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Sanchez v. Elizondo

United States Court of Appeals, Ninth Circuit

January 5, 2018

Jon Gregory Sanchez, Plaintiff-Appellee,
v.
Robert Elizondo, Defendant-Appellant.

          Argued and Submitted December 4, 2017 San Francisco, California

         Appeal from the United States District Court for the District of D.C. No. 3:15-cv-00474-RCJ-VPC Nevada Robert Clive Jones, Senior District Judge, Presiding

          Jonathan E. Neuman (argued), Fresh Meadows, New York, for Defendant-Appellant.

          Steven F. Bus (argued), Reno, Nevada, for Plaintiff-Appellee.

          Before: MILAN D. SMITH, JR. and SANDRA S. IKUTA, Circuit Judges, and JOHN D. BATES, [*] Senior District Judge.

         SUMMARY[**]

         Arbitration

         The panel reversed the district court's order vacating Robert Elizondo's arbitration award and remanding for a new arbitration; and remanded to the district court for further proceedings.

         Elizondo was awarded $75, 000 in damages in the parties' arbitration, which Elizondo initiated to recoup losses he suffered as a result of plaintiff Gregory Sanchez's mismanagement of his investment portfolio.

         The panel held that there was jurisdiction pursuant to 9 U.S.C. § 16 of the Federal Arbitration Act to review vacatur orders that also remand for a new arbitration.

         The panel held that the district court erred in vacating the award on the basis that the arbitrator exceed his authority. The panel held that the arbitrator's award was not completely irrational; and the arbitrator confined himself to the interpretation and application of the parties' agreement; and therefore the arbitrator did not exceed his authority. The panel also held that the arbitrator did not exhibit manifest disregard of the law.

         Because the district court resolved Sanchez's petition on only one of the several grounds for vacatur Sanchez asserted, the panel remanded for further proceedings.

         Judge Ikuta concurred. She would hold that the court clearly had jurisdiction under 9 U.S.C. § 16, and there was no need for the majority to engage in an examination of the policies underlying § 16(a) or the potential meaning of Congressional silence to determine the scope of the jurisdictional grant.

          OPINION

          M. SMITH, CIRCUIT JUDGE.

         Defendant-Appellant Robert Elizondo appeals the district court's order vacating his arbitration award and remanding for further proceedings. Elizondo was awarded $75, 000 in damages (the Award) in the parties' arbitration, which Elizondo initiated to recoup losses he suffered as a result of Plaintiff-Appellee Gregory Sanchez's mismanagement of his investment portfolio. Elizondo argues that the district court erred in vacating the Award on the basis that the arbitrator exceeded his authority.

         We agree, reverse the district court's vacatur, and remand the case for further proceedings.

         FACTUAL AND PROCEDURAL BACKGROUND

         The essential facts in this case are undisputed. In April of 2008, Elizondo retained Sanchez, who is licensed as a securities broker by the Financial Industry Regulatory Authority (FINRA), to manage his investment portfolio. In September of 2008, Sanchez invested a portion of Elizondo's portfolio in leveraged inverse Exchange Traded Funds. Elizondo believed that this investment placed his holdings in an inappropriately risky position.

         On April 29, 2014, Elizondo brought a claim against Sanchez, alleging that Sanchez had mismanaged Elizondo's portfolio. The parties executed a FINRA Arbitration Submission Agreement, according to which they agreed (1) to submit their case to arbitration in accordance with the FINRA By-Laws, Rules, and Code of Arbitration Procedure; (2) to be bound by the procedures and rules of FINRA relating to arbitration; and ...


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