Mosley v. Wells Fargo & Company, 4:24-cv-03173

46 plaintiffs who held accounts at Wells Fargo in California alleged Wells Fargo charged overdraft fees on debit and ATM transactions without proper consent, violating Regulation E and California's Unfair Competition Law.
The plaintiffs’ accounts with Wells Fargo were governed by an Account Agreement that requires disputes to be resolved through individual arbitration under the AAA Consumer Arbitration Rules and expressly incorporates the Federal Arbitration Act (FAA).
In 2022, plaintiffs and others filed individual demands for arbitration with the AAA, which grouped and invoiced Wells Fargo for administrative fees under California law.
Wells Fargo paid the arbitration fees shortly after the due date, resulting in the AAA closing the arbitrations of the California claimants, citing California’s CCP Sections 1281.97 and 1281.98 regarding fee payment deadlines.
Plaintiffs filed this federal lawsuit after the AAA administratively closed their arbitrations due to the late payment of fees.
The core dispute became whether arbitration could be compelled again or if Wells Fargo had waived its right by missing the fee deadline under California law.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Does the FAA or CAA procedural rules govern payment and closure of arbitration?	The CAA applied because the Account Agreement referenced state law and AAA properly closed the cases under CAA provisions.	FAA governs because the Account Agreement does not clearly incorporate CAA procedural rules; only the FAA and AAA rules apply.	FAA governs; CAA procedural rules (Sections 1281.97/98) do not apply as not clearly incorporated.
Did AAA independently close arbitrations under its own discretion or solely under state law?	AAA closed cases based on its independent policies paralleling the CAA, so closure should stand.	AAA closed cases exclusively based on CAA, not its own discretion; closure improper if CAA does not apply.	AAA acted solely pursuant to CAA, not its own rules, so closure was improper under federal law.
Is there valid agreement to arbitrate and does it encompass the dispute?	Not disputed.	Not disputed.	Valid arbitration agreement; dispute falls within scope.
Should the case be stayed pending arbitration?	Opposed, arguing AAA closure prevents going back to arbitration.	Case should be stayed; arbitration is still required.	Case stayed pending completion of individual arbitrations.

AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (establishes strong federal policy in favor of arbitration under the FAA)
Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (holds FAA broadly applies to arbitration agreements affecting interstate commerce)
Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126 (court's role is to decide validity and scope of arbitration agreement)
Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79 (party resisting arbitration has the burden to show claims are unsuitable for arbitration)
Johnson v. Gruma Corp., 614 F.3d 1062 (FAA's procedural rules presumed to govern absent clear incorporation of state law)
Sovak v. Chugai Pharm. Co., 280 F.3d 1266 (distinguishes between substantive and procedural law in arbitration agreements; FAA governs procedure unless state law is expressly chosen)
Fid. Fed. Bank, FSB v. Durga Ma Corp., 386 F.3d 1306 (requires clear intent in contract to apply state arbitration procedures over FAA)