Mastrobuono v. Shearson Lehman Hutton, Inc.
United States Supreme Court
514 U.S. 52, 115 S.Ct. 1212, 131 L.Ed.2d 76 (1995)
- Written by Rocco Sainato, JD
Facts
In 1985, Antonio Mastrobuono (plaintiff) opened an account with Shearson Lehman Hutton, Inc. (defendant). In doing so, Mastrobuono also agreed to Shearson’s Client Agreement, which included an arbitration clause. It stated that all disputes would be settled by arbitration in accordance with New York state law, and the rules set forth by the National Association of Securities Dealers (NASD). In 1989, Mastrobuono brought suit against Shearson. The suit was settled by arbitration in favor of Mastrobuono, who was awarded punitive damages as well as actual damages. Shearson then appealed to the court of appeals, arguing that New York state law prohibited punitive damages in arbitration clauses. The court of appeals ruled in Shearson’s favor. Mastrobuono then petitioned for certiorari to the United States Supreme Court.
Rule of Law
Issue
Holding and Reasoning (Stevens, J.)
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