Easley v. WLCC II
Decision Date | 16 September 2021 |
Docket Number | Civil Action 1:21-00049-KD-MU |
Parties | LILLIAN EASLEY, and all other similarly situated, [1] Plaintiffs, v. WLCC II, d/b/a Arrowhead Advance, Defendant. |
Court | U.S. District Court — Southern District of Alabama |
This matter is before the Court on Plaintiff's petition or motion to confirm arbitration award embedded in her Complaint (Doc. 1-2); and Defendant's motion to dismiss for improper venue and to compel arbitration (Doc. 2) Plaintiff's Opposition (Doc. 6), and Defendant's reply (Doc. 10).[2]
This action stems from an individual payday loan case that was fully and finally arbitrated and which resulted in an October 8, 2020 award in favor of Plaintiff Lillian Easley (Easley) and against Defendant WLCC II, d/b/a Arrowhead Advance (WLCC).
Specifically from August 9, 2018 to November 26, 2019, Easley obtained 10 individual small loans online (in varying amounts ($200 to $950) and interest rates (596% to 650%) from WLCC. Easley executed contracts for each loan. (Doc. 2-1 at 1-123). The total amount borrowed by Easley was $5, 250 and the finance charges imposed total $14, 529.02. Each of the loan contracts that Easley signed contained an arbitration agreement designating the American Arbitration Association (AAA) as the arbitral forum, as well as the following terms and conditions:
On March 25, 2020, Easley initiated an arbitration proceeding against WLCC before the AAA by submitting a Statement of Claim alleging that WLCC's loan contracts violated Alabama law and were void ab initio. (Doc. 2-1 at 125-142). WLCC answered, and participated in the arbitration proceeding. On October 8, 2000, the arbitrator rendered the full and final arbitration award declaring each of the WLCC loan contracts that Easley executed with WLCC void ab initio. (Doc. 6-1). Specifically, the arbitration award ruled that WLCC had waived any sovereign immunity, the transactions involved off-reservation commercial activities to which sovereign immunity does not apply, and because each of the loans was extended without a license under the ALSA, the loan contracts were void in their entirety and ab inito. (Id.) WLCC did not seek to vacate or appeal the award.
Thereafter, on December 16, 2020, Easley, on behalf of herself and all others similarly situated, filed a Complaint in the Circuit Court for Mobile County, Alabama against Defendant WLCC II, d/b/a Arrowhead Advance (WLCC)[3] asserting two (2) counts: 1) Count I -- relief on behalf of a putative class[4] of Alabama consumers alleging that WLCC has violated the Alabama Small Loans Act (ALSA), Ala. Code § 5-18-1, et seq.. by extending loans without a license; and 2) Count II -- requesting confirmation of the arbitration award that Easley obtained against WLCC and issuance of an order confirming the award and directing the Clerk to promptly enter same as final judgment (under Alabama Rules of Civil Procedure Rule 71C). (Doc. 1-2). Additionally, Easley, for herself and on behalf of a class, seeks a declaration that the loan contracts are void ab initio and seeks recovery of all sums collected, received, or retained by Defendant in connection with the loan contracts. (Doc. 1-2 at 2). In support, Easley alleges that WLCC extends small loans (payday loans) to consumers in Alabama via the internet with interest rates typically ranging between 200%-830% annually, but has never been licensed to extend such loans in Alabama under the ALSA.[5] (Id. at 3). The relief Easley seeks, via the vehicle of confirmation of her arbitration award, includes certification of her action as a class action and: 1) disgorgement of all sums WLCC has collected, received and retained in connection with the loans; 2) a declaration that WLCC's loans violate the ASLA and are void ab initio; 3) to enjoin WLCC from continuing to offer loans without an Alabama license; 4) actual damages; and 4) attorneys' fees/costs. (Doc. 1-2 at 10, 13).
In response, WLCC removed the case on January 29, 2021, asserting this Court has original jurisdiction per 28 U.S.C. § 1332(d) (Class Action Fairness Act (CAFA)) as this is a purported class action with at least 100 putative class members, there is diversity of citizenship, [6] and