Jannetti et al v. Stifel, Nicolaus & Company, Inc.

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. 25-21176-CIV-DPG/EIS
DAVID JANNETTI, et al.,
Petitioners,
v.
STIFEL, NICOLAUS & CO., INC.,
Respondent.
_______________________________________/
REPORT AND RECOMMENDATION ON
RESPONDENT ’S MOTION TO V ACATE ARBITRATION AWARD AND
PETITIONERS ’ CROSS -M OTION FOR POST -AWARD PREJUDGMENT I NTEREST AND S ANCTIONS
This matter is before the Court on Respondent’s Motion to Vacate Arbitration Award, ECF
No. 27, and Petitioners’ Cross-Motion for Post-Award Prejudgment Interest and Sanctions, ECF
No. 39 at 62-63.1 After careful review of the motions, the parties’ filings, the pertinent portions
of the record, and the applicable law, and the undersigned being otherwise fully advised in the
premises, the undersigned RESPECTFULLY RECOMMENDS that Respondent’s Motion to
Vacate Arbitration Award, ECF No. 27, be DENIED and that Petitioners’ Cross-Motion for Post-
Award Prejudgment Interest and Sanctions, ECF No. 39 at 62-63, be GRANTED IN PART and
DENIED IN PART.
I. 	BACKGROUND
On May 11, 2023, Petitioners, four members of the Jannetti family, initiated a Financial
Industry Regulatory Authority (“FINRA”) arbitration against Respondent in Case No. 23-01342
(“Jannetti”). 	See ECF No. 27-4 at 2-3. 	Petitioners asserted claims against Respondent for (i)
1 The Honorable Darrin P. Gayles referred both motions to the undersigned. ECF Nos. 43, 55.
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breach of fiduciary duty; (ii) negligence; (iii) negligent supervision; (iv) fraud; (v) breach of
contract; and (vi) violation of the Florida Securities and Investor Protection Act (“FSIPA”). ECF
No. 27-2 at ¶¶ 70-96. 	Specifically, Petitioners alleged that one of Respondent’s employees,
investment advisor Chuck Roberts (“Roberts”), solicited Petitioner David Jannetti as a customer
by, among other specific misrepresentations, stating that the structured notes he recommended
were “less risky than investing in stocks,” had “downside protection,” and “would preserve his
capital” while generating a long-term average return of about 12.25%. Id. at ¶ 15. Petitioners also
alleged that once they had opened accounts with Respondent, Roberts “cultivated a close personal
relationship” with David Janetti, “lulled him into believing that Roberts was his friend,” and made
additional misrepresentations and unsuitable investment recommendations (e.g., recommending
structured notes linked to single high-risk stocks and overconcentration in structured notes linked
to high-risk securities) that induced Petitioners into purchasing high-risk and unsuitable structured
notes, engaging in unsuitable short-term trading of speculative stocks, making extreme and
unsuitable use of leverage, and authorizing Roberts to execute trades (which included trading in
speculative and volatile stocks) without prior authorization. E.g., id. at ¶¶ 17, 22, 31-36, 41-43,
46, 52-63. 	Petitioners claimed Respondent failed to exercise “any adequate supervision” over
Roberts, thereby allowing him to “succeed in his abusive conduct,” and that Respondent was
vicariously liable for the acts and omissions of its employees and other agents, including Roberts.
Id. at ¶¶ 8, 68.
Two days earlier, on May 9, 2023, a separate FINRA arbitration was initiated by the
claimants in Case No. 23-01288 (“Deluca”), setting forth claims against Respondent concerning
investment losses they suffered. See ECF No. 39-36 at 2. In that arbitration—which involved the
same counsel and ran in large part concurrently with Jannetti—the claimants also brought claims
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against Respondent for (i) breach of fiduciary duty; (ii) negligence; (iii) negligent supervision; (iv)
fraud; (v) breach of contract; and (vi) violation of the FSIPA. ECF No. 39-28 at ¶¶ 47-73. The
Deluca claimants alleged that they opened accounts with Respondent based on specific
misrepresentations made by Roberts to claimant Louis Deluca (who had stage four lymphoma and
had informed Roberts that he was a conservative investor who was “not interested in high risk or
speculative investments”), including Roberts’ claims that the structured notes he recommended
were “low risk,” had “downside protection,” and “would preserve his capital and generate around
12%.” 	See ECF No. 39-28 at ¶¶ 8, 11-14. 	The Deluca claimants further alleged: that Roberts
made additional misrepresentations that induced them into making and maintaining high-risk
unsuitable investments, including Roberts’ representation that they “should not pay attention to
pricing and the related losses” on the structured notes in which they had invested because they
would “get back [their] investment at full maturity”; that Roberts purchased structured investment
products for the claimants’ accounts without authorization and/or informed consent; and that when
Roberts obtained authorization to execute discretionary trades for claimants without prior
authorization, he traded in speculative and volatile stocks. 	Id. at ¶¶ 17-19, 26, 31, 34, 37.
According to the Deluca claimants, Respondent’s failure to exercise “any adequate supervision”
over Roberts allowed him to “succeed in his abusive conduct,” and Respondent is vicariously liable
for the acts and omissions of its employees and other agents, including Roberts. Id. at ¶¶ 6, 45.
On June 30, 2023, the parties in the Deluca arbitration were provided with an arbitrator
ranking form containing a list of potential arbitrators for each party to rank or strike—one of which
was a public arbitrator by the name of Stephanie Jeanette Charny (“Charny”). See ECF No. 39-30
at 8. A few days later, on July 5, 2023, a similar ranking form was issued in Jannetti, in which
Charny was also listed as a potential arbitrator. See ECF No. 39-31 at 8. Respondent, a party to
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both the Deluca and Jannetti arbitrations, ranked Charny as a potential arbitrator in both, and
FINRA subsequently sent letters to the parties on July 28 and August 4, 2023 confirming that
Charny had ultimately been appointed to both panels. ECF No. 39-33 at 2, 7; ECF No. 39-34 at
2, 7. The Initial Pre-Hearing Conferences before the appointed arbitration panels were held on
August 24 and September 12, 2023. See ECF No. 39-33 at 2; ECF No. 39-36 at 6; ECF No. 39-
34 at 2; ECF No. 39-2 at 6. Respondent did not object at the time to Charny serving as an arbitrator
in both arbitrations.
A year later, in July and August of 2024, final hearings were held in Deluca, in which
Charny and the other arbitrators on the panel heard testimony concerning the Deluca claimants’
investments, Roberts’ misrepresentations to those claimants, and Respondent’s failure to supervise
Roberts.2 See ECF No. 39-36 at 6; see also id. (pre-hearing conference before panel on June 4,
2024). Those hearings concluded on August 28, 2024, but Respondent still filed no objection to
Charny’s continued participation on the Jannetti arbitration panel. Over a month later, on October
3, 2024, the Deluca panel issued an award in the claimants’ favor, finding Respondent liable for
$4,065,436 in compensatory damages, $9,000,000 in punitive damages, $1,100,000 in attorneys’
fees, and $100,000 in costs. See ECF No. 39-36 at 3-4. The next day, in Jannetti, Charny issued
an updated Oath of Arbitrator and Disclosure Checklist, disclosing that she had served in an
arbitration involving the same counsel and “similar allegations,” and certifying that she had not
“formed an opinion, positive or negative, about any of the parties, their counsel or the subject
matter of the arbitration.” ECF No. 27-9 at 9.
