Vazquez v. Pershing LLC et al, No. 3:2009cv02137 - Document 26 (D.P.R. 2010)

Court Description: OPINION AND ORDER granting 16 MOTION to dismiss and to Compel, filed by Pershing LLC, Santander Securities Corporation. We DISMISS Plaintiff's claims against Movants without prejudice. The matter shall be placed in arbitration, the court retai ning jurisdiction to enforce any award. In addition, We ORDER Plaintiff to show cause, on or before June 30, 2010, for the failure to identify and serve unknown defendants. Otherwise, the case against said unknown defendants will be dismissed. Show Cause Response due by 6/30/2010. Signed by Chief Judge Jose A Fuste on 6/17/2010.(mrj)

Download PDF
1 2 3 UNITED STATES DISTRICT COURT DISTRICT OF PUERTO RICO URBANA Và ZQUEZ, 4 Plaintiff, 5 v. 6 7 Civil No. 09-2137 (JAF) PERSHING, LLC, et al., Defendants. 8 9 OPINION AND ORDER 10 Plaintiff, Urbana Vázquez, brings the present action against Defendants, Pershing, LLC 11 ( Pershing ); Santander Securities Corp. ( Santander ); and various unknown parties, alleging 12 violations of the Consumer Credit Protection Act, 15 U.S.C. §§ 1601 1693r; the Fair Credit 13 Billing Act, 15 U.S.C. §§ 1666 1666j; and Article 1802 of the Puerto Rico Civil Code, 31 14 L.P.R.A. § 5141 (1990). (Docket No. 1.) Defendants Santander and Pershing ( Movants ) 15 move to compel arbitration under Plaintiff s contractual obligations and to dismiss under 16 Federal Rule of Civil Procedure 12(b)(1) and (b)(6). (Docket No. 16.) Plaintiff opposes. 17 (Docket No. 22.) Movants reply in support of the motion to dismiss. (Docket No. 25.) 18 I. 19 Factual and Procedural Synopsis 20 In April 2000, Plaintiff opened a brokerage account managed by Movants. Account 21 applications by Plaintiff for both Santander and Pershing contained broadly-worded arbitration 22 clauses. (Docket Nos. 16-2; -3.) Plaintiff alleges that, at some point, a third party opened Civil No. 09-2137 (JAF) -2- 1 various credit-card accounts under her name and without her authorization. Movants then 2 authorized debits from Plaintiff s account to be paid out to the various fraudulent accounts that 3 had been created. Plaintiff alleges that Movants failed to verify the credit-card account holder 4 requesting payment in her name, resulting in over $54,000 in unauthorized debits from her 5 account. 6 II. 7 Standard for Motion to Compel Arbitration 8 The Federal Arbitration Act ( FAA ), 9 U.S.C. §§ 1 16, governs the enforcement of 9 most arbitration agreements by federal courts and embodies a federal policy strongly favoring 10 the enforcement of arbitration agreements. See, e.g., Campbell v. Gen. Dynamics Gov t Sys. 11 Corp., 407 F.3d 546, 551 52 (1st Cir. 2005) (discussing federal policy). In granting a motion 12 to compel arbitration, we must determine that an arbitration agreement exists; that the claims 13 before us fall within the scope of said agreement; and that the movant has not waived its arbitral 14 rights. See Combined Energies v. CCI, Inc., 514 F.3d 168, 171 (1st Cir. 2008). [A]ny doubts 15 concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the 16 problem at hand is the construction of the contract language itself, or an allegation of waiver, 17 delay or a like defense to arbitrability. Moses H. Cone Mem l Hosp. v. Mercury Constr. Corp., 18 460 U.S. 1, 24 25 (1983); see also Volt Info. Scis., Inc. v. Bd. of Trs. of Leland Stanford Jr. 19 Univ., 489 U.S. 468, 475 76 (1989) ( [D]ue regard must be given to the federal policy favoring 20 arbitration, and ambiguities as to the scope of the arbitration clause itself resolved in favor of 21 arbitration. ). Civil No. 09-2137 (JAF) -3- 1 If we grant a motion to compel arbitration, we must stay proceedings on all arbitrable 2 claims. See 9 U.S.C. § 3. When we exercise jurisdiction under 28 U.S.C. § 1331, a finding that 3 all federal claims are arbitrable, such that we have only supplemental jurisdiction over the 4 remaining claims, allows us to dismiss the case in its entirety. See Bercovitch v. Baldwin Sch., 5 Inc., 133 F.3d 141, 156 n.21 (1st Cir. 1998). 