Case Study:  Scope of Arbitration

An investor brought suit in federal court to compel arbitration of her claim against a brokerage firm.  Although the statute of limitations had expired, the district court granted her request and compelled arbitration, holding that a statute of limitations defense could be addressed only by the arbitrator.  We persuaded the federal court of appeals to reverse.  The court agreed with our argument that in an NASD arbitration against a securities firm, the statute of limitations is to be decided as a threshold matter by the court.