[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
December 16, 2004
No. 03-15745
THOMAS K. KAHN
________________________ CLERK
D. C. Docket No. 03-80395-CV-DMM
STERLING FINANCIAL INVESTMENT GROUP, INC.,
Plaintiff-Appellee,
versus
BERNARD D. HAMMER,
Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Southern District of Florida
_________________________
(December 16, 2004)
Before BARKETT, HULL and COX, Circuit Judges.
COX, Circuit Judge:
I. INTRODUCTION
Bernard D. Hammer appeals an order entered by the district court in the
Southern District of Florida granting Sterling Financial Investment Group Inc.’s
motion to stay arbitration in Houston, Texas and compel arbitration in Boca Raton,
Florida. We conclude that the district court properly exercised jurisdiction in this
case pursuant to section 4 of the Federal Arbitration Act, 9 U.S.C. § 4 (2004).
Accordingly, we affirm.
II. BACKGROUND & PROCEDURAL HISTORY
Bernard Hammer, a stockbroker at Morgan Stanley/Dean Witter in Beaumont,
Texas, was approached by the Sterling Financial Investment Group, Inc. about
possible employment at Sterling’s headquarters in Boca Raton, Florida. After several
months of negotiations, Hammer accepted Sterling’s offer to work as their nationwide
supervisor for recruitment of brokers. He resigned his position at Morgan
Stanley/Dean Witter in Texas, relocated to Florida, and began working for Sterling
in September of 2001.
Hammer entered into two agreements with Sterling in October of 2001, an
Employment Agreement and a Representative Agreement. The Employment
Agreement states that Hammer is an “at will” employee of Sterling. And, the
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Employment Agreement contains an arbitration agreement with a forum selection
clause, which provides that:
The parties agree that any claim or controversy concerning the terms,
conditions or application of this Agreement shall be subject to
arbitration pursuant to the National Association of Securities Dealers,
Inc. in Boca Raton, Florida.
(R.-1 at Ex. A, ¶ 11.) The Employment Agreement further provides that it “shall be
construed, and the validity, performance and enhancement thereof, shall be governed
by the laws of the State of Florida.” (Id. at ¶ 5.) Similarly, the Representative
Agreement contains an arbitration agreement with a forum selection clause, which
provides that:
Any disputes between the parties hereto shall be submitted to binding
arbitration before the National Association of Securities Dealers with
venue being in the State of Florida.
(R.-1 at Ex. B, ¶ 14.) The Representative Agreement also states that it “shall be
construed in accordance with and shall be governed by the laws of the State of
Florida.” (Id. at ¶ 13.)
Not long after beginning his new job, Hammer was fired. Sterling claims that
Hammer’s job performance was unsatisfactory. Hammer claims that he was not
provided with sufficient support staff, office or telephone arrangements, and that
there was confusion at Sterling about his position and his responsibilities. Hammer
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returned to Texas and, in February 2003, commenced arbitration proceedings against
the company. Hammer filed a Statement of Claim against Sterling with the National
Association of Securities Dealers (NASD), asserting claims for fraudulent
inducement and quasi contract, breach of contract and promissory estoppel, and
“other claims under statutory and common law.” (R.-1 at Ex. C.) Hammer asked that
the arbitration be assigned to a panel in Houston, Texas. Sterling objected to the
Texas venue and asked that the NASD transfer venue to Florida. The NASD denied
Sterling’s request, and referred the motion to an arbitration panel in Houston, Texas.
Sterling filed a motion in the United States District Court for the Southern
District of Florida, seeking to stay the Texas arbitration and compel arbitration in
Florida. The district court granted Sterling’s motion, and Hammer appeals.
III. ISSUE ON APPEAL AND STANDARD OF REVIEW
We must determine whether the district court properly enjoined arbitration in
Houston, Texas and compelled arbitration in Boca Raton, Florida. We review the
district court’s decision de novo. Employers Ins. of Wausau v. Bright Metal
Specialties, Inc., 251 F.3d 1316, 1321 (11th Cir. 2001).