2 On July 8th, 2024, the first day of the final hearing in Deluca, Charny disclosed to the parties
that she was also assigned to serve as an arbitrator in the Janetti case. See ECF No. 27-11 at 5.
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Immediately following Charny’s award in Deluca and her submission of the updated oath
in Jannetti, Respondent filed a motion seeking—for the first time—Charny’s recusal or removal
from the Jannetti panel. See ECF No. 27-10; see also ECF No. 27-12. That motion, however, was
denied, and Charny ultimately remained on the panel over Respondent’s objections. See ECF Nos.
27-11, 27-13 (denials of Respondent’s motion). From October 2024 through January 2025, final
hearings were held in Jannetti, during which the parties presented testimony and evidence to the
arbitration panel—Charny included—concerning Petitioners’ claims. See ECF No. 39-2 at 6. On
March 12, 2025, the panel issued an award in Petitioners’ favor for $26,504,292 in compensatory
damages, $79,512,876 in punitive damages, and $26,504,292 in attorneys’ fees and costs. See id.
at 3-6.
Respondent now challenges that award pursuant to sections 10 and 11 of the Federal
Arbitration Act (“FAA”), 9 U.S.C. §§ 10, 11, and Petitioner requests prejudgment interest on the
award and sanctions against Respondent for the filing of its motion to vacate the award.
II. 	LEGAL STANDARD
The FAA provides the “exclusive means by which a federal court may upset an arbitration
panel’s award.” 	White Springs Agric. Chems., Inc. v. Glawson, 660 F.3d 1277, 1280 (11th Cir.
2011). Under the FAA, there is a “heavy presumption in favor of confirming arbitration awards;
therefore, a court’s confirmation of an arbitration award is usually routine or summary.” 	Cat
Charter, LLC v. Schurtenberger, 646 F.3d 836, 842 (11th Cir. 2011) (quotation omitted). Indeed,
“[t]he Supreme Court has stressed that judicial review of an arbitration award is very limited in
scope,” Barclays Cap. Inc. v. Urquidi, 786 F. App’x 970, 973 (11th Cir. 2019) (citing Oxford Health
Plans, LLC v. Sutter, 569 U.S. 564, 568 (2013)), and the Eleventh Circuit has stated that judicial
review of arbitration decisions is “among the narrowest known to the law,” Bamberger Rosenheim,
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Ltd. v. OA Dev., Inc., 862 F.3d 1284, 1286 (11th Cir. 2017) (quoting AIG Baker Sterling Heights,
LLC v. Am. Multi-Cinema, Inc., 508 F.3d 995, 1001 (11th Cir. 2007)).
Accordingly, a court may vacate an arbitration award under narrow circumstances, where:
(1) “the award was procured by corruption, fraud, or undue means”; (2) “there was evident
partiality or corruption in the arbitrators, or either of them”; (3) “the arbitrators were guilty of
misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear
evidence pertinent and material to the controversy; or of any other misbehavior by which the rights
of any party have been prejudiced”; or (4) “the arbitrators exceeded their powers, or so imperfectly
executed them that a mutual, final, and definite award upon the subject matter submitted was not
made.” 	See 9 U.S.C. § 10(a). 	In addition, a court may modify or correct an arbitration award
where: (1) “there was an evident material miscalculation of figures or an evident material mistake
in the description of any person, thing, or property referred to in the award”; (2) “the arbitrators
have awarded upon a matter not submitted to them, unless it is a matter not affecting the merits of
the decision upon the matter submitted”; or (3) “the award is imperfect in matter of form not
affecting the merits of the controversy.” Id. § 11.
These “seven grounds for ‘vacating or modifying’ an arbitration award listed in §§ 10 and
11 of the FAA are ‘exclusive.’” 	C. Czarnikow Sugar, Inc. v. Pullman Sugar, LLC, No. 24-CV-
23809, 2025 WL 3165224, at *3 (S.D. Fla. Nov. 12, 2025) (quoting Hall Street Assocs., L.L.C. v.
Mattel, Inc., 552 U.S. 576, 584 (2008)). “While several judicially-created bases for vacatur had
developed in this circuit,” the Eleventh Circuit “held in Frazier that such grounds are no longer
valid in light of the Supreme Court’s decision in Hall Street.” Johnson v. Directory Assistants Inc.,
797 F.3d 1294, 1299 (11th Cir. 2015); see also Frazier v. CitiFinancial Corp., LLC, 604 F.3d 1313,
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1324 (11th Cir. 2010).3
III. 	ANALYSIS
Respondent asks the Court to vacate the entire arbitration award and argues that to the
extent the Court declines to do so, it should vacate or modify the punitive damages and attorneys’
fees awards. 	See ECF No. 27 at 11-14. 	The undersigned addresses each of Respondent’s
arguments in turn.
A. Vacatur of the Entire Award Is Not Warranted Under Section 10(a) of the FAA.
Respondent first asks the Court to vacate the entire arbitration award pursuant to section
10(a) of the FAA on multiple grounds concerning Charny’s purported partiality or bias in Jannetti.
For the reasons explained below, vacatur on these bases is not warranted.
i. 	Respondent Has Waived Its Objection to Charny’s Purported Partiality or Bias.
Respondent first contends the Jannetti award should be vacated under section 10(a)(2)
because Charny’s prior award in Deluca establishes her “evident partiality.” See ECF No. 27 at
23-31. Specifically, Respondent argues that Charny “prejudged the key material factual and legal
issues at the core of” Jannetti because she determined in Deluca that the “same alleged misconduct
by the same financial advisor and his supervisors based on most of the same” witnesses warranted
punitive damages, thereby revealing that she “had formed a negative impression” of Respondent
and its conduct. Id. at 26-27; see also ECF No. 40 at 7 (“To award punitive damages [in Deluca],
Ms. Charny was required to find [Respondent] guilty of . . . either intentional misconduct or gross
negligence.”). Petitioners, however, argue that Respondent has waived or should be estopped from
3 Accordingly, to the extent Respondent now seeks review of the Jannetti award on any judicially-
created bases for vacatur, see, e.g., ECF No. 27 at 51 n.22 (arguing the panel’s attorneys’ fee award
was arbitrary and capricious, and that the panel manifestly disregarded the law), such review is
precluded by Frazer. See Johnson, 797 F.3d at 1299.
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raising these grounds because Respondent “failed to object to Charny for more than 14 months
after she was appointed, and only asserted an objection for the first time after it received an adverse
award in the Deluca [a]rbitration.” ECF No. 39 at 28.
The Eleventh Circuit has explained that “[w]hen a party discovers an arbitrator’s conflict,
it must ‘contest’ the partiality ‘at that time’ or else ‘waive[] the right to object in the future.’”
Biscayne Beach Club Condo. Ass’n, Inc. v. Westchester Surplus Lines Ins. Co., 111 F.4th 1182,
1186 (11th Cir. 2024) (quoting Univ. Commons-Urbana, Ltd. v. Universal Constructors Inc., 304
F.3d 1331, 1340 (11th Cir. 2002)). 	In other words, a party “may not ‘sit idle,’ see whether the
award is favorable, and then collaterally attack the proceedings on a ground that it declined to flag
sooner.” Id. (quoting Técnicas Reunidas de Talara S.A.C. v. SSK Ingeniería y Construcción S.A.C.,
40 F.4th 1339, 1347 (11th Cir. 2022)). Instead, that party “must, in the face of known potential
bias, object or hold their peace.” Id. (citing Bianchi v. Roadway Exp., Inc., 441 F.3d 1278, 1286
(11th Cir. 2006)).
