Bellantuono v. ICAP Securities USA, LLC, No. 12-4253 (3rd Cir. Jan. 30, 2014) [click for opinion]

On September 12, 2008, Joseph Bellantuono was fired from ICAP Securities after 22 years working at the firm.  On February 2, 2009, Bellantuono commenced a FINRA arbitration proceeding against ICAP, claiming wrongfully withheld compensation, breach of contract by not extending his employment through 2010, wrongful employment termination and defamation.  After extensive hearings over the course of 6 months, the FINRA Panel awarded Bellantuono $643,500 plus interest.

Bellantuono petitioned the United States District Court for the District of New Jersey to vacate the award under the Federal Arbitration Act (“FAA”), claiming the arbitration panel manifestly disregarded the law or refused to consider relevant evidence.  The district court affirmed the award and Bellantuono appealed.

In an unpublished opinion, the Third Circuit affirmed.  The Third Circuit analyzed Bellantuono’s two bases to vacate the arbitral award under the FAA.  Prior to 2008, the Third Circuit (and many other circuits) had held that an arbitration panel’s manifest disregard of the law could be grounds for vacating an award, even though manifest disregard of the law is not one of the enumerated bases for challenging an arbitral award under the FAA. In 2008, the Supreme Court held in Hall Street Assocs. LLC v. Mattel, Inc.,“the grounds for vacatur . . . provided by § . . . 10 . . . of the FAA are exclusive.”  Afterwards, a Circuit split emerged regarding whether manifest disregard of the law remained a valid grounds for vacatur.  The Third Circuit noted that it had not yet ruled on whether manifest disregard survived Hall Street but said that, since it found in this case that the district court was correct in concluding that the FINRA Panel did not act in manifest disregard of the law, it need not decide the issue.

Bellantuono’s second grounds for vacatur—that the FINRA panel refused to consider relevant evidence—was similarly dismissed by the Third Circuit, finding that the FINRA Panel’s rulings in this case did not deprive Bellantuono of a fair hearing.