Professional Documents
Culture Documents
Published
Published
No. 15-1170
on
behalf
of
Plaintiffs - Appellants,
v.
DELBERT SERVICES CORPORATION,
Defendant - Appellee.
-------------------------------NATIONAL
CONSUMER
LENDING,
NATIONAL ASSOCIATION OF
CENTER
FOR
RESPONSIBLE
No. 15-1217
NATIONAL
CONSUMER
LENDING,
NATIONAL ASSOCIATION OF
CENTER
FOR
RESPONSIBLE
Appeals from the United States District Court for the Eastern
District of Virginia, at Richmond.
John A. Gibney, Jr.,
District Judge. (3:14-cv-00258-JAG)
Argued:
December 9, 2015
Decided:
February 2, 2016
Hayes,
a
payday
the
lead
loan
plaintiff-appellant
from
lender
in
called
this
case,
Western
Sky
became
the
servicing
agent
for
Hayess
loan.
Because
that
Hayes
and
his
fellow
plaintiffs
agreed
to
of
alternative
dispute
resolution
while
simultaneously
not
protect
unambiguously
the
forbids
sort
an
of
arbitration
arbitrator
from
agreement
even
applying
that
the
I.
This case originates with the lending practices of Western
Sky. Western Sky was an online lender owned by Martin Webb. Webb
was a member of the Cheyenne River Sioux Tribe, and Western
Skys
offices
were
located
on
the
Cheyenne
River
Indian
origination
fee.
Hayes
thus
received
$2,525.00
in
cash.
one
appears
to
seriously
dispute
that
Western
Skys
laws
and
jurisdiction
of
the
Cheyenne
River
Sioux
and
public
enforcement
actions
seems
to
have
led
however,
the
financial
and
legal
problems
The
plaintiffs
claim
that
Delbert
sent
them
collection
identity
of
the
actual
creditor.
They
also
allege
that
and
Practices
Consumer
phone
Act,
15
Protection
calls
violated
U.S.C.
Act,
the
Fair
1692-1692p,
47
U.S.C.
Debt
and
227.
Collection
the
Hayes
Telephone
also
sought
then
purports
to
disavow
the
authority
of
all
state
or
of
the
rest
of
the
loan
document
concerns
the
any
anyone
dispute
else
under
[the
borrower]
ha[s]
with
Western
this
loan
Sky
or
agreement
will
be
resolved
by
will
be
conducted
by
the
Cheyenne
River
Sioux
any
claim
obtain
the
loan
based
and
upon
the
marketing
handling
or
or
solicitations
servicing
of
to
[the
or
scope
of
this
loan
or
the
Arbitration
provisions
of
the
arbitration
agreement
mirror
states
TRANSACTION
that
INVOLVING
the
THE
agreement
INDIAN
7
IS
MADE
COMMERCE
PURSUANT
CLAUSE
OF
TO
THE
CONSTITUTION
OF
GOVERNED
THE
BY
arbitrator
Tribal
will
Nation
THE
UNITED
LAW
OF
apply
and
the
STATES
THE
the
OF
AMERICA,
CHEYENNE
laws
terms
of
of
RIVER
the
this
AND
SIOUX
Cheyenne
SHALL
TRIBE.
River
Agreement.
BE
The
Sioux
J.A.
156.
Mediation
Services
(JAMS),
or
another
organization
to
in
earlier
versions
of
the
Western
Sky
arbitration
Sky
arbitration
to
compensate
mechanism
set
for
out
the
in
fact
the
that
the
agreement
tribal
proved
in
practice to be illusory.
Relying on these various terms, Delbert filed a motion to
dismiss,
claiming
that
the
loan
agreements
forum
selection
arbitration
tribal
agreement.
arbitration
agreement
involved
had
in
The
mechanism
proved
Western
court
acknowledged
established
problematic,
Sky-related
and
by
the
that
litigation
had
that
the
arbitration
other
courts
accordingly
this
case
had
recourse
to
well-recognized
arbitration
enforce
the
forum
selection
clause
and
denying
the
review
de
novo
district
courts
order
compelling
cognizant
of
the
strong
federal
policy
in
favor
of
The specific statutory basis for our review comes from the
FAAs second section, which says that an agreement to settle by
arbitration
controversy
thereafter
arising
shall
be
raise
several
related
challenges
to
the
arbitration agreement.
B.
The
first
challenge
involves
bit
of
history.
The
Cheyenne
River
Sioux
Tribal
Nation
by
an
authorized
155.
Other
courts
reviewing
Western
Sky
arbitration
[a]lthough
process
conducted
th[is]
under
contract
the
language
watchful
eye
contemplates
of
legitimate
representatives
who
conduct
arbitrations,
and
that
the Tribe does not even possess a method through which it might
select and appoint such a person. In fact, one official from the
Tribe has acknowledged that the tribal governing authority does
not
authorize
Arbitration
and
the
tribal
court
does
not
not
appear
to
contest
these
points.
Indeed,
in
other
Inc.
(one
of
Western
Skys
allied
firms,
as
noted
12
847, 851-52 (E.D. Wis. 2015), appeal docketed, No. 15-2699 (7th
Cir. Aug. 12, 2015).