Here, Respondent argues that it did not waive its objection because the conflict at issue
stems from the Deluca award itself, and thus, Respondent could not have discovered or known
about any conflict until after the award was issued. See, e.g., ECF No. 40 at 9-10 (arguing that
“[t]he operative event here is Ms. Charny’s award in Deluca”). But to the extent, if any, that the
Deluca award created a conflict sufficient to warrant Charny’s recusal or removal in Jannetti,
Respondent knew (or should have known) of that potential conflict well before the Deluca award
was issued. Indeed, by no later than August 2024, it would have been apparent to Respondent that
both arbitrations involved what it contends are “the same conduct, claims, evidence, and
witnesses.” See ECF No. 27 at 27. By then, the statements of claim submitted in each arbitration
set forth similar allegations, compare ECF No. 39-28, with ECF No. 39-24, and the final hearings
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in Deluca had concluded, providing ample notice to Respondent of the evidence that Charny would
be evaluating and whether it included any of the same evidence that would be presented in Jannetti,
see ECF No. 39 at 22-23 (indicating the Deluca final hearings were held in July and August of
2024); ECF No. 27 at 18-19 (discussing similarity between the allegations and evidence in both
arbitrations). 	Moreover, Respondent knew the claimants in Deluca were seeking punitive
damages, see ECF No. 27 at 19, and knew that Charny and the Deluca arbitration panel would be
evaluating the evidence of Roberts’ and Respondent’s conduct with respect to the Deluca claimants
and making the very subject matter determinations that Respondent now decries as “negative.”
See Fla. Stat. § 768.72(2) (punitive damages are permitted only if the defendant is found guilty of
intentional misconduct or gross negligence).
Yet, despite knowing Charny was considering what Respondent describes as “substantially
the same” evidence in both arbitrations, see ECF No. 27 at 18, and that the Deluca panel, including
Charny, could potentially issue a punitive damages award in Deluca that would necessarily be
based on negative findings about Respondent’s conduct with respect to the Deluca claimants,
Respondent raised no objection to Charny’s participation in Jannetti until after the Deluca award
was issued on October 3, 2024. 	See ECF No. 39-36 (Deluca award); ECF No. 39-37 at 2-7
(Respondent’s motion to recuse Charny, filed the day after the Deluca award was issued). In other
words, to the extent Charny’s award in Deluca may have created a conflict in Jannetti, Respondent
was aware of that “known potential” conflict well before the Deluca award was issued, but “s[a]t
idle” for at least a month—and for more than a year after the statements of claim were submitted
in the two arbitrations—waiting to see “whether the award [was] favorable,” and, only upon
discovering that the award was unfavorable, raised an eleventh-hour challenge to Charny’s
participation in Jannetti on a ground that it had “declined to flag sooner.” 	See Biscayne Beach
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Club, 111 F.4th at 1186. By doing so, Respondent “waived the right to object in the future,” id.,
and it should not be permitted to seek vacatur of the Jannetti award under section 10(a)(2).
ii. 	In Any Event, Respondent Has Not Established Partiality Under Section 10(a)(2).
Even if it had not waived its objection, Respondent nonetheless fails to meet its burden for
establishing evident partiality under section 10(a)(2). 	See Barclays Cap. Inc. v. Platt, No. 15-
21850-CIV, 2018 WL 10759189, at *2 (S.D. Fla. Dec. 26, 2018) (“[T]he burden of proof for
showing facts which would establish partiality under 9 U.S.C. § 10(a)(2) is on the party
challenging the arbitration award.”) (quotation omitted), aff’d sub nom. Barclays Cap. Inc. v.
Urquidi, 786 F. App’x 970 (11th Cir. 2019). “Evident partiality exists where a reasonable person
would have to conclude that an arbitrator was partial to one party,” id. (quotation omitted and
emphasis added), such that “an arbitration award may be vacated due to the ‘evident partiality’ of
an arbitrator only when either (1) an actual conflict exists, or (2) the arbitrator knows of, but fails
to disclose, information which would lead a reasonable person to believe that a potential conflict
exists.” Univ. Commons-Urbana, Ltd. 304 F.3d at 1339 (quoting Gianelli Money Purchase Plan
& Trust v. ADM Inv’r Servs., Inc., 146 F.3d 1309, 1312 (11th Cir. 1998)). To establish evident
partiality, 	Respondent 	must 	establish 	partiality 	that 	is 	“direct, 	definite 	and 	capable 	of
demonstration rather than remote, uncertain and speculative.” Gianelli Money Purchase Plan &
Trust, 146 F.3d at 1312 (quoting Middlesex Mut. Ins. Co. v. Levine, 675 F.2d 1197, 1201 (11th Cir.
1982)); see also, e.g., Al-Harbi v. Citibank, N.A., 85 F.3d 680, 683 (D.C. Cir. 1996) (agreeing with
the Fourth Circuit that “the burden on a claimant for vacation of an arbitration award due to
‘evident partiality’ is heavy, and the claimant must establish specific facts that indicate improper
motives on the part of an arbitrator” (quoting Peoples Sec. Life Ins. Co. v. Monumental Life Ins.
Co., 991 F.2d 141, 146 (4th Cir. 1993)). “[T]he mere appearance of bias or partiality is not enough
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to set aside an arbitration award.” 	Lifecare Intern., Inc. v. CD Medical, Inc., 68 F.3d 429, 433
(11th Cir. 1995).
Here, Respondent has not established that Charny had any actual conflict. 	Instead,
Respondent relies entirely on the Deluca award that was adverse to Respondent to infer that
Charny was biased or partial against Respondent. But “[a]n adverse award in and of itself is no
evidence of bias absent some evidence of improper motivation.”4 	Andersons, Inc. v. Horton
Farms, Inc., 166 F.3d 308, 330 (6th Cir. 1998) (citing Sheet Metal Workers Int’l Ass’n Loc. Union
No. 420 v. Kinney Air Conditioning Co., 756 F.2d 742, 746 (9th Cir. 1985)). As Petitioners point
out, even within the context of recusal for the federal judiciary, in which the threshold for
disqualification is significantly lower, see, e.g., Applied Indus. Materials Corp. v. Ovalar Makine
Ticaret Ve Sanayi, A.S., 492 F.3d 132, 137 (2d Cir. 2007) (explaining that a judge “can be
disqualified in any proceeding in which his impartiality might reasonably be questioned,” but an
arbitrator can be disqualified “only when a reasonable person, considering all of the circumstances,
would have to conclude that [the] arbitrator was partial”) (citations and quotations omitted), courts
have repeatedly emphasized that prior adverse rulings do not evince bias or partiality. See, e.g.,
Liteky v. U.S., 510 U.S. 540, 555 (1994) (“[J]udicial rulings alone almost never constitute valid
basis for a bias or partiality recusal motion.”); Byrne v. Nezhat, 261 F.3d 1075, 1103 (11th Cir.
