RESPONDENT: Robert Cocchi et al.
LOCATION: Florida Circuit Court of the Fifteenth Judicial Circuit Palm Beach County
DOCKET NO.: 10-1521
DECIDED BY: Roberts Court (2010-2016)
LOWER COURT: State appellate court
CITATION: 565 US (2011)
GRANTED: Nov 07, 2011
DECIDED: Nov 07, 2011
Facts of the case
Respondents, 19 individuals and entities, bought limited partnerships, which were invested with Bernard Madoff. After losing millions, Respondents sued Petitioner KMPG LLC, a financial auditor, alleging use of improper accounting standards. KMPG moved to compel arbitration under an audit services agreement between KMPG and Tremont, a fund who managed the limited partnerships. This agreement stated that any claim arising out of KMPG's services, including claims by any person for whose benefit the services were provided, would be resolved in mediation or arbitration. The Florida Circuit Court of the Fifteenth Judicial Circuit, Palm Beach County denied the motion. The Court of Appeal of Florida, 4th Circuit affirmed. The court found that Respondents never expressly consented to the arbitration agreement, so the only claims derived from KMPG's services for the management fund were subject to arbitration. The court concluded that two of the claims were direct and not covered under the arbitration agreement. Because these claims were not arbitrable the court refused to compel arbitration of any part of the complaint.
Does a court have a duty under the Federal Arbitration Act (FAA) to compel arbitration of a complaint where some claims are not arbitrable?