Tanjutco v. NYLife Securities LLC

Background

Carolina Tanjutco filed this action without a lawyer to confirm part of, and vacate part of, a May 26, 2023 arbitration award issued by a Financial Industry Regulatory Authority (FINRA) arbitration panel. The underlying arbitration involved Tanjutco, NYLife Securities LLC, and New York Life Insurance Company. Carol Maria Luttati chaired the arbitration panel as a public arbitrator.

Tanjutco’s original pleading named NYLife, New York Life Insurance Company, and Luttati as respondents. After the court dismissed the original petition for lack of subject-matter jurisdiction, meaning the court found that the pleading did not establish a basis for federal jurisdiction, Tanjutco filed an amended petition. That amended petition named NYLife, New York Life Insurance Company, FINRA, and the Securities and Exchange Commission, but it did not name Luttati, assert a personal claim against her, or seek relief from her.

FINRA moved under Federal Rule of Civil Procedure 21 to remove Luttati as a party. Tanjutco separately moved under Rule 15(a) for permission to include Luttati in the case. After the court issued its March 18 order, Tanjutco filed a proposed second amended petition without obtaining permission. That pleading again named Luttati and described challenges to decisions she made while serving as chair of the arbitration panel.

Court’s analysis

The court granted FINRA’s Rule 21 motion. Rule 21 allows a court to add or remove a party at any time on appropriate terms. The court concluded that Luttati was not properly joined because the operative amended petition did not name her or assert claims against her. Tanjutco’s objections—that Luttati showed apparent bias, failed to perform her duties, and made rulings favorable to NYLife or New York Life Insurance Company—did not change that conclusion. Tanjutco acknowledged that Luttati’s name did not appear in the amended petition and did not argue that she had stated a personal claim against Luttati or sought relief from her.

The court also denied Tanjutco’s Rule 15(a) motion. Construing the motion in light of Tanjutco’s status as a self-represented litigant and her later filings, the court treated it as a request for permission to file the proposed second amended petition and restore Luttati as a party. The court determined that the proposed pleading did not state a legally viable claim against Luttati. It explained that the challenged conduct occurred within the arbitral process, and that arbitrators have absolute immunity from civil liability for conduct performed in their capacity as arbitrators. The court therefore found that amendment would be futile, meaning the proposed claim could not survive a motion to dismiss.

The court noted that allegations about bias, refusal to hear evidence, disregard of FINRA rules, or exceeding arbitral authority might relate to Tanjutco’s effort to vacate portions of the arbitration award under 9 U.S.C. § 10(a). But those allegations did not create a personal claim against Luttati based on her conduct as an arbitrator.

Disposition

The court vacated its March 18 order because that order incorrectly stated that Luttati had not opposed FINRA’s motion. After considering Tanjutco’s opposition, the court adhered to the prior decisions to grant FINRA’s motion to drop Luttati as a party and deny Tanjutco’s motion to include Luttati as a party.

The court also denied Tanjutco leave to file the proposed second amended petition and directed that the pleading be struck. The clerk was directed to vacate the March 18 order, close the motions concerning Luttati, and strike the proposed pleading. FINRA’s separate motion under Rule 12(b)(6), which asks whether the petition adequately states a claim, remained pending. The court requested additional briefing on the effect of FINRA Rule 2080(b), concerning naming FINRA as an additional party when a party seeks judicial confirmation of an arbitration award containing expungement relief.