KPMG LLP v. Cocchi, No. 10–1521.

• Court: United States Supreme Court
• Writing for the Court: PER CURIAM.
• Citation: 181 L.Ed.2d 323,565 U.S. 18,132 S.Ct. 23
• Parties: KPMG LLP, v. Robert COCCHI et al.
• Decision Date: 07 November 2011
• Docket Number: No. 10–1521.

565 U.S. 18
132 S.Ct. 23
181 L.Ed.2d 323

KPMG LLP,
v.
Robert COCCHI et al.

No. 10–1521.

Supreme Court of the United States

Nov. 7, 2011.

132 S.Ct. 24

PER CURIAM.

565 U.S. 19

Agreements to arbitrate that fall within the scope and coverage of the Federal Arbitration Act (Act), 9 U.S.C. § 1 et seq., must be enforced in state and federal courts. State courts, then, "have a prominent role to play as enforcers of agreements to arbitrate." Vaden v. Discover Bank, 556 U.S. 49, 59, 129 S.Ct. 1262, 173 L.Ed.2d 206 (2009).

The Act has been interpreted to require that if a dispute presents multiple claims, some arbitrable and some not, the former must be sent to arbitration even if this will lead to piecemeal litigation. See Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 217, 105 S.Ct. 1238, 84 L.Ed.2d 158 (1985). From this it follows that state and federal courts must examine with care the complaints seeking to invoke their jurisdiction in order to separate arbitrable from nonarbitrable claims. A court may not issue a blanket refusal to compel arbitration merely on the grounds that some of the claims could be resolved by the court without arbitration. See ibid .

In this case the Fourth District Court of Appeal of the State of Florida upheld a trial court's refusal to compel arbitration of respondents' claims after determining that two of the four claims in a complaint were nonarbitrable. Though the matter is not altogether free from doubt, a fair reading of the opinion indicates a likelihood that the Court of Appeal failed to determine whether the other two claims in the complaint were arbitrable. For this reason, the judgment of the Court of Appeal is vacated, and the case remanded for further proceedings.

* * *

Respondents are 19 individuals and entities who bought limited partnership interests in one of three limited partnerships, all known as the Rye Funds. The Rye Funds were managed by Tremont Group Holding, Inc., and Tremont Partners, Inc., both of which were audited by KPMG. The Rye Funds were invested with financier Bernard Madoff

565 U.S. 20

and allegedly lost millions of dollars as a result of a scheme to defraud. Respondents sued the Rye Funds, the Tremont defendants, and Tremont's auditing firm, KPMG.

Only the claims against KPMG are at issue in this case. Against KPMG, respondents alleged four causes of action: negligent misrepresentation; violation of the Florida Deceptive and Unfair Trade Practices Act (FDUTPA), Fla. Stat. 501.201 et seq. (2010) ; professional malpractice; and aiding and abetting a breach of fiduciary duty. Respondents' basic theory was that KPMG failed to use proper auditing standards with respect to the financial statements of the partnerships. These improper audits, respondents contend, led to "substantial misrepresentations" about the health of the funds and resulted in respondents' investment losses. 51 So.3d 1165, 1168 (Fla.App.2010).

132 S.Ct. 25

KPMG moved to compel arbitration based on the audit services agreement that existed between it and the Tremont defendants. That agreement provided that "[a]ny dispute or claim arising out of or relating to ... the services provided [by KPMG] ... (including any dispute or claim involving any person or entity for whose benefit the services in question are or were provided) shall be resolved" either by mediation or arbitration. App. to Pet. for Cert. 63a. The Florida Circuit Court of the Fifteenth Judicial Circuit Palm Beach County denied the motion.

The Court of Appeal affirmed, noting that "[n]one of the plaintiffs ... expressly assented in any fashion to [the audit services agreement] or the arbitration provision." 51 So.3d, at 1168. Thus, the court found, the arbitration clause could only be...