First of Michigan Corp. v. Bramlet

From September 1989 through August 1991, Carlton and Dolores Bramlet (defendants) invested $62,000 in an Individual Retirement Account (IRA) with First of Michigan Corp. (First of Michigan) (plaintiff) through broker Michael Sobol (plaintiff). The Bramlets were residents of Florida, but they had met with Sobol in Michigan and made their investment decisions by calling Sobol in Michigan. All of the Bramlets’ investment transactions occurred in Michigan. By June 1991, the Bramlets’ IRA had lost more than half of its value. In June 1996, the Bramlets initiated an arbitration proceeding in Florida with the National Association of Securities Dealers (NASD), alleging that First of Michigan and Sobol had failed to send them periodic statements, thereby precluding them from realizing and mitigating the extent of the losses in their IRA. First of Michigan and Sobol brought a declaratory action against the Bramlets in the United States District Court for the Eastern District of Michigan, seeking to enjoin the Bramlets’ arbitration proceeding on the ground that NASD rules prohibited arbitration claims relating to investments more than six years old. The Bramlets moved to dismiss the federal lawsuit for improper venue. The district court dismissed the suit, reasoning that venue in Michigan was improper, because the “most substantial event” underlying the plaintiffs’ claim was the Bramlets’ initiation of the arbitration proceeding in Florida. First of Michigan and Sobol appealed.