2001) (“Precedent clearly holds that adverse rulings alone do not provide a party with a basis for
4 Respondent submits two FINRA decisions as supplemental authority on this issue. See ECF Nos.
47-1, 51-1 (finding it reasonable to infer arbitrators were partial due to prior service in similar
arbitration). 	At best, these non-binding authorities suggest that a prior award in a similar
arbitration may create the appearance of partiality—which is plainly “not enough to set aside” an
award under the FAA. 	See Lifecare Intern, Inc., 68 F.3d at 433; see also Barclays, 2018 WL
10759189 at *2 (“Evident partiality exists where a reasonable person would have to conclude that
an arbitrator was partial to one party to the arbitration.”) (citation and quotation marks omitted)
(emphasis added).
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holding that the court’s impartiality is in doubt.”), abrogated on other grounds by Bridge v. Phoenix
Bond & Indem. Co., 553 U.S. 639 (2008); United States v. Merkt, 794 F.2d 950, 960-61 (5th Cir.
1986). And while Respondent attempts to distinguish this case based on the punitive damages
award and findings in the Deluca arbitration in which Charny served, see, e.g., ECF No. 40 at 14-
15, Respondent fails to demonstrate why the same rationale—that such an award on its own does
not constitute evidence of bias or partiality—would not apply. Indeed, an arbitrator’s participation
in a prior related arbitration, even one involving overlapping matters, does not establish evident
partiality. See, e.g., Fed. Vending, Inc. v. Steak & Ale of Fla., Inc., 71 F. Supp. 2d 1245, 1250 (S.D.
Fla. 1999) (concluding that evident partiality was not demonstrated when an arbitrator had
“considered a particular issue and made a legal determination on the merits” in a recent prior
arbitration involving one of the parties and that issue “figured prominently in the instant
arbitration” because “[t]hat [the arbitrator] might likely decide the same issue the same way in a
later arbitration does not mean that he has a bias for or against either party, or that he is motivated
for an improper reason to decide the issue or the case one way or the other”); Dealer Computer
Servs., Inc. v. Dave Sinclair Lincoln-Mercury St. Peters, Inc., No. CIV.A. H-13-2006, 2013 WL
5918406, at *3 (S.D. Tex. Nov. 1, 2013) (concluding that defendant failed to establish evident
partiality of arbitrator who served on an earlier arbitration panel involving plaintiff and that
circumstances were “wholly insufficient to establish that [arbitrator] was partial” where plaintiff
“presented the same expert witness and a similar damages model” as in earlier arbitration and “the
panel’s decision may have employed an analysis similar to [arbitrator’s] analysis” in the prior
arbitration); cf. Levy v. Citigroup Glob. Markets, Inc., No. 06-21802-CIV, 2006 WL 8432648, at
*5 (S.D. Fla. Oct. 17, 2006) (“Serving as an arbitrator in more than one case in which one or more
of the parties is involved is not the kind of information that requires disclosure.”). Beyond offering
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speculation, Respondent has failed to demonstrate that Charny failed to act impartially and without
bias when she considered both the claims and supporting evidence presented by the Jannetti
claimants and the defenses and supporting evidence presented by Respondent.5 	Under the
circumstances presented, Respondent has not demonstrated evident partiality such that vacatur
under section 10(a)(2) is warranted.
iii. 	Respondent Has Not Established That Its Rights Were Prejudiced Under Section
10(a)(3).
Respondent next seeks vacatur of the award under section 10(a)(3) of the FAA, which
permits vacatur “where the arbitrators were guilty of . . . misbehavior by which the rights of any
party have been prejudiced.” See ECF No. 27 at 28-30. 	“To prove misbehavior” under this
subsection, Respondent “must show, as a preliminary matter, that [its] rights have been
prejudiced.” Anderson v. Am. Gen. Life Ins. Co., 802 F. App’x 548, 553 (11th Cir. 2020).
Here, Respondent claims its “right to a fundamentally fair hearing before an impartial
arbitrator” was prejudiced by Charny’s supposed “misbehavior” in which she failed to recuse
herself and allegedly certified falsely that she had not formed a negative opinion about Respondent
or the subject matter in Jannetti after issuing the award in Deluca. See ECF No. 27 at 28-30. But,
as explained above, Respondent has failed to demonstrate that Charny acted with bias or partiality,
see supra section III(A)(i), and Respondent has thus failed to demonstrate that it did not receive a
fundamentally fair hearing, that is, the “adequate notice,” “hearing on the evidence,” and
“impartial decision by the arbitrator” that it claims it was denied. 	See ECF No. 27 at 28-29
5 Here, Respondent has failed to establish that either Charny’s certification that she had not
“formed an opinion, positive or negative, about any of the parties, their counsel or the subject
matter of the arbitration,” ECF No. 27-9 at 9, or her express statement that she was “certain that
[she] can serve and decide the case impartially,” ECF No. 27-11 at 5, were anything but truthful
and accurate. The fact that Respondent failed to prevail in both the Deluca and Jannetti arbitrations
does not establish otherwise and simply does not establish evident partiality.
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(citation and quotation marks omitted) (emphasis original). Respondent has simply not established
that it suffered any prejudice from Charny’s participation in the arbitration, and vacatur under
section 10(a)(3) is thus not warranted. See, e.g., Graybeal v. Wells Fargo Clearing Servs., LLC,
No. 6:24-CV-01199-CEM-UAM, 2025 WL 1276849, at *3 (M.D. Fla. Mar. 27, 2025) (overruling
section 10(a)(3) objection to “misbehavior” where the plaintiff failed to show his rights were
prejudiced).
iv. 	Charny’s Certification Does Not Warrant Vacatur Under Section 10(a)(4).
With respect to Charny’s purportedly false certification, see ECF No. 27-9 at 9 (certifying
that Charny had not “formed an opinion, positive or negative, about any of the parties, their counsel
or the subject matter of the arbitration”), Respondent contends that the award should be vacated
under section 10(a)(4) because “by failing to be truthful or impartial, [Charny’s] conduct exceeded
her authority under the governing [s]ubmission [a]greement.” ECF No. 27 at 30 n.13.
Respondent contends that Charny must have lied in her certification because “[n]o one
could 	plausibly” make such 	a certification 	after 	issuing 	a punitive damages 	award 	and
“acknowledging [they were] being asked to evaluate similar claims, facts, and witnesses.” Id. at
30. But Respondent’s assessment of Charny’s bias and partiality, and hence her supposed lack of
truthfulness, is based wholly on speculation, is unsupported by any evidence, and fails to establish
that Charny exceeded her authority. See Biscayne Beach Club Condo. Ass’n, Inc. v. Westchester
Surplus Lines Ins. Co., No. 18-CV-23105, 2022 WL 18776152, at *9 (S.D. Fla. Mar. 1, 2022)
(rejecting section 10(a)(4) argument for lack of evidence), aff’d, 111 F.4th 1182 (11th Cir. 2024).
Moreover, it is more than merely “plausible” that an arbitrator, like a judge, could make a decision
in a given case without forming personal opinions that require recusal. See, e.g., United States v.
Gelin, No. 21-11091, 2022 WL 10220112, at *2 (11th Cir. Oct. 18, 2022) (finding impartiality of
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judge could not have reasonably been questioned when recusal arguments were based solely on
judge’s conduct during proceedings and adverse rulings, and not personal or extrajudicial sources).
