenge to the arbitrators who are deciding the injured

party’s case would force a similar disruption to the proceedings

and eliminate the possibility that mid-course errors could be

corrected or would prove harmless once the arbitration was

completed. However, were Bradley’s claims held to have

accrued before the arbitration panel dismissed her complaint

with prejudice, then she would be between the scylla and

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charybdis of either suing her arbitrators while the arbitration

proceeding was ongoing or forfeiting any claims against them.

For these reasons we will assume that the continuous

representation rule applies to arbitral malpractice suits. 

In Winston, as a result of an attorney’s alleged malpractice,

the Federal Communications Commission denied the plaintiff’s

application to build a new radio station. 700 A.2d at 767. But

the plaintiff retained the attorney to seek reconsideration before

the agency and to appeal to this court. Id. In the malpractice

suit against the attorney, the District of Columbia Court of

Appeals adopted the continuous representation rule and held that

despite the plaintiff’s inquiry notice, the statute of limitations

was “tolled until the attorney cease[d] to represent the client in

the specific matter at hand.” Id. at 768. The analogue to arbitral

malpractice claims is that the limitation period is tolled until the

arbitrators cease to service the parties in the specific dispute

between them. The court in Winston also set an outer bound on

the duration of the “specific dispute”– it does not include

appeals. Id. at 770-71; see also Knight v. Furlow, 553 A.2d

1232, 1235 (D.C. 1989). It follows that the continuous

representation rule tolls the running of the statute of limitations

on Bradley’s claims only until the January 7, 1998 dismissal of

her arbitral complaint with prejudice. Bradley’s claims are time

barred even under the continuous representation rule.

Amicus points to the recent decision of the D.C. Court of

Appeals in Wagner to support Bradley’s position that January 7,

1998 is not the appropriate accrual date for Bradley’s claims. In

Wagner, the plaintiffs sued their former attorney for legal

malpractice arising out of a medical malpractice case in which

the attorney represented the plaintiffs until being fired in the

middle of the case. 847 A.2d at 1153-54. The court held that

the limitations period under D.C. Code § 12-301(8) did not

begin to run until the jury had returned an adverse verdict

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because “a statute of limitations cannot begin to run until the

first day on which discovery will show that the plaintiff had a

bona fide lawsuit based on injury, meaning a legally cognizable

claim that would survive a motion to dismiss. Absent injury,

there is no lawsuit.” Id. at 1155. The court reasoned that until

the underlying case giving rise to a lawsuit for legal malpractice

“is resolved (either by verdict or ruling in court or by

settlement), the injury remains uncertain or inchoate” and,

therefore, the statute of limitations does not begin to run. Id. at

1156. Prior to resolution of the underlying lawsuit, the court

explained, the plaintiffs “still had hope, however faint, that

matters could be turned around . . . .” Id. So, Amicus

maintains, Wagner shows that Bradley did not suffer any

redressable injury until the Florida arbitration panel’s dismissal

with prejudice on February 24, 1999, as Bradley was not

previously on inquiry notice because the panel had cited the

wrong rule as the basis for its January 7, 1998 dismissal. 

There is no indication in District of Columbia law that

inquiry notice requires knowledge of the nature of one’s injury.

In Wagner, the court reaffirmed that a “plaintiff need not be

fully informed about the injury for the statute [of limitations] to

begin running; she need only have some knowledge of some

injury.” Wagner, 847 A.2d at 1154, citing Colbert v.

Georgetown Univ., 641 A.2d 469, 473 (D.C. 1994) (en banc);

see also Knight v. Furlow, 553 A.2d 1232, 1235 (D.C. 1989).

Just as the Wagner plaintiffs were on inquiry notice of a claim

for legal malpractice once the jury returned its verdict even

though the plaintiffs did not know the precise basis for the

verdict, Bradley was on inquiry notice of her claims for arbitral

malpractice no later than January 7, 1998, when her complaint

was dismissed with prejudice even though she did not know

why. Bradley’s lack of knowledge of the precise basis for the

dismissal does not toll the running of the statute of limitations.

Under District of Columbia law, the panel’s subsequent

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clarification on February 24, 1999 of the basis for its dismissal

is a circumstance of no relevance. 

To the extent that Bradley maintains that her injuries, like

those of the plaintiffs in Wagner, were “inchoate” until the

February 24, 1999 dismissal of her arbitral complaint with

prejudice, she would stretch the continuous representation

exception beyond its limits. Amicus suggests that because the

panel did not cite the correct rule for its dismissal of Bradley’s

arbitral complaint until February 24, 1999, the arbitration was

“still being administered.” Amicus Reply Br. at 10. This

approach will not work here. First, the District of Columbia

does not recognize the exhaustion of appeals rule, under which

a “cause of action accrues when the case has come to the end of

the appellate process.” Winston, 700 A.2d at 771; see also

Furlow, 553 A.2d at 1234-36 & n.2. By parity of reasoning, any

lingering hope that the state court might vacate the January 7,

1998 dismissal or that a remand might cause the panel to

reinstate her arbitral complaint is irrelevant for purposes of

determining whether Bradley was on inquiry notice on January

7, 1998. Second, Bradley filed a lawsuit in Florida state court

premised on the dismissal of her arbitral complaint on January

7, 1998, eliminating any doubt that as of that date she was on

inquiry notice of her injuries as a result of the actions by NASD

and its employees that are alleged in her complaint. 

Accordingly, because Bradley’s claims are time barred

under D.C. Code § 12-301(8), we have no occasion to address

whether NASD and its employees have immunity from suit, and

we affirm the judgment dismissing the complaint.

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