I have used this forum before on occasion to complain about the vagaries of the FINRA arbitration process, and, in particular, the perspective of a respondent’s counsel that the game often seems to be rigged in favor of claimants. Let me give you an example that just occurred in the last two days. And let me just say this: it is insulting to the letter “F” that the words “FINRA” and “fairness” both start with it.
My story concerns the scheduling of hearings. While FINRA provides a vague “guideline” regarding the length of time it is supposed to take from the filing of a Statement of Claim to the final hearing, for the most part, the actual scheduling of that hearing is a matter of agreement between the parties. Most times, the parties are able to work out a date that is suitable for everyone, even if that date is well after when FINRA’s guideline suggests it should be. From time to time, however, the scheduling of the hearing becomes a long, drawn-out, weird and ugly battle.
The case in question was initially scheduled for a hearing in April 2017 in San Juan. I had to request a continuance, as my daughter was born two months prematurely, so my wife and I had to spend 40 days in the NICU with her until we could take her home. Claimants’ counsel graciously agreed, under the circumstances, to postpone. The hearing was then re-set for July 2017, reflecting only a modest delay. In June, however, FINRA notified us that one of the three arbitrators developed a scheduling conflict and could not do the hearing in July. Rather than proceeding with two arbitrators, or having a replacement arbitrator appointed, either of which could have happened if time was truly of the essence, Claimants’ counsel elected, instead, to postpone the hearing in order to keep the conflicted arbitrator. So, the hearing was postponed, a second time, with our consent, to some yet-to-be-determined date later in 2017.
Then came the hurricanes, and the devastation they wrought on San Juan, and FINRA administratively stayed all hearings in Puerto Rico through early December. That required my colleagues and me to find room in our nearly completely full 2018 calendar for this case. We offered July and September, but Claimants’ counsel refused. Instead, they argued to the Panel that the hearing should take place in March, during a two-week period when we already had two other hearings scheduled. Claimants’ counsel argued that this case should have priority, as the principal Claimant was ill. While sympathetic to Claimant’s situation, we pointed out that (1) our expert witness – who’s been with the case since it was filed and wrote a report – was unavailable, and (2) we were unsure whether our chief fact witness, the RR who handled the account, was available. We also pointed out that Claimants’ counsel had hardly been pushing the case, which kind of belied the sudden need for a prompt hearing.
The Panel ignored our arguments, and issued an Order that those other two cases would be stayed, so that this case could proceed, notwithstanding our witness issues.
The good news – at least temporarily – was that the Director of the FINRA Dispute Resolution office administering the case recognized the problem, and the Order was withdrawn when I pointed out to him that the Panel had no authority to direct that two other cases be stayed over my objection. Stupid me, I presumed that with the benefit of a little time to regroup, the Panel would reissue its Order and set the hearing in July or September, as we had offered. Nope. Today, we received the amended Order requiring me to try this case over two weeks in March, on the very same days that I am already scheduled to try two other cases. I still have no expert witness, and I still don’t know if my registered rep is available. And while I have to believe those other two panels will yield to this one’s Order, it is possible they won’t, my client and I will somehow have to be in two places at once.
The point is pretty obvious: in its zeal to accommodate the Claimants, the Panel completely disregarded the prejudice that its decision to hear the case sooner rather than later has caused my client. I mean, the Panel is apparently content to make me defend a case without an expert and possibly without my most important fact witness. How can that possibly be considered fair?
Look, I will dutifully file a motion for reconsideration, and I will complain, again, to the Director about this situation the Panel has created for my client and me. But, based on experience, I wouldn’t bet on my chances of changing anyone’s mind. Why? Because I’m just the respondent, and no one cares about the respondent. I can tell you with absolute candor, no editorializing, no hyperbole, that decisions like this, Claimant-favorable procedural/administrative decisions, are issued every day. Remarkably, though, and completely contrary to experience, PIABA will still argue that the playing field is tilted in favor of respondents. Even worse, FINRA will listen.