David Johnson v. Keybank National Association
2014 U.S. App. LEXIS 11443
11th Cir.2014Background
- KeyBank acquired Puget Sound Bank; deposit agreements later included change-of-terms and arbitration provisions.
- In 2001 KeyBank added a delegation clause allowing an arbitrator to decide threshold questions of arbitrability.
- David Johnson sued for overdraft-fee overcharges; KeyBank moved to compel arbitration but did not raise delegation clause at that time.
- District court denied arbitration on unconscionability grounds; the case was later remanded for reconsideration in light of Rent-A-Center and related decisions.
- On remand, after discovery, the district court ordered arbitration on the threshold issue of arbitrability because of the delegation clause.
- This appeal argues that KeyBank waived the delegation clause; the Eleventh Circuit agrees and vacates the order and remands.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether KeyBank waived enforcement of the delegation clause | Johnson argues waiver due to prolonged litigation and late invocation. | KeyBank contends no waiver occurred; appropriate issues were preserved and timely raised. | Waiver found; delegation clause enforcement waived. |
| Whether the delegation clause binds Johnson to arbitrate threshold questions | Johnson contends no binding effect on him; notice and assent issues exist. | KeyBank argues the clause allows arbitrator resolution of threshold questions. | Delegation clause binding; threshold questions may be arbitrated. |
| Impact of Rent-A-Center and intervening law on waiver | Rent-A-Center allows arbitrator to decide arbitrability; waiver analysis unaffected by intervening changes. | KeyBank argues Rent-A-Center changed controlling law. | Rent-A-Center not an intervening change; waiver remains valid. |
| Whether Rule 62.1 ruling preserves jurisdiction and waives appeal effects | Rule 62.1 indicative ruling did not salvage waiver argument. | KeyBank attempted to resurrect delegation clause via Rule 62.1. | Rule 62.1 did not cure waiver; waiver stands. |
Key Cases Cited
- Barras v. Branch Banking & Trust Co., 685 F.3d 1269 (11th Cir. 2012) (waiver when delegation clause raised after initial motion)
- Hough v. Regions Fin. Corp., 672 F.3d 1224 (11th Cir. 2012) (waiver when delegation clause argued post-partial adjudication)
- Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63 (U.S. 2010) (enforceability of delegation clause for gateway questions)
- Cruz v. Cingular Wireless, LLC, 648 F.3d 1205 (11th Cir. 2011) (post-Concepcion framework for arbitration threshold issues)
- Doe v. Princess Cruise Lines, Ltd., 657 F.3d 1204 (11th Cir. 2011) (precedent on waiver and arbitration delegation)