### FI LED U.S. COURT O F APP EALS ELEVENTH CIRCUIT D ecember 16, 20 04 THO MAS K. KAH N CL ERK [PUBLIS H] IN THE UN ITED STATES COURT OF APPEALS FO R T HE EL EV EN TH CIRC UI T

____ ____ ____ ____ ____ ____ N o. 03- 1574 5

____ ____ ____ ____ ____ ____ D. C. Docket N o. 03-80395 -CV -D MM STERLING FINANCIAL INVESTMENT GROUP, INC.,
Plaintiff-Appellee,
ve rs us BE RNA RD D. HA MMER , D ef en da nt- Appe llant.

____ ____ ____ ____ ____ ____ Appeal f rom the United State s District Court fo r the S outhe rnD istri ct

of F lor ida

____ ____ ____ ____ ____ ____ _ (D ec em be r 16, 200 4) Be fo re BA RKE T T , H U L L a nd C O X , Ci rc uit Jud ge s. COX , C ircuit Judg e:2 I. INTRODUCTION Be rn ar d D
. H am

m er appeals a n or de r en te re d by the dis tr ic t c ourt i n th e So uthern District of F lorida granting Sterling Financial Investm ent Gr oup I n c. ’s
m oti on t o st ay

a rb itr at ionin H oust on, T ex as a nd com pe l arb itr at ionin Bo ca

Raton , Fl or ida
. W e co nc lud e tha t th e distri ct c ourt pr ope rl y

e xe rc ise d j ur isd ic tio n inthi s case pursuant to section 4 of the Feder al A rbitration Act, 9 U. S. C. § 4 (2004 ). A c c o r d i n g l y, w e a f

f i rm. II. BA CKG ROU

ND & PR OCE DU RAL HI ST ORY Be rn ar d H am

m er , a sto ck

br oke r at Mor ga n St an le y /D ean W itt er

in Be au m ont , T ex as , w as appr oa ch ed

by the S te rl ing F inanc ia l I nvest m ent G ro up, I nc . about poss ible em

ploy m ent at Sterling’ s headquarters in Boca Ra ton, Florida. Af ter sever al
m onths o f ne got ia tio ns, H am m er a cc ep te d S t e r l i n g’ s of

fe r to w or k a s th ei r na tio nw ide superviso r fo r re cruitm ent of brokers. He resigned his po sition at Morgan St an le y /D ean W itt er

in T ex as , re loc at ed to Fl or ida , an d be ga n w orkin g f or S te rl ing in S ep te m

be r of 200 1. H a m m e r e nt e r e d i nt o t w o a gr e e m e nt s w i t h S t e r l i ng i n O c t ob e r of 2001 , a n E m plo ym en t A gr ee m en t and a Re pr es en ta tiv e A gr ee m en t. T he E m plo ym en t A gr ee m en t st at es tha t H am m er is an“ at

wil l” em

pl oye e of S te rl ing
. A nd, the3

E m plo ym en t A gr ee m en t c ont ai ns an arb itr at iona gr ee m en t w ithaf or um se le ct ion cl au se , w hic h pr ovi de s th at : T he p a rt i e s a g r e e t h a ta n y c l a i m o r c o n t r o v e r s y

c o n c e rn i n g t h e te rm s, co ndi tio ns o r ap pli ca tio n of thi s A gr ee m en t sh al l be sub j ec t t o ar bitratio n pu rs uant t o th e N at ion al A sso ci at ionof S ec ur iti es D ea le rs , In c. in Bo ca Ra to n, Fl or id a. (R
. -1 a t E x. A , ¶

11. ) T he E m

plo ym en t A gr ee m en t f

urthe r pr ovi de s th at

it “ sha ll be construed, and the validity , per form ance and enhancem ent thereof, shall be gov erned by the law s of the State of Florida.” ( Id
. a t ¶ 5. ) S im il ar ly , the Re pr es en ta tiv e Agre emen t contains an arbitration agreem ent with a f orum selection clause, which pr ovi de s th at : A ny dis put es be tw ee n th e pa rt ie s he re to s ha ll be sub m itt ed to bin din g ar bitration be fo re the N at ion al A sso ci at ionof S ec ur iti es D ea le rs w ith venue being in the State of Florida. (R
. -1 a t E x. B, ¶

14. ) T he Re pr es en ta tiv e A gr ee m en t a lso state s th at it “ sha ll be
co nstru ed in ac co rd an ce w itha nd s ha ll be gov er ne d by th e law s of

the S ta te of Florida.” (

Id . at ¶ 1 3.) Not long after beginn ing his new j ob, H am m er w as fire d. Ste rling claim s that H am m er ’s jo b pe rf

orm an ce w as uns at isf

ac tor y . H am m er c la im s th at

he w as not provided wi t h s u fficient support staff, office or telephone arrangem ents, and that there w as confusion at Ster ling abo ut his p ositio n and his responsib ilities. H am m er4

re tur ne d to T ex as a nd, in Fe br

ua ry 200 3, c om

m en ce d arb itr at ion pr oc ee din gs a ga ins t the com pany . Ham

m er f iled a Statem ent of Claim against Sterling with the N ational A sso ci at ionof

