Dean Witter Reynolds, Inc. v. Byrd
United State Supreme Court
470 U.S. 213, 105 S. Ct. 1238, 84 L. Ed. 2d 158 (1985)
- Written by Alexander Hager-DeMyer, JD
Facts
A. Lamar Byrd (plaintiff) sold his dental practice and invested in securities through Dean Witter Reynolds, Inc. (Dean Witter) (defendant), a securities broker-dealer. When Byrd invested with Dean Witter, he signed a customer agreement providing that any controversy between Dean Witter and Byrd would be settled by arbitration. Byrd’s investment account devalued substantially over only a few months, and Byrd blamed Dean Witter’s mismanagement. Byrd filed suit against Dean Witter in federal district court for violations of the Securities Exchange Act and several state-law provisions. The claims under the Securities Exchange Act were not subject to arbitration, but the state laws were arbitrable under the customer agreement. Dean Witter filed a motion to sever and compel arbitration of the state-law claims. Dean Witter argued that the Federal Arbitration Act (FAA) required the district court to compel arbitration in accordance with Byrd’s signed customer agreement. The district court denied Dean Witter’s motion, and Dean Witter filed an interlocutory appeal with the United States Court of Appeals for the Ninth Circuit. The court of appeals affirmed, and Dean Witter appealed to the United States Supreme Court.
Rule of Law
Issue
Holding and Reasoning (Marshall, J.)
Concurrence (White, J.)
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