Joshua Parnell v. Cashcall, Inc.
2015 U.S. App. LEXIS 18770
| 11th Cir. | 2015Background
- Parnell, a Georgia resident and former Army servicemember, applied online for a $1,000 short-term loan from Western Sky; the loan agreement disclosed a 232.99% APR and total repayment of $4,905.56.
- The Loan Agreement included a broad arbitration clause and language stating that a “Dispute” includes “any issue concerning the validity, enforceability, or scope of this loan or the Arbitration agreement.”
- Parnell signed the agreement electronically; his loan was later serviced by CashCall, which removed Parnell’s subsequent state-court suit to federal court and moved to compel arbitration.
- Parnell challenged the arbitration provision generally as unconscionable under Georgia law but did not specifically challenge the delegation provision committing arbitrability to the arbitrator.
- The district court denied the motion to compel arbitration, finding unconscionability; the Eleventh Circuit reversed, holding the Loan Agreement contains an enforceable delegation clause and that Parnell failed to challenge it directly.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the arbitration agreement delegates arbitrability to an arbitrator | Parnell argued the arbitration provision (as a whole) is unconscionable and unenforceable under Georgia law | CashCall argued the agreement contains a clear delegation clause committing arbitrability to the arbitrator, so courts should compel arbitration | Court held the contract contains a clear delegation provision; arbitrability is for the arbitrator |
| Whether a general challenge to the arbitration clause suffices to avoid a delegation provision | Parnell argued a general attack on the arbitration provision invalidates arbitration | CashCall argued Rent-A-Center requires a specific challenge to the delegation clause itself | Court held Rent-A-Center requires a specific challenge to the delegation provision; a general attack is insufficient |
| Whether federal courts should enforce the delegation clause under the FAA | Parnell argued unconscionability defenses apply to revoke the arbitration agreement | CashCall argued FAA §2–4 require enforcement of delegation unless delegation itself is challenged | Court held FAA requires treating an unchallenged delegation provision as valid and compelling arbitration |
| Choice-of-law implications for interpreting the contract’s delegation language | Parnell relied on Georgia consumer-law defenses (including O.C.G.A.) to attack enforceability | CashCall relied on contract text and federal policy favoring arbitration; parties pointed to tribal-law choice but offered no tribal rules | Court applied general plain-meaning contract principles (looking to Georgia law) and found language clearly delegates arbitrability |
Key Cases Cited
- Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63 (holds parties must specifically challenge delegation provisions; otherwise delegations are enforced)
- Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (arbitration clauses separable from contract validity under FAA)
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (federal policy favors enforcement of arbitration agreements)
- First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (clear-and-unmistakable standard for contracting to arbitrate arbitrability)
- Jenkins v. First Am. Cash Advance of Ga., LLC, 400 F.3d 868 (11th Cir. standard: de novo review of district court denial to compel arbitration)
- Paladino v. Avnet Computer Techs., Inc., 134 F.3d 1054 (11th Cir. discussion of choice-of-law and contract interpretation principles)
- Inetianbor v. CashCall, Inc., 768 F.3d 1346 (11th Cir. precedent discussing FAA and interstate commerce)