John J. Hurry and Alpine Securities Corporation v. Financial Industry Regulatory Authority, Inc.

Summary

The United States District Court for the District of Utah grants FINRA's motion to dismiss claims brought by John J. Hurry and Alpine Securities Corporation. The court holds that the Exchange Act's statutory review scheme, including FINRA Rule 1017 and review by the SEC and an appropriate court of appeals, provides the exclusive avenue for challenging FINRA's objection to Hurry's appointment as Alpine's FINOP. The court dismisses for lack of subject matter jurisdiction and does not reach FINRA's alternative Rule 12(b)(6) argument.

Holdings

1. The Exchange Act's statutory review scheme precludes the district court from exercising subject matter jurisdiction over plaintiffs' claims challenging FINRA's objection to Hurry's appointment as Alpine's FINOP.
2. Plaintiffs' due-process, Utah constitutional, and implied-covenant claims were not wholly collateral because each sought to challenge or reverse FINRA's specific personnel-membership decision and sought relief available through the Rule 1017 process.

Questions Presented

1. Whether the Exchange Act's statutory review scheme, including FINRA Rule 1017 review followed by review by the National Adjudicatory Council, the SEC, and ultimately a federal court of appeals, deprived the district court of subject matter jurisdiction over plaintiffs' challenges to FINRA's objection to Hurry's appointment.
2. Whether plaintiffs' constitutional and contract claims were sufficiently collateral to the Exchange Act review scheme or outside agency expertise to permit district-court jurisdiction.
3. Whether the complaint failed to state a claim under Rule 12(b)(6), an issue the court did not decide after dismissing for lack of jurisdiction.

Disposition

dismissed