Antonio Mastrobuono and Diana G. Mastrobuono v. Shearson Lehman Hutton, Inc., et al. (514 U.S. 52)
U.S. Supreme Court · decided March 6, 1995 · Supreme Court Database (Spaeth)
- Citation
- 514 U.S. 52 · 115 S. Ct. 1212
- Decided
- March 6, 1995
- Term
- October Term 1994
- Vote
- 8–1
- Majority author
- Justice Stevens
- Issue area
- Economic Activity
- Disposition
- Reversed
- Outcome
- Petitioning party won
- Ideological direction
- Liberal
Opinion excerpt
Justice Stevens delivered the opinion of the Court. New York law allows courts, but not arbitrators, to award punitive damages. In a dispute arising out of a standard-form contract that expressly provides that it “shall be governed by the laws of the State of New York,” a panel of arbitrators awarded punitive damages. The District Court and Court of Appeals disallowed that award. The question presented is whether the arbitrators’ award is consistent with the central purpose of the Federal Arbitration Act to ensure “that private agreements to arbitrate are enforced according to their terms.” Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior Univ., 489 U. S. 468, 479 (1989). I In 1985, petitioners, Antonio Mastrobuono, then an assistant professor of medieval literature, and his wife Diana Mastrobuono, an artist, opened a securities trading account with respondent Shearson Lehman Hutton, Inc. (Shearson), by executing Shearson’s standard-form Client’s Agreement. Respondent Nick DiMinico, a vice president of Shearson, managed the Mastrobuonos’ account until they closed it in 1987. In 1989, petitioners filed this action in the United States District Court for the Northern District of Illinois, alleging that respondents had mishandled their account and claiming damages on a variety of state and federal law theories. Paragraph 13 of the parties’ agreement…
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