Court Denies Argentinian Plaintiff’s Request for In-Person Hearing
We’ve blogged about the growing demand for legal interpreting services for remote arbitration hearings and for deposition interpreter services for remote depositions in the time of COVID-19. The coronavirus has impacted virtually every aspect of our way of life and has transformed even the most traditional institutions in our country. While the U.S. Court System has historically been more likely to adhere to tradition than to change, the global pandemic has forced the legal system to both adopt and embrace new means of conducting legal proceedings in these unprecedented times. In the case discussed below, Legaspy v. Financial Industry Regulatory Authority, Inc., an Argentinian claimant filed a temporary restraining order seeking an in-person arbitration hearing. Not surprisingly, the court denied this request in favor of a safe, remote hearing. Remote hearings are sure to become even more commonplace in the coming months and years.
Spanish-Speaking Plaintiffs’ Claim
In 2019, the Spanish-speaking plaintiffs/claimants filed a statement of claim against the defendants in the Financial Industry Regulatory Authority, Inc. (“FINRA”) arbitration tribunal, a private entity, as a result of monetary losses they suffered in a brokerage account. The claimants sought $2.765 million, loan interest, dividends, and lost appreciation. The parties submitted a joint agreement to FINRA which stated that “in the event a hearing is necessary, such hearing shall be held at a time and place as may be designated by the Director of FINRA…” and that “the arbitration will be conducted in accordance with the FINRA Code of Arbitration Procedure.”
The arbitration hearing was initially scheduled to commence on August 17, 2020 in Boca Raton, Florida. However, due to the COVID-19 pandemic, on June 23, 2020 the parties were informed that the hearing would either be rescheduled or would be held via Zoom or telephonically. Two days later, the parties were informed that the hearing would, in fact, proceed on August 17, 2020 but that the hearing would be conducted through FINRA’s virtual hearing services. In other words, the hearing would not be conducted in-person.
Plaintiff Argues Remote Hearing Would be Difficult Due to Spanish Interpreter
Shortly before the hearing, the plaintiff, one of the claimants, filed suit against FIRNA for breach of its Code of Arbitration Procedure, breach of the parties’ uniform submission agreement, deprivation of his rights to due process, and requesting injunctive relief. The plaintiff also sought a temporary restraining order (“TRO”) to stop the hearing from being conducted remotely.
The plaintiff argued that remote proceedings would be “cumbersome” and “procedurally irregular” because the claimants were from Argentina and would require a Spanish court interpreter at the arbitration proceeding. The plaintiff further argued that a remote hearing would be difficult because there were dozens of witnesses and hundreds of Spanish documents that would have to be shared electronically.
Court Denies Plaintiff’s TRO and Request for In-Person Hearing
The court first explained that in order to succeed on a temporary restraining order, a party must demonstrate the following: (1) its claim has some likelihood of success on the merits; (2) traditional legal remedies would be inadequate; and (3) absent injunctive relief, it would suffer irreparable harm in the period prior to final resolution of its claim. Halal Chamber of Commerce, inc. v. Best Choice Meats, Inc., 402 F.Supp.3d 427, 433 (N.D. Ill. 2019.)
In evaluating the likelihood of success on the merits, the court found that plaintiff’s claims were unlikely to succeed. First, the court rejected the plaintiff’s argument that a remote hearing violated the FINRA code of arbitration The court noted that FINRA Rule 12409 gave the panel the authority to decide the applicability of all of the provisions under the code, including how and where the hearing would take place. In addition, the court noted that the plaintiff was not prohibited from “attending” the hearing; he was indeed permitted to attend the hearing, albeit remotely.
The court also rejected the plaintiff’s argument that a remote hearing would violate his right to due process. The court explained that this argument was invalid because FINRA cannot be sued for violating the Fifth Amendment because FINRA is a private corporation, not a state actor.
As to the issue of irreparable harm and legal remedies, the court found that the plaintiff had only established that he would prefer to arbitrate in person, not that the remote proceedings made him more likely to suffer any kind of harm. The court considered the plaintiff’s claim that he would “go out of business” if he lost the arbitration but found that the plaintiff could lose the arbitration no matter where or how it occurred. Because the Spanish-speaking plaintiff could not prove that he would be irreparably harmed by being forced to arbitrate remotely, the court found that the Spanish-speaking plaintiff had not shown the necessary element of irreparable harm in order to succeed on a TRO.
Finally, the court found that the balance of equities was not in the plaintiff’s favor. Specifically, the court found that ordering the FINRA to conduct in-person hearings would expose the arbitrators, claimants, and witnesses to COVID-19 or, at a minimum, would delay the hearing indefinitely since it was unclear when in-person hearings would be able to resume.
Based on the foregoing, the court denied the plaintiff’s motion for a temporary restraining order and preliminary injunction.
The case is Carlos Legaspy v. Financial Industry Regulatory Authority, Inc., Case No. 20 C 4700, decided on August 12, 2020 in the United States District Court for the Northern District of Illinois, Eastern Division.
All Language Alliance, Inc. provides legal interpreters for remote arbitration hearing via Zoom in Spanish, Italian, Mandarin, Korean, Russian, Japanese, and other foreign languages. In-person services of international arbitration hearing interpreters and translators are also available.
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