Tuesday, April 8, 2008

Comment Period on Motions to Dismiss Ends Thursday

As everyone now knows, FINRA has a rule proposal pending to eliminate motions to dismiss in arbitrations. The comment period ends on Thursday, and very few comments have been submitted. The ones that have been made are almost uniformly in favor of the rule.

FINRA's proposal will effectively eliminate motions to dismiss in arbitrations prior to the presentation of Claimant's case. While those motions are rarely granted, some are granted, and motions made during the course of discovery are also granted. Such motions are a valid part of the arbitration process, and serve to limit the scope of a proceeding, or the length of a hearing.

And there are times when a motion to dismiss should be made at the outset, and all of these motions will be banned under the new proposal - for example, motions based on the statute of limitations, motions based on an absolute privilege, and motions based on res judicata.

FINRA claims that the proposal is necessary because arbitrations are being delayed by frivolous motions. Of course, if that is true, there are other ways to deal with the issue, rather than simply ban motion practice.

Before motion practice goes the way of subpoena issuance, you might consider submitting a comment on the proposed rule.

The comment period ends on Thursday, April 10.

The rule proposal is at http://www.sec.gov/rules/sro/finra/2008/34-57497.pdf

The comment page is at http://www.sec.gov/comments/sr-finra-2007-021/finra2007021.shtml

You can submit comments at http://preview.tinyurl.com/47wsh8
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