Rodriguez v. Stanley

• Decision Date: 14 December 2020
• Docket Number: Civil Action No. 19-9104 (CCC)
• Parties: AMY VICTORIA RAMIREZ RODRIGUEZ, Plaintiff, v. MORGAN STANLEY, et al., Defendants.
• Court: U.S. District Court — District of New Jersey

AMY VICTORIA RAMIREZ RODRIGUEZ, Plaintiff, v. MORGAN STANLEY, et al., Defendants.

Civil Action No. 19-9104 (CCC)

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

December 14, 2020

OPINION AND ORDER

CLARK, Magistrate Judge

THIS MATTER comes before the Court on a Motion by pro se Plaintiff Amy Victoria Ramirez Rodriguez ("Plaintiff") for a "Preliminary or Alternatively Temporary Injunction" to compel arbitration of her claims before the Financial Industry Regulatory Authority ("FINRA") [ECF No. 64]. Defendants Morgan Stanley and Morgan Stanley Wealth Management (collectively "Defendants" or "Morgan Stanley") oppose Plaintiff's Motion [ECF Nos. 41, 69].¹ Additionally, before the Court is a Motion by Defendants to dismiss the Third Amended Complaint in its entirety pursuant to Fed. R. Civ. P. 12(b)(6) [ECF No. 68]. Plaintiff opposes Defendants' Motion to Dismiss [ECF No. 71]. On October 5, 2020, the parties consented to the jurisdiction of the Undersigned to decide these dispositive motions pursuant to 28 U.S.C. § 636(c). ECF No. 90.

Having considered the parties' written submissions pursuant to Federal Rule of Civil Procedure 78, for good cause shown, and for the reasons set forth herein, Plaintiff's Motion for a "Preliminary or Alternatively Temporary Injunction" to compel arbitration of Plaintiff's claims before FINRA [ECF No. 64] is DENIED and Defendants' Motion to Dismiss [ECF No. 68] is GRANTED.

I. BACKGROUND

On February 8, 2019, Plaintiff initiated this action by filing a Complaint in the Southern District of New York. ECF No. 2. On March 15, 2019, Plaintiff filed an Amended Complaint. ECF No. 5. On March 21, 2019, this case was transferred sua sponte to the District of New Jersey. ECF No 6.

Defendants timely moved to dismiss the Amended Complaint on May 13, 2019. ECF No. 12. On June 17, 2019, per the parties' stipulation and Court Order, Defendants withdrew the motion to dismiss and Plaintiff was permitted the opportunity to file a Second Amended Complaint. ECF No. 20.² Plaintiff filed her Second Amended Complaint consisting of three-hundred eleven pages on August 8, 2019. ECF No. 36. Defendants filed a motion to dismiss the Second Amended Complaint on August 26, 2019. ECF No. 43.

On December 13, 2019, the Court granted Plaintiff leave to file a Third Amended Complaint compliant with Fed. R. Civ. P. 8(a)(2) insofar as it "must contain all of Plaintiff's factual allegations." ECF No. 57. Plaintiff filed a Third Amended Complaint [ECF No. 60] on January 21, 2020 and a "revised" Third Amended Complaint ("TAC") on January 28, 2020 [ECF No. 61].³ In the revised Third Amended Complaint, Plaintiff alleges that she was employed by Morgan Stanley in March of 2015 as a Wealth Advisor Associate, and during her employment faced discrimination and retaliation on the basis of her disability (morbid obesity) and discrimination by Defendants based on "sex, race, and ethnicity" in violation of various federal statutes including 42 U.S.C. § 1981, the Americans with Disability Act ("ADA"), Title VII of the Civil Rights Act of 1964 ("Title VII"), and the Family Medical Leave Act ("FMLA"). See TAC, ¶¶ 14-98. Plaintiff also alleges that Defendants violated "Securities Laws." See TAC, ¶¶ 99-107.

Additionally, on March 2, 2020, Plaintiff filed a motion for a "Preliminary or Alternatively Temporary Injunction" to compel arbitration of Plaintiff's claims before FINRA. ECF No. 64. Defendants filed a motion to dismiss Plaintiff's Third Amended Complaint on March 11, 2020. ECF No. 68.

II. MOTION TO COMPEL ARBITRATION BEFORE FINRA

First, the Court will consider Plaintiff's motion for a "Preliminary or Alternatively Temporary Injunction" to compel arbitration of Plaintiff's claims before FINRA. ECF No. 64. The Court notes that while Plaintiff has styled the motion as one seeking an injunction, the relief Plaintiff is seeking in the motion is to compel Defendants to participate in an arbitration before FINRA of Plaintiff's claims "born of the acts set forth in [her] T.A.C." ECF No. 64-1 at pp. 1-2. The Court will therefore construe Plaintiff's motion as a motion to compel arbitration.

