McKenzie v. Betts
55 So. 3d 615
| Fla. Dist. Ct. App. | 2011Background
- Plaintiffs Betts and Reuter filed a class action against McKenzie for alleged usury and FDUPTA/FCRCPA violations related to payday loans.
- Tiffany Kelly joined later and signed an arbitration agreement with a blanket class action waiver applicable to both arbitration and litigation.
- The trial court held the class action waiver violated public policy because it would hinder access to competent counsel and undermine remedial statutes.
- Expert testimony showed Florida consumers would struggle to obtain counsel for individual payday loan claims without class action leverage; some attorneys had never handled such cases.
- The parties agreed that if the class waiver were unenforceable, the arbitration provision would be stricken.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the class action waiver violate public policy? | Betts/Reuter contend the waiver defeats remedial statutes. | McKenzie argues Fonte controls; waiver remains valid. | Waiver violates public policy; enforceability struck. |
| Does Fonte distinguish this case? | Evidence shows lack of competent counsel without class action. | Fonte controls; no proof of counsel impossibility. | Fonte distinguishable; public policy violated here. |
| Should enforcement of the waiver be balanced against remedial statutes like FDUTPA and FCRCPA? | Remedial purposes require effective private enforcement. | Arbitration policy favors class waiver if general policy permits. | Public policy outweighs arbitration presumption; waiver void. |
| Does the availability of enforcing authorities affect the public policy analysis? | Enforcement actions by authorities are blocked by the waiver. | Fonte acknowledges other enforcement avenues exist. | Waiver precluding enforcement actions defeats policy; invalid. |
| What is the proper jurisdictional stance on class waivers given separation of powers? | Legislature authorized remedial statutes; courts should honor them. | Federal arbitration framework remains controlling. | Florida public policy prevails; ruling upholds separation of powers. |
Key Cases Cited
- Fonte v. AT&T Wireless Services, Inc., 903 So.2d 1019 (Fla. 4th DCA 2005) (class waiver not per se invalid; discussed remedial purpose of FDUTPA)
- Randolph v. Green Tree Financial Corp.-Alabama, 244 F.3d 814 (11th Cir. 2001) (non-waivable right to class action not implied by statute)
- Jenkins v. First American Cash Advance of Georgia, LLC, 400 F.3d 868 (11th Cir. 2005) (fee recovery and availability of counsel affect enforceability of class waivers)
- Dale v. Comcast Corp., 498 F.3d 1216 (11th Cir. 2007) (fee provisions influence totality-of-the-circumstances test for class waivers)
- Kristian v. Comcast Corp., 446 F.3d 25 (1st Cir. 2006) (class arbitration waiver may undermine statutory rights; considers fee recovery)
- Discover Bank v. Superior Court, 36 Cal.4th 148 (Cal. 2005) (class waiver analysis; California treats class actions/arbitration as remedy-focused)
- Honig v. Comcast of Ga. I, LLC, 537 F. Supp. 2d 1277 (N.D. Ga. 2008) (enforcement considerations in class waiver disputes)