UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

SHEARSON LEHMAN HUTTON,
INCORPORATED,
Plaintiff-Appellant,

v.                                                               No. 97-1849

JOHN P. VENNERS, d/b/a Prime Oil,
LTD,
Defendant-Appellee.

Appeal from the United States District Court
for the Eastern District of Virginia, at Alexandria.
Claude M. Hilton, Chief District Judge.
(CA-89-526-A)

Submitted: October 13, 1998

Decided: November 2, 1998

Before WILKINSON, Chief Judge, LUTTIG, Circuit Judge,
and GOODWIN, United States District Judge for the
Southern District of West Virginia, sitting by designation.

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Affirmed by unpublished per curiam opinion.

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COUNSEL

William J. Minor, Jr., GODARD, WEST & ADELMAN, Fairfax,
Virginia, for Appellant. William T. Freyvogel, ADAMS, PORTER &
RADIGAN, LTD., McLean, Virginia, for Appellee.

_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

Shearson Lehman Hutton, Inc., (Shearson) appeals from the district
court's order dismissing its complaint against John P. Venners, doing
business as Prime Oil, Ltd., based on an alleged breach of a standard-
form Commodity Agreement (Agreement). For the reasons that fol-
low, we affirm.

Venners is president and fifty-percent owner of Prime Oil, Ltd. In
December 1988, Venners opened an account in the name of Prime Oil
with Shearson and signed a pre-printed Commodity Agreement pro-
vided by Shearson. Venners signed in his capacity as president of
Prime Oil but did not execute a personal guarantee. From December
1988 until March 1989, Prime Oil entered into a series of transactions
for the purchase and sale of commodities futures and options con-
tracts, resulting in losses totaling $1,067,149.55. Shearson closed the
account the following month and then instituted this action against
Venners seeking to hold him personally liable for Prime Oil's debt.

In May 1989, the district court stayed the case and ordered the par-
ties to proceed with arbitration under the provisions of the arbitration
agreement which was contained within the Agreement between
Shearson and Prime Oil. In June 1989, Prime Oil and Venners initi-
ated a reparations proceeding in the Commodity Futures Trading
Commission ("CFTC"). Shearson counter-claimed, seeking an award
of the debit balance against Prime Oil and against Venners under an
"alter ego" theory. The CFTC entered its final decision in July 1992
and dismissed both Prime Oil's and Venners' claim for reparations
and awarded Shearson its debit balance against Prime Oil only. The
administrative law judge found that: (1) the Agreement was between
Shearson and Prime Oil only; (2) Venners was not a party to the
Agreement in any personal capacity; (3) Venners had not personally
guaranteed any liability owed to Shearson by Prime Oil; and (4) under

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CFTC policy, he could not "pierce the corporate veil." None of the
parties appealed the CFTC's final decision.

In March 1997,* Shearson filed a motion in the district court to lift
the stay to allow it to proceed against Venners. The district court
lifted the stay and then granted Venners' Fed. R. Civ. P. 12(b)(6)
motion to dismiss the complaint, finding that Shearson's claim against
him was barred by the CFTC's ruling. Shearson appeals.

This court reviews the district court's grant of Venners' Fed. R.
Civ. P. 12(b)(6) motion to dismiss de novo. See Brooks v. City of
Winston-Salem, 

, 181 (4th Cir. 1996). On appeal from an
order granting a Rule 12(b)(6) motion to dismiss, this court accepts
as true the facts as alleged in the complaint, and recognizes that dis-
missal is inappropriate unless, accepting as true the well-pleaded facts
in the complaint and viewing them in the light most favorable to the
plaintiff, "it appears to a certainty that the plaintiff would be entitled
to no relief under any state of facts which could be proved in support
of his claim." Mylan Lab., Inc. v. Matkari , 

, 1134 & n.4
(4th Cir. 1993) (internal quotation marks omitted).

With this standard in mind, we find that the district court properly
dismissed Shearson's complaint against Venners. The Agreement
between Shearson and Prime Oil mandated that all controversies
between or among the parties and/or the officers, directors, employees
and agents of the corporation concerning the commodity futures trad-
ing account be resolved through binding arbitration. Shearson, Prime
Oil, and Venners litigated all of their claims before the CFTC, which
clearly ruled that Venners was not personally liable for the deficit in
the Prime Oil trading account. Shearson, Prime Oil, and Venners are
bound by these rulings. See Commodity Futures Trading Comm'n v.
Schor, 

(1986) (sustaining the jurisdiction of the Com-
modity Futures Trading Commission over state law counterclaims in
reparation proceedings). Thus, Shearson was bound by the CFTC's
_________________________________________________________________
*Shearson stated that its five-year delay in seeking an order lifting the
stay was due to "the confusion following the dissolution [of Shearson
Lehman Hutton into Lehman Brothers, Inc., and Smith Barney]" and that
it had simply "lost track" of the matter.

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determination that, as an individual, Venners was not personally lia-
ble for Shearson's losses.

As to Shearson's claim that Venners is derivatively liable under an
alter ego theory, the district court properly dismissed Shearson's
claim. Piercing the corporate veil is not an independent cause of
action. See Thomas v. Peacock, 

, 499 (4th Cir. 1994),
rev'd on other grounds, 

(1996). Rather, piercing the
corporate veil is a method of imposing liability on an underlying
cause of action. See WILLIAM FLETCHER, FLETCHER CYCLOPEDIA OF THE
LAW OF PRIVATE CORPORATIONS § 41, at 603 (perm. ed. rev. vol. 1990).
Therefore, Shearson cannot maintain a separate cause of action
against Venners based solely on an alter ego theory.

We note that the Administrative Law Judge did not resolve the
alter ego issue as it is against CFTC policy to pierce the corporate
veil at the Commission level. Under the Commodities Exchange Act,
once Prime Oil failed to pay on the CFTC judgment, Shearson should
have litigated its alter ego theory against Venners in an enforcement
proceeding filed with the district court. See 7 U.S.C.A. § 18(d) (West
Supp. 1998); see also Hwang v. Bull Market Commodities, Inc.
[1986-1987 Transfer Binder] Comm. Fut. L. Rep. (CCH) ¶ 23,773
("The Commission . . . has resisted imposition of liability [on the
basis of an alter ego] . . . preferring`in the main to let the federal
courts handle such questions during the enforcement phase of a repa-
ration award.'") (emphasis added). Instead Shearson moved to lift the
stay in the district court proceedings some four years after the CFTC
judgment was entered. Even if we were to construe Shearson's
motion to lift the stay as an enforcement action, Shearson's action
was time-barred and filed in the wrong district court. See 

against whom an award has been made does not pay the repa-
ration award within the time specified by the Commission's order, the
complainant, or any person for whose benefit such order was made,
within three years of the date of the order, may file a certified copy
of the order of the Commission, in the district court of the United
States, for the district in which he resides or in which is located the
principal place of business of the respondent, for enforcement of such
reparation award by appropriate orders.") (emphasis added).

Accordingly, we affirm the district court's order.

AFFIRMED

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