Charny’s decision not to recuse herself and to remain on the Jannetti panel, even if that decision
had been erroneous, did not exceed her authority and is not a basis to vacate the award under
section 10(a)(4). See, e.g., Hidroelectrica Santa Rita S.A. v. Corporacion AIC, SA, 119 F.4th 920,
928 (11th Cir. 2024) (“[A]n arbitrator does not exceed his power when he makes errors.”).
B. Vacatur or Modification of the Punitive Damages Award Is Not Warranted Under
Sections 10(a) and 11(b) of the FAA.
Respondent next contends that, to the extent that the Court declines to vacate the entire
award, it should vacate or modify the punitive damages award under sections 10(a) and 11(b) of
the FAA. See ECF No. 27 at 31-44. Respondent’s arguments are unavailing.
i. 	The Panel Did Not Exceed Its Authority by Awarding Punitive Damages.
Respondent first asks the Court to vacate or modify the punitive damages award under
sections 10(a)(4) and 11(b) by arguing that the Jannetti arbitrators exceeded their authority, as
expressed in the parties’ arbitration agreement, to decide only “the present matter in controversy,
as set forth in [the] statement of claim,” when they issued a punitive damages award based solely
on the FSIPA. 	See ECF No. 27 at 31-35; see also ECF No. 27-4 at 2 (arbitration submission
agreement).
The Court’s review under section 10(a)(4) “is quasi-jurisdictional: a check to make sure
that the arbitration agreement granted the arbitrator authority to reach the issues it resolved.”
Gherardi v. Citigroup Glob. Markets Inc., 975 F.3d 1232, 1238 (11th Cir. 2020). In other words,
the award “can be challenged ‘not on the ground that the arbitrators made a mistake but that they
violated the agreement to arbitrate.’” Id. (quoting Wise v. Wachovia Sec., LLC, 450 F.3d 265, 269
(7th Cir. 2006)). Accordingly, “the test for whether an arbitrator exceeds his authority is whether
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the arbitrator had the power, based on the parties’ submissions or the arbitration agreement, to
reach a certain issue, not whether the arbitrator correctly decided that issue.”6 Comput. Task Grp.,
Inc. v. Palm Beach Cty., 782 So. 2d 942, 943 (Fla. 4th DCA 2001), cited and quoted parenthetically
with approval in Inversiones y Procesadora Tropical INPROTSA, S.A. v. Del Monte Int’l GmbH,
921 F.3d 1291, 1304 (11th Cir. 2019). An award will be overturned “only when it is ‘apparent’ the
arbitrator exceeded his authority.” Barclays, 786 F. App’x at 973 (quoting Wiregrass Metal Trades
Council AFL-CIO v. Shaw Envt’l & Infrastructure, Inc., 837 F.3d 1083, 1090-91 (11th Cir. 2016)).
Here, Respondent claims that because the arbitration panel awarded punitive damages
“solely under the FSIPA,” see ECF No. 27 at 31, and because “Petitioners never sought punitive
damages on their claim for violations of the FSIPA,” the panel exceeded its authority by deciding
an issue that the parties “did not submit” to the panel, see ECF No. 40 at 18. But Respondent’s
characterization of the punitive damages award is belied by its plain text, which states: “Pursuant
to Common Law and Florida Statutes Sections 768.72, 768.73 and specifically 768.72 (2)(a), and
Chapter 517, Respondent is liable for and shall pay punitive damages . . . .” 	ECF No. 1-3 at 3
(emphasis added). 	Considering that Petitioners did in fact request punitive damages for their
common law claims within the operative statement of claims, see ECF No. 27-2 at 16-17, 18-19,
the arbitration agreement “granted the [panel the] authority to reach the issue[]” of punitive
damages, Gherardi, 975 F.3d at 1238, precluding vacatur or modification of the award on this
basis.
Yet, Respondent claims common law could not have been the source of the panel’s punitive
damages award because the panel only awarded compensatory damages under the FSIPA—not
6 Similarly, under section 11(b) of the FAA, an arbitration award may be modified “[w]here the
arbitrators have awarded upon a matter not submitted to them.” 9 U.S.C. § 11(b).
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under Petitioners’ common law claims. See ECF No. 27 at 32. Respondent asks the Court to reach
this conclusion by reading language into the award about the legal basis for the compensatory
damages that were awarded. 	See id. 	But the text of the award is silent as to the rationale for
Respondent’s liability for compensatory damages and whether the compensatory damages were
awarded pursuant to the FSIPA, Petitioners’ common law claims, or both. See ECF No. 1-3 at 2-
3 (providing only that Respondent is liable for and shall pay certain sums “in compensatory
damages”). Nothing in the language of the award says that compensatory damages were awarded
solely pursuant to FSIPA. On the contrary, in the paragraph awarding punitive damages, the award
makes clear that, among the reasons supporting the award of punitive damages is the finding that
“Respondent’s egregious conduct included, but was not limited to . . . violating its fiduciary duty
owed to [Petitioners].” ECF No. 1-3 at 3. And as discussed above, Petitioners’ statement of claim
expressly requested punitive damages on Petitioners’ common law claims, including Petitioners’
breach of fiduciary duty claim. ECF No. 27-2 at 16-17 (Count I).
Notwithstanding Respondent’s arguments, there is no legitimate basis to read the punitive
damages award as having been issued solely under the FSIPA, and there is no basis for concluding
that the arbitration panel exceeded its authority by deciding a punitive damages issue that was not
submitted to it.7 See Barclays, 786 F. App’x at 973 (“A mere ambiguity . . . which permits the
inference that the arbitrator may have exceeded his authority[] is not a reason for refusing to
enforce the award.”) (quoting Wiregrass, 837 F.3d at 1090-91). Thus, vacatur or modification is
not warranted on this basis.
7 Respondent further contends that the award of attorneys’ fees is proof that compensatory damages
were awarded solely under the FSIPA. See ECF No. 27 at 32-33. But the mere fact that the panel
stated that it was awarding attorneys’ fees “pursuant to Florida Statutes Chapter 517” simply does
not mean that the FSIPA served as the sole basis for the award of compensatory damages. 	See
ECF No. 1-3 at 3.
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ii. 	No Constitutional Due Process Protections Are Implicated by the Punitive Damages
Award, And Regardless, Respondent Was Not Deprived of Any Process It Was Due.
Respondent also seeks vacatur of the punitive damages award under section 10(a)(4) “for
the independent reason that it is grossly excessive and exceeds Constitutional boundaries.” See
ECF No. 27 at 35. Specifically, Respondent asks the Court to determine “whether the [Jannetti]
[a]rbitrators’ award of punitive damages in the underlying arbitration exceeded their authority”
because the award was “so excessive” as to violate Respondent’s due process rights. See id. at 36.
Whether constitutional due process applies to the FINRA arbitration proceeding at issue is
heavily disputed between the parties. 	See ECF No. 27 at 35-40; ECF No. 39 at 47-52. 	The
Eleventh Circuit, however, has explained that “constitutional protections ‘do not extend to “private
conduct abridging individual rights,”’” and thus, “only state action is subject to scrutiny under the
Due Process Clause.” Davis v. Prudential Sec., Inc., 59 F.3d 1186, 1190 (11th Cir. 1995) (quoting
National Collegiate Athletic Ass’n v. Tarkanian, 488 U.S. 179, 191 (1988)). The Eleventh Circuit
further “agree[d] with the numerous courts that have held that the state action element of a due
process claim is absent in private arbitration cases.” Id. at 1191 (addressing “private [arbitration]
proceeding arranged by a voluntary contractual agreement of the parties”). “To decide otherwise,”
the Eleventh Circuit said, “would constitutionalize private arbitration proceedings and diminish
both the effectiveness and the appeal of the arbitral forum as an alternative means for resolving
disputes.” 	Id. at 1193-94. 	Accordingly, because the instant proceeding—to which the parties
“submit[ted] the present matter in controversy” and “agree[d] to abide by and perform any
award(s) rendered,” see ECF No. 27-4 at 2, 4—constitutes voluntary private action,8 Davis
8 Respondent claims the fact that it is “required to submit to FINRA arbitration at the customer’s
request, and [FINRA’s] rules and procedures . . . highlights the need for constitutional protections.”
