Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

ABN AMRO SAGE CORPORATION v. PTI CAPITAL MANAGEMENT

August 18, 2003

ABN AMRO SAGE CORPORATION, PLAINTIFF,
v.
PTI CAPITAL MANAGEMENT, L.L.C., DEFENDANT



The opinion of the court was delivered by: George Marovich, Senior District Judge

MEMORANDUM OPINION AND ORDER

Plaintiff ABN AMRO Sage Corporation ("AA Sage") filed a Complaint for Declaratory and Injunctive Relief pursuant to the Declaratory Judgment Act, 28 U.S.C. § 2201, and Rule 65 of the Federal Rules of Civil Procedure, against PTI Capital Management, L.L.C. ("PTI") and NASD Dispute Resolution, Inc. ("NASD") to enjoin an NASD arbitration pending against AA Sage. AA Sage has since voluntarily dismissed NASD from this action. PTI has moved to dismiss the Complaint under 12(b)(1) for lack of subject matter jurisdiction. For the reasons set forth below, the Court grants PTI's Motion to Dismiss.

BACKGROUND

Unless otherwise noted, the following facts are not in dispute. On or about September 10, 2001, PTI filed a Statement of Claim for arbitration with the NASD Dispute Resolution, Inc. against AA Sage. PTI alleges that AA Sage violated, inter alia, the following federal laws: Section 10(b) of the Securities [ Page 2]

Exchange Act of 1934, 15 U.S.C. § 78j (b) ("Securities Act"), and SEC rule 10b-5, 17 C.F.R. § 240.10b-5 ("Rule 10b-5").

AA Sage, by virtue of its NASD membership, has agreed to comply with the rules of NASD, including those involving arbitration. According to the NASD Rules, AA Sage has only agreed to arbitrate claims brought by its "customers" or another NASD member before the NASD. On June 24, 2002, AA Sage filed a Complaint for Declaratory and Injunctive Relief under Declaratory Judgment Act, 28 U.S.C. § 2201 and Fed.R.Civ.P. 65, against PTI and NASD Dispute Resolution, Inc. NASD has since been voluntarily dismissed from the case. AA Sage brought this Complaint to stay the arbitration, alleging that PTI is not a "customer" under the NASD rules. AA Sage further alleges that since PTI is not a "customer" and since AA Sage never agreed to arbitrate its claims, AA Sage should not be compelled to arbitrate, per the Federal Arbitration Act ("FAA"). On September 18, 2002, PTI filed its Motion to Dismiss for lack of subject matter jurisdiction. In its response, AA Sage alleges that this Court, has jurisdiction 28 U.S.C. § 1331 (" § 1331"), and now additionally under 28 U.S.C. § 1332 ("§ 1332") by virtue of NASD being voluntarily dismissed from the case.

DISCUSSION

I. Standard for a Motion to Dismiss

When considering a motion to dismiss, a court must view the complaint's allegations in the light most favorable to the plaintiff, and all well-pleaded facts in the complaint must be accepted as true. Wilson v. Formigoni, 42 F.3d 1060, 1062 (7th [ Page 3]

Cir. 1994). To withstand a motion to dismiss, a complaint must allege facts which sufficiently set forth the essential elements of the cause of action. Gray v. County of Dane, 854 F.2d 179, 182 (7th Cir. 1988). Dismissal is proper only if it appears beyond a doubt that a plaintiff can prove no set of facts in support of a claim which would entitle him to relief. Conley v. Gibson, 355 U.S. 41, 45-46 (1957).

II. Subject Matter Jurisdiction

In its Complaint, AA Sage alleges that "this Court has jurisdiction over this action pursuant to § 1331 because PTI's arbitration claims arise and NASD has violated its obligations under the Securities Exchange Act of 1934, 15 U.S.C. § 78a, et seq." (Compl. ¶ 9.) Additionally, AA Sage asserts in its Memorandum in Opposition to Defendant's Motion to Dismiss that even if this Court does not have jurisdiction under § 1331, jurisdiction is proper under § 1332 since given the dismissal of the NASD, the parties are now diverse.

A. Federal Question Jurisdiction

First, AA Sage argues that the United States Supreme Court in Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (1983), and the Seventh Circuit in Minor v. Prudential Securities, Inc., 94 F.3d 1103 (7th Cir. 1996), have interpreted Section 4 of the FAA to allow a district court to look to the underlying claims in the arbitration in order to determine the existence of a federal question for purposes of jurisdiction under ยง 1331. ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.