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Howsam v. Dean Witter Reynolds, Inc.
United States Supreme Court
537 U.S. 79, 123 S. Ct. 588, 154 L. Ed. 2d 491 (2002)
Karen Howsam (plaintiff) accused Dean Witter Reynolds, Inc. (Dean Witter) of providing her with bad investment advice. Dean Witter’s client-services agreement required arbitration of the issue and allowed Howsam to select the arbitration forum. Howsam chose to arbitrate before the National Association of Securities Dealers (NASD). The NASD’s rules barred arbitration of disputes if the occurrence giving rise to the dispute happened more than six years before submission of the dispute to arbitration. Citing the NASD time limit, Dean Witter sued in federal district court, requesting a declaration that the dispute, which was more than six years old, was ineligible for arbitration. The district court dismissed Dean Witter’s complaint, reasoning that it was not authorized to rule on the applicability of the NASD’s time limit. The court of appeals reversed, reasoning that issues of arbitrability are ordinarily resolved by a court and that the applicability of the NASD time-limit rule was an issue of arbitrability. The United States Supreme Court granted certiorari.
Rule of Law
Holding and Reasoning (Breyer, J.)
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