The plaintiffs are quick to point out, moreover, that in at
least one Western Sky dispute that made it to arbitration, the
appointed arbitrator was a Mr. Chasing Hawk. But Mr. Chasing
Hawk later admitted that Western Skys owner had asked him to
arbitrate
Supp.
2d
litigation
the
dispute.
1303,
was
1308
also
Inetianbor
(S.D.
put
v.
Fla.
forward
CashCall,
2013).
Inc.,
Evidence
suggesting
that
Mr.
962
in
F.
that
Chasing
and
his
co-plaintiffs
argue
that
the
problems
dispute
rules
contemplated
by
the
arbitration
arbitral
mechanism
collectively
render
the
arbitration
13
Delbert
counters
by
pointing
out
that
the
bulk
of
the
According
to
Delbert,
this
addition
to
the
agreement
the
arbitration,
according
to
the
not
actually
plaintiffs
conduct
reading
of
it.
the
AAA or JAMS rules only to the extent that those rules and
procedures
do
not
contradict
either
the
law
of
the
Cheyenne
clear,
for
arbitrator
instance,
would
whether
still
need
an
to
AAA-
be
an
or
JAMS-
authorized
various
convoluted
provisions
in
the
agreement
would
reason
questions
that
the
concerning
FAA
the
largely
basic
leaves
fairness
judicial
and
review
function
of
of
an
of
the
application
of
federal
law
to
resolve
the
the
dispute
resolution
mechanism
it
establishes
has
not.
Accordingly,
Delbert
does
not
attempt
to
ground
its
in
its
briefing
and
during
oral
argument,
Delbert
waiver
of
agreement.
federal
law
But
that
provision
provision
found
is
in
the
simply
16
The
Supreme
agreements
Court
that
give
has
an
repeatedly
arbitrator
upheld
authority
arbitration
to
arbitrate
Lane
Corp.,
500
U.S.
20,
35
(1991)
(ADEA
Inc.,
473
U.S.
614,
640
(1985)
(federal
antitrust
748
F.3d
217,
224
(4th
Cir.
2014)
(various
federal
of
class
arbitration
permissible);
Vimar
Seguros
Reaseguros, S.A. v. M/V Sky Reefer, 515 U.S. 528, 541 (1995)
(arbitration
in
foreign
countries
permissible);
see
also
Muriithi v. Shuttle Exp., Inc., 712 F.3d 173, 181-83 (4th Cir.
2013) (fee splitting between the parties to an arbitration may
17
be
permissible).
These
decisions
flow
naturally
from
the
of
contract
and,
therefore,
that
courts
must
that
the
prohibition
of
substantive
waivers
of
at
2311
(alteration
in
original)
(quoting
Green
Tree
Muriithi,
clause
may
712
be
F.3d
at
181
unenforceable
(noting
if
high
that
an
arbitration
arbitration
costs
federal
statutory
claim
18
in
arbitration
worth
the
Exp.
Co.,
133
S.
Ct.
at
2311-12.
Rather,
the
Court
waiver
remedies.
Id.
of
at
party's
2310
right
(emphasis
to
in
pursue
statutory
original)
(quoting
Mitsubishi Motors Corp., 473 U.S. at 637 n.19). The Court thus
upheld the class arbitration waiver in American Express, because
the
waiver
federal
reduced
antitrust
pursuing
stated
only
an
that
certainly
claim.
antitrust
the
cover
economic
incentive
It
did
prevent
claim
rule
a
the
not
altogether.
against
provision
In
substantive
in
an
to
fact,
bring
party
the
waivers
arbitration
from
Court
would
agreement
IS
MADE
PURSUANT
TO
TRANSACTION
INVOLVING
THE
INDIAN
COMMERCE
CLAUSE
OF
THE
CONSTITUTION
OF
THE
UNITED
STATES
OF
of
selecting
Indians
the
law
to
of
this
a
Agreement.
certain
J.A.
155.
jurisdiction
to
Instead
govern
of
the
agreement
uses
its
choice
of
law
provision
to
enforced.
See
id.
at
306-07.
Moreover,
parties
are
free
697 n.7 (4th Cir. 2012). These provisions often bring a welcome
measure of predictability and thus efficiency to the dispute
resolution process. But a party may not underhandedly convert a
choice of law clause into a choice of no law clause -- it may
not
flatly
and
categorically
renounce
the
authority
of
the
we
provisions
do
not
are
believe
severable.
the
It
arbitration
is
basic
agreements
principle
of
and
its
allies
could
engage
in
lending
and
collection
although
our
focus
must
be
on
the
arbitration
contract
provisions
in
in
the
which
loan
it
is
situated.
agreement
starkly
As
noted
proclaim
above,
that
no
Skys
attempt
to
expressly
arbitration
achieve
forbidden.
agreement
through
Graham
is
little
arbitration
Oil
Co.,
more
what
43
F.3d
than
Congress
at
1249.
an
has
Good
Id.
(quoting
E.
Allan
Farnsworth,
Farnsworth
on
favoring
arbitration
agreements.
Home
Buyers
Warranty
Corp. v. Hanna, 750 F.3d 427, 436 (4th Cir. 2014) (quoting Moses
H. Cone Mem'l Hosp. v. Mercury Const. Corp., 460 U.S. 1, 24
(1983)).
But
rather
than
use
arbitration
as
just
and
in
the
future
companies
will
craft
arbitration