See ECF No. 27 at 37-38. But Respondent “is no more ‘compelled’ to arbitration than one of its
customers who, in order to open an account with it, signs a . . . contract with an arbitration clause,”
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controls, and no due process protections are implicated by the punitive damages award.9 	See
Davis, 59 F.3d at 1190-92.
Respondent nonetheless contends that Davis does not apply and that due process
protections are implicated in this case because, unlike the private arbitration organization in Davis
(the American Arbitration Association), “FINRA is properly considered a government actor.” See
ECF No. 27 at 37. Yet as both parties acknowledge, the Eleventh Circuit has “not yet determined
whether FINRA is a government actor subject to the [Due Process] Clause’s requirements.”
Busacca v. S.E.C., 449 F. App’x 886, 890 (11th Cir. 2011).10 Instead, the Busacca court assumed
that FINRA was a government actor and explained that “[t]o the extent the Due Process Clause
applies to FINRA proceedings, its core demand is an opportunity to be heard ‘at a meaningful time
and in a meaningful manner.’” Id. (quoting Armstrong v. Manzo, 380 U.S. 545, 552 (1965)). The
court then found that because the petitioner “was afforded a meaningful opportunity to be heard”
in a FINRA disciplinary proceeding, “he was not denied any process to which he may have been
entitled.” Id. at 891.
Here, notwithstanding Respondent’s claim of partiality by arbitrator Charny, see supra at
because “if [Respondent] doesn’t like [FINRA’s predecessor’s] arbitration requirement, it could
choose not to participate in the securities business.” Park v. First Union Brokerage Servs., Inc.,
926 F. Supp. 1085, 1089-90 (M.D. Fla. 1996); see also, e.g., ECF No. 39-15 at 4-5 (clause binding
Respondent’s client to arbitration).
9 “[R]ecognizing that this Court does not have the authority to disregard the Eleventh Circuit,”
Respondent argues that “Davis should be overruled.” 	ECF No. 27 at 39-40. 	The question of
whether Davis should be overruled is plainly beyond this Court’s authority. See, e.g., Parrot, Inc.
v. NiceStuff Distrib. Int’l, Inc., No. 06-61231-CIV, 2008 WL 11332025, at *4 (S.D. Fla. Dec. 9,
2008) (“Rulings of the Eleventh Circuit are binding on this Court, and this Court must, therefore,
follow them.”).
10 It must be noted that, as stated in the award, FINRA simply “makes available an arbitration
forum—pursuant to rules approved by the SEC—but has no part in deciding the award.” ECF No.
1-3 at 1. “Awards are rendered by independent arbitrators who are chosen by the parties to issue
final, binding decisions.” Id. In other words, FINRA had no part in making the decision to award
punitive damages in this case.
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section III(A)(i), Respondent was not denied a meaningful opportunity to be heard in the
arbitration.11 Rather, Respondent claims that “the opportunity to be heard is but one requirement
of the due process clause,” see ECF No. 40 at 23-24, and that the Court should evaluate the
arbitration award under the due process standard that is used to determine whether a jury’s punitive
damages award is unconstitutionally excessive, see ECF No. 27 at 36, 40-44 (citing the standard
delineated in BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 574-75 (1996)). But Respondent has not
cited any authority within this Circuit supporting the application of this substantive standard to the
review of an arbitration award. See generally ECF Nos. 27, 40; see also Davis, 59 F.3d at 1192
(concluding that case law that “involved an award of punitive damages by a jury, not a panel of
arbitrators,” is “distinguishable” and that “[i]t is plausible to conclude that the due process
safeguards required for the imposition of punitive damages by a jury are not required” in the
arbitration context). As such, under the standard articulated in Busacca, the “core demand” of due
process has been satisfied, and Respondent was not deprived of any process that it was due. See
449 F. App’x at 890. 	The “due process challenge to the arbitration panel’s award of punitive
11 Although Respondent contends in a footnote that the panel improperly excluded expert
testimony, see ECF No. 27 at 44 n.19, “[a]ddressing a legal argument only in a footnote is an
incorrect method to present substantive arguments on the merits” and amounts to a waiver of the
argument. Plain Bay Sales, LLC v. Gallaher, No. 18-80581-CIV, 2019 WL 1782761, at *6 (S.D.
Fla. Apr. 24, 2019); Mock v. Bell Helicopter Textron, Inc., 373 F. App’x 989, 992 (11th Cir. 2010)
(deeming argument waived because it was raised only in a footnote)). At any rate, the basis for
the panel’s exclusion of the testimony was reasonable, see ECF No. 27-23 at 7-11; United States
ex rel. Salomon Constr. & Roofing, Corp. v. BES Design/Build, LLC, No. 1:18-CV-21059-UU,
2020 WL 13953718, at *4 (S.D. Fla. June 18, 2020) (an arbitrator “is not ‘guilty of misconduct’”
if the arbitrator “has any reasonable basis to limit or exclude certain evidence”), and Respondent
has not established that the panel acted “in bad faith or committed an error so gross ‘as to amount
to affirmative misconduct,’” see Battles v. Am. Van Lines, Inc., No. 15-CV-62247, 2016 WL
1258597, at *4 (S.D. Fla. Mar. 31, 2016) (quoting United Paperworkers Int’l Union, AFL-CIO v.
Misco, Inc., 484 U.S. 29, 40 (1987)). Moreover, Respondent has not shown that it was denied a
meaningful opportunity to be heard on the issue.
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damages must fail.” Davis, 59 F.3d at 1193.12
C. Vacatur or Modification of the Attorneys’ Fees Award Is Not Warranted Under
Sections 10(a) and 11(b) of the FAA.
Respondent also seeks vacatur or modification of the attorneys’ fee award under sections
10(a) and 11(b). See ECF No. 27 at 45-51. Respondent’s arguments are again unavailing.
i. 	The Court May Not Vacate the Attorneys’ Fee Award for Insufficiency of Evidence.
Respondent, claiming that Petitioners “introduced no evidence whatsoever concerning
attorneys’ fees” in Jannetti, argues that the panel acted without authority when it awarded
attorneys’ fees despite the “complete lack of evidence.” See ECF No. 27 at 45-49 (citing Florida
law and provisions of FINRA’s Arbitration Guide). Respondent asks the Court to vacate that award
pursuant to section 10(a)(4). See id.
