In Re Checking Account Overdraft Litigation
672 F.3d 1224
11th Cir.2012Background
- Houghs sues Regions Bank for overdraft charges under deposit agreement, on behalf of themselves and others similarly situated.
- Regions moved to compel arbitration based on a broad arbitration clause; district court denied due to unconscionability (class waiver).
- Court remanded after Concepcion to reconsider conscionability; on remand, district court again denied due to unconscionable reimbursement provision.
- Regions argues the clause delegates arbitrability to the arbitrator and is otherwise enforceable; Houghs argue the clause is substantively unconscionable and procedurally unfair.
- District court’s earlier ruling found the reimbursement provision unconscionable; appellate court reverses finding about severability and analyzes waiver of threshold issues as to conscionability.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Regions waived the arbitration-consciouness issue. | Houghs | Regions | Regions waived the conscionability issue. |
| Is the reimbursement provision unconscionable under Georgia law? | Houghs | Regions | Reimbursement provision is conscionable; not unconscionable. |
| Should the arbitrator decide questions of arbitrability? | Houghs | Regions | Not necessary to decide; court treating as waived. |
| Is the arbitration clause procedurally unconscionable? | Houghs | Regions | Clause not procedurally unconscionable under Georgia law. |
| Is the arbitration clause substantively unconscionable given the take-it-or-leave-it context? | Houghs | Regions | Not substantively unconscionable; clause enforceable. |
Key Cases Cited
- Green Tree Fin. Corp. v. Bazzle, 539 U.S. 444 (U.S. 2003) (delegation and scope of arbitration questions)
- Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79 (U.S. 2002) (delegation of gateway questions to arbitrator)
- Doe v. Princess Cruise Lines, Ltd., 657 F.3d 1204 (11th Cir. 2011) (waiver of ability to challenge arbitrability by district court)
- Rent-A-Center, W., Inc. v. Jackson, 561 U.S. _ (U.S. 2010) (arbitrability issues delegated to arbitrator under contract)
- Cappuccitti v. DirecTV, Inc., 623 F.3d 1118 (11th Cir. 2010) (discussion of unconscionability and arbitration)
- Doctor's Associates, Inc. v. Casarotto, 517 U.S. 681 (U.S. 1996) (concerning conspicuousness of arbitration provisions)
- Gilmer v. Interstate/Johnson L., 500 U.S. 20 (U.S. 1991) (bargaining power not per se tobar arbitration)
- Munoz v. Green Tree Fin. Corp., 343 S.C. 531, 542 S.E.2d 360 (S.C. 2001) (adhesion contracts not per se unconscionable)