S.D.S. AUTOS, INC., а Florida Corporation, d/b/a Lexus of Jacksonville, Appellant,
v.
Francis A. CHRZANOWSKI, Kimberly M. Chrzanowski, Alfred G. Jonas, Harold Gregory Forrest and Rita B. Forrest, both individually and on behalf of all others similarly situated, Appellees,
Brumos Motor Cars, Inc., a Florida Corporation, Appellant,
v.
Carolyn C. Montgomery, Cleophus M. Howell, Alfred G. Jonas and Heidi H. Jonas, both individually and on behalf of all others similarly situated, Appellees.
District Court of Appeal of Florida, First District.
*602 Christopher J. Greene and Gregory Williamson of Brant, Abraham, Reiter, McCormick & Greene, P.A., Jacksonville, for Appellant.
J. Michael Lindell and Roger K. Gannam of Lindell, Farson & Pincket, P.A., Jacksonville, and Bryan S. Gowdy and John S. Mills of Mills & Creed, P.A., Jacksonville, for Appellees.
BENTON, J.
Appellants Brumos Motor Cars, Inc., a Mercedes dealership (Brumos), and S.D.S. Autos, Inc., a Lexus dealership (S.D.S.), seek relief from non-final orders[1] denying their motions to dismiss amended class action complaints filed under Florida's Deceptive and Unfair Trade Practices Act (FDUTPA or the Act), section 501.201 et seq., Florida Statutes (2005). The trial court construed their motions to dismiss as in part motions to compel arbitration. To the extent Brumos and S.D.S. sought dismissal on the ground that automobile lessees were contractually obligated to pursue their claims (on an individual basis) in arbitration, we have jurisdiction to review the orders. See Fla. R.App. P. 9.130(a)(3)(C)(iv)(2007) (allowing appeals of non-final orders that determine "the entitlement of a party to arbitratiоn").
*603 I.
Appellees' amended class action complaints allege that Brumos and S.D.S. charged each named plaintiff $379.70 (the fee) as either an "administrative and documentary fee" or as "administrative and state fees" in connection with each vehicle the appellees acquired. The complaints allege that Brumos and S.D.S. violated FDUTPA by failing to disclose the true nature of the fee as required by sections 501.976(11) and 501.976(18), Florida Statutes (2005), and seek, among other things, injunctive relief and money damages under FDUTPA.[2] The appellees also sought certification of a class consisting of all those who paid the fee[3] "in connection with the purchase or lease of a motor vehicle."
Brumos and S.D.S. moved to dismiss the amended complaints in part on the ground that putative class members who had leased[4] vehicles from them had signed leases containing arbitration provisions. Brumos and S.D.S. argued the lessees could proceed no further in court, once Brumos and S.D.S. demanded arbitration. While the motions to dismiss were pending, the appellees moved for leave to file their second amended class action complaints,[5] adding as named plaintiffs two couples who had leased vehicles from Brumos and S.D.S. under agreements containing arbitration provisions. In July of 2006, the trial court denied the motions to dismiss, and timely appeals ensued. The trial court certified a class[6] only after it denied the motions to dismiss, and after the present appeals had been taken. In the orders under review, the trial court ruled the arbitration provisions of various leases unenforceable, on grounds they were unconscionable, contrary to Florida's public policy, and unsupported by mutual assent and consideration.
II.
We address the validity of only two arbitration provisions, the arbitration provisions in the leases which the plaintiffs named in the second amended complaint signed.[7] Both these leases (the Lexus 2 *604 and Brumos 2 agreements) provide for binding arbitration of all disputes concerning the lease or any related transaction, at the election of either party to the agreement. Both arbitration provisions also contain express class action waivers. The Lexus 2 agreement provides that "[a] claim can only be arbitrated on an individual basis and not as a class action." This agreement further provides that "[t]here shall be no right to arbitrate a claim as a representative of others or in a private attorney general capacity and there shall be no joinder or consolidation of parties, except for parties to the same contract." The Brumos 2 agreement provides that leasing customers "give up any right [they] may have to bring a class-action lawsuit or class arbitration, or to participate in either as a claimant, and . . . agree to give up any right [they] may have to consolidate [their] arbitration with the arbitration of others."[8] We conclude that, under our precedent, the class action waivers in the two leases we have to consider violate public policy by hampering important remedial purposes of FDUTPA, because they are designed to prevent individuals with small claims arising out of a motor vehicle dealer's alleged violation of section 501.976, Florida Statutes (2005), from seeking remedies as a class. On that ground, we affirm the orders below (to the extent they deny Brumos and S.D.S. arbitration of claims arising out of the Lexus 2 and Brumos 2 agreements).[9]
III.
The validity of an arbitration provision is a purely legal question a reviewing court considers de novo. See Gainesville Health Care Ctr., Inc. v. Weston,
Pursuant to the FAA, any "written [arbitration] provision in . . . a contract evidencing a transaction involving commerce . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2 (2006). The Supreme Court has held that sеction two of the FAA "is a congressional declaration of a liberal federal policy favoring arbitration agreements, notwithstanding any state substantive or procedural policies to the contrary." Perry v. Thomas,
IV.
State law may, however, invalidate an arbitration provision without contravening the FAA "provided the law at issue governs contracts generally and not arbitration agreements specifically." Bess v. Check Express,
The FAA requires arbitration of a statutory cause of action only so long as arbitration does not impair a statute's remedial function or render it ineffective as a deterrent. See Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc.,
We hаve held that an arbitration agreement that "defeat[s] the remedial purpose of the statute upon which an action is based," Powertel,
V.
Although prevailing parties in FDUTPA actions may recover attorney's fees and costs,[11] an individual asserting a successful FDUTPA claim arising out of a motor vehicle dealer's violation of section 501.976, Florida Statutes (2005), may recover only such attorney's fees as are reasonable in light of the amount of the individual's actual damages. See § 501.976, Fla. Stat. (2005) ("In any civil litigation resulting from a violation of this section, when evaluating the reasonableness of an award of attorney's fees to a private person, the trial court shall consider the amount of actual damages in relation to the time spent.").
Yet FDUTPA's attorney's fee provisions are intended to ensure the efficacy of the Act's private enforcement scheme, not to doom it to failure. See LaFerney v. Scott Smith Oldsmobile, Inc.,
Courts have not invаlidated every arbitration provision precluding consumers from seeking class-wide vindication of every statutory claim.[12] But our own precedent requires nothing less in the case of numerous, small claims brought against motor vehicle dealers under section 501.976, Florida Statutes (2005). See Am. Online,
In America Online, we held unenforceable a forum selection clause which would have required suit under FDUTPA to be brought in Virginia, where class action relief was unavailable.
*608 In finding the arbitration provision in Powertel substantively unconscionable,[13] we relied in part on the fact that the "[t]he arbitration clause . . . effectively removes Powertel's exposure to any remedy that could be pursued on behalf of a class of consumers" and noted that the benefit of class relief preclusion inured asymmetrically to Powertel, not to its customers. Id. at 576. The Powertel court explained that
[c]lass litigation provides the most economically feasible remedy for the kind of claim that has been asserted here. The potential claims are too small to litigate individually, but collectively they might amount to a large sum of money. The prоspect of class litigation ordinarily has some deterrent effect on a manufacturer or service provider, but that is absent here. By requiring arbitration of all claims, Powertel has precluded the possibility that a group of its customers might join together to seek relief that would be impractical for any of them to obtain alone.
Id.[14] The fee at issue in these cases has also given rise to small claims that are impractical for consumers to litigate or arbitrate on an individual basis but which allegedly involve "a large sum of money" when considered collectively.
VI.
Disаllowing class relief effectively prevents consumers with small, individual claims based upon motor vehicle dealers' violations of section 501.976, Florida Statutes (2005), from vindicating their statutory rights under FDUTPA. See, e.g., Kristian v. Comcast Corp.,
Precluding class representation for holders of small claims whose attorney's fees are limited by the amount of their individual damages dramatically undermines FDUTPA's private enforcement mechanisms.[15]Cf. Kristian,
VII.
FDUTPA provides for public and private enforcement alike. See generally Kristian,
FDUTPA permits the Office of the State Attorney or the Department of Legal Affairs to investigate claims of deceptive practices and to seek on behalf of consumers, among other things, actual damages and injunctive relief to prohibit such practices. See §§ 501.207 and 501.203(2), Fla. Stat. (2005). In addition, the Department of Legal Affairs has the authority to issue a cease and desist order to prevent future violations of the act. See § 501.208, Fla. Stat. (2005). These procedures concededly contemplate relief for more than one individual consumer at a time. See Fonte,
But public enforcement resources are necessarily limited. Reflecting this realityand against the backdrop of class action availabilitythe Act created a private cause of action for consumers aggrieved by FDUTPA violations. See § 501.211(1),(2), Fla. Stat. (2005). Given the restrictions on individual attorney's fee awards under section 501.976, to preclude class treatment of consumers' claims would distort the statutory scheme, undermine FDUTPA's private enforcement mechanisms and often make relief the statute contemplates unavailable, as a practical matter. In enacting FDUTPA, the Legislature was necessarily aware of class actions' role in deterring future FDUTPA violations by еffectively redressing past violations, see Am. Online, Inc.,
VIII.
In doing so, we join numerous other courts in declining to enforce bans on class relief in consumer contracts that give rise to claims under consumer protection statutes. See, e.g., Muhammad v. County Bank of Rehoboth Beach,
*611 IX.
In sum, we conclude that the contractual provisions at issue here which purport to prohibit consumers from pursuing class relief for small but numerous claims against motor vehicle dealers based upon alleged violations of section 501.976, Florida Statutes (2005), are irreconcilably at odds with the remedial purposes of FDUTPA, contrary to the public policy of this state, and unenforceable for that reason.
Affirmed.
BARFIELD and WOLF, JJ., concur.
NOTES
Notes
[1] Two orders were entered in separate cases involving substantially identical operative facts. Each order was appealed and the appeals have been consolidated. To the extent either order denied a motion to dismiss on grounds that have nothing to do with arbitration, we lack jurisdiction. See Fla. R.App. P. 9.130(a)(3)(C) (2007). An order denying a motion to dismiss is not appealable as such until after final judgment, even when the motion to dismiss is appealed in conjunction with an appealable non-final order. Chicago Title Ins. Agency v. Chicago Title Ins. Co.,
[2] Those who suffer loss as a result of a violation of the Act may recover actual damages, attorney's fees, and court costs. See § 501.211(2), Fla. Stat. (2005). In awarding attorney's fees to FDUTPA plaintiffs who prevail under Section 501.976, Florida Statutes (2005), courts must take into account "the amount of actual damages in relation to the time spent." § 501.976, Fla. Stat. (2005).
[3] The appellees later amended their requests for class certification to limit the class to all persons who were charged the fee in purchasing or leasing automobiles from Brumos and S.D.S. on or after August 18, 2001.
[4] All plaintiffs named at that time had purchased rather than leased vehicles from the appellants. The appellants do not allege that the contracts of any customers purchasing vehicles from the appellants contain arbitration clauses.
[5] In effect, at the hearing on the motions to dismiss, the parties stipulated that the arbitration question was ripe for decision, whatever the sequence in which the trial court ruled on pending motions. The trial court granted the appellees' motions for leave to amend, moreover, before the appellants filed the notices of appeal seeking review of the denial of the motions to dismiss refusing to order arbitration.
[6] We denied the appellants' motion to stay proceedings in the trial court pending resolution of their aрpeal of the non-final orders denying their motions to dismiss. Later Brumos and S.D.S. appealed the orders granting class certification separately. Those appeals have been consolidated with one another, see case numbers 1D06-5662 and 1D06-5664, but not with the present appeals.
[7] Until the trial court certified the class, just those persons actually named in the complaints were parties, and only their leases were pertinent, although the record contains other leases. See Policastro v. Stelk,
[8] The Lexus 2 agreement provides that "if the provision prohibiting classwide arbitration is deemed invalid, then this entire Arbitration Provision shall be null and void." The Brumos 2 agreement provides, in contrast, for the severability of any provision of the arbitration clause found unenforceable or invalid, and directs that the remaining provisions be "given full effect as if the severed provision had not been included." On appeal for the first time, the appellants argue that, even if the class action waivers were properly invalidated, the trial court erred by invalidating the entire Brumos 2 arbitration clause, rather than compelling arbitration pursuant to the remaining provisions of the clause. But Brumos never made this argument below. The argument is unavailable to it on appeal, because Brumos failed to raise it in the trial court. See Steinhorst v. State,
[9] We do not reach the trial court's alternative reasons for invalidating the arbitration provisions.
[10] The Lexus 2 agreement provides that "[t]his Arbitration Provision is made pursuant to a transaction involving interstate commerce, and shall be governed by the FAA." The Brumos 2 agreement provides that "[t]his Lease evidences a transaction involving interstate commerce" and that "[a]ny arbitration under this Lease shall be governed by the Federal Arbitration Act (9 U.S.C. 1, et seq.)."
[11] Section 501.2105, Florida Statutes (2005), provides, in relevant part, that "[i]n any civil litigation resulting from an act or practice involving a violation of this part, . . . the prevailing party . . . may receive his or her reаsonable attorney's fees and costs from the nonprevailing party." § 501.2105(1), Fla. Stat. (2005).
[12] See Jenkins v. First Am. Cash Advance, LLC,
[13] The trial court in Powertel,
[14] The Powertel court did not invalidate the arbitration clause solely because the clause defeated the remedial purpose of FDUTPA, but relied in part on the clause's preclusion of class remedies in finding the contract substantively unconscionable. See Powertel, Inc. v. Bexley,
[15] In finding these two arbitration clauses' preclusion of class relief unenforceable, we do not suggest that no FDUTPA claim is arbitrable. To the contrary, Florida courts have repeatedly held some FDUTPA claims subject to arbitration. See Five Points Health Care, Ltd. v. Alberts,
[16] See also Dale v. Comcast Corp.,
