Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52, 18 (1995)

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Cite as: 514 U. S. 52 (1995)

Thomas, J., dissenting

(awards shall be "publicly available"). The majority cannot find a provision of the NASD Code that specifically addresses punitive damages, or that speaks more generally to the types of damages arbitrators may or may not allow. Such a rule simply does not exist. The code certainly does not require that arbitrators be empowered to award punitive damages; it leaves to the parties to define the arbitrators' remedial powers.

The majority also purports to find a clear expression of the parties' agreement on the availability of punitive damages in "a manual provided to NASD arbitrators." Ante, at 61. But paragraph 13 of the Client's Agreement nowhere mentions this manual; it mentions only "the rules then in effect, of the [NASD]." App. to Pet. for Cert. 44. The manual does not fit either part of this description: it is neither "of the [NASD]," nor a set of "rules."

First, the manual apparently is not an official NASD document. The manual was not promulgated or adopted by the NASD. Instead, it apparently was compiled by members of the Securities Industry Conference on Arbitration (SICA) as a supplement to the Uniform Code of Arbitration, which the parties clearly did not adopt in paragraph 13. Petitioners present no evidence that the NASD has a policy of giving this specific manual to its arbitrators. Nor do petitioners assert that this manual was even used in the arbitration that gave rise to this case. More importantly, there is no indication in the text of the Client's Agreement that the parties intended this manual to be used by the arbitrators.

Second, the manual does not provide any "rules" in the sense contemplated by paragraph 13; instead, it provides general information and advice to the arbitrator, such as "Hints for the Chair." SICA, Arbitrator's Manual 21 (1992). The manual is nothing more than a sort of "how to" guide for the arbitrator. One bit of advice, for example, states: "Care should be exercised, particularly when questioning a witness, so that the arbitrator does not indicate disbelief.

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