Griffith v. Ameriprise Financial Services Inc et al
Filing
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ORDER denying 4 Motion for Temporary Restraining Order. Signed by Chief Judge Terry L Wooten on 12/31/2014.(asni, )
UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH CAROLINA
COLUMBIA DIVISION
Jack W. Griffith,
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Plaintiff,
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vs.
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Ameriprise Financial Services, Inc., and
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Ameriprise Financial, Inc.,
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Defendants.
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__________________________________________ )
Case No. 3:14-cv-04295-TLW
ORDER
Plaintiff Jack W. Griffith filed this action regarding a bonus payment dispute on
November 4, 2014. Doc. #1. The same day, he filed a motion seeking a temporary restraining
order (“TRO”) to stay arbitration of the dispute before the American Arbitration Association
(“AAA”) until the Financial Industry Regulatory Authority (“FINRA”) rules on whether to issue
a permanent injunction in the matter. Doc. #4. Defendants Ameriprise Financial Services, Inc.
and Ameriprise Financial, Inc. have filed a response opposing the motion. Doc. #18. Following
briefing on the matter, the Court held a motions hearing on December 1, 2014. Doc. #20. At that
time, the Court took the injunction matter under advisement. Id. The motion for TRO is now ripe
for disposition, and for the reasons noted below, the Court finds that the motion should be
denied.
FACTS
According to the Complaint, Plaintiff was formerly employed by Ameriprise Financial
Services, Inc. (“Ameriprise Services”) as a Branch Office Manager and Financial Advisor from
October 2008 through January 27, 2014. Doc. #1 at 1. Ameriprise Services is a subsidiary of
Ameriprise Financial, Inc., (“Ameriprise Financial”), the party who filed for arbitration with
AAA. See Doc. #1. At the conclusion of his employment with Ameriprise Services, Plaintiff
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received a bonus payout. Id. However, the parent company Ameriprise Financial maintains that
after leaving Ameriprise Services, Plaintiff violated a non-compete provision entitling
Ameriprise Financial to recoup at least a portion of the bonus payout. Id. As a result, Ameriprise
Financial has filed a demand for arbitration with AAA. Id. Ameriprise Financial’s subsidiary and
Plaintiff’s former employer, Ameriprise Services, is not a party to the AAA arbitration. Id. In his
motion for a TRO, Plaintiff argues that Ameriprise Services is the only real party-in-interest to
the bonus dispute. Doc. #4 at 6. Further, he asserts that because both he and Ameriprise Services
are FINRA members1, FINRA – not AAA – is the appropriate arbitration venue. Id. at 5-6. Thus,
Plaintiff asks the Court to stay the AAA arbitration so that he can seek a ruling from FINRA on
the appropriate venue. Id.
LEGAL STANDARD
A temporary restraining order is governed by the same general standards that govern the
issuance of a preliminary injunction. Hoechst Diafoil Co. v. Nan Ya Plastics Corp., 174 F.3d
411, 422 (4th Cir. 1999). As a form of preliminary injunctive relief, a temporary restraining
order is an “extraordinary remedy” that is “never granted as of right.” Winter v. Natural Res.
Council, Inc., 555 U.S. 7, 24 (2008).
A plaintiff seeking injunctive relief must establish each of the following four elements:
(1) the likelihood that the plaintiff will succeed on the merits; (2) the likelihood of irreparable
harm to the plaintiff if the injunction is not granted; (3) that the balance of equities tips in the
plaintiff’s favor; and (4) that the injunction is in the public interest. Winter, 555 U.S. at 19–20;
Real Truth About Obama, Inc. v. Fed. Election Comm’n, 575 F.3d 342, 346–47 (4th Cir. 2009),
vacated on other grounds, 130 S. Ct. 2371 (2010), overruling Blackwelder Furniture Co. of
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Ameriprise Financial is not a FINRA member.
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Statesville v. Seilig Mfg. Co., 550 F.2d 189 (4th Cir. 1977)2. Each of the four elements must be
satisfied before the Court enters preliminary injunctive relief. Real Truth, 575 F.3d at 347.
Moreover, a plaintiff must demonstrate more than the mere “possibility” of irreparable harm
because injunctive relief is an extraordinary remedy that may only be awarded upon a clear
showing that plaintiff is entitled to such relief. See id. at 346 (citing Winter, 555 U.S. at 19–22).
DISCUSSION
1. Success on the Merits
In his memorandum in support of a TRO, Plaintiff seeks “to enjoin [the AAA]
proceeding filed by Defendant Ameriprise Financial, Inc…. until [FINRA] determines whether a
permanent injunction is appropriate….” Doc. #4 at 1. Thus, to satisfy the first element of the
TRO standard, Plaintiff must show that he is likely to succeed in demonstrating that AAA
arbitration is inappropriate and that FINRA has the jurisdiction to rule on a permanent injunction
in the matter. For the reasons stated below, the Court finds that the Plaintiff has not satisfied this
element.
