191 So. 3d 530
Fla. Dist. Ct. App.2016Background
- Plaintiffs Betts, Reuter, and later Kelly sued McKenzie Check Advance and principals alleging deceptive, usurious payday loans; some loan agreements contained arbitration provisions with explicit class-action waivers.
- Reuter’s arbitration provision was enforced earlier; her individual claims were compelled to arbitration and that ruling was affirmed (Reuter). Betts’s contracts lacked arbitration provisions.
- Kelly signed a near-identical arbitration clause; the trial court initially denied defendants’ motion to compel arbitration for Kelly’s claims, finding the class-action waiver violated public policy by denying a meaningful remedy.
- On appeal (McKenzie I) the Fourth District agreed the waiver violated public policy and certified a question to the Florida Supreme Court; the Florida Supreme Court reversed in McKenzie II, holding Concepcion controls and the class-action waiver is enforceable under the FAA.
- After McKenzie II the trial court again compelled Kelly’s individual claims to arbitration but also referred the class claims to arbitration, reasoning McKenzie II did not decide whether class arbitration was available under the contract.
- The Fourth District on this appeal held McKenzie II implicitly decided the waiver prohibits class arbitration and reversed, directing the trial court to refer only individual claims to arbitration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the class-action waiver in the arbitration clause is enforceable | Kelly/Pls: McKenzie II only held FAA preemption of public-policy invalidation; whether class arbitration is available is a question for the arbitrator | Defs: McKenzie II held the waiver enforceable and thus forecloses class arbitration (law of the case) | Held: McKenzie II implicitly determined class arbitration is prohibited; waiver enforceable; only individual claims may be arbitrated |
| Whether the law-of-the-case doctrine bars relitigation of the availability of class arbitration | Pls: Doctrine inapplicable because McKenzie II did not interpret contract scope | Defs: Doctrine applies because McKenzie II necessarily considered the prohibition on classwide procedures under Concepcion | Held: Law of the case applies — Florida Supreme Court necessarily addressed that class arbitration is prohibited |
| Whether the trial court must refer class claims to an arbitrator to decide gateway issues | Pls: Threshold/interpretation issues reserved for arbitrator; class availability is for arbitrator | Defs: McKenzie II already resolved enforceability; court should not refer class claims | Held: Trial court erred in referring class claims; only individual claims to arbitrator |
| Whether additional issues (waiver by litigation conduct; who decides gateway issues) needed resolution | Pls and Defs presented arguments | Court: unnecessary to decide given holding on enforceability | Held: Not addressed as disposition made them unnecessary |
Key Cases Cited
- McKenzie Check Advance of Fla., LLC v. Betts, 112 So. 3d 1176 (Fla. 2013) (Florida Supreme Court held FAA/Concepcion preempted state public-policy invalidation and enforced the class-action waiver)
- McKenzie v. Betts, 55 So. 3d 615 (Fla. 4th DCA 2011) (Fourth District held class-action waiver violated public policy; certified question)
- Reuter v. McKenzie Check Advance of Fla., LLC, 825 So. 2d 1070 (Fla. 4th DCA 2002) (earlier appellate decision affirming enforcement of arbitration clause for Reuter)
- AT&T Mobility, LLC v. Concepcion, 563 U.S. 333 (U.S. 2011) (U.S. Supreme Court held FAA preempts state rules that invalidate class-action waivers in arbitration agreements)
- Fla. Dep’t of Transp. v. Juliano, 801 So. 2d 101 (Fla. 2001) (law-of-the-case doctrine may apply to issues implicitly addressed on prior appeal)
- U.S. Concrete Pipe Co. v. Bould, 437 So. 2d 1061 (Fla. 1983) (law-of-the-case limited to rulings actually presented and considered)