6 III. 7 Analysis 8 Plaintiff has not challenged Movants assertion that the FAA governs the interpretation 9 of this arbitration clause. Plaintiff s sole argument against the enforceability of the arbitration 10 agreements with Movants is that her claims fall outside the scope of those agreements. (Docket 11 No. 22.) Plaintiff has neither challenged the validity of the arbitration clause under Puerto Rico 12 law nor argued that Movants waived their contractual right to arbitration. Thus, we turn to the 13 scope of the arbitration agreements. 14 The Santander agreement, according to Plaintiff, is for the purchase and sale of 15 securities only and does not, in any way, regulate matters related to debits in said account. 16 (Docket No. 22 at 3.) The arbitration clause, however, is broadly worded: It is agreed that any 17 controversy between us arising out of your business or this agreement, shall be submitted to 18 arbitration . . . . (Docket No. 16-2 at 2.) A brokerage account, by nature, requires debiting as 19 securities are bought. Such debits obviously arise out of Santander s business as an investment 20 bank. And any doubt as to whether this agreement covers fraudulent debits by third parties must 21 be resolved in favor of arbitration. See Moses H. Cone Mem l Hosp., 460 U.S. at 24 25. Civil No. 09-2137 (JAF) -4- 1 Plaintiff concedes that her arbitration agreement with Pershing clearly deals with 2 debits, but argues that it excludes the fraudulent, unauthorized debits at issue here. (Docket 3 No. 22 at 3.) As with Santander, Pershing s arbitration clause is broadly worded: It is agreed 4 that any controversy between or among the account holder, Pershing, and introducing financial 5 institution or any of them arising out of Pershing s or the introducing Financial Institution s 6 business or this agreement shall be submitted to arbitration . . . . (Docket No. 16-3 at 9.) The 7 Supreme Court has repeatedly held that we must enforce arbitration clauses unless it may be 8 said with positive assurance that the arbitration clause is not susceptible of an interpretation that 9 covers the asserted dispute. AT&T Techs., Inc. v. Commc ns Workers, 475 U.S. 643, 650 10 (1986) (quoting United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582 83 11 (1960)). Given the broad language of the clause, Plaintiff s contention that this arbitration 12 clause does not cover unauthorized debits to her account by third parties is unavailing. 13 Jurisdiction in this case is premised on federal claims, which we find arbitrable. 14 Therefore, we may dismiss the case, including supplemental claims, against Movants. See 15 Bercovitch, 133 F.3d at 156 n.21. Over 120 days have passed since the filing of this action, 16 during which time Plaintiff has neither identified nor served unknown defendants. Thus, we 17 may also dismiss claims against unknown defendants if Plaintiff fails to show good cause for 18 her delay. See Fed. R. Civ. P. 4(m). Civil No. 09-2137 (JAF) -5- 1 IV. 2 Conclusion 3 For the reasons stated herein, we hereby DISMISS Plaintiff s claims against Movants 4 without prejudice. The matter shall be placed in arbitration, the court retaining jurisdiction to 5 enforce any award. In addition, We ORDER Plaintiff to show cause, on or before June 30, 6 2010, for the failure to identify and serve unknown defendants. Otherwise, the case against said 7 unknown defendants will be dismissed. 8 IT IS SO ORDERED. 9 San Juan, Puerto Rico, this 17 th day of June, 2010. 10 11 12 s/José Antonio Fusté JOSE ANTONIO FUSTE Chief U.S. District Judge

Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.