As explained above, this Court’s review under section 10(a)(4) “is quasi-jurisdictional: a
check to make sure that the arbitration agreement granted the arbitrator authority to reach the issues
it resolved.” 	Gherardi, 975 F.3d at 1238. 	Here, Respondent does not dispute that the issue of
attorneys’ fees was properly submitted to the panel for consideration. See generally ECF No. 27;
see also ECF No. 27-2 at 17, 18, 19, 20 (Petitioner’s operative statement of claim, seeking
12 Even were the Jannetti arbitration award reviewable under the guideposts and standards used to
evaluate jury awards of punitive damages, see, e.g., State Farm Mut. Auto. Ins. Co. v. Campbell,
538 U.S. 408, 418 (2003); Gore, 517 U.S. at 574-75, given the record in this case and the findings
made by the arbitration panel concerning the reprehensibility of the knowing conduct in which the
Respondent engaged, which conduct led to a punitive damages award for each Petitioner that
trebled the amount of compensatory damages suffered by that particular Petitioner, see ECF No.
1-3 at 3, Respondent’s arguments, including its recharacterization of the evidence, the damages
award, and the culpable wrongfulness of Respondent’s conduct directed toward Petitioners, see,
e.g., ECF No. 27 at 40-44, have failed to establish that the punitive damages awarded to Petitioners
were constitutionally excessive. See, e.g., Pac. Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 23 (1991)
(holding that punitive damages award that was “more than 4 times the amount of compensatory
damages” and “more than 200 times the out-of-pocket expense” of the plaintiff did “not cross the
line into the area of constitutional impropriety” and did not violate due process).
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attorneys’ fees under various counts). Instead, Respondent’s “entire argument for vacatur is based
on the weight of the evidence presented.” Wiand v. Schneiderman, 778 F.3d 917, 926 (11th Cir.
2015). But “that is simply beyond this [C]ourt’s . . . power to review” under the FAA. Id.; see
also, e.g., Original Appalachian Artworks, Inc. v. JAKKS Pac., Inc., 718 F. App’x 776, 786 (11th
Cir. 2017) (“Defendant argues that there was no evidence to support this conclusion. However,
we may not vacate an arbitrator’s award for mere insufficiency of the evidence.”).13 Accordingly,
vacatur is not warranted under section 10(a)(4).
ii. 	The Panel Did Not “Refuse to Hear Evidence” Under Section 10(a)(3).
Respondent next contends that the panel’s “decision to award fees without hearing any
supporting evidence” is equivalent to “refusing to hear evidence pertinent and material to the
controversy,” which is a basis for vacatur for “misconduct” under section 10(a)(3). ECF No. 27
at 48-49; see also 9 U.S.C. § 10(a)(3). Respondent’s argument is both baffling and meritless. By
its text, the portion of section 10(a)(3) that Respondent relies upon contemplates an arbitrator’s
affirmative “refus[al] to hear evidence,” i.e., an arbitrator’s limitation, exclusion, or other denial
of evidence offered by a party in an arbitration. Indeed, that is what the caselaw on section 10(a)(3)
concerns, see, e.g., United States ex rel. Salomon Constr. & Roofing, Corp. v. BES Design/Build,
LLC, No. 1:18-CV-21059-UU, 2020 WL 13953718, at *4 (S.D. Fla. June 18, 2020) (explaining
that an arbitrator “is not ‘guilty of misconduct’ as contemplated by” section 10(a)(3) “[i]f the
arbitrator has any reasonable basis to limit or exclude certain evidence”), and it is not “analogous”
13 Respondent attempts to distinguish Original Appalachian on the grounds that the case
“concerned the materiality of a breach of contract claim and did not involve attorneys’ fees.” ECF
No. 40 at 28. That is a distinction without a difference. See EWC Franchise, LLC v. DOC Dev.,
LLC, No. 20-60035-CIV, 2020 WL 13367252, at *3 (S.D. Fla. July 17, 2020) (concluding that
“even if the arbitrator erred . . . by making his decision [on attorneys’ fees] with insufficient
evidence,” that is “not grounds for vacating the award”) (citing Wiand).
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to the instant case, in which Respondent identifies no evidence whatsoever that was offered by any
party on the subject of attorneys’ fees that the arbitrators refused to consider. Accordingly, vacatur
is not warranted under section 10(a)(3).
iii. 	The Panel Did Not Exceed Its Authority by Awarding Attorneys’ Fees.
Finally, Respondent contends that the panel exceeded its authority when it awarded
attorneys’ fees and costs based on punitive damages under the FSIPA and argues that vacatur or
modification under sections 10(a)(4) and 11(b) of the FAA is warranted. See ECF No. 27 at 49-
51.
Respondent contends the panel decided on a matter that was not submitted by the parties
when it awarded attorneys’ fees in the amount of 25% of compensatory and punitive damages,
because Petitioners only requested 25% of compensatory damages. See id. at 50. But the “matter”
of attorneys’ fees was plainly submitted to the arbitrators for consideration. 	See, e.g., id.
(acknowledging that Petitioners “expressly asked for ‘reasonable’ attorneys’ fees.”); see also 9
U.S.C. § 11(b) (modification only warranted where arbitrators “have awarded upon a matter not
submitted to them”). And to the extent Respondent contends that the panel exceeded its authority
because it was contrary to applicable law to include a percentage of punitive damages in the
computation of an attorneys’ fee award, see id. at 50-51 (contending FSIPA does not permit
awarding attorneys’ fees based on percentage of punitive damages), the Court cannot review the
award on that basis. 	See White Springs, 660 F.3d at 1283 (“These points on appeal essentially
involve the same argument: the panel exceeded its powers by acting contrary to the law. 	We
cannot, however, review the panel’s award for underlying legal error. 	Even though [appellant]
presents its arguments in terms of the FAA, it asks us to do what we may not—look to the legal
merits of the underlying award.”) (citing Hall St., 552 U.S. at 586). 	Accordingly, vacatur or
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modification is not warranted on these grounds.
D. Petitioners’ Cross-Motion for Post-Award Prejudgment Interest and Sanctions
Should be Granted in Part and Denied in Part.
In the cross-motion found at the end of Petitioners’ response to Respondent’s motion to
vacate, 	Petitioners 	request 	both 	post-award 	prejudgment 	interest 	and 	sanctions 	against
Respondent. See ECF No. 39 at 62-63. The undersigned addresses each of Petitioners’ requests
in turn.
i. 	Petitioners Are Entitled to Post-Award Prejudgment Interest.
First, Petitioners request “post-award prejudgment interest on the full amount of the
[arbitration] [a]ward from the date the amount was liquidated,” i.e., the date the Jannetti award
was issued, “through the date of confirmation of the [a]ward” in this Court. ECF No. 39 at 63.
Here, because “[s]ubject matter jurisdiction is founded on diversity of citizenship,” Florida law
“governs whether [Petitioners] [are] entitled to post-award, pre-judgment interest.” Rollins, Inc.
v. Black, 167 F. App’x 798, 800 n.4 (11th Cir. 2006); see also ECF No. 41 at 11 n.4.
The parties dispute whether Petitioners are entitled to post-award prejudgment interest on
the full amount of the arbitration award. Respondent argues that Florida law prohibits prejudgment
interest on punitive damages, see ECF No. 39 at 41 at 11-13, but none of the cases cited by
Respondent for that proposition squarely address the present scenario. 	See ECF No. 46 n.3
(distinguishing case law). Here, the damages at issue were liquidated under Florida law when the
arbitration panel issued its award. 	Okun v. Litwin Sec., Inc., 652 So.2d 387, 389 (Fla. 3d DCA
1995) (concluding that an arbitration award liquidates the amount owed to the prevailing party).
