United States District Court, District of Columbia
Simon S. Kogan, Staten Island, NY, Tiffany J. Brown, Hunter Taubman Weiss LLP, Miami, FL, for Petitioner.
David Samuel Panzer, Greenberg Traurig, LLP, Washington, DC, Joseph Clay Coates, III, Greenberg Traurig, LLP, West Palm Beach, FL, for Respondent.
COLLEEN KOLLAR-KOTELLY, District Judge.
This matter comes before the Court on Petitioner Lawrence Glaser's Verified Petition to Vacate Arbitration Award and Respondents Jonathan Russell Legg, Morgan Stanley & Co., and Edmund Stephan's  Cross-Petition to Confirm Arbitration Award. The Petitioner seeks to vacate, and the Respondents seek to confirm, a February 16, 2012 FINRA Dispute Resolution arbitration award. Upon consideration of the pleadings, the relevant legal
authorities, and the record as a whole, the Court finds the petition to vacate is untimely, and the Petitioner is barred from raising any grounds in support of vacatur as affirmative defenses to the Respondents' cross-petition to confirm the award. In opposing the cross-petition, the Petitioner failed to identify any other grounds to deny confirmation. Accordingly, the petition to vacate is DISMISSED as untimely, and the cross-petition to confirm the arbitration award is GRANTED.
A. Factual Background
The facts relevant to the disposition of the parties' petitions are undisputed. In 2002, the Petitioner initiated arbitration against the Respondents asserting a number of claims arising out of the Petitioner's purchase of securities from Enzo Biochemical, Inc. Resp'ts' Ex. E (12/8/04 NASD Dispute Resolution Award) at 1-2. The parties executed a settlement agreement resolving the Petitioner's claims on February 24, 2004. Resp'ts' Ex. D (Release & Settlement Agreement). At the parties' request, the National Association of Securities Dealers Dispute Resolution arbitration panel entered a stipulated award dismissing with prejudice all claims for relief asserted by the Petitioner. Resp'ts' Ex. E at 4. The Supreme Court of the State of New York subsequently confirmed the award. Resp'ts' Ex. F ( Morgan Stanley v. Glaser, No. 110724/2005, Am. Order (N.Y.Sup.Ct. Dec. 12, 2005)).
The Petitioner initiated a new arbitration proceeding in 2011, alleging that the Respondents fraudulently induced the Petitioner to enter into the 2004 settlement agreement by (1) failing to turn over relevant documents to the Petitioner; (2) failing to disclose payment to the Petitioner's former counsel in excess of the settlement amount; and (3) failing to disclose certain " newly discovered" facts regarding the underlying securities offering. Pet'r's Ex. C (Stmt. of Claim) at 2. The Petitioner asked the new panel to void the 2004 settlement agreement, and adjudicate the substance of the Petitioner's claims arising out of the underlying securities purchase at issue in the 2002 proceeding. Id. at 27-43. The Respondents moved to dismiss the arbitration on, among grounds, that the new proceeding constituted an improper collateral attack on the 2004 award, which could only be set aside by way of a petition to vacate in federal court. Resp'ts' Ex. I (Resp'ts' Mot. to Dismiss) at 7-8. The arbitration panel agreed with the Respondents, noting that
It has no authority to vacate the earlier arbitral proceeding and reexamine the issues there considered. It is settled law that, once an arbitration has been conducted under a valid arbitration agreement involving interstate commerce, the Federal Arbitration Act, 9 U.S.C. § 1 et seq. (" FAA" ) provides the exclusive remedy for challenging acts that may justify the vacatur of the award.
Resp'ts' Ex. A (2/16/2012 FINRA Dispute Resolution Award)  at 5. The panel issued
its decision on February 16, 2012, and mailed notice of the decision to the parties the same day. Id. at 7; Resp't's Ex. M. ...