IV. CONTENTIONS OF THE PARTIES
Hammer contends that the district court improperly enjoined the arbitration and
improperly reversed the venue determination made in arbitration. According to
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Hammer, since both parties agree that arbitration is appropriate, all decisions --
including a decision about venue -- should be made by the arbitrators. Hammer’s
position is bolstered by rule 10315 of the NASD’s Code of Arbitration Procedure,
which states that “[t]he Director shall determine the time and place of the first
meeting of the arbitration panel and the parties.” NASD Code of Arbitration
Procedure § 10315 (2003). The rule further provides that “[t]he arbitrators shall
determine the time and place for all subsequent meetings. . . .” Id. Hammer asserts
that it is inappropriate for federal courts to micro-manage the vast array of issues
which arise in arbitration proceedings.
Sterling contends that the district court had the authority under the Federal
Arbitration Act to enforce the terms of the Employment and Representative
agreements. According to Sterling, the mere fact that both parties consent to
arbitration does not divest a federal court of jurisdiction to enforce forum selection
and choice of law clauses in the parties’ agreements.
V. DISCUSSION
We begin our discussion with section 4 of the Federal Arbitration Act, which
provides that:
A party aggrieved by the alleged failure, neglect, or refusal of another
to arbitrate under a written agreement for arbitration may petition any
United States district court . . . for an order directing that such
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arbitration proceed in the manner provided for in such agreement. .
. . The court shall hear the parties, and upon being satisfied that the
making of the agreement for arbitration or the failure to comply
therewith is not in issue, the court shall make an order directing the
parties to proceed to arbitration in accordance with the terms of the
agreement. The hearing and proceedings, under such agreement, shall
be within the district in which the petition for an order directing such
arbitration is filed.
9 U.S.C. § 4 (emphasis added). Despite Hammer’s assertion that a federal court may
only review an arbitration proceeding after it has concluded, the plain language of the
statute indicates otherwise. We therefore hold that a federal district court, pursuant
to 9 U.S.C. § 4, has jurisdiction to enforce a forum selection clause in a valid
arbitration agreement that has been disregarded by the arbitrators.
The Second Circuit reached the same conclusion in Bear, Stearns & Co. v.
Bennett, 938 F.2d 31 (2d Cir. 1991). In Bennett, a Florida resident filed a demand to
have his dispute with Bear Stearns arbitrated in Naples, Florida. Bear Stearns, relying
upon the parties’ Customer Agreement, filed a petition in the Southern District of
New York to compel arbitration in New York City. The Second Circuit rejected
Bennett’s argument that the “situs of suit” should be determined by the arbitrators
rather than by the district court. Id. at 32. The court found that the parties had agreed
on New York as the venue for arbitration, and “[w]here there is a valid agreement for
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arbitration, Congress has directed the district courts to order that arbitration proceed
‘in accordance with the terms of the agreement.’” Id. (citing 9 U.S.C. § 4).
Hammer, however, asserts that there was no valid agreement for arbitration in
his case as he was fraudulently induced to work at Sterling. Hammer’s fraudulent
inducement claim is based on alleged misrepresentations made while Hammer was
still in Texas, prior to his move to Florida. Thus, according to Hammer, we should
apply the principle from Texas law that one cannot assert a venue clause from a
contract in a case involving improper inducement to enter into that contract. Busse
v. Pac, Cattle Feeding Fund, 896 S.W. 2d 807, 813 (Tex. App. 1995) (“Where the
wrongs arise from misrepresentations inducing a party to execute the contract and not
from breach of the contract, remedies and limitations specified by the contract do not
apply.”).
While Hammer’s Statement of Claim does contain a count for fraudulent
inducement, Hammer never argued in the district court that his claim for fraudulent
inducement rendered the forum selection clauses or the choice of law clauses in the
agreements invalid. The law in our circuit is clear that “arguments not presented in
the district court will not be considered for the first time on appeal.” Mills v.
Singletary, 63 F.3d 999, 1008, n. 11 (11th Cir. 1995) (citing Lancaster v. Newsome,
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880 F.2d 362, 371 (11th Cir. 1989)). We therefore decline to consider Hammer’s new
argument.
VI. CONCLUSION
The district court properly exercised its jurisdiction pursuant to section 4 of the
Federal Arbitration Act in staying arbitration in Houston, Texas and compelling
arbitration in Boca Raton, Florida. The order of the district court is, therefore,
affirmed.
AFFIRMED.
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