McKenzie Check Advance of Florida, LLC v. Betts
112 So. 3d 1176
Fla.2013Background
- The Fourth District held that a class action waiver in a payday loan arbitration agreement violated Florida public policy.
- Certfied question to this Court about whether such a waiver violates public policy when a trial court is persuaded a consumer cannot obtain competent counsel.
- Concepcion (U.S. Supreme Court) held FAA preempts California Discover Bank rule prohibiting class-action waivers and requiring classwide arbitration in consumer contracts.
- This Court applied Concepcion to conclude FAA preempts Florida public-policy invalidation of the class waiver in this case.
- The Court quashed the Fourth District decision as moot and declined to answer the certified question.
- Evidence showed Kelly might be unable to obtain competent counsel for individual small claims, which the Fourth District found supportive of voiding the waiver, but the Court rejected this on Concepcion grounds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the FAA preempt state-law invalidation of a class action waiver? | Kelly argues Concepcion does not compel enforcement of the waiver on public-policy grounds. | MCA argues FAA preempts Florida public-policy defenses to enforce arbitration as written. | Yes; FAA preempts state public-policy invalidation of the waiver. |
| Does Concepcion apply to void-as-public-policy defenses in state-law contexts? | Concepcion does not overrule or require enforcement despite public-policy concerns. | Concepcion supports enforcement by preempting state defenses that block class-action waivers. | Yes; Concepcion controls and preempts state public-policy defenses. |
| Should the certified question be answered given mootness after Concepcion? | Question remains important to FDUTPA/FCRCPA remedy concerns. | Concepcion renders the question moot. | Moot; certified question not answered. |
Key Cases Cited
- AT&T Mobility, LLC v. Concepcion, 131 S. Ct. 1740 (U.S. 2011) (FAA preempts state-law rules that hinder classwide arbitration; promotes enforcement of arbitration agreements)
- Discover Bank v. Superior Court, 113 P.3d 1100 (Cal. 2005) (California rule: class-action waivers in adhesion contracts often unenforceable; used to oppose class arbitration)
- Cruz v. Cingular Wireless, LLC, 648 F.3d 1205 (11th Cir. 2011) (Eleventh Circuit applying Concepcion to preempt state-law public-policy objections)
- Pendergast v. Sprint Nextel Corp., 691 F.3d 1224 (11th Cir. 2012) (Eleventh Circuit reiterates Concepcion preemption in similar context)
- Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (U.S. 1985) (Statutory rights and vindication analysis; federal statutory claims exception to arbitration)