United States Court of Appeals

FOR THE EIGHTH CIRCUIT

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No. 97-1259

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Isadore Fendelman; Bernice *

Fendelman, *

Plaintiffs - * District Court for the

Appellees, * Eastern District of Missouri

 v. *

Jerry Stein; *

Defendant - Appellant, *

Newhard Cook & Company; Advest, *

Inc., *

 Defendants.

* Appeal from the United States

*

*

* [UNPUBLISHED]

*

*

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Submitted: September 9, 1997

 Filed: January 6, 1998

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Before McMILLIAN, HANSEN, and MURPHY, Circuit Judges.

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PER CURIAM.
The Honorable Edward L. Filippine, United States District Judge for the Eastern 1

District of Missouri.

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Jerry Stein appeals the district court’s order confirming an

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arbitration award and entering judgment in favor of Isadore and Bernice

Fendelman. Stein argues the district court lacked subject matter

jurisdiction to enter this order. We affirm.

On January 25, 1990, the Fendelmans brought suit in federal district

court against their broker, Jerry Stein, and other defendants not involved

in this appeal. Their complaint alleged federal securities law violations,

federal Racketeer Influenced and Corrupt Organizations Act (RICO) violations,

and various state law claims. In April 1994, the district court granted

Stein’s request to stay the proceedings in the district court pending

arbitration by the National Association of Securities Dealers, Inc. (NASD).

In the NASD arbitration, the Fendelmans made the same factual allegations and

legal claims against Stein as they had made in their complaint filed in

district court. The arbitrators ruled in favor of the Fendelmans based on

their state law claims, awarding $338,000 in actual damages, $165,000 in

punitive damages, $24,000 for attorneys’ fees, and $250 for the arbitration

filing fee. The arbitrators denied all the Fendelmans’ federal law claims.

In September 1995, the Fendelmans moved the district court to confirm

the NASD arbitration award and enter judgment against Stein. Stein responded

by filing a motion to dismiss, arguing the district court lacked subject

matter jurisdiction because the arbitrators had denied the Fendelmans relief

on their federal law claims, and
Subsequent to the filing of the Fendelmans’ complaint in this case, Congress

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codified the common law doctrine of pendent jurisdiction in 28 U.S.C. § 1367 (1994),

as “supplemental jurisdiction.” Because this case was filed prior to its enactment, we

refer to the common law terminology of “pendent” jurisdiction.

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therefore, the court no longer had federal question or pendent jurisdiction2

over the remaining state law claims. The district court denied Stein’s

motion to dismiss, confirmed the arbitration award, and entered judgment in

favor of the Fendelmans.

Stein argues that the NASD arbitrators’ denial of the Fendelmans’

federal law claims divested the district court of subject matter

jurisdiction. All parties agree that the district court had subject matter

jurisdiction over the Fendelmans’ complaint. The court had jurisdiction over

the federal law claims pursuant to federal question jurisdiction, 28 U.S.C.

§ 1331, and pendent jurisdiction over the state law claims because they arose

from the same “common nucleus of operative fact” as the federal claims.

United Mine Workers v. Gibbs, 383 U.S. 715, 725 (1966). Under the common law

doctrine of pendent jurisdiction, a federal court can decide a plaintiff’s

state law claims arising from the same set of facts as the plaintiff’s

federal claim even if the court rules against the plaintiff on the federal

claims. Siler v. Louisville & Nashville R.R., 213 U.S. 175, 191 (1909). The

NASD arbitrators ruled in favor of the Fendelmans on their state law claims,

but against them on their federal law claims. This was analogous to a jury

award finding for the plaintiffs on their state law claims and against them

on their federal law claims, which certainly would not divest the federal

court of jurisdiction to enter judgment on the award. Under the holding in

Siler, it is clear that the arbitration award did not divest the federal

court of its subject matter jurisdiction.
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Therefore, we hold the district court had subject matter jurisdiction to

confirm the arbitration award and enter judgment in favor of the Fendelmans.

A true copy.

Attest:

CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.