Marsh & McLennan Agency LLC v. Ferguson

Background

Marsh & McLennan Agency LLC (MMA) sued Elmer “Rick” Ferguson over conduct following the end of Ferguson’s employment. MMA alleged that Ferguson took client information and solicited former MMA clients after joining Teros Advisors. Its complaint asserted ten claims, including breach of contract, breach of the duty of loyalty, interference with business relations, unfair competition, misappropriation of confidential information, defamation, and trade-secret violations under California law.

In July 2021, the court granted Ferguson’s motion to compel arbitration before the Financial Industry Regulatory Authority (FINRA). The arbitration produced an award in MMA’s favor. The arbitrators found for MMA on seven of its ten claims and awarded $248,411 in compensatory damages, $248,411 in exemplary damages under the California Uniform Trade Secrets Act, and $267,064.15 in attorney fees. The arbitrators found that MMA had not proved its other three claims.

MMA moved to confirm and enforce the arbitration award. Ferguson, who was representing himself, moved to dismiss MMA’s claims, reverse the court’s earlier orders, and vacate the FINRA award. The court treated Ferguson’s filing as a request for reconsideration of the July 2021 decision, a request to vacate or modify the arbitration award, and opposition to MMA’s confirmation motion.

Reconsideration of the Earlier Decision

The court denied reconsideration. It first held that Ferguson’s request was untimely: he filed it 872 days after the July 2021 decision, beyond the deadlines under the applicable court rule and Federal Rules of Civil Procedure 59(e) and 60(b).

The court also addressed Ferguson’s arguments on the merits. Ferguson argued that MMA lacked the required injury to bring the lawsuit because the clients received investment-advisory services through MMA Securities LLC (MMAS), a separate MMA subsidiary. The court relied on its earlier finding that MMA had its own economic interests in the client list because it supported MMAS, recruited employees for it, received part of its revenue, and could cross-sell other MMA products to MMAS clients. The loss of those clients therefore could directly harm MMA, even if MMAS also suffered an injury.

The court rejected Ferguson’s argument that any alleged regulatory violation by MMA or MMAS eliminated MMA’s standing. It stated that standing—whether a plaintiff has suffered an injury sufficient to sue—is separate from whether particular conduct was illegal. The court also concluded that Ferguson had not shown the clear error or serious unfairness required for reconsideration, and that much of his argument repeated issues he had previously raised.

Review of the Arbitration Award

The court denied Ferguson’s motion to vacate or modify the award. Under the Federal Arbitration Act, a court generally confirms an arbitration award unless the party opposing confirmation proves one of the narrow grounds for vacating, modifying, or correcting it. Ferguson argued that the arbitrators had acted in disregard of the law because MMA was not registered to provide investment-advisory services.

The court found that Ferguson had not shown that the arbitrators ignored a clear and well-established legal rule. The regulatory framework involved registered broker-dealers and insurance networking arrangements, including Securities and Exchange Commission no-action letters, and the court found the applicable law ambiguous. An arbitrator’s mistake in applying an unclear law does not meet the standard for vacating an award. The court also found no evidence that the arbitrators intentionally defied the law, acted outside their authority, or procured the award through fraud or dishonesty.

The court therefore granted MMA’s motion to enforce and confirm the arbitration award. It denied Ferguson’s motion to dismiss MMA’s claims and his motion to vacate or modify the award. The court directed MMA to submit a proposed judgment consistent with the award by June 23, 2025, and directed the clerk to terminate the pending motions.