Fed. Sec. L. Rep. P 91,531 Robert Kershaw and Rob Kershaw v. Dean Witter Reynolds, Inc., a Delaware Corporation

Defendant-appellant Dean Witter Reynolds, Inc. (“Dean Witter”) appeals from the interlocutory order of a United States Magistrate denying Dean Witter’s motion to compel arbitration and for a stay pending arbitration. We reverse.

Plaintiffs-appellants Robert and Rob Kershaw (“the Kershaws”) filed a four count complaint. Three claims alleged a violation of state law. The fourth alleged a violation of § 10(b) of the Securities Exchange Act of 1934.

Under their agreements with Dean Witter, the Kershaws agreed to arbitration of disputes. Claims arising out of alleged violations of federal securities laws, however, are not arbitrable. Wilko v. Swan, 346 U.S. 427 , 74 S.Ct. 182 , 98 L.Ed. 168 (1953). Relying on the doctrine of intertwining, see Miley v. Oppenheimer & Co., 637 F.2d 318 (5th Cir.1981); DeLancie v. Birr, Wilson & Co., 648 F.2d 1255 , 1259 n. 4 (9th Cir.1981), Dean Witter did not move for arbitration of the state law claims. A few days before trial, the Kershaws announced their intention to dismiss the federal claim. Dean Witter moved to stay further proceedings pending arbitration of the remaining claims. The motion was denied. Dean Witter appeals.

The Ninth Circuit…