S ec ur iti es D ea le rs ( NASD) , a sse rt ing c la im s f or f ra udul en t ind uc em en t and qua si c ontract , b rea chof c ontra ct a nd p ro m iss or

y e sto ppe l, a nd

“ other claim s under statuto ry and com m on law. ” (R.-1 at Ex. C.) Ham m er a sked that the a rb itr at ionbe a ssi gn ed to a pan el in H oust on, T ex as . S te rl ing obj ec te d to the Te xas venue and asked that the NA SD transfer venue to Florida. The NA SD denied St er lin g’ s r eque st, a nd r ef er re d th e m oti on t o an arb itr at ion pa ne l in Hou sto n, T ex as . Sterlin g fi l ed a m otion in the United States D istrict Court for the Southern D ist r i c t o f F l o r i d a , s e e k i n g t o s t a y t h e T e x a s a r b i t r a t i o n a n d c o m

p e l a r b i t r a t i on i n Fl or ida
. T he dis tr ic t c ourt gr an te d S te rl ing ’ s m oti on, a nd H am m er appe al s. III. ISS UE ON A PPEAL AND STAND ARD OF REVIEW W e m ust de te rm ine w he the r the dis tr ic t cour t prop er ly e nj oin ed a rb itr at ionin H oust on, T ex as a nd c om pe lle d arb itr at ionin Bo ca Raton , F lo rid a. W e re vie w the di st ric t co ur t’s d eci si on de no vo . E m plo ye rs I ns. of W au sau v. B rig

ht M etal Sp eci al ti es , Inc ., 251 F. 3d 1 316, 132 1 (1 1t h C ir. 2 00 1)
.

IV. CONTENT IONS OF THE PARTIES H am m er c ont en ds tha t the dis tr ic t c ourt i m p r o p e r l y e n j o i n ed the a rb itr at iona nd im pr oper ly r ev er se d th e ve nue de te rm ina tio n m ad e in arb itr at ion
. A cc or din g to5

Ha m m e r , si nc e bo t h part i e s a gr e e t ha t a r bi t r a t i on i s app r op r i a t e , a l l de c i si on s -- i n cl u d i n g a d ec i s i o n ab o u tv en u e - - s h o u l db e mad e b y t h e a rb i t r a t o r s . Ha m m er ’s posit ion is b olste red by

rule 10315 of the N AS D’ s Code of Ar bitration Procedure,
w hic h st at es tha t “ [t ] he Dire ct or sha ll de te rm ine the ti m e an d pl ac e of the f ir st
m ee tin g of

the a rb itr at ionpane l and the part ie s. ” NA SD Co de of A rb itr at ion Pr oc ed ur e § 10 315 (2 003)
. T he r ule f urthe r pr ovi de s th at “ [t ] he a rb itr at or s sh al l determ ine the tim e and place for all subs equent m eetings. .
. . ” Id
. H am m er a sse rt s that it is inapp ropriate for federa l co u rt s t o m icro-m anage the vast arr ay of issues whi ch ari se in arb it rat io n p ro ceed in gs . Ster l i n g co ntends th at the district court had the authorityunder the Federa l A rb itr at ionA ct

to en fo rc e the te rm s of th e E m plo ym en t and R ep re se nta tiv e ag re em en ts. A cc or din g to S te rl ing, th e m er e fa ct tha t bo th p ar

tie s c onse nt t o
ar bitratio n do es not div es t a fe de ra l cour t of j ur isd ic tio n to en fo rc e fo ru m se le ct ion
an d c hoi ce of

law c lause s inthe part ie s’ a gr ee m en ts.

V. DISCUSSION W e begin our discus sion with section 4 of the Feder al A rbitration Act, which pr ovi de s th at : A part y a gg r i e ve d by t he a l l e ge d f a i l ur e , ne gl e c t , or r e f

us a l of another to arb itr at e under

aw ri tte n a gr ee m en t f

or a rb itr at ionm ay

pe tit iona ny United States district court .
. . f or an o rd er direc ting th at such6

ar bitratio n pr oc ee d in the m anner provided for in such agree m ent
. .

