Brief for emer. MTN for temp stay pend appeal to fifth circuit

IN THE

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

_______

NO. ______

_______

_______________,

vs. Plaintiff-Appellee,

_______________, INC./

_______________,

and_______________ COMPANY, Defendants-Appellants,

_______

APPELLANTS' MEMORANDUM IN SUPPORT OF EMERGENCY

MOTION FOR TEMPORARY STAY PENDING APPEAL

To Said Honorable Court:

On __________, Defendants filed a Notice of Appeal to the Fifth Circuit appealing an order denying a motion to compel arbitration. Pursuant to Fed. R. App. P. 8, Defendants __________, Inc./___________ ("Inc.") and ____________ Company ("Company") (collectively "Defendants"), hereby request the Fifth Circuit issue a temporary stay of proceedings in the district court pending resolution of Defendants' appeal to the Fifth Circuit.

I. SUMMARY OF FACTS AND PROCEEDINGS BELOW

___________, Plaintiff/Appellee ("Plaintiff") began selling securities and insurance products on behalf of the Defendants in [year]. To assist Plaintiff in making those sales, he became licensed by the National Association of Security Dealers ("NASD")¹. As part of that licensing requirement, Plaintiff agreed in writing to abide by all NASD rules. Those rules specifically require arbitration of employment disputes. Pursuant to those rules, the Federal Arbitration Act ("FAA") and Gilmer v. Interstate/Johnson Lane Corp., the defendants filed a motion to compel arbitration. Without making findings of fact or conclusions of law, the district court denied that motion.

Defendants filed a motion to stay proceedings in the district court pending Defendants' appeal to the Fifth Circuit. The district court denied that motion. Plaintiff has propounded discovery to Defendants and refused to delay Defendants' response to that discovery until after resolution of the Fifth Circuit appeal. Therefore, Defendants have filed an Emergency Motion for Temporary Stay Pending Appeal ("Emergency Motion") to stay all district court proceedings pending their appeal of the denial of the motion to compel arbitration.

II. COURSE OF PROCEEDINGS AND DISPOSITION IN THE COURT BELOW

Pursuant to the Age Discrimination in Employment Act, 29 U.S.C. § 621 et. seq. (Supp. 1994) ("ADEA"), Plaintiff filed an age discrimination complaint with the Equal Employment Opportunity Commission ("EEOC"). The EEOC summarily dismissed the charge, finding that Plaintiff was an independent contractor, not an employee². Plaintiff filed a lawsuit in state district court, which Defendants timely removed to the United States District Court for the _______ District of Texas, _______ Division.

On _________, Defendants filed a Motion to Dismiss in federal court based on the EEOC's findings. On or about __________, Defendants learned of an arbitration agreement between the parties. On __________, Defendants filed a Motion to Stay Proceedings Pending Arbitration³ ("motion to compel arbitration") and Memorandum in Support⁴. Plaintiff filed a response to that motion⁵ and Defendants filed a reply.⁶ On _________, the Honorable Judge _________ denied Defendants' motion to compel arbitration, without making findings of fact or conclusions of law⁷. On __________, Defendants filed a motion to stay district court proceedings pending Defendants' appeal of the district court's denial of the motion to compel arbitration,⁸ and a memorandum in support^.9

Defendants filed a timely Notice of Appeal to the Fifth Circuit on __________, and timely filed their brief on __________. That appeal is currently pending before the Fifth Circuit, Case No. ________. On _________, the district court denied Defendants' Motion to Stay Pending Appeal¹⁰.

On __________, Plaintiff served Defendants with a Request for Production of Documents and Interrogatories¹¹. Counsel for Defendants contacted Plaintiff's counsel and requested that Defendants' response to the discovery be delayed until 10 days after the Fifth Circuit had ruled on the motion to compel arbitration¹². Plaintiff refused this request. Further, Defendants' counsel requested that Plaintiff stipulate that Defendants' response to the discovery would not constitute waiver of their right to demand arbitration. Plaintiff refused this request as well!¹³

III. RELIEF SOUGHT

Defendants request that by [date], this Court enter an order temporarily staying proceedings in the district court until such time as the Fifth Circuit has ruled on Defendants' appeal of the district court's denial of their motion to compel arbitration. Defendants request a prompt ruling because Plaintiff has refused to extend Defendants' [date] deadline for responding to Plaintiff's discovery. In the unlikely event this Court denies this Emergency Motion, Defendants need time to respond to Plaintiff's discovery.

In the alternative, Defendants request that this Court immediately issue a temporary stay of all district court proceedings until the Fifth Circuit has time to review this Emergency Motion.

IV. JURISDICTION

This Court has jurisdiction to hear this appeal pursuant to the Fed. R. App. P. 8. Jurisdiction for this stay is also appropriate pursuant to the court-created doctrine that filing a notice of appeal "confers jurisdiction on the Court of Appeals and divests the district court of its control over those aspects of the case involved in the appeal." Griggs v. Provident Consumer Discount Co., 459 U.S. 56, 59 (1982); Coastal Corp. v. Texas Eastern Corp., 869 F.2d 817, 820 (5th Cir. 1989).

This Emergency Motion is ripe because Defendants have applied to the district court for the relief sought and the district court has denied, without comment, the relief applicants requested¹⁴.

V. STANDARD OF REVIEW

The Fifth Circuit has held that in determining whether a stay pending appeal should be granted, a court should consider the following issues:

(1) Whether the movant has made a showing of likelihood of success on the merits;

(2) Whether the movant has made a showing of irreparable injury if the stay is not granted;

(3) Whether the granting of the stay would substantially harm the other parties; and

(4) Whether the granting of the stay would serve the public interest.

First South Savings Association, 820 F.2d 700, 704 (5th Cir. 1987) (citing Ruiz v. Estelle, 666 F.2d 854, 856 (5th Cir. 1982)).

VI. DETAILED RECITATION OF FACTS

Shortly after he began his association with Defendants in [year], Plaintiff entered into a registered representative's agreement (the "Registered Representative's Agreement") with [Defendant’s] predecessor, _______, Inc. The Registered Representative's Agreement¹⁵ required Plaintiff to maintain a current state license to sell securities. Under the terms of the Agreement, Plaintiff agreed "to become familiar with the rules of the National Association of Securities Dealers, Inc., . . . [and] to comply with such rules, regulations, acts or statutes." Exhibit "A" to Emergency Motion, at Exhibit "A," at ¶ 5.

Two days later Plaintiff applied for registration with the NASD by signing a Uniform Application for Securities Industry Registration or Transfer ("U-4 Registration")¹⁶. By executing the U-4 Registration, Plaintiff again agreed to comply with the NASD's rules¹⁷. The U-4 Registration states: "I agree to arbitrate any dispute, claim or controversy that may arise between me and my firm, or a customer, or any...