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October 15, 1987

Arman Brick, Plaintiff,
J. C. Bradford & Company, Inc., et al., Defendants

The opinion of the court was delivered by: GASCH

 OLIVER GASCH, Senior Judge

 This case arises from facts that are distressingly common in the halls and on the trading floors of Wall Street. In January and February 1986, plaintiff made several large purchases of stock pursuant to a public offering in the shares of Advanced Tobacco Products, Inc. ("ATP"). The purchases were allegedly induced by representations by defendants that ATP would soon be a target in the take-over epidemic that has engulfed Wall Street. To plaintiff's disappointment, ATP was never courted, and the value of the corporation's stock plummeted. This case is the debris that remains from the crash of ATP stock. *fn1"

 Plaintiff's complaint alleged four counts of violations of federal securities laws and three counts of state common law claims. In an order dated June 9, 1987, the Court dismissed three of plaintiff's federal securities law claims, leaving a single federal claim under section 10(b) of the Securities Exchange Act of 1934 ("1934 Act"), 15 U.S.C. § 78j (1982), and Rule 10b-5 promulgated thereunder. Also remaining are common law claims of breach of fiduciary duty, fraud, and negligent misrepresentation. Subsequent to that order defendants J.C. Bradford & Co., Mulford, Snaman, and Seckler filed motions to compel arbitration of all the claims against them. *fn2" In addition, defendant Mulford repeated his motion to dismiss. Plaintiff opposed all the motions to compel arbitration with one small exception and urged the Court to stay any arbitration that is ordered.


 In its June 9, 1987, Order, the Court specifically addressed defendant Bradford's motion to dismiss on grounds that plaintiff was in pari delicto with the defendants. The Court rejected this argument and concluded that "plaintiff had pled adequately a claim of securities fraud and market manipulation against all defendants." June 9 Order, at 3. Defendant Mulford has once against moved to dismiss plaintiff's section 10(b) claim against him on the ground that plaintiff has failed to plead sufficient facts to state a claim.

 The language of the Court's Order of June 9 plainly states that plaintiff had pled sufficient facts to allege a section 10(b) claim against all defendants. Defendant Mulford, however, apparently believes that his motion was not denied because the order did not specifically address him by name. Mulford is clearly incorrect, and his motion is again denied.


 Defendants' motion to compel arbitration is based upon the Federal Arbitration Act, 9 U.S.C. §§ 1-14 (1982) ("Arbitration Act"). Sections 2 and 3 of the Arbitration Act provide for enforcement by the federal courts of private agreements to arbitrate disputes arising out of commercial contracts. *fn3" Commenting on the purpose of the Arbitration Act, the Supreme Court has stated that Congress intended to "revers[e] centuries of judicial hostility to arbitration agreements . . . [and] place arbitration agreements 'upon the same footing as other contracts.'" Scherk v. Alberto-Culver Co., 417 U.S. 506, 510-11, 41 L. Ed. 2d 270, 94 S. Ct. 2449 (1974) (quoting H.R. Rep. No. 96, 68th Cong., 1st Sess. 1, 2 (1924)); see Shearson/American Express, Inc. v. McMahon, 482 U.S. 220, 107 S. Ct. 2332, 2337, 96 L. Ed. 2d 185 (1987) (quoting Scherk). Extrapolating from the language of the Arbitration Act and the legislative history, numerous federal courts have noted that there is a strong federal policy favoring enforcement of arbitration agreements. McMahon, 107 S. Ct. at 2337; Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 105 S. Ct. 3346, 3355, 87 L. Ed. 2d 444 (1985); Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 25, 74 L. Ed. 2d 765, 103 S. Ct. 927 (1983); National Foundation for Cancer Research v. A.G. Edwards & Sons, Inc., 261 U.S. App. D.C. 284, 821 F.2d 772, 774 (D.C. Cir. 1987).

 Implementing this policy, many federal courts have determined that arbitration agreements should be liberally construed and any ambiguities as to the scope of such agreements should be resolved in favor of arbitration. E.g., Bhatia v. Johnston, 818 F.2d 418, 421 (5th Cir. 1987); Letizia v. Prudential Bache Securities, Inc., 802 F.2d 1185, 1189 (9th Cir. 1986); Shahmirzadi v. Smith Barney, Harris Upham & Co., 636 F. Supp. 49, 56 (D.D.C. 1985) (Harris, J.); Shotto v. Laub, 632 F. Supp. 516, 520 (D. Md. 1986); Brown v. Dean Witter Reynolds, Inc., 601 F. Supp. 641, 644 (S.D. Fla. 1985). Indeed, the Supreme Court has incorporated this deference into its application of general contract law principles to arbitration agreements. See Mitsubishi, 105 S. Ct. at 3354 ("as with any other contract, the parties' intentions control, but those intentions are generously construed as to issues of arbitrability"); see also Finkle & Ross v. A.G. Becker Paribas, Inc., 622 F. Supp. 1505, 1510 (S.D.N.Y. 1985) (citing Mitsubishi).

 Recently, however, the United States Court of Appeals for the District of Columbia Circuit adopted a more restrained interpretation of the federal arbitration policy. In National Foundation for Cancer Research v. A. G. Edwards & Sons, Inc., 261 U.S. App. D.C. 284, 821 F.2d 772 (D.C. Cir. 1987), Judge Mikva, writing for the court, commented that the Arbitration Act is an expression of Congress' intention to have the federal courts enforce arbitration agreements as they would enforce any other contract. According to Judge Mikva, the Act is not an expression of a preference for arbitration as a dispute resolution mechanism. Id. at 774. Thus, he concluded that whether a defendant has waived his right to arbitration should be determined according to contract law principles of waiver and ignoring that arbitration is the substance of the right. Id.

 In resolving the issues underlying the instant motion to compel arbitration, the Court is mindful of Judge Mikva's restrained reading of the Arbitration Act.

 Is the Arbitration Clause in the Customer Agreement Valid ?

 In cases like the one before the Court, plaintiffs have frequently challenged the validity of the arbitration clause sought to be enforced by defendant brokerage firms and brokers. These challenges are based on section 2 of the Arbitration Act which allows the federal courts to refuse to enforce an arbitration agreement "upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2 (1982). Plaintiffs commonly offer two arguments to support their challenge.

 First, plaintiffs often contend that they were fraudulently induced to sign the customer agreement. See, e.g., Bhatia, 818 F.2d at 421-22; Driscoll v. Smith Barney, Harris, Upham & Co., 815 F.2d 655, 659 (11th Cir. 1987). Plaintiff makes no such claim; indeed, in his opposition to the instant motion, plaintiff admits that he was not fraudulently induced to execute the Customer Agreement. *fn4" Nevertheless, such a claim would be fruitless. The Supreme Court held long ago that claims of fraud in the inducement of the entire agreement are to be decided by the arbitrator. Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 403-04, 18 L. Ed. 2d 1270, 87 S. Ct. 1801 (1967). ...

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