Robert Muh v. Newburger, Loeb & Co., Inc., a Delaware Corporation, and Does I Through Xx

540 F.2d 970 Robert MUH, Plaintiff-Appellant, v. NEWBURGER, LOEB & CO., INC., a Delaware Corporation, and Does I through XX, Defendants-Appellees. No. 74-2783. United States Court of Appeals, Ninth Circuit. July 8, 1976. Michael R. Mitchell (argued), Los Angeles, Cal., for plaintiff-appellant. Donald H. Shaw (argued), of Kantor, Shaw & Davidoff, New York City, for defendants-appellees. OPINION Before ELY and WALLACE, Circuit Judges, and ORRICK, * District Judge. WALLACE, Circuit Judge: 1 We have before us the question whether an arbitration clause contained in the constitution of the New York Stock Exchange is binding upon the parties and forecloses court action on the claim asserted. Muh brought suit on a contract in the California state court against Newburger, Loeb & Co., Inc. (Newburger) and the case was removed to the federal court based upon diversity of citizenship. Newburger then moved for a stay of the action pursuant to 9 U.S.C. § 3 , contending that the claim must be arbitrated. The district court agreed and Muh appealed. We have jurisdiction pursuant to 28 U.S.C. § 1292 (a). Shanferoke Coal & Supply Corp. v. Westchester Service Corp., 293 U.S.…

(concurring):

I concur. I have no doubt that the agreement to arbitrate which existed by virtue of both parties’ membership in the New York Stock Exchange at the time that the purchase and consultancy contracts were executed survived Muh’s resignation and the withdrawal of Newburger, Loeb & Co., Inc. (Newburger) from the New York Stock Exchange. See Bear v. Hayden, Stone, Inc., 526 F.2d 734 (9th Cir. 1975); Isaacson v. Hayden, Stone, Inc., 319 F.Supp. 930 (S.D. N.Y.1970). I am also in accord that the agreement to arbitrate was not revoked by any “boilerplate” language in the various agreements executed by the parties to the transaction.

Moreover, assuming arguendo that California law applies, I reject Muh’s contention that this suit for unpaid consulting fees is a dispute about wages which may be maintained under state law notwithstanding any private agreement to arbitrate. Cal.Labor Code § 229.

In Ware v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 24 Cal.App.3d 35 , 100 Cal. Rptr. 791 (1972), the California Court of Appeal determined that a suit by a former stock broker against his former employer concerning the entitlement of the plaintiff to payments from a profit-sharing…

We have before us the question whether an arbitration clause contained in the constitution of the New York Stock Exchange is binding upon the parties and forecloses court action on the claim asserted. Muh brought suit on a contract in the California state court against Newburger, Loeb & Co., Inc. (Newburger) and the case was removed to the federal court based upon diversity of • citizenship. Newburger then moved for a stay of the action pursuant to 9 U.S.C. § 3 , contending that the claim must be arbitrated. The district court agreed and Muh appealed. We have jurisdiction pursuant to 28 U.S.C. § 1292 (a). Shanferoke Coal & Supply Corp. v. Westchester Service Corp., 293 U.S. 449, 451-52 , 55 S.Ct. 313 , 79 L.Ed. 583 (1935); see 9 J. Moore, Federal Practice ¶110.20[4.-1], at 247-48 (2d ed. 1975). We affirm.

Newburger is a stock brokerage corporation with offices in New York City and Los Angeles. Muh was the owner of a substantial number of shares of Newburger and was employed in New York City as a senior executive officer. On February 11, 1972, Muh agreed to sell his 200,000 shares of Newburger at $2 per share to three individuals in separate transactions as follows:

At…