889 F.3d 1230
11th Cir.2018Background
- Plaintiffs filed nationwide class actions (2008–2009) accusing Wells Fargo (including Wachovia) of improper overdraft fees; customer agreements required individual arbitration and barred class arbitration.
- MDL consolidation followed; the District Court set deadlines (Dec 8, 2009; Apr 19, 2010) for merits and arbitration motions but the orders were ambiguous about unnamed, putative class members.
- Wells Fargo did not move to compel arbitration of the named plaintiffs before Concepcion; it expressly reserved its arbitration rights as to any future or unnamed putative class members and asserted arbitration as an affirmative defense in its answers.
- After the Supreme Court’s decision in AT&T Mobility v. Concepcion, Wells Fargo moved to compel arbitration of the named plaintiffs; the District Court found waiver as to named plaintiffs (affirmed by this Court in Garcia) but later certified the class.
- Post-certification Wells Fargo moved to compel arbitration for the unnamed class members; the District Court denied the motion as waived/untimely and prejudicial, and Wells Fargo appealed.
- The Eleventh Circuit held Wells Fargo did not waive arbitration rights as to unnamed putative class members because it gave fair early notice and it was impracticable and jurisdictionally improper to move against speculative, uncertified plaintiffs; the district order was vacated and remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Wells Fargo waived arbitration rights as to unnamed putative class members by not moving earlier | Wells Fargo delayed and litigated, so it acted inconsistently and prejudiced plaintiffs | Wells Fargo preserved rights by expressly reserving them and could not practically or jurisdictionally move to compel arbitration against speculative, unnamed class members | No waiver as to unnamed plaintiffs; reservation and timing were adequate |
| Whether defendants were required to file conditional/arbitrary placeholder motions to avoid waiver | Plaintiffs implied defendants’ failure to file such motions signaled abandonment of arbitration rights | Wells Fargo said such motions would be speculative and the court lacked jurisdiction pre-certification | Court rejected any requirement to file speculative conditional motions; reservation sufficed |
Key Cases Cited
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011) (FAA preemption of state rules voiding class-waiver arbitration provisions)
- In re Checking Account Overdraft Litig., 780 F.3d 1031 (11th Cir. 2015) (district court lacked jurisdiction to rule on arbitration for unnamed putative class members pre-certification)
- Garcia v. Wachovia Corp., 699 F.3d 1273 (11th Cir. 2012) (defendant waived arbitration as to named plaintiffs by litigating post-Concepcion issue)
- Benoay v. Prudential-Bache Sec., Inc., 805 F.2d 1437 (11th Cir. 1986) (arbitration is a contractual right that can be waived)
- Stone v. E.F. Hutton & Co., 898 F.2d 1542 (11th Cir. 1990) (party asserting waiver bears heavy burden because federal law favors arbitration)
- Ivax Corp. v. B. Braun of Am., Inc., 286 F.3d 1309 (11th Cir. 2002) (two-part waiver test: inconsistent conduct and prejudice)
- S & H Contractors v. A.J. Taft Coal Co., Inc., 906 F.2d 1507 (11th Cir. 1990) (substantially invoking litigation machinery is key waiver factor)