644 F. App'x 893
11th Cir.2016Background
- Plaintiff Lisa Flagg sued First Premier Bank in a class action alleging RICO violations tied to facilitating illegal online payday lender transactions.
- Flagg’s loan agreement required arbitration under the National Arbitration Forum (NAF) Code of Procedure, claiming disputes would be resolved by NAF.
- NAF had not accepted consumer arbitration claims since 2009 due to a related consent decree and other actions.
- NAF declined Flagg’s request to arbitrate after she filed a claim, prompting First Premier to move to compel arbitration and substitute another arbitrator, or stay/dismiss.
- The district court denied the motion; First Premier appealed, arguing FAA §5 allows appointing a substitute arbitrator when the chosen forum is unavailable.
- The Eleventh Circuit held that designation of NAF was integral to the arbitration agreement, so the FAA substitute-arbitrator mechanism does not apply.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether NAF designation is integral to the agreement | Flagg contends NAF is integral and unavailable means arbitration cannot proceed. | First Premier argues the forum is not integral and substitute arbitration is allowed. | Integral; district court correct to deny arbitration. |
Key Cases Cited
- Inetianbor v. CashCall, Inc., 768 F.3d 1346 (11th Cir. 2014) (forum chosen can be integral to arbitration)
- Brown v. ITT Consumer Financial Corp., 211 F.3d 1217 (11th Cir. 2000) (Brown not controlling where forum is expressly designated)
- Beverly Enters., Inc. v. Cyr, 608 F. App'x 924 (11th Cir. 2015) (supports integral forum analysis in consumer arbitration)
- Sunbridge Ret. Care Assocs., LLC v. Smith, 326 Ga.App. 550, 757 S.E.2d 157 (Ga. Ct. App. 2014) (GA court recognizes effect of NAF consent decree on arbitration)