Johnson v. NASD ( 1996 )

UNITED STATES COURT OF APPEALS
Filed 5/29/96
TENTH CIRCUIT
GORDON E. JOHNSON, )
)
Plaintiff-Appellant, )
)
and )
)
VERNA K. JOHNSON, IVAN J. NEWMAN, )
BARBARA NEWMAN, )
)
Plaintiffs, )
)
v. ) No. 95-4031
) (D.C. No. 94-NC-101-G)
THE NATIONAL ASSOCIATION OF ) (D. Utah)
SECURITIES DEALERS, INC., )
)
Defendant-Appellee, )
)
and )
)
KENNETH THOMAS ADAMS, FIRST )
EQUITIES CORP., REO CUTLER, )
)
Defendants. )
ORDER AND JUDGMENT*
*
This order and judgment is not binding precedent, except under the doctrines of
law of the case, res judicata, and collateral estoppel. The court generally disfavors the
citation of orders and judgments; nevertheless, an order and judgment may be cited under
the terms and conditions of 10th Cir. R. 36.3.
Before ANDERSON, BARRETT and LOGAN, Circuit Judges.
After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist the determination of this
appeal. See Fed. R. App. P. 34(a); 10th Cir. R. 34.1.9. The case is therefore ordered
submitted without oral argument.
Plaintiffs filed this action to compel arbitration, naming The National Association
of Securities Dealers (NASD) and other defendants. The district court dismissed the
complaint, citing both the lack of a federal question and that the amount in controversy
did not meet the $50,000 jurisdictional minimum contained in 28 U.S.C. § 1332 to
support jurisdiction on the basis of diversity of citizenship. The only issue on appeal is
whether the district court correctly dismissed for lack of subject matter jurisdiction.
We have reviewed the briefs and the record and are satisfied that the district court
accurately summarized the facts and correctly applied the law. Plaintiffs initiated
arbitration proceedings in November 1987, alleging defendants sold them unsuitable
securities in May 1981. The NASD dismissed because the arbitration was filed more than
six years after the securities purchases. Thereafter, plaintiffs twice unsuccessfully
resorted to Utah state courts. The instant action was filed under the Federal Arbitration
Act, 9 U.S.C. §§ 1 through 14 (FAA), to compel the NASD to arbitrate plaintiffs’
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complaints against the other named defendants. However, the FAA does not create a
federal cause of action. It provides a vehicle for enforcing a written arbitration agreement
when an independent federal cause of action exists. Moses H. Cone Hospital v. Mercury
Construction Corp., 460 U.S. 1, 25 n.32 (1983). Likewise, plaintiffs’ claims fall below
the required amount in controversy for diversity jurisdiction.
We therefore AFFIRM. Plaintiffs’ motion for summary disposition is denied as
moot. For the reason that we find this a frivolous appeal pursuant to defendant NASD’s
request under 28 U.S.C. § 1912, we award it double costs but no other damages. In
limiting this award we considered the fact plaintiff is a pro se litigant; if he had counsel
who would represent him in pursuing such an appeal the sanctions would be greater.
Entered for the Court
James K. Logan
Circuit Judge
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