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The Case For Dismissing The Case: Why Dispositive Prehearing Motions Should Remain An Integral Part Of The Arbitral Process

I. Introduction

It has been more than twenty years since the Supreme Court decided the seminal case of Celotex Corp. v. Catrett, 417 U.S. 317 (1986), in which Justice Rehnquist, for the majority, wrote:

Summary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed "to secure the just, speedy and inexpensive determination of every action."1

Celotex is recognized as changing the landscape. Prior to it, many courts were wary of summary adjudications and viewed the process as threatening fundamental rights to jury trials. Difficult standards had evolved - such as denying summary judgment if there was the "slightest doubt" about its appropriateness in a case. "The oft-recounted tale of the sign posted in a New Orleans district court, 'No Spitting, No Summary Judgments,' encapsulates the extreme version of judicial antipathy to summary judgment [prior to Celotex]."2

Yet today, the securities arbitration community still struggles with the appropriateness of dispositive motions. Despite the long and consistent line of legal precedent recognizing that NASD arbitrators have implicit authority to grant prehearing motions to dismiss or for summary judgment, the response to such motions invariably includes arguments that the arbitrators lack the authority to grant the motion and/or policy arguments that such motions are inherently pernicious or contradict the goals and spirit of arbitration. Indeed, when in 2003 the NASD proposed amending the Code of Arbitration Procedure to explicitly recognize its arbitrators' authority to grant such motions, it suggested language which was replete with cautions and genuinely hostile to such motions. Even that ignited a...

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