DEBORAH MOSS, on behalf of herself and all others similarly situated, Plaintiff-Appellee,
FIRST PREMIER BANK, a South Dakota state-chartered bank, and BAY CITIES BANK, a Florida state-chartered bank, Defendants-Appellants.
Argued: April 8, 2016
from a July 16, 2015 order of the United States District
Court for the Eastern District of New York (Bianco,
J.), vacating a prior order compelling arbitration.
The parties agreed to arbitrate their disputes before the
National Arbitration Forum ("NAF"), which no longer
accepts consumer arbitrations. The district court held that
it could not appoint a substitute arbitrator because the
language of the arbitration agreement contemplated
arbitration only before NAF. We agree with the district court
and therefore AFFIRM.
RIEDER, Bryan Cave LLP (Megan Awerdick Pierson, on the
brief), New York, NY, for Defendant- Appellant Bay Cities
R. Freeman, Lindquist & Vennum LLP, Minneapolis, MN;
Bryan Craig Meltzer, Herrick, Feinstein LLP, for
Defendant-Appellant First PREMIER Bank.
AUSTIN MOORE, Stueve Siegel Hanson LLP (Norman E. Siegel,
Steve N. Nix, Stueve Siegel Hanson LLP; Darren T. Kaplan, New
York, NY; Hassan Zavareei, Jeffrey D. Kaliel, Tycko &
Zavareei, Washington, D.C., on the brief), Kansas City, MO,
Before: POOLER, LIVINGSTON, and LOHIER, Circuit Judges.
POOLER, Circuit Judge:
Moss signed an arbitration agreement providing that any
disputes between her and her payday lender would be resolved
by arbitration before the National Arbitration Forum
("NAF"). When she tried to take her case to
arbitration, however, NAF refused to accept it pursuant to a
consent decree that prohibited NAF from accepting consumer
arbitrations. The district court (Bianco, J.)
construed the arbitration agreement as contemplating
arbitration only before NAF and declined to compel
Moss to arbitrate before a different arbitrator. We agree
with the district court's construction of the agreement
and accordingly affirm.
Moss took out three payday loans from an online payday
lender, SFS, Inc. ("SFS"). When a payday lender
such as SFS agrees to loan a customer money, it relies on
banks to serve as middlemen to debit the customer's
account. These banks are known as "Originating
Depository Financial Institutions, " or
"ODFIs." First Premier Bank and Bay Cities Bank
each served as an ODFI for one of Moss's payday loans
Moss applied for the loans, she electronically signed an
application that included an arbitration clause. The
arbitration clause on one of the applications provided,
Arbitration of All Disputes: You and we agree that
any and all claims, disputes or controversies between you and
us, any claim by either of us against the other . . . and any
claim arising from or relating to your application for this
loan, regarding this loan or any other loan you previously or
may later obtain from us, this Note, this agreement to
arbitrate all disputes, your agreement not to bring, join or
participate in class actions, regarding collection of the
loan, alleging fraud or misrepresentation . . . including
disputes regarding the matters subject to arbitration, or
otherwise, shall be resolved by binding individual (and not
joint) arbitration by and under the Code of Procedure of the
National Arbitration Forum ("NAF") in effect at the
time the claim is filed. . . . Rules and forms of the NAF may
be obtained and all claims shall be filed at any NAF office,
on the World Wide Web at aww.arb-forum.com, by telephone at
800-474- 2371, or at "National Arbitration Forum, P.O.
Box 50191, Minneapolis, Minnesota 55405." Your
arbitration fees will be waived by the NAF in the event you
cannot afford to pay them.
at 168. The following notice is printed directly beneath the
arbitration provision: "NOTICE: YOU AND WE WOULD HAVE
HAD A RIGHT OR OPPORTUNITY TO LITIGATE DISPUTES THROUGH A
COURT AND HAVE A JUDGE OR JURY DECIDE THE DISPUTES BUT HAVE
AGREED INSTEAD TO RESOLVE DISPUTES THROUGH BINDING
ARBITRATION." App'x at 168. The other applications
Moss signed contained similar arbitration clauses.
filed a putative class action against First Premier Bank and
Bay Cities Bank in federal court, alleging violations of the
Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C.
§ 1962, and state law. In short, Moss alleged that the
banks unlawfully facilitated high-interest payday loans that
have been outlawed in several states.
banks moved to compel arbitration on the basis of the
arbitration agreements that Moss signed when she applied for
the loans. Although the banks were not parties to those
agreements, they argued that they were entitled to enforce
the agreements against Moss under principles of estoppel. The
district court agreed ...