Laverne Jones v. Bernaldo Dancel
792 F.3d 395
4th Cir.2015Background
- Between 1998–2003, Jones, Jones, and Ness contracted with Genus for debt management and executed arbitration provisions in their contracts.
- Genus purportedly provided services as a non-profit but accepted voluntary contributions and received funds from creditors for the program.
- Genus contracted with Amerix and affiliates to perform marketing, enrollment, and payment processes, with Amerix and affiliates receiving portions of voluntary and fair share payments.
- In 2004, plaintiffs filed a nationwide class action in Maryland alleging CROA, RICO, MDCPA, MDMSA, and common-law claims; the district court compelled arbitration and later certified a CROA and MCPA class.
- The arbitrator issued an 80-page final award: CROA/disclosure violations found; no CROA actual damages; punitive damages awarded; and substantial attorneys’ fees requested were denied; the district court confirmed the award in part and denied vacatur.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the arbitrator’s CROA ruling on damages was correct | Jones argued actual damages were proven under CROA, including voluntary contributions. | Genus/ Amerix argued voluntary contributions were not “amounts paid” under CROA §1679g(a)(1)(B). | No reversible error; arbitrator’s interpretation of ‘amounts paid’ was reasonable. |
| Whether the arbitrator properly denied extra CROA attorneys’ fees and costs | Plaintiffs contend CROA obligates payment of reasonable fees and costs. | Arbitrator found the fee request unreasonable and properly reduced or denied them. | No reversible error; arbitrator’s reasoning and application of standards were permissible. |
| Whether the arbitrator exceeded his powers under FAA §10(a)(4) | Arbitrator misread CROA and exceeded contract authority. | Arbitrator interpreted applicable law within contract-based authority. | No exceedance of authority; award stayed within delegated powers. |
Key Cases Cited
- Hall Street Assocs., LLC v. Mattel, Inc., 552 U.S. 576 (2008) (vacatur standards and deference to arbitral judgment; four grounds for vacatur; manifest disregard limited)
- Wachovia Sec., LLC v. Brand, 671 F.3d 472 (4th Cir. 2012) (limits of manifest disregard and narrow review of arbitration awards)
- Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991) (statutory claims may be arbitrated; reasonable review to ensure statute compliance)
- CompuCredit Corp. v. Greenwood, 132 S. Ct. 665 (2012) (arbitration of CROA claims; CROA does not bar arbitration)
- Oxford Health Plans LLC v. Sutter, 133 S. Ct. 2064 (2013) (heavy burden to show arbitrator acted outside authority)
- Fair Hous. Council of Greater Washington v. Landow, 999 F.2d 92 (4th Cir. 1993) (reasonableness-based analysis for attorney’s fees under fee-shifting statutes)
- Barber v. Kimbrell’s, Inc., 577 F.2d 216 (4th Cir. 1978) (Barber factors for assessing attorney’s fee reasonableness)
- Perdue v. Kenny A. ex rel. Winn., 559 U.S. 542 (2010) (guidance on calculating reasonable attorneys’ fees)
- Apex Plumbing Supply, Inc. v. U.S. Supply Co., 142 F.3d 188 (4th Cir. 1998) (extremely limited review of arbitration awards)