And “[i]n Florida, interest from the date of the arbitral award is ‘required’ where the award
liquidated the amount owed.” Rollins, Inc., 167 F. App’x at 800 (quoting Okun, 652 So.2d at 389).
Respondent cites no authority that applies Florida’s general prohibition of prejudgment interest on
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punitive damages to an award that liquidated damages. 	See ECF No. 39. 	Indeed, the Florida
Supreme Court has explicitly distinguished liquidated claims in this context. 	See Argonaut Ins.
Co. v. May Plumbing Co., 474 So. 2d 212, 215 (Fla. 1985) (distinguishing liquidated claims from
unliquidated claims and explaining that once damages have been “liquidated . . . as of a date
certain, computation of prejudgment interest is merely a mathematical computation” and “it is a
purely ministerial duty of the trial judge or clerk of the court to add the appropriate amount of
interest”). Accordingly, Petitioners are entitled to prejudgment interest on the liquidated amount
set forth in the award.
Respondent further contends that FINRA Rule 12904(j)—which states in relevant part that
“[a]n award shall bear interest from the date of the award: (1) If not paid within 30 days of receipt;
(2) If the award is the subject of a motion to vacate which is denied; or (3) As specified by the
panel in the award”—cabins the post-award prejudgment interest here only to compensatory
damages because the arbitration panel awarded interest solely on compensatory damages and
denied “[a]ny and all claims for relief not specifically addressed.” See ECF No. 41 at 8-11. But
by its plain text, the rule Respondent relies upon does not limit interest from accruing only “[a]s
specified by the panel in the award,” but instead also states that post-award interest accrues “[i]f
the award is the subject of a motion to vacate which is denied.” FINRA Rule 12904(j). Because
the undersigned recommends denial of Respondent’s motion to vacate, post-award prejudgment
interest on the entire amount of the award is appropriate. See Schottenstein v. J.P. Morgan Sec.,
LLC, No. 21-CV-20521, 2022 WL 15497004, at *6 (S.D. Fla. Oct. 27, 2022) (rejecting the same
argument that has been advanced by Respondent and concluding, where the arbitrators only
awarded interest on compensatory damages, that the identically-worded FINRA Rule 13904(j)
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supported awarding prejudgment interest on costs and attorneys’ fees), aff’d sub nom, Goldman
Sachs Tr. Co., N.A. v. J.P. Morgan Sec., LLC, 2024 WL 445571, at *3 (11th Cir. Feb. 6, 2024).
Finally, Respondent contends that Petitioners are attempting to modify or correct the
underlying arbitration award. See ECF No. 41 at 7-8. But that argument is meritless, as Petitioners
merely seek prejudgment interest to which they are entitled under Florida law and FINRA Rule
12904(j). Accordingly, Petitioners’ request for prejudgment interest should be granted.
ii. 	Monetary Sanctions Are Not Warranted.
Next, Petitioners ask the Court to “enter monetary sanctions against [Respondent] for
pursuing a frivolous challenge to the [arbitration] [a]ward in the amount of the [Petitioners’]
attorneys’ fees and costs incurred in defending against [Respondent’s] frivolous [m]otion.” ECF
No. 39 at 63. Petitioners do not explicitly state the basis for the requested sanctions, but appear to
be relying on the Eleventh Circuit’s decision in B.L. Harbert Int’l, LLC v. Hercules Steel Co., in
which the court stated:
Courts cannot prevent parties from trying to convert arbitration losses into court
victories, but it may be that we can and should insist that if a party on the short end
of an arbitration award attacks that award in court without any real legal basis for
doing so, that party should pay sanctions.
441 F.3d 905, 913 (11th Cir. 2006). 	Courts in this Circuit “have invoked Hercules Steel in
considering sanctions.” Bertin v. Zadok Real Est. Holdings, LLC, No. 10-24508-CIV, 2012 WL
13012463, at *16 (S.D. Fla. Feb. 3, 2012), report and recommendation adopted, 2012 WL
13012422 (S.D. Fla. Feb. 23, 2012).
Here, despite Petitioners’ conclusory assertion that Respondent’s “frivolous” motion is
“without evidentiary or legal support,” ECF No. 39 at 63, the undersigned “cannot conclude that
[Respondent’s] challenge was utterly devoid of a basis of law that would compel the Court to
impose sanctions” pursuant to Hercules Steel. See Deitchman v. Bear Stearns Sec. Corp., No. 07-
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60465CIV-MARRA/JO, 2007 WL 4592238, at *8 (S.D. Fla. Dec. 28, 2007). Respondent raised
various colorable grounds for vacatur or modification of the award and cited to a host of record
evidence and applicable legal authority in support of its arguments. See generally ECF No. 27.
While Respondent’s challenge ultimately fail on the merits, it cannot be said that Respondent
pursued this challenge “without any real legal basis for doing so.” Hercules Steel, 441 F.3d at 913.
Accordingly, Petitioners’ cross-motion for sanctions should be denied. See, e.g., Williams v. NCL
(Bahamas) Ltd., No. 18-22774-CV, 2018 WL 5807659, at *7 (S.D. Fla. Nov. 6, 2018) (denying
motion for sanctions because plaintiff’s “belief that she would prevail by challenging the award in
this [c]ourt” was not “objectively unreasonable,” even though “many of the arguments raised by
[p]laintiff [were] unavailing”), report and recommendation adopted, 2019 WL 568394 (S.D. Fla.
Jan. 9, 2019).
IV. 	CONCLUSION
For the reasons set forth above, the undersigned RESPECTFULLY RECOMMENDS
that Respondent’s Motion to Vacate Arbitration Award, ECF No. 27, be DENIED, that the
underlying Petition to Confirm Arbitration Award, ECF No. 1, accordingly be GRANTED, and
that Petitioners’ Cross-Motion for Post-Award Prejudgment Interest and Sanctions, ECF No. 39 at
62-63, be GRANTED as to the request for prejudgment interest and DENIED as to the request
for sanctions.
Within fourteen (14) days from the date of this Report and Recommendation, that is, by no
later than February 20, 2026, the parties shall serve and file written objections, if any, to this
Report and Recommendation with the Honorable Darrin P. Gayles, United States District Judge.
Failure to file timely objections will bar a de novo determination by the District Judge of any issue
addressed in the Report and Recommendation, will constitute a waiver of a party’s “right to
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challenge 	on 	appeal 	the 	district 	court’s 	order 	based 	on 	unobjected-to 	factual 	and 	legal
conclusions,” and will only allow appellate review of the district court order “for plain error if
necessary in the interests of justice.” 11th Cir. R. 3-1; 28 U.S.C. § 636(b)(1); Thomas v. Arn, 474
U.S. 140 (1985); Henley v. Johnson, 885 F.2d 790, 794 (11th Cir. 1989); see also Harrigan v.
Metro-Dade Police Dep’t Station #4, 977 F.3d 1185, 1191-92 (11th Cir. 2020).
RESPECTFULLY RECOMMENDED in Chambers in Miami, Florida, this 6th day of
February 2026.
___________________________________
EDUARDO I. SANCHEZ
UNITED STATES MAGISTRATE JUDGE
cc: 	Hon. Darrin P. Gayles
Counsel of Record
Case 1:25-cv-21176-DPG Document 55 Entered on FLSD Docket 02/06/2026 Page 28 of 28