. . T he c ourt sh al l he ar

the part ie s, a nd u

pon be ing sa tis fi ed

tha t the m ak ing of

the a gr ee m en t f

or a rbitra tio n or

the f ai lur e to c om

ply th erewi th is no t i n i ss ue , the court shall m ak e a n o rder direc ting th e parties t o proceed to arbitr ation in accordan ce wi th the term s of the agreem ent. T he he ar ing an d pr oc ee din gs, unde r suc h a gr ee m en t, sha ll be within the district in which the petition for an order directin g s u ch ar bitratio n is f

ile d. 9 U. S. C. § 4 (em

phasis added). De spite Ham m er’ s assertion that a federa l court m ay onl y r ev ie w a n ar

bitratio n proc ee din g af

te r it ha s c onc lud ed , the pla in l an gua ge of the sta tut e ind ic at es oth er

w ise
. W e the re fo re hol d tha t a fe de ra l di str ic t c ourt, pur suant to 9 U
. S. C. § 4, ha s j ur isd ic tio n to e nf or ce af or um se le ct ionc lause in a va lid arb it rat io n a gr eem en t t ha t h as be en di sr eg ard edby the arb it rat or s. T he S ec ond Ci rc uit

r ea ch ed the sa m e co nclus ionin Be ar, Stearns & Co. v

. Ben ne tt , 938 F. 2d 3 1 ( 2d C ir
. 199 1)
. I n B en ne tt , aF lor ida r es ide nt f ile d ade m an d to ha ve his dis put e w ithBe ar St earn s ar bitra te d in N ap le s, Fl or ida
. Be ar S te ar ns, r el y ing uponthe part ie s’ Cu sto m er A gr ee m en t, f

ile d ape tit ionin the S outhe rn Dis tr ic t of Ne w Y ork to co m

p el ar b itration in NewYork C ity
. The S econd Circuit rej ected Bennett’ s argum ent that the “ situs of suit” shou ld be determ ined b y t he arbitrators rat he r th an by t he di st ric t co ur t. Id
. at 32. The court found th at the parties had agree d
on N ew Y ork as the ve nue f or a rb itr at ion , a nd “ [w ] he re the re is a va lid a gr ee m en t f

or7

arbitration, Congress has directed the district c ourts to order that arbitration proceed

‘ in accordance w ith the term s of the agreem ent.’ ” Id . (ci ti ng 9 U.S.C. § 4). H am m er , how ev er , a sse rt s th at the re w as no v al id a gr ee m en t f or a rb itr at ionin his c as e as he w as f

ra udul en tly ind uc ed to w ork a t S te rl ing
. H am m er ’ s f ra udul en t indu cem ent claim

is b as ed on alleged m isrepresentations m ade w hile Ham m er w as sti ll in T ex as , pr ior

to his m ove to Fl or ida
. Thu s, ac co rd ing to H am m er , w e shou ld
ap p l y t h e p r i n c i p l e f

r o m T e x a s l a w t h a to n e c a n n o ta s s e rtav e n u e c l au s e f r o m a
co nt ract in a cas e in vo lv in g i m pr op er i nd uc em en t t o e nt er i nt o t ha t co nt ract . B uss e
v. P ac , Ca ttl e F

ee din g F und , 896 S
. W
. 2d 8 07, 813 ( T ex . App. 199 5) ( “ Whe re the
w ro ngs ar ise f

ro m m isr ep re se nta tio ns i nduc ing aparty to ex ec ute the co ntr ac t and n ot fr om br ea chof the c ontra ct , r em ed ie s and lim ita tio ns spe ci fi ed by the c ontra ct

do n ot apply .” ). Whil e H am

m er ’ s S ta te m en t of

Cl ai m doe s c ont ai n a co unt

f or f ra udul en t ind uc em en t, H am

m er ne ve r ar gue d inthe dis tr ic t c ourt tha t hi s c la im fo r fr au dul en t ind uc em en t r en de re d th e fo ru m se le ct ionc lause s or

the c hoi ce of

law cl au se s in the ag re em en ts inva lid
. T he law in our c ir cu it is c le ar

tha t “ ar gum en ts n ot p re se nte d in the district court will n o t b e co nsidered for the first tim e on appeal.” Mills v. Sin gle tar y , 63 F. 3d 99 9, 1008, n. 11 (11th Cir. 1995 ) ( citing Lancas ter v. Newsom e,8

880 F.2d 362 , 371 (11th Cir. 1989 )). W e theref ore decline to consider Ham m er’ s new
ar gum en t. VI. CONCLUSION T he dis tr ic t c ourt pr ope rl y e xe rc ise d it s j ur isd ic tio n pu rs ua nt to se ct ion 4 of the Fe de ra l A rb itr at ionA ct

in stay ing arb it rat ionin H oust on, T ex as a nd c om pe lli ng arbitration in Boca Raton , Fl o ri da. The order of the district court is, there fore, af fi rm ed
. AFFIR MED.