The Great and Powerful FAA: Why Schwab’s Class Action Waiver Should Have Been Enforced Over FINRA’s Rules

Article by: Clint Hale

42 PEPP. L. REV. 109 (2014)

“Does the FAA limit the ability of federal regulators acting pursuant to congressional authority to impose conditions and limitations on the use of arbitration provisions in order to ensure fairness?” This Comment answers that question in the affirmative and argues that recent Supreme Court precedent, circuit court decisions in contexts similar to FINRA’s oversight of the securities industry, and investors’ true interests all instruct that Schwab’s class action waiver should have been enforced over FINRA’s contrary command. Part II discusses FINRA’s role in the securities industry, the FAA and recent Supreme Court precedent interpreting the FAA, and the FINRA Rules that Schwab’s class action and joinder waiver violated. Part III analyzes why the conflict between the FAA and FINRA’s rules should have been resolved in favor of the FAA and supports this argument with discussion of federal circuit court decisions in contexts analogous to the securities industry. Part IV addresses the fears voiced by investor protection advocates and articulates the policy reasons in support of enforcing the class action waiver, arguing that its enforcement would have actually benefited investors. Part V concludes.

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The Universal Remedy for Attorney Abandonment: Why Holland v. Florida and Maples v. Thomas Give All Courts the Power to Vacate Civil Judgments Against Abandoned Clients by Way of Rule 60(b)(6)

Article by: Stephen White

42 PEPP. L. REV. 155 (2014)

The Supreme Court recently decided two cases that give hope to clients afflicted with incompetent attorneys. In Holland v. Florida and Maples v. Thomas, cases involving two different habeas corpus petitioners, the Court outlined a standard known as “attorney abandonment,” which effectively states that clients are not bound by the acts or omissions of attorneys who have abandoned them. Although created in a criminal procedure context, attorney abandonment must logically extend to the civil realm, a consequence that means all federal courts in civil cases must necessarily have the power to relieve abandoned clients from the conduct— or lack thereof—of their absent attorneys. This Article argues that Federal Rule of Civil Procedure 60(b)(6) (Rule 60(b)(6)) is the only remedy that courts can always rely on to enforce this power. The universal availability of this statutory rule, which states that courts can vacate judgments against parties “for any . . . reason that justifies relief,” ensures that courts can safeguard clients from the conduct of attorneys who have abandoned them.

Part II of this Comment provides an overview of the distinct models the Supreme Court has utilized to evaluate attorney misconduct and the circumstances that bind clients to that misconduct. Part II also describes in detail the uses of Rule 60(b)(6) and the circuit split prior to Holland and Maples concerning the interaction between Rule 60(b)(6) and attorney misconduct. Part III thoroughly analyzes Holland, Maples, and the attorney abandonment standard these two cases jointly created. Part IV contends that the Supreme Court likely intended for this attorney abandonment standard to apply in the civil context. Part V consequently argues that whenever a court finds that a client was abandoned in a civil suit, Holland and Maples mandate that the court must necessarily have the power to vacate any judgment against that client by utilizing Rule 60(b)(6). Part VI returns to the circuit split described in Part II, shows how the circuit split is cured when courts always have the ability to vacate judgments against abandoned clients by utilizing Rule 60(b)(6), and outlines how each of the circuits must alter their jurisprudence to reflect Holland and Maples. Part VII acknowledges some lingering questions that Congress and future courts must answer because of Holland and Maples. Part VIII concludes.

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