Michael Dasher v. RBC Bank
745 F.3d 1111
| 11th Cir. | 2014Background
- Dasher (and other account holders) sued RBC for allegedly excessive overdraft fees; the case is part of MDL-2036.
- RBC had issued a 2008 account agreement (RBC Agreement) containing a broad arbitration clause; the district court previously found that clause unenforceable pre-Concepcion.
- While RBC’s renewed motion to compel arbitration was pending and discovery ongoing, PNC acquired RBC and issued a new account agreement (PNC Agreement) which Dasher accepted; the PNC Agreement is silent on arbitration and contains merger/supersession language.
- District court held the PNC Agreement entirely superseded the RBC Agreement and, because the PNC Agreement is silent on arbitration, denied RBC’s motion to compel arbitration.
- RBC appealed, arguing (among other things) that the FAA presumption favors arbitration, silence in the PNC Agreement cannot defeat the prior arbitration clause, the termination clause preserves arbitration for pre-termination transactions, and the PNC Agreement should not be applied retroactively.
- The Eleventh Circuit affirmed: under North Carolina law the RBC Agreement was entirely superseded; the PNC Agreement’s silence does not establish an agreement to arbitrate; the PNC Agreement governs "at all times," including retroactively.
Issues
| Issue | Dasher (Plaintiff) Argument | RBC (Defendant) Argument | Held |
|---|---|---|---|
| Whether FAA presumption of arbitrability applies | Presumption does not apply because question is formation/supersession of agreement (state-law issue) | FAA presumption requires resolving doubts in favor of arbitration | Court: Presumption inapplicable; threshold formation/supersession is a state-law question (Granite Rock) |
| Whether a subsequent, entirely superseding agreement silent on arbitration preserves prior arbitration clause | PNC Agreement superseded RBC Agreement; silence does not evidence assent to arbitrate | Silence cannot defeat prior arbitration clause; arbitration survives absent explicit elimination | Court: When a later agreement entirely supersedes an earlier one, silence does not preserve prior arbitration; prior clause ineffective (apply state contract law) |
| Whether RBC Agreement’s termination clause saves arbitration for transactions occurring before supersession | The termination clause does not apply because parties chose to supersede (not merely terminate); supersession governs | RBC: Transactions initiated before termination remain subject to RBC terms including arbitration | Court: Distinguishes termination vs. supersession; here amendment/supersession clause governs, so termination clause inapplicable |
| Whether PNC Agreement applies retroactively to disputes arising under RBC Agreement | PNC’s terms govern "at all times" per RBC Agreement’s amendment clause; thus PNC applies retroactively | RBC: PNC became effective prospectively and should not affect past disputes; pre-supersession facts should be governed by RBC Agreement and its arbitration clause | Court: The RBC Agreement’s amendment clause stated the most current agreement "at all times govern," so PNC governs retroactively; no FAA prohibition on retroactive elimination of arbitration |
Key Cases Cited
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011) (preemption of state-law rules that disproportionately disfavor arbitration)
- Granite Rock Co. v. International Brotherhood of Teamsters, 561 U.S. 287 (2010) (presumption of arbitrability applies only after validity/formation of arbitration agreement is established)
- First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995) (arbitration is a matter of contract; apply ordinary state-law contract principles to formation)
- Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1 (1983) (doubts concerning scope of arbitrable issues resolved in favor of arbitration)
- Nolde Brothers, Inc. v. Local No. 358, Bakery & Confectionery Workers Union, 430 U.S. 243 (1977) (arbitration clauses may survive contract termination)
- Applied Energetics, Inc. v. NewOak Capital Markets, LLC, 645 F.3d 522 (2d Cir. 2011) (a subsequent entirely superseding agreement silent on arbitration precludes compelling arbitration)
- Bank Julius Baer & Co. v. Waxfield Ltd., 424 F.3d 278 (2d Cir. 2005) (treated prior arbitration clause as surviving where prior agreement’s rights remained in effect under subsequent agreement)
- Dottore v. Huntington National Bank, [citation="480 F. App'x 351"] (6th Cir. 2012) (affirming that an entirely new account agreement silent on arbitration defeats prior arbitration clause)
- Burgess v. Jim Walter Homes, Inc., 588 S.E.2d 575 (N.C. Ct. App. 2003) (under North Carolina law, a new contract that supersedes the prior one does not create an arbitration agreement absent express terms)
- Caley v. Gulfstream Aerospace Corp., 428 F.3d 1359 (11th Cir. 2005) (federal policy favoring arbitration informs but does not replace state-law formation analysis)