Johnson v. KeyBank National Ass'n
84 F. Supp. 3d 1345
S.D. Fla.2015Background
- KeyBank's Second Renewed Motion to Compel Arbitration was filed August 22, 2014 in this MDL case.
- The case was originally filed in the Western District of Washington and transferred to this MDL for consolidated proceedings.
- This Court had denied KeyBank's first motion to compel arbitration on June 16, 2010, finding Washington law applied and the arbitration clause substantively unconscionable.
- After remand following Concepcion and related decisions, KeyBank renewed its motion; the Eleventh Circuit vacated and remanded for reconsideration of the unconscionability issue.
- Upon remand, the Court concluded Washington law applies, but the arbitration clause remains substantively unconscionable, and thus arbitration is not compelled.
- The court's disposition denies KeyBank's Second Renewed Motion to Compel Arbitration and Dismiss the Complaint.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Washington law still governs the dispute | Washington law applies as the forum; differences with Ohio law remain material. | Concepcion undermines Washington's public policy against class waivers; Ohio law should apply. | Washington law applies. |
| Whether the arbitration provision is unconscionable under Washington law | Arbitration remains substantively unconscionable even after removing class-action waiver per Concepcion. | Under Concepcion, class-action waiver analysis is no longer a basis for unconscionability; overall unconscionability may vanish. | Arbitration provision remains substantively unconscionable. |
| Whether Ohio law's enforcement would violate Washington public policy besides class-action waivers | Washington policy protections in consumer banking should apply; Ohio would not. | Concepcion moots class-waiver policies; other Washington policies are not implicated. | Washington policy concerns still favor applying Washington law over Ohio. |
Key Cases Cited
- Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63 (2010) (delegation clauses and arbitrability questions)
- AT&T Mobility, LLC v. Concepcion, 563 U.S. 333 (2011) (FAA preempts state class-action waivers in consumer contracts)
- In re Checking Account Overdraft Litigation, 754 F.3d 1290 (11th Cir. 2014) (waiver of delegation issue waived on appeal)
- Cruz v. Cingular Wireless, LLC, 648 F.3d 1205 (11th Cir. 2011) (post-Concepcion guidance on arbitration and class actions)
- Coneff v. AT&T Corp., 620 F. Supp. 2d 1248 (W.D. Wash. 2009) (choice-of-law and enforceability in arbitration agreements)
- Coneff v. AT&T Corp., 673 F.3d 1155 (9th Cir. 2012) (reversed on other grounds; Ninth Circuit treatment of choice-of-law)
- Menowitz v. Brown, 991 F.2d 36 (2d Cir. 1993) (two-part test for applying chosen law in MDL forum)