Melanie Garcia v. Wachovia Corporation
2012 U.S. App. LEXIS 22268
| 11th Cir. | 2012Background
- Wells Fargo and Wachovia allegedly charged overdraft fees under arbitration agreements requiring individual arbitration.
- The agreements prohibit class actions or consolidation and require arbitration on an individual basis.
- Wells Fargo declined to move to compel arbitration after two district-court invitations (Nov 2009 and Apr 2010).
- After Concepcion (2011) held FAA preempts state rules conditioning arbitration on class procedures, Wells Fargo moved to compel arbitration but district court denied as waiver.
- Court held Wells Fargo waived its right to compel arbitration, and Concepcion did not render a futile motion to compel before it.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was Wells Fargo’s arbitration right waived? | Wells Fargo waived. | Did not waive; futile before Concepcion. | Yes, Wells Fargo waived. |
| Was moving to compel arbitration before Concepcion futile? | Pre-Concepcion arguments would have failed. | Futility not established; argued preemption possible. | Not futile; waiver occurred anyway. |
Key Cases Cited
- S & H Contractors, Inc. v. A.J. Taft Coal Co., 906 F.2d 1507 (11th Cir. 1990) (two-step waiver test: inconsistency and prejudice)
- Ivax Corp. v. B. Braun of Am., Inc., 286 F.3d 1309 (11th Cir. 2002) (inconsistency and prejudice framework)
- Se. Stud & Components, Inc. v. Am. Eagle Design Build Studs, LLC, 588 F.3d 963 (8th Cir. 2009) (discusses futility and preemption in waiver context)
- Southland Corp. v. Keating, 465 U.S. 1 (1984) (FAA preempts state law constraints on arbitration)
- Doctor’s Assocs. v. Casarotto, 517 U.S. 681 (1996) (FAA preempts state restrictions on enforcing arbitration)
- Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213 (1985) (intertwining doctrine rejected; Byrd affects waiver analysis)
- Benoay v. Prudential-Bache Sec., Inc., 805 F.2d 1437 (11th Cir. 1986) (futility doctrine limited; Byrd changed framework)
- Miller v. Drexel Burnham Lambert, Inc., 791 F.2d 850 (11th Cir. 1986) (futility standard; almost certainly would have been denied arbitration)