The Federal Arbitration Act ("FAA") reflects the "national policy favoring arbitration and places arbitration agreements on equal footing with all other contracts.'" Bacon v. Avis Budget Grp., Inc., 959 F.3d 590, 599 (3d Cir. 2020) (quoting Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 443 (2006)). "The FAA requires courts to stay litigation and compel arbitration of claims covered by a written, enforceable arbitration agreement." Bacon, 959 F.3d at 599 (citing FAA, 9 U.S.C. §§ 3, 4). Despite the strong federal policy in favor of arbitration, "[a]rbitration is strictly a matter of contract" and is governed by state law. Bel-Ray Co. v. Chemrite (Pty) Ltd., 181 F.3d 435, 441, 444 (3d Cir. 1999) ("If a party has not agreed to arbitrate, the courts have no authority to mandate that he do so."). Accordingly, in deciding whether a party may be compelled to arbitrate, the Court considers "(1) whether there is a valid agreement to arbitrate between the parties and, if so, (2) whether the merits-based dispute in question falls within the scope of that valid agreement." Flintkote Co. v. Aviva PLC, 769 F.3d 215, 220 (3d Cir. 2014) (quotations and citation omitted).

In determining whether a valid arbitration agreement exists between the parties, the Court must first decide whether to apply the Rule 12(b)(6) or Rule 56 standard of review. Sanford v. Bracewell & Guiliani, LLP, 618 F. App'x 114, 117 (3d Cir. 2015). "Motions to compel arbitration are reviewed under Rule 12(b)(6) '[w]here the affirmative defense of arbitrability of claims is apparent on the face of a complaint (or . . . documents relied upon in the complaint).'" Id. (citation omitted). Conversely, Rule 56 will apply "[i]f the motion to compel arbitration is not based on a complaint 'with the requisite clarity' to establish arbitrability." Id. (citation omitted). "Where a complaint does not plead or attach the relevant terms of an arbitration provision, courts apply a summary judgment standard, and should compel arbitration where there is no material issue of fact that 'a valid agreement to arbitrate exists' and 'the particular dispute falls within the scope of that agreement.'" Ranginwala v. CitiBank, N.A., No. 18-14896, 2020 WL 6817508, at *3 (D.N.J. Nov. 19, 2020) (citing Trippe Mfg. Co. v. Niles Audio Corp., 401 F.3d 529, 532 (3d Cir. 2005)).

Here, the Court will consider Plaintiff's motion to compel arbitration under the summary judgment standard because Plaintiff did not plead or attach the relevant terms of an arbitration agreement as part of her Third Amended Complaint. Fed. R. Civ. P. 56(c). As the Third Amended Complaint does not make clear that the parties entered into an agreement to arbitrate, summary judgment is the appropriate standard of review.

Plaintiff also does not set forth the source or the terms of the parties' agreement to arbitrate claims before FINRA in her motion to compel arbitration. The only evidence that an agreement to arbitrate exists between the parties is a provision found in Plaintiff's Employment Agreement, which states:

You agree to arbitrate any dispute, claim or controversy that may arise between you and Morgan Stanley or any person that is required to be arbitrated: (i) under the rules, constitutions, or by-laws (as may be amended from time to time) of any self-regulatory organization with which you are or may become registered, including, but not limited to, the Financial Industry Regulatory Authority ("FINRA") or (ii) pursuant to any arbitration agreement to which you are a party.

See ECF 41-1, Declaration of Thomas A. Linthorst dated August 20, 2019 ("August 20, 2019 Linthorst Decl."), Ex. A, at pp. 4-5. As no other arbitration agreement or provision appears before the Court, the Court will assume that this provision is the source of Plaintiff's motion to compel arbitration before FINRA.

Defendants contend that pursuant to the terms of Plaintiff's Employment Agreement the only claims that are required to be arbitrated before FINRA are those disputes that are required to be arbitrated under FINRA rules. ECF No. 41 at p. 5. Under Rule 13201(a) of the FINRA Code of Arbitration Procedure for Industry Disputes, "[a] claim alleging employment discrimination . . . in violation of a statute, is not required to be arbitrated under the Code. Such a claim may be arbitrated only if the parties have agreed to arbitrate it, either before or after the dispute arose." Defendants argue that the parties have not agreed to arbitrate statutory employment discrimination claims before FINRA so there is no basis for this Court to compel arbitration of such claims before FINRA. ECF No. 41 at p. 5.

Plaintiff argues that Defendants have compelled arbitration of statutory employment discrimination claims in other cases. ECF No. 64-1, at pp.7-8; ECF No. 72 at p. 7. Plaintiff relies on Lockette v. Morgan Stanley, No. 18-876, 2018 WL 4778920 (S.D.N.Y. Oct. 3, 2018) for this proposition. In Lockette, however, the Court was presented with an arbitration agreement found in the defendants' guidebook to their own internal employee dispute resolution program entitled "CARE" (Convenient Access to Resolutions for Employees), which provided registered employees the option of pursuing employment discrimination claims through arbitration by various alternative-dispute-resolution services including FINRA. Id. at *1. Here, Plaintiff has not presented evidence that the CARE guidebook applies to her case or that any other arbitration agreement exists between the parties besides the arbitration provision found in Plaintiff's Employment Agreement. Thus, Plaintiff's reliance on Lockette is misplaced.

The Court agrees with Defendants that Plaintiff has not demonstrated the existence of an arbitration agreement compelling arbitration before FINRA of her claims found in her Third Amended Complaint. I...