As an initial matter, all parties agree that disputes regarding the bonus payout are
governed by the LTIA, which was signed by the Plaintiff. See Docs. #1, 18. The LTIA states that
it is “issued to employee financial advisors pursuant to the Ameriprise Financial 2005 Incentive
Compensation Plan and the 2008 Master Employment Inducement Equity Award Agreement…”
(“2005 Plan” and “2008 Plan,” respectively). Doc. #18-4 at ¶ 1 (emphasis added). The 2005
Plan, in turn, explicitly provides for AAA arbitration: “[a]ny dispute, claim or controversy that
may arise between a Participant and the Company or any other person… under the Plan is
subject to arbitration… pursuant to the Commercial Dispute Resolution Procedures of the
2
In light of the Supreme Court’s decision to vacate Real Truth. on other grounds, the Fourth Circuit Court of
Appeals expressly reissued the portions of that opinion that articulated the revised preliminary injunction standard.
See Real Truth About Obama, Inc. v. Fed. Election Comm’n, 607 F.3d 355, 355 (4th Cir. 2010).
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American Arbitration Association….” See Doc. 18-9 at ¶ 15.9. Thus, read together, the terms of
the LTIA and 2005 Plan provide for the resolution of disputes in AAA arbitration. While the
Plaintiff disputes whether the term “pursuant to” acts to incorporate the 2005 Plan, Plaintiff has
not provided – nor has the Court seen – persuasive or conclusive authority on the matter. The
American Century Dictionary defines “pursuant” as follows: “in accordance with.” It is
reasonable to conclude that “pursuant to” incorporates the 2005 plan. As a result, the 2005 Plan
weighs against the Plaintiff’s likelihood of success on the merits.
Second, even if, as the Plaintiff argues, the 2005 Plan is not incorporated into the LTIA,
the LTIA on its own permits the “Company” to select the jurisdiction for disputes:
6. Choice of Forum. Any arbitration, litigation or other proceeding commenced by
you or the Company for the purpose, in whole or in part, of enforcing the [LTIA]
or the respective rights or obligations of you or the Company hereunder shall be
commenced in accordance with the applicable arbitration policy, in the Federal or
State courts of New York or in such other jurisdiction as the Company may
reasonably select.”
Doc. #18-4 at ¶ 6 (emphasis added). The 2008 Plan signed by the Plaintiff and referenced in the
LTIA contains an identical provision. Doc. #21-3 at ¶ 6. These provisions, Defendants argue,
permit the Company – defined as Ameriprise Financial and its subsidiaries and affiliates (Docs.
#18-4 at ¶ 1, 21-3 at ¶ 1) – to select the forum, whether it be in arbitration or court. These
provisions also weigh against the Plaintiff’s likelihood of success on the merits.
Finally, regardless of whether the LTIA allows the Defendants to select AAA arbitration
to resolve disputes arising out of the LTIA, Plaintiff has not demonstrated that the Court has
legal authority to compel Defendants to arbitrate before FINRA. Ameriprise Financial – which is
not a FINRA member – filed the demand for arbitration with AAA; Ameriprise Services – which
is a FINRA member – is not named as a party to that proceeding. See Doc. #18-2. Regarding
Ameriprise Financial, Plaintiff has provided no persuasive authority indicating that the Court can
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and should compel a non-FINRA member to arbitrate with FINRA. Regarding the Defendant
Ameriprise Services, Plaintiff has provided no authority indicating that the Court can and should
compel Ameriprise Services – who is not a party to the dispute – to litigate the dispute.
Plaintiff also attempts to separate Ameriprise Financial from the dispute, arguing that it is
not a party-in-interest. However, Ameriprise Financial has provided evidence to the contrary.
First, Ameriprise Financial is explicitly named as a party to the LTIA. Doc. #18-4 at 1. Second,
Ameriprise Financial has indicated that it, and not Ameriprise Services, held the stock that was
issued as the bonus award. Doc. #18. Plaintiff provides no persuasive authority indicating that
Ameriprise Financial, as a party-in-interest named in the LTIA contract, cannot seek to enforce
the LTIA on its own.3 Thus, the Plaintiff has not indicated that he is likely to succeed on the
merits in compelling the Defendants to await a decision by FINRA on a permanent injunction.
In summary, Plaintiff has failed to show a likelihood of success on the merits. The terms
of both the LTIA and the 2005 Plan cast significant question on whether the Plaintiff can avoid
AAA arbitration. Furthermore, the Plaintiff has not provided a basis for the Court to compel a
non-FINRA member to arbitrate before FINRA, nor has he provided a basis to compel
Ameriprise Services, which is not a party to the AAA proceedings, to pursue a dispute in which
it does not seek to be involved. As a result, for the reasons stated, the Plaintiff has not shown a
likelihood of success on the merits.
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Plaintiff cites FINRA Letter of Acceptance, Waiver, and Consent, No. 2009020188101 (Jan. 25, 2012) in support
of his argument that by filing for AAA arbitration, Ameriprise Financial is inappropriately attempting to avoid
FINRA arbitration. Doc. #4 at 13. However, the matter discussed in this letter – which is not binding precedent on
this Court – is easily distinguished from the matter at hand. There, Merrill Lynch – a FINRA member – created a
separate non-FINRA entity to avoid arbitration entirely. Here, neither Ameriprise Financial nor Ameriprise services
are seeking to avoid arbitration, nor is there any evidence that either corporation was formed to avoid otherwiseapplicable contractual terms.
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2. Irreparable Harm
Plaintiff next argues that absent a TRO, he will suffer irreparable harm because (1) AAA
arbitration violates Plaintiff’s statutory and contractual rights; (2) a non-FINRA forum works to
the benefit of the Defendants; and (3) FINRA has a special understanding of industry standards,
regulations, and public policy, which understanding AAA lacks. Doc. #4 at 11, 12. Plaintiff also
asserts that he has a legitimate business interest in seeking FINRA arbitration based on FINRA’s
status as “the regulator of the investment advisory industry.” Doc. #1 at 10. Plaintiff asserts that
as regulator of the industry, FINRA needs to “retain jurisdiction of all disputes related to this
industry in order to maintain consistent ruling on issues related to the investment industry.” Id.
The Court finds that Plaintiff has not demonstrated a likelihood of irreparable harm as
required to meet the TRO standard. See Real Truth, 575 F.3d at 346. First, regarding the alleged
loss of statutory and contractual rights, the Court finds that, as discussed above, the applicable
terms allow Ameriprise Financial to pursue AAA arbitration. Second, regarding whether AAA
arbitration benefits Ameriprise Financial over the Plaintiff, Plaintiff only asserts conclusory
statements that such advantage exists. Third, regarding AAA’s alleged lack of a special
understanding of the industry, Plaintiff has not demonstrated this alleged shortcoming is more
likely to harm him over the Defendants; an alleged absence of industry experience is not a basis
to presume unfairness. Finally, regarding FINRA’s alleged status as “the regulator of the
investment advisory industry,” the Court finds that FINRA’s interests play no part in its
consideration of the irreparable harm element. It is the Plaintiff’s interests – not FINRA’s – that
are at issue in this case. Thus, the Court finds that Plaintiff has not met the irreparable harm
element.
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3. Balance of Equities
Plaintiff must further indicate that the balance of equities tips in his favor. In a position
that overlaps with his argument regarding irreparable harm, the Plaintiff argues that he would be
harmed if FINRA, with its industry experience, does not preside over arbitration of this dispute.
Doc. #4 at 12. Plaintiff also asserts that the Defendants cannot show that they would be harmed
by FINRA arbitration over AAA arbitration. Id. Thus, Plaintiff argues that the balance of equities
weighs in his favor.
The Court finds that the Plaintiff has not demonstrated that the balance of equities weighs
in his favor. As already discussed, the balance of equities with regards to FINRA’s alleged
industry experience is not a strong basis favoring the Plaintiff; thus, it is not clear that this
argument weighs in the Plaintiff’s favor. Furthermore, the Plaintiff’s allegation that the
Defendants would not be harmed by FINRA arbitration is not convincing. Rather, as discussed
above, a TRO may deprive the Defendants of the arbitration language in their previously
referenced contract, and it would further delay the arbitration proceedings already in place with
AAA. As a result, the Court finds that the Plaintiff has not demonstrated that balance of equities
weighs in his favor.
4. Public Interest
Finally, Plaintiff argues that a TRO is in the public’s interest. Specifically, Plaintiff
argues that a TRO in this matter benefits the public because “FINRA seeks to further the
investing public’s interests in privacy and freedom of choice with respect to the movement of
their investment representatives between firms.” Doc. #4 at 12. Plaintiff also asserts that the
public has an interest in preserving the uniform application of investment industry standards,
regulations, and policy, because stability lends confidence to the investment industry as a whole.
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The Court finds that the Plaintiff has not demonstrated that a TRO is in the public
interest. While certain public benefits might exist in granting a TRO, Plaintiff has not shown that
those interests outweigh the public’s interests that might be furthered in denial of the TRO. Any
public interest in prompt and appropriate resolution of this dispute would be frustrated through a
TRO because arbitration has already begun with AAA, and a TRO would delay the process.
Furthermore, as discussed above, the contractual terms of the LTIA permit AAA arbitration in
this case. Thus, the public interest in enforcement of valid contracts could be harmed if a TRO is
granted. As a result, the Court concludes that the Plaintiff has not demonstrated that a TRO is in
the public interest.
CONCLUSION
Therefore, after careful consideration, this Court finds that the Plaintiff has failed to
establish any of the elements required for the issuance of a temporary restraining order. As a
result, the Plaintiff’s Motion for Temporary Restraining Order, Doc. #4, is DENIED.
IT IS SO ORDERED.
s/Terry L. Wooten
Terry L. Wooten
Chief United States District Judge
December 31, 2014
Columbia, South Carolina
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