Press Release

November 8, 2012

Does one year really mean one year? Fourth Circuit to decide how long Ameriprise has to confirm FINRA arbitration award

Ruling could spark a battle in the Supreme Court, affect financial advisors nationwide

Richmond, Virginia – The United States Court of Appeals for the Fourth Circuit is slated to hear argument in a case in early December that could have significant ramifications for financial advisors nationwide. The dispute in the case, Ameriprise Financial Services, Inc. v. M. Smith, revolves around a seemingly simple question of statutory interpretation.

The Federal Arbitration Act (“FAA”) provides that parties that arbitrate disputes (as in the standard FINRA arbitration required by most financial advisor’s employment contracts) have the option of filing the arbitration award with a court of law, a process called “confirming the award.” Confirming the award allows the winner in arbitration to use legal measures to collect the award, such as wage and bank account garnishments and real property liens.

The Fourth Circuit will decide just how long a winner in arbitration has to file with a court of law to confirm the award. In relevant part,

9 U.S.C. § 9, emphasis added. In its brief, Ameriprise has argued that the highlighted language is not a firm, one-year deadline despite the plain reading of the statute. Mr. Smith, on the other hand, has argued that Congress clearly intended to form a one-year deadline by which Ameriprise and other parties prevailing in arbitration must file with a court of law to confirm an award.

Further complicating the case is the fact that U.S. appellate courts have come down on opposite sides of this issue. The Second Circuit and Fifth Circuit have found the one-year deadline to be a firm, mandatory statute-of-limitations, barring any petitions filed after a year has elapsed. The Fourth and Eighth Circuits have found that, in essence, the one-year deadline is not a real deadline and petitions can be filed at any time.

“This is a basic question of statutory interpretation that deserves a uniform and consistent answer,” says attorney Matthew D. Skipper of Trunnell Law, LLC, who represents Mr. Smith. “The entire purpose of a federal law like the Federal Arbitration Act is to provide a uniform, nationwide rule applicable to everyone. Financial advisors in Maryland should not be treated differently than those in New York under a federal law.” The current split between the appellate circuits has many observers speculating on the likelihood that regardless of who prevails at the Fourth Circuit, the U.S. Supreme Court will ultimately decide the issue. The case, No. 12-1193, is set for oral argument on December 4, 2012.

Photopaint Techs., LLC v. Smartlens Corp., 335 F.3d 152, 158 (2nd Circ. 2003)
Bernstein Seawell & Kove v. Bosarge, 813 F.2d 726, 731 (5th Cir. 1987)

Sverdrup Corp. v. WHC Constructors, Inc., 989 F.2d 148, 156 (4th Cir. 1993)
Val-U Constr. Co. v. Rosebud Sioux Tribe, 146 F.3d 573 (8th Cir. 1998)
Pelanek, Laura and Suskin, Howard. Deadline for Confirming an Arbitration Award: The Sharpening Split Among the Courts. Bloomberg Finance L.P. (2008)


July 9, 2012

Lawsuit alleges Metro subcontractor failed to pay wages earned, pocketed money allegedly withheld as union dues

Six drivers sue Challenger Transportation in federal court seeking class action-like status

Capitol Heights, Maryland – Six former employees are suing Challenger Transportation, a company that administers Metro’s Metro Access program, alleging that the company that transports sick and disabled persons violated federal and state wage payment laws. The lawsuit claims that Challenger drivers were not paid for all time actually worked, including time spent waiting on their employer’s premises, time spent driving to a driver’s first pickup, and time spent undergoing mandatory training. Even more disconcerting, the lawsuit alleges that Challenger withheld money from drivers’ paychecks that it claimed was being paid as union dues, even though the money was never actually paid to any union.

“When I needed the union, I called them and they said they had no record of me even though Challenger had been withholding union dues from my paycheck for seven months,” says former Challenger driver Devin Hunter. “It was like I didn’t exist, even though I thought I had been paying dues for months.”

“The more we looked into the claim, the more we found,” says attorney Matthew Skipper of Trunnell Law, LLC. “What started as a question about union dues uncovered what seems to be a pattern of continued and intentional violations of the state and federal wage laws.” The laws referenced include the federal Fair Labor Standards Act, or the FLSA, which provides that successful plaintiffs can receive liquidated damages and attorneys’ fees along with past due wages.

Both Matthew Skipper and attorney Wes Henderson of Henderson Law, LLC have been retained by the Plaintiffs to advance their claim in federal court. “The claim is referred to as a collective action,” says attorney Henderson, “and is being filed on behalf of the six named Plaintiffs and all other Challenger employees who have suffered the same types of infringements upon their right to fair payment for wages actually earned.” This type of claim allows other employees to join the claim even after the lawsuit is filed.

“The labor and wage laws were put in place to protect employees from the types of abuse that we believe Challenger has systematically engaged in for quite some time,” says Matthew Skipper. The lawsuit, filed in the U.S. District Court for the District of Maryland is Devin Hunter, et al. v. Challenger Transportation, Inc.


June 6, 2012

BGE Fails to Fix Dangerous Condition in Home, Electrical Fire during Birthday Party Results

Lawsuit filed as family fears for safety

Anne Arundel County, Md. – Catricia Lankford of Lothian, Maryland and Linda Reynolds of Centreville, Maryland, have sued energy giant Baltimore Gas & Electric Company, a subsidiary of Exelon Corporation, for failing to fix life threatening electrical surging that has been occurring in a Lothian home for more than two years.

Generally, the lawsuit alleges that beginning in January 2010, the home owned by Ms. Reynolds and rented by Ms. Lankford began experiencing electrical surging, a dangerous condition caused by sudden rises in voltage and current throughout household electrical wiring. In September 2010, the Complaint alleges that the unsafe condition caused an electrical fire during a birthday party where children were present, destroying many of the appliances in the home.

Even after the electrical fire, Plaintiffs allege that BGE has not fixed the surging even though a BGE technician admitted that the surging was still taking place as recently as December 2011. The Complaint states that the home has been without power for extended periods of time, and that Ms. Lankford has called BGE numerous times, pleading with them to fix the surging and protect her and her daughter, Charity.

“All BGE had to do was fix the problem, and we would not be here today,” says Lankford and Reynolds' attorney Matthew Skipper of Trunnell Law, LLC. “For nearly two and a half years, BGE simply did the minimum, failing to fix the dangerous condition. In the meantime, they were putting Ms. Lankford and her daughter Charity's lives in danger. Catricia called them time and again, spoke to supervisors, and pleaded with them to fix the house, but her pleas fell on deaf ears.”

Attorney Skipper went on to explain that BGE enjoys special protection under Maryland law, making any surging claim against BGE challenging. “In Maryland, if a small business owner is negligent and someone is hurt as a result, the business owner can be held liable for acts of ordinary negligence. But if BGE is negligent in its delivery of electricity to someone's home and people are hurt or property is damaged, the home owner has to prove not just ordinary negligence, but gross negligence, a higher legal standard that helps insulates BGE from liability.”

Plaintiffs are seeking compensation to replace the wiring in the home, the damaged or destroyed appliances (valued over $30,000) and other related damages. The case, number 02-C-169629, was filed in the Circuit Court for Anne Arundel County, Maryland on May 7, 2012.

Trunnell Law in the news - WBAL's coverage of Lankford, et al. v. BGE




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