Guidance for Cases Venued in Puerto Rico Following Hurricane Maria

Background

On September 20, 2017, Hurricane Maria struck Puerto Rico inflicting extreme damage to the island’s infrastructure and property, and resulted in a humanitarian crisis for island residents. On that same day, FINRA Office of Dispute Resolution (“ODR”) administratively canceled all hearings and conference calls scheduled to be held on or before October 6, 2017 in cases venued in Puerto Rico, and extended all case-related deadlines until October 13, 2017.

On September 25, 2017, FINRA ODR announced that it had extended the administrative stay for all cases venued in Puerto Rico until October 20, 2017. This included canceling all hearings, conference calls and deadlines scheduled during this time.

Guidance for Cases after October 20, 2017

Effective October 21, 2017, FINRA ODR will lift the stay for all cases venued in Puerto Rico. Please note that when the stay is lifted, FINRA ODR will resume the scheduling of in-person hearings in Puerto Rico for dates on or after December 4, 2017, as long as there are hotels and restaurants available for the parties and arbitrators, and there are no security issues or concerns. FINRA ODR will update this guidance regarding the status of scheduling in-person hearings in Puerto Rico by November 20, 2017.

Cases should proceed as the facts and circumstances of each case allow. FINRA ODR is cognizant that these circumstances may prevent some cases from moving forward while other cases will proceed in the normal course of business. The parties, counsel, and arbitrators are in the best position to review and decide the proper course of action for their individual case and circumstances.

At the request of a party or panel, FINRA ODR will schedule a telephonic pre-hearing conference call to expedite the rescheduling of evidentiary hearings related to the stay. FINRA ODR will compensate the arbitrators for these calls but will waive the fees for the parties.

Alternate Hearing Locations:

Parties that want to change the hearing location from Puerto Rico to another hearing location can do so by mutual agreement, as set forth in the Code of Arbitration Procedure. If the parties cannot agree, they may make an appropriate motion to the panel in their case. Such motions will be decided by the panel pursuant to Code of Arbitration Procedure Rules 12213(a)(4) or 13213(a)(4), which state that “[a]fter a panel is appointed, the panel may decide a motion relating to changing the hearing location.” In order to decide these motions on an expedited basis, FINRA ODR has shortened the response and reply times for any motion relating to changing the hearing location to 5 calendar days and 2 business days respectively. If parties do not want to change their hearing location, FINRA ODR encourages the parties to work together to reset their evidentiary hearings to start on or after December 4, 2017.

When considering another hearing location for evidentiary hearings, the parties are encouraged to consider the ability of parties and witnesses to appear by phone and video conference, as well as in-person. The parties should also consider creative solutions to the logistical hurdles present in Puerto Rico. For example, the parties may wish to consider accepting the testimony of certain witnesses recorded in other similar hearings who are not currently available to appear at a hearing and that the parties agree would be largely identical to the testimony that person would provide in this case. Similarly, the parties may be able to stipulate to what testimony would have been provided by the unavailable witness, in lieu of requiring the witness to appear again.

Service:

FINRA ODR will serve all cases venued in Puerto Rico on all broker-dealers with the exception of Popular Securities and Oriental Financial Services, as both of these firms are unable to receive service through the FINRA ODR portal. As infrastructure is restored in Puerto Rico, FINRA ODR will begin service of claims on these firms.

Motion Deadlines:

With respect to motion deadlines that occurred during the stay, the parties should work with opposing counsel to agree upon new deadlines. If the parties are unable to agree, the parties should raise the issue with the panel for determination.

All Other Deadlines:

With respect to FINRA Code-prescribed deadlines, FINRA ODR will consider extension requests for good cause pursuant to Code of Arbitration Procedure Rules 12207(c) and 13207(c). To the extent that FINRA Code-prescribed deadlines occurred during the stay, FINRA ODR will communicate new deadlines to the parties on a rolling, case-by-case basis, beginning with expedited cases. If parties mutually agree, they should communicate that agreement to FINRA ODR at their earliest convenience.

FINRA ODR reminds the parties that mediation is an expeditious and cost effective option for resolving cases, and may be of particular appeal to the parties at this time. If you are interested in mediation, please contact Leon de Leon (561-447-4917 or by email) or Allison Phillips (561-447-4907 or by email).

FINRA ODR will continue to monitor the situation in Puerto Rico and will make any necessary adjustments to the foregoing as conditions warrant.