* This order and judgment is not binding precedent, e xcept under the

doctrines of law of the case, res judicata, and col lateral estoppel. The court generally disfavors the citation of orders and judg ments; nevertheless, an order and judgment may be cited under the terms and condi tions of 10th Cir. R. 36.3. 

## F I L E D United States Court of Appeals Tenth Circuit 

### FEB 19 1999 

### PATRICK FISHER Clerk UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT

OLDE DISCOUNT CORPORATION,

Plaintiff-Appellant,

v. JULIAN HUBBARD,

Defendant-Appellee. No. 98-3179 (D.C. No. 98-MC-205-EEO)

(D. Kan.)

ORDER AND JUDGMENT *

Before BRORBY , EBEL , and LUCERO , Circuit Judges.

After examining the briefs and appellate record, th is panel has determined unanimously to grant the parties’ request for a dec ision on the briefs without oral argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore ordered submitted without oral argument.-2-

OLDE Discount Corporation (OLDE) appeals from the d istrict court’s denial of its petition to compel arbitration and it s entry of summary judgment in favor of Julian Hubbard (Hubbard). Our jurisdic tion arises under 28 U.S.C. § 1291, and we affirm.
I. Relevant undisputed facts Upon accepting employment with OLDE in January 1996 , Hubbard signed an employment agreement and a Uniform Application f or Securities Industry Registration or Transfer, Form U-4. Both agreement s contained clauses wherein Hubbard agreed to arbitrate any disputes or claims against OLDE, including those controversies arising out of his employment or term ination that were required to be arbitrated under the rules of the New York StockExchange (NYSE) and the National Association of Securities Dealers (NASD). OLDE terminated Hubbard’s employment in July 1996, and Hubbard filed a discri mination charge against OLDE with the Equal Employment Opportunity Commissi on. In February 1998 Hubbard offered to settle his claims against OLDE, stating that if no settlement was reached, he would file a class action suit for racial discrimination in federal district court in Kansas City, Kansas. See Appellee’s App. at 2. On March 3, 1998, OLDE filed a petition in the Kansas City, Kan sas federal district court requesting an order to compel Hubbard to arbitrate his dispute with OLDE pursuant to the employment and U-4 agreements. See Appellant’s App. at 1. On1 Because the rules are substantively identical, an d the parties have focused on

the NASD rule, we will quote and apply only the NAS D rules in this order and judgment. -3- March 12, 1998, Hubbard filed a class action suit i n the federal district court for the Western District of Missouri in Kansas City, Missouri. See Appellee’s App. at 5. As a defense to arbitration, Hubbard argued in a motion to dismiss OLDE’s petition that his claims were not within the scope of the arbitration agreement because they were filed as a class action and there fore fit within an express exclusion to arbitration under both the NYSE and NASD rules. 1 Finding that NASD Code of Arbitration Procedure Rule 10301(d)(2) (and the correlative NYSE rule) applied to exclude Hubbard’s claims fromthe scope of the arbitration agreement, the district court denied OLDE’s petitio n for an order to compel arbitration, treated Hubbard’s motion to dismiss as one for summary judgment, and granted summary judgment in favor of Hubbard. See Order, Appellant’s App. at 46, 48.

II. Issues raised Although OLDE’s brief initially states that the iss ue raised on appeal is that “the district court erroneously failed to comp el [defendant Julian] Hubbard to abide by his agreement with OLDE to arbitrate any claims related to his employment,” Appellant’s Br. at 2, it later emphasi zes that the point of the appeal-4-

is not “that the District Court should have interpreted the procedures to apply only to a pending class action . . . [but] that the District Court should not have decided the class-action dispute at all” under the second p aragraph of Rule 10301(d)(2). See id. at 10. By its emphasis, OLDE has all but waived i ts argument that the court misinterpreted and misapplied Rule 10301(d). We will, however, rule on that issue as well as addressing OLDE’s jurisdictio nal argument.

III. Standard of review We review the denial of a motion to compel arbitration de novo , applying the same legal standards the district court employed. See Armijo v. Prudential
Ins. Co. , 72 F.3d 793, 796 (10th Cir. 1995). Because the m aterial facts are undisputed, we also review the grant of summary judgment de novo , determining if the district court correctly applied the substantive law. See Kaul v. Stephan , 83 F.3d 1208, 1212 (10th Cir. 1996).

IV. Discussion Rule 10301(d)(1) states: A claim submitted as a class action shall not be el igible for arbitration . . . Rule 10301(d)(2) states: Any claim filed by a member . . . of a putative or certified class action is also ineligible for arbitration . . . if the claim is encompassed by a putative or certified class actionfiled in federal or state court.-5-

. . . . Disputes concerning whether a particular claim is e ncompassed by a putative or certified class action shall be referre d by the Director of Arbitration to a panel of arbitrators in accordance with Rule 10302 or Rule 10308, as applicable. Either party may elect instead to petition the court with jurisdiction over the putative or ce rtified class action to resolve such disputes. NASD Manual - Code of Arbitration Procedure Rule 10 301(d) (emphasis added). In order to avoid application of Rule 10301(d)(1) t o Hubbard’s claims, OLDE argued in district court that it was “‘not see king to compel arbitration of a class action, but merely to force Hubbard to subm it[] his claims, as agreed, to arbitration.’” See Order, Appellant’s App. at 46. Implicit in this argument is the assumption that Hubbard’s claims did not qualify as “a claim submitted as a class action.” Rule 10301(d)(1). The court could have p roperly concluded that OLDE’s distinction was a false one (because, by fil ing suit, Hubbard “submitted” his claims as a class action) and held that Hubbard ’s claims were not eligible for arbitration under Rule 10301(d)(1). Instead, the c ourt accepted OLDE’s characterization of Hubbard’s claims as individual claims and found that those individual claims were encompassed within Hubbard’s newly filed class action. The court then properly concluded that under Rule 1 0301(d)(2), Hubbard’s individual claims were also precluded. On appeal, OLDE focuses on the language in the seco nd paragraph of Rule 10301(d)(2), arguing that the court erred by answering a Rule 10301(d)(2)-6-

question that, in its view, could be answered only by the court with actual jurisdiction over the class action or by an arbitration panel. OLDE cites no authority for this proposition, relying solely on the express language of the rule. Hubbard objects that OLDE didn’t raise that issue i n the trial court and has thus waived its claim of error. See Appellee’s Br. at 4. OLDE responds that it had no opportunity to do so because the court recog nized the issues that created a dispute under Rule 10301(d)(2) and ruled on them at the same time. See Appellant’s Reply Br. at 5. OLDE ignores, however, that the court recognized the issue precisely because OLDE characterized Hubbard’ s claims as individual claims instead of class claims--thus, OLDE implicit ly invited the court to rule on its argument. On this basis alone, we could ref use to review OLDE’s jurisdictional complaints. See Brown v. Presbyterian Healthcare Servs. , 101 F.3d 1324, 1332 (10th Cir. 1996) (“[A]n appellant may no t generally complain on appeal of errors he has himself induced or invited. ”). There are additional reasons why we reject its arguments. The language that OLDE claims precluded the distric t court from making a factual finding on whether Hubbard’s individual c laims are encompassed within his class claims is permissive; it also addr esses the procedures the parties may elect to follow and not the jurisdiction of a particular court. See Rule 10301(d)(2). At least one other court has fou nd that this rule is procedural-7-

and not substantive, and can therefore be waived by the parties. Cf. D.E. Frey & Co., Inc. v. Wherry , 27 F. Supp. 2d 950, 951 (S.D. Tex. 1998). We hol d that the district court did not exceed its jurisdiction by m aking a ruling under Rule 10301(d)(2) after being invited to do so by ap pellant. We also find, for the reasons stated in the district court’s May 13, 1998 Memorandum and Order, that the court properly denied OLDE’s petition to compel arbitration. The judgment of the United States District Court fo r the District of Kansas is AFFIRMED.

Entered for the Court

Wade Brorby Circuit Judge