Jоshua PARNELL, Plaintiff-Appellee, v. CASHCALL, INC., Defendant-Appellant, Western Sky Financial, LLC, Martin A. (“Butch“) Webb, Defendants.
No. 14-12082.
United States Court of Appeals, Eleventh Circuit.
Oct. 28, 2015.
Our opinion in Moore v. Crosby, 321 F.3d 1377 (11th Cir.2003), also does not support Espinosa‘s argument. In Moore, we considered a different issue: whether a petition for belated appeal, which was filed after the one-year limitation period had already expired and was later granted by the state appellate court, could retroactively toll the one-year limitation period. Id. at 1379-80. We held that “an out-of-time appeal does not revive the time during which no state cоllateral petition was pending.” Id. at 1380. We discussed a decision of the Fifth Circuit that had reached a similar holding, and we stated that “the Fifth Circuit concluded that after the appeal period lapsed, an application ceased to be pending, but that a subsequently properly filed application entitled the petitioner to additional tolling beginning at the time of the proper filing.” Id. (citing Melancon v. Kaylo, 259 F.3d 401, 407 (5th Cir.2001)). But the Fifth Circuit described a procedural posture materially different from Espinosa‘s appeal: the state court had granted an untimely application and then considered the merits of the underlying claim for collateral relief. See Melancon, 259 F.3d at 403, 407.
In other jurisdictions, motions to appeal out of time have tolled the one-year limitation period when, unlike here, the state courts permitted the untimely applications. See, e.g., Gibson v. Klinger, 232 F.3d 799, 802-03 (10th Cir.2000); Fernandez v. Sternes, 227 F.3d 977 (7th Cir.2000). In Fernandez v. Sternes, the Seventh Circuit addressed the tolling effect of a “motion for permission to file a late petition for leave to appeal” that was granted and “treated as a petition for leave to appeal.” 227 F.3d at 979. The Seventh Circuit concluded that the motion tolled the federal limitation period because the state court “excused the untimeliness as a matter of state law and ruled on the merits.” Id. at 981.
When the state appellate court denied Espinosa‘s petition for belated appeal, it never considered the merits of his underlying claims. Espinosa‘s petition for belated appeal never triggered a reexamination of his conviction or sentence and, as a result, failed to toll the federal limitation period. Espinosa‘s federal habeas petition was untimely.
IV. CONCLUSION
We AFFIRM the dismissal of Espinosa‘s petition.
James Warren Hurt, Jr., Hurt Stolz & Cromwell, LLC, Athens, GA, Christopher Neil Armor, Armor Law, LLC, Atlanta, GA, for Plaintiff-Appellee.
Barry Levenstam, Daniel T. Fenske, Jenner & Block, LLP, Chicago, IL, Neil M. Barofsky, Brian J. Fischer, Katya Jestin, Jenner & Block, LLP, New York, N.Y., Nancy H. Baughan, William James Holley, II, Erin McGarry Moore, Parker Hudson Rainer & Dobbs, LLP, Atlanta, GA, for Defendant-Appellant.
WILSON, Circuit Judge:
This case requires us to determine whether a plaintiff properly challenges an arbitration agreement‘s validity when he does not specifically challеnge the delegation provision contained therein. The Supreme Court has explained that where an arbitration agreement contains a delegation provision—committing to the arbitrator the threshold determination of whether the agreement to arbitrate is enforceable—the courts only retain jurisdiction to review a challenge to that specific provision. Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 72, 130 S.Ct. 2772, 2779, 177 L.Ed.2d 403 (2010). Absent such a challenge, the Federal Arbitration Act (FAA) requires that we treat a delegation provision as valid and permit the parties to proceed to arbitration. Id. at 71-72, 130 S.Ct. at 2779; see
The district court erred in neglecting to recognize the delegation provision in the agreement in this case. Accordingly, we reverse and remand.
I
Upon completing his service in the United States Army and experiencing lessthan-ideal financial circumstances, Plaintiff-Appellee Joshua Parnell responded to a television advertisement for short-term loans. Parnell, situated in Georgia, logged onto his computer and applied for a loan frоm Western Sky Financial, LLC (Western Sky), a South Dakota limited liability company with its principal place of business in Timber Lake, South Dakota. Just ten minutes after Parnell submitted his online loan application, a Western Sky employee called Parnell to inform him that he had been approved for a $1000 loan and relevant paperwork would be emailed to him shortly. The email Parnell received contained a document titled “Western Sky* Consumer Loan Agreement” (Loan Agreement), which stated the terms of the contract between the parties. The Loan Agreement‘s Truth in Lending Act Disclosure Statement made plain the 232.99% annual percentage rate and finance charge of $3,905.56. In total, after making twenty-five scheduled repayments on the $1,000 loan, Parnell would pay $4,905.56.
WAIVER OF JURY TRIAL AND ARBITRATION.
PLEASE READ THIS PROVISION OF THE AGREEMENT CAREFULLY. Unless you exercise your right to opt-out of arbitration in the manner described below, any dispute you have with Western Sky or anyone else under this loan agreement will be resolved by binding arbitration. Arbitration replaces the right to go to court, including the right to have a jury, to engage in discovery (except as may be provided in the arbitration rules), and to participate in a class action or similar proceeding. In Arbitration, a dispute is resolved by an arbitrator instead of a judge or jury. Arbitration procedures are simpler and more limited than court procedures. Any Arbitration will be limited to the dispute between yourself and the holder of the Note and will not be part of a class-wide or consolidаted arbitration proceeding.
Agreement to Arbitrate. You agree that any Dispute, except as provided below, will be resolved by Arbitration, which shall be conducted by the Cheyenne River Sioux Tribal Nation by an authorized representative in accordance with its consumer dispute rules and the terms of this Agreement.
Arbitration Defined. Arbitration is a means of having an independent third party resolve a Dispute. A “Dispute” is any controversy or claim between you and Western Sky or the holder or servicer of the Note. The term Dispute is to be given its broadest possible meaning and includes, without limitation, all claims or demands (whether past, present, or future, including events that occurred prior to the opening of this Account), based on any legal or equitable theory (tort, contract, or otherwise), and regardless of the type of relief sought (i.e. money, injunctive rеlief, or declaratory relief). A Dispute includes, by way of example and without limitation, any claim based upon marketing or solicitations to obtain the loan and the handling or servicing of my account whether such Dispute is based on a tribal, federal or state constitution, statute, ordinance, regulation, or common law, and including any issue concerning the validity, enforceability, or scope of this loan or the Arbitration agreement. . . .
Parnell digitally signed the Loan Agreement and, seventy-two hours later, Western Sky directly deposited $1,000 in Parnell‘s bank account. Prior to the due date of his first repayment, Parnell received notification that Defendant-Appellant CashCall, Inc. (CashCall) had taken over his loan and he should make all his payments to CashCall, not Western Sky.
After sending his final payment to CashCall, Parnell filed suit in state court, alleging that CashCall and Western Sky‘s business practices exploit tribal sovereign immunity and illicitly avoid federal and state regulations, including the Georgia Payday Lending Act,
II
We have jurisdiction under
III
The district court erred in holding that Parnell properly challenged the Loan Agreement. We hold that the Loan Agreement contains a delegation provision and, though Parnell challenged the validity of the arbitrаtion provision, he did not articulate a challenge to the delegation provision specifically. Therefore, the FAA requires that we treat the delegation provision as valid, enforce the terms of the Loan Agreement, and leave to the arbitrator the determination of whether the Loan Agreement‘s arbitration provision is enforceable.
A
The FAA places arbitration agreements оn equal footing with all other contracts and sets forth a clear presumption—“a national policy” in favor of arbitration. Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 443, 126 S.Ct. 1204, 1207, 163 L.Ed.2d 1038 (2006); accord AT & T Mobility LLC v. Concepcion, 563 U.S. 333, 337-39, 131 S.Ct. 1740, 1745, 179 L.Ed.2d 742 (2011); Rent-A-Center, 561 U.S. at 67; Inetianbor v. CashCall, Inc., 768 F.3d 1346, 1349 (11th Cir.2014). The FAA governs the Loan Agreement because the parties conducted their business across state lines. See
Importаntly, parties may agree to commit even threshold determinations to an arbitrator, such as whether an arbitration agreement is enforceable. The Supreme Court has upheld these so-called “delegation provisions” as valid, Rent-A-Center, 561 U.S. at 68-70, and explained that they are severable from the underlying agreement to arbitrate, Buckeye, 546 U.S. at 445. When an arbitration agreement contains a delegation provision and the рlaintiff raises a challenge to the contract as a whole, the federal courts may not review his claim because it has been committed to the power of the arbitrator. Instead, the plaintiff must “challenge[] the delegation provision specifically.” Rent-A-Center, 561 U.S. at 72 (emphasis added). In sum, absent a challenge to the delegation provision itself, the federal courts must treat the delegation
B
When federal courts interpret arbitration agreements, state contract law governs and directs the courts’ analyses of whether the parties committed an issue to arbitration. See First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 944, 115 S.Ct. 1920, 1924, 131 L.Ed.2d 985 (1995); Paladino v. Avnet Computer Techs., Inc., 134 F.3d 1054, 1061 (11th Cir.1998); see also In re Checking Account Overdraft Lit., 685 F.3d 1269, 1275 (11th Cir.2012) (applying South Carolina law to interpret an аrbitration agreement subject to the FAA). However, as the Supreme Court explained in First Options, “[c]ourts should not assume that the parties agreed to arbitrate arbitrability unless there is clear and unmistakable evidence that they did so.” 514 U.S. at 944 (internal quotation marks omitted).
Although the Loan Agreement expressly provides that the laws of the Cheyenne River Sioux Tribe (the Tribe) govern the agreement,1 the parties provided this court with no rule of tribal law regarding contract interpretation and our research uncovered none. We faced similar circumstances in Paladino, where we made an assumption regarding the proper choice of law based on one party‘s place of employment because neither party addressed which state‘s law applied and the relevant “principles of contract construction [were], in any event, matters of hornbook law.” See 134 F.3d at 1061 n. 1. Here, the plain-meaning rule is a foundational principle of common law contract interpretation widely adopted in the United States, including in Georgia, the forum that Western Sky specifically targeted with its television advertisement and in which Parnell viewed and signed the Loan Agreement. Accordingly, we look to Georgia law for a statement of the plain-meaning rule and apply it in this case.
Under Georgia law, “[i]f the language of the contract is plain, unambiguous, and capable of only one reasonable interpretation, that interpretation must control, and no construction of the contract is required or even permissible.” See City of Decatur v. DeKalb Cty., 289 Ga. 612, 713 S.E.2d 846, 849 (2011). Applying this rule and remaining cognizant of the requirement that a contractual commitment to arbitrate arbitrability must be “clear and unmistakable,” we hold that the Loan Agreement‘s plain language contains an express delegation provision. This provision conveys the parties’ intent to submit to an arbitrator the threshold issue of arbitrability.
The delegation provision appears in the third sub-paragraph of the Loan Agreement‘s arbitration provision. The portion of the Loan Agreement titled “Arbitration
Parnell urges us to hold that no delegation provision exists because this language appears within a string citation of examples. However, there is no requirement that a delegation provision be offset from other contractual language or solely discuss arbitration of arbitrability in order to be valid. Moreover, the Loan Agreement (i) requires that all Disputes be resolved in arbitration, with Disputes construed broadly, and (ii) specifically defines Disputes to include at least “issue[s] concerning the validity, enforceability, or scope of this loan or the Arbitration agreement,” regardless of what other matters may also constitute a Dispute. Thus, the Loan Agreement contains a delegation provision, providing clear and unmistakable evidence that the parties intended to commit the issue of arbitrability to the arbitrator.
C
Because the Loan Agreement contains a delеgation provision, we only retain jurisdiction to review a challenge to that particular provision. Absent a direct challenge, we must treat the delegation provision as valid and allow the arbitrator to determine the issue of arbitrability. Rent-A-Center, 561 U.S. at 72, 130 S.Ct. at 2779. Parnell‘s complaint only challenges the arbitration provision generally, and therefore falls short of the Rent-A-Center pleading requirement.
In Rent-A-Center, Plaintiff Jackson brought a discrimination suit against his former emplоyer, who responded with a motion to compel arbitration based on the signed employment agreement between the parties. In opposing the motion to compel arbitration, Jackson stated that “the entire agreement seems drawn to provide Rent-A-Center with undue advantages should an employment-related dispute arise” and that “the arbitration agreement as a whole is substantively unconscionable.” Id. at 73, 130 S.Ct. at 2779. The Supreme Court determined that the arbitration agreement contained a delegation provision because it gave the arbitrator “exclusive authority to resolve any dispute relating to the . . . enforceability . . . of this Agreement,” id. at 71, 130 S.Ct. at 2779, and Jackson‘s opposition to the motion only challenged the arbitration agreement as a whole. Accordingly, the Court ignored Jackson‘s arguments that the agreement was procedurally and substantively unconscionable because at no point did Jackson make out a challenge to the delegation provision itself, id. at 72, 130 S.Ct. at 2779, and enforced the arbitration agreement as
Parnell‘s complaint largely parallels the shortcomings of Jackson‘s opposition to the motion in Rent-A-Center. Parnell includes in the final paragraphs of his complaint that the Loan Agreement contains an arbitration provision that violаtes substantive Georgia law. The cited Georgia law states that “[a]n arbitration clause in a payday loan contract shall not be enforceable if the contract is unconscionable” and lists a variety of factors the courts should consider when evaluating unconscionability under state law.
Our holding in this case doеs not, as Parnell suggests, require future plaintiffs to “file one challenge to an agreement as a whole, followed by a challenge to a certain clause, followed by challenges to single sentences, followed by challenges to words tacked onto conjunctions at the end of a sentence.” To the contrary, the result in this case merely follows the directive set forth in Rent-A-Center and emphasizes that whеn a would-be plaintiff seeks to challenge an arbitration agreement containing a delegation provision, he or she must challenge the delegation provision directly.
IV
We hold that the Loan Agreement between the parties contained a delegation provision and because Parnell did not directly challenge that provision,
REVERSED and REMANDED for proceedings consistent with this oрinion.
Melissa A. ALVES, Corey M. Arranz, Sandrine M. Bosshardt, Kensa K. Gunter, and Alaycia D. Reid, Plaintiffs-Appellants, v. BOARD OF REGENTS OF THE UNIVERSITY SYSTEM OF GEORGIA, Jill Lee-Barber, in her individual capacity, and Douglas F. Covey, in his individual capacity, Defendants-Appellees.
No. 14-14149.
United States Court of Appeals, Eleventh Circuit.
Oct. 29, 2015.
Notes
GOVERNING LAW. This Agreement is governed by the Indian Commerce Clause of the Constitution of the United States of America and the laws of the Cheyenne River Sioux Tribe. We do not have a presence in South Dakota or any other states of the United States. Neither this Agreement nor Lender is subject to the laws of any state of the United States of America. By executing this Agreement, you hereby expressly agree that this Agreement is executed and performed solely within the exterior boundaries of the Cheyenne River Sioux Indian Reservation, a sovereign Native Amеrican Tribal Nation. You also expressly agree that this Agreement shall be subject to and construed in accordance only with the provisions of the laws of the Cheyenne River Sioux Tribe, and that no United States state or federal law applies to this Agreement.