Milani

MEMORANDUM AND ORDER DENYING MOTION TO COMPEL ARBITRATION

This matter is before the court on defendant’s motion to compel arbitration pursuant to the United States Arbitration Act, 9 U.S.C. § 4 (1970). Jurisdiction is found in 28 U.S.C. § 1337 (1970) and under the doctrine of pendent jurisdiction.

Defendant ContiCommodity Services, Inc., is a commodities brokerage firm. Defendant Harold Maine is one of its account executives. Plaintiff, formerly a customer of defendants, alleges violations of sections 4b and 4o of the Commodity Exchange Act (“CEA”), as amended by the Commodity Futures Trading Commission Act of 1974, 7 U.S.C. §§ 6b & 6o (Supp. V 1975), as well as common law fraud, negligence, rescission, and breach of fiduciary duty.

Defendants’ motion is based upon paragraph 8 of a Customer’s Agreement signed by plaintiff on June 27,1975, an agreement to arbitrate future disputes:

Since the parties have conceded that the Customer’s Agreement evidences a transaction in interstate commerce, it would ordinarily be subject to the terms of the United States Arbitration Act. However, plaintiff urges two reasons for not enforcing the arbitration provisions: (1) It is contrary to §…