George Franklin Wells v. Versaille Capital Advisors, LLC, FundTeq, and Michigan Department of Licensing and Regulatory Affairs

Summary

The United States District Court for the Eastern District of Michigan granted the Michigan Department of Licensing and Regulatory Affairs’ motion to dismiss George Franklin Wells’s petition to confirm a JAMS arbitration award. The court held that 9 U.S.C. § 9 does not independently confer federal subject-matter jurisdiction, and that neither federal-question nor diversity jurisdiction was established. The court dismissed the case without reaching LARA’s public-policy arguments concerning expungement of registration records.

Holdings

1. Section 9 of the Federal Arbitration Act does not independently confer federal subject matter jurisdiction. A petition to confirm an arbitration award under the FAA requires diversity jurisdiction or another independent basis for federal jurisdiction.
2. FINRA Rule 2080, SEC approval of FINRA rules, and the federal securities regulatory framework do not supply federal-question jurisdiction for a petition seeking confirmation of a private JAMS arbitration award and expungement of CRD information when the petitioner does not allege a violation of federal securities law, FINRA's statutory authority, or a FINRA duty.
3. Diversity jurisdiction does not exist because the pleaded parties do not establish complete diversity and the requested relief does not satisfy an amount-in-controversy requirement.

Questions Presented

1. Whether 9 U.S.C. § 9 of the Federal Arbitration Act independently confers federal subject matter jurisdiction over a petition to confirm an arbitration award.
2. Whether FINRA Rule 2080, SEC approval of FINRA rules, or the federal securities regulatory framework supplies an independent basis for federal-question jurisdiction over a petition seeking expungement of CRD information.
3. Whether diversity jurisdiction exists where the petitioner is a Michigan citizen, the business respondents are located in Michigan, LARA is a state agency, and the requested relief concerns expungement of records.

Disposition

dismissed