FINRA Arbitration Claimant Asks Federal Court to Appoint Counsel

March 29, 2022

Is there a right to have legal counsel appointed in a civil court case? Interesting question and one that often elicits the wrong answer. In today's blog we come across the plight of a public customer Claimant who filed an arbitration claim against a FINRA member firm. Except the firm says she's not a customer and can't compel them to arbitrate. Where did the firm make that argument? In federal court. Which means that the Claimant now has to deal with both her FINRA arbitration and a federal court case. But she's representing herself pro se in the pending court matter, and, she asks the Court for help. Will she get it?

Case in Point

Public customer Kelli Fusaro apparently filed a FINRA Arbitration Statement of Claim against FINRA member firm Cambria Capital, LLC. As Cambria sees it, Fusaro sued in the wrong place because the brokerage firm says that the arbitration forum lacks jurisdiction. Cambria Capital, LLC, Plaintiff, v. Kelli Fusaro, Defendant (Memorandum Decision and Order, United States District Court for the District of Utah, 21-CV-00428)

TRO and PI -- and Declaratory Judgment

Cambria sought from D. Utah a temporary restraining order ("TRO") and preliminary injunction ("PI") enjoining Fusaro's FINRA action; however, the Court denied that relief. Thereafter, Cambria asked the Court for a declaratory judgment stating that:

(1) Ms. Fusaro is not a Cambria "customer" within the meaning of FINRA and lacks standing to initiate or compel arbitration of claims against Cambria through FINRA; (2) Ms. Fusaro and Cambria do not have an agreement to arbitrate disputes before FINRA, and, therefore, FINRA lacks jurisdiction over the dispute between Ms. Fusaro and Cambria; and (3) Ms. Fusaro's written arbitration agreement with another entity supersedes FINRA rules and provides for arbitration in other forums.

at Page 2 of the D. Utah Decision/Order

Despite the Court's denial of the TRO and PI, Cambria's Complaint was not dismissed and that much of the case proceeded. 

Motion to Stay/Motion to Appoint Counsel

On December 3, 2021, Fusaro filed a Motion to Stay the D. Utah case alleging that she was preparing for her FINRA arbitration against the company and that it had become "very confusing and costly" to also respond to Plaintiff's federal court lawsuit. The Court denied Fusaro's motion, which prompted the following [Ed: footnotes omitted]:

On February 15, 2022, Ms. Fusaro filed her motion to appoint counsel and her instant motion to stay. In her motion to stay, she argues that, because of her lack of legal knowledge, she cannot properly respond to Cambria's discovery requests, and, therefore, this case should be stayed until counsel is appointed for her. In her motion to appoint counsel, she contends that counsel is necessary to help her correct deficient discovery responses and respond to requests in a timely and efficient manner. She also asserts that she cannot currently afford to hire an attorney.

at Pages 3 - 4 of the D. Utah Decision/Order

In opposing Fusaro's Motion to Appoint Counsel, Cambria argued that there is no constitutional right to counsel in civil cases; and that even to the extent that some discretion on the issue resided with the Court, Defendant had not proven that the appoint of civil counsel was necessary. In reiterating her need for civil counsel in replying to Cambria's arguments, Fusaro further asserted that the Plaintiff had "harassed her by claiming she failed to adequately respond to its discovery requests and that appointed counsel could help her avoid similar harassment in the future." at Page 4 of the D. Utah Decision/Order.

Appointing, Requesting, and Compelling

In denying Fusaro's Motion to Appoint Counsel, D. Utah initially clarifies that in terms of civil cases, it is technically inaccurate to talk about federal courts appointing counsel because, at best, the courts are merely empowered to request counsel take on a civil case -- there is no power to compel such legal representation. at Footnote 21 of the D. Utah Decision/Order. Having accepted that it had the "discretion" to decide whether to request counsel take on Defendant Fusaro's civil case, D. Utah declined to exercise said discretion, in part, because:

Ms. Fusaro fails to meet her burden because she does not address the merits of her case. For that reason alone, her request for appointed counsel fails. Additionally, the remaining factors do not justify appointing counsel. The nature of the factual issues raised in this case are not particularly complex. Further, although litigation may be difficult and time consuming for her, Ms. Fusaro fails to demonstrate that she cannot pursue this case adequately. Finally, the legal issues in this case are not so complex as to require the appointment of counsel. For those reasons, the court denies Ms. Fusaro's motion to appoint counsel.

at Page 5 of the D. Utah Decision/Order

In addition to declining to request civil counsel for Fusaro, the Court further denied her Motion to Stay pending the "appointment' of a lawyer. Not only did the Court deem that the predicate delay for the appointing of a lawyer was now moot but it further found that Fusaro had presented no other compelling reasons warranting the granting of her motion.