Ayres court argued that § 10(b) was such an important part of the public-law regulation of the securities business that agreements to arbitrate claims under it should not be upheld.
Last year, the Supreme Court again suggested that § 10(b) claims are not governed by the Wilko rule, Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 105 S. Ct. 1238, 84 L. Ed. 2d 158 (1985). In a concurring opinion, Justice White asserted that lower court cases rejecting the arbitrability of § 10(b) claims "must be viewed with some doubt," 105 S. Ct. at 1244.
In Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 105 S. Ct. 3346, 87 L. Ed. 2d 444 (1985), the Court rejected the argument that the importance of a statutory scheme, as determined by a court, could outweigh the stated policy of the Federal Arbitration Act to enforce contractual agreements to arbitrate. In so holding, the Court approvingly quoted Justice White's concurrence in Byrd.
The dictum in Ayres thus does not survive the holding of Mitsubishi. Congress did not explicitly forbid arbitration of § 10(b) claims; therefore, § 10(b) claims may be remitted to arbitration in accordance with the intent of the parties. Here, the parties agreed to arbitrate all disputes arising out of defendants' handling of transactions. Plaintiffs' § 10(b) claims, with the exception of those dealing with fraud in the inducement, will be remitted to arbitration.
IV. The Civil RICO Claim
The leading opinion on this issue, S.A. Mineracao Da Trindade-Samitri v. Utah International, Inc., 576 F. Supp. 566, 574-76 (S.D.N.Y.1983), aff'd 745 F.2d 190 (2d Cir.1984), held that the RICO statute implicated a public interest "at least as great as the policy in favor of arbitration." Therefore, it ruled, civil RICO claims would not be remitted to arbitration.
After Mitsubishi, the logic of this opinion is no longer valid. Courts which have considered the issue in light of Mitsubishi have determined that civil RICO claims are in fact arbitrable, Jacobson v. Merrill Lynch, Pierce, Fenner and Smith, 1985-86 Fed.Sec.L.Rep. (CCH) P 92,276 (W.D.Pa.1985) [Available on WESTLAW, DCTU database]; Finn v. Davis, 610 F. Supp. 1079, 1087 (S.D.Fla.1985). I believe that these courts are correct. Accordingly, that portion of the RICO claims which are not predicated on acts occurring before the contracts were signed will be remitted to arbitration.
In Dean Whitter v. Byrd, supra, the Supreme Court pointed out that arbitration awards do not have the status of res judicata in federal court proceedings. However, they do have significant evidentiary effect. For this reason, I will stay that portion of this case that remains in this court until the arbitration proceeding is completed. Blumenthal v. Dean Whitter Reynolds, Inc., No. 84-4799 (D.N.J. July 3, 1983).
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