Court Opinion

ID: 182113
Source: CourtListenerOpinion
Date Created: 2011-01-04 15:37:49+00
Date Added: 2024-06-11T17:25:58.092808
License: Public Domain

10-0690-cv
     UBS Sec. LLC v. Voegeli

                          UNITED STATES COURT OF APPEALS
                              FOR THE SECOND CIRCUIT

                                      SUMMARY ORDER
     RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT . CITATION TO A SUMMARY ORDER FILED
     ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE
     PROCEDURE 32.1 AND THIS COURT ’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A
     DOCUMENT FILED WITH THIS COURT , A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
     ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER ”). A PARTY CITING A SUMMARY ORDER MUST
     SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL .

 1            At a stated term of the United               States Court of Appeals
 2       for the Second Circuit, held at the               Daniel Patrick Moynihan
 3       United States Courthouse, 500 Pearl               Street, in the City of
 4       New York, on the 4 th day of January,              two thousand eleven.
 5
 6       PRESENT: DENNIS JACOBS,
 7                              Chief Judge,
 8                GUIDO CALABRESI,
 9                ROBERT D. SACK,
10                              Circuit Judges.
11
12       - - - - - - - - - - - - - - - - - - - -X
13       UBS SECURITIES, LLC,
14
15                    Plaintiff-Appellee,
16
17                    -v.-                                               10-0690-cv
18
19       FRIDOLIN VOEGELI, MARCEL GRUBENMANN,
20       HANS-FELIX VOEGELI, THOMAS BACHMANN,
21       FELIX SCHERRER, PRIMUS FELLMANN,
22       MARCO GEMMA, ERNESTO SURBECK,
23
24                Defendants-Appellants.
25       - - - - - - - - - - - - - - - - - - - -X
26
27

                                                  1
 1   FOR APPELLANTS:    Simon S. Kogan Esq.
 2                      Law Office of Simon Kogan
 3                      27 Weaver St.
 4                      Staten Island, NY 10312
 5
 6   FOR APPELLEES:     Robert J. Giuffra, Jr.
 7                      (Brent J. McIntosh, on brief)
 8                      Sullivan & Cromwell LLP
 9                      125 Broad St.
10                      New York, NY 10004
11
12        Appeal from the grant of a declaratory judgment and
13   permanent injunction by the United States District Court for
14   the Southern District of New York (Cote, J.).
15
16        UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED
17   AND DECREED that the district court’s decision is AFFIRMED.
18
19        The Appellants (“Swiss Investors”) appeal the district
20   court’s grant of a declaratory judgment that the Swiss
21   Investors cannot compel Appellee (“UBS”) to submit to
22   arbitration on their security fraud claims.         The Swiss
23   Investors also appeal the district court’s grant of a
24   permanent injunction prohibiting them from pursuing these
25   claims against UBS in arbitration.     We assume the parties’
26   familiarity with the underlying facts, the procedural history,
27   and the issues presented for review.
28
29        We review a district court’s grant of a permanent
30   injunction for abuse of discretion. Roach v. Morse, 440 F.3d
31   53, 56 (2d Cir. 2006).        “A district court abuses its
32   discretion in entering an injunction when it relies on clearly
33   erroneous findings of fact or an error of law.”       Id.   We
34   review de novo a district court’s determination of questions
35   of law related to an injunction, including the issue of
36   arbitrability. Am. Express Fin. Advisors Inc. v. Thorley, 147
37   F.3d 229, 231 (2d Cir. 1998); see also John Hancock Life Ins.
38   Co. v. Wilson, 254 F.3d 48, 57 (2d Cir. 2001) (“We review do
39   novo a district court’s determination that the parties agreed
40   to arbitrate a given dispute.”).
41
42        To obtain a permanent injunction, a party must establish
43   three things: (1) success on the merits; (2) the lack of an
44   adequate remedy at law; and (3) irreparable harm if relief is
45   not granted. Roach, 440 F.3d at 56.
46

                                   2
 1        “[A] party cannot be required to submit to arbitration
 2   any dispute which he has not agreed so to submit.” Howsam v.
 3   Dean Witter Reynolds, Inc., 537 U.S. 79, 83 (2002). Under the
 4   Financial Industry Regulatory Authority (“FINRA”) Code, a
 5   member can be compelled to arbitrate under two circumstances
 6   only: (1) where arbitration is “[r]equired by a written
 7   agreement,” or (2) where arbitration is “[r]equested by the
 8   customer.”   FINRA R. 12200.    The district court correctly
 9   concluded that the Swiss Investors were not customers of UBS
10   and had no contract with UBS that required arbitration.
11   Therefore, the Swiss Investors have no right to compel UBS to
12   arbitrate their claims, and UBS succeeds on the merits of its
13   request for an injunction.
14
15        Being forced to arbitrate a claim one did not agree to
16   arbitrate constitutes an irreparable harm for which there is
17   no adequate remedy at law.    Merrill Lynch Inv. Managers v.
18   Optibase, Ltd., 337 F.3d 125, 129 (2d Cir. 2003) (per curiam).
19   Because UBS is not legally obligated to arbitrate the Swiss
20   Investors’ claims, and the lack of an injunction would result
21   in UBS effectively being required to do so, UBS satisfies the
22   “irreparable harm” and “lack of adequate remedy at law”
23   requirements for an injunction.
24
25        We hereby AFFIRM the district court’s grant of a
26   declaratory judgment and permanent injunction terminating the
27   FINRA arbitration proceedings and prohibiting Appellants from
28   attempting to compel Appellee to submit to arbitration on
29   their claims against it.
30
31
32                               FOR THE COURT:
33                               CATHERINE O’HAGAN WOLFE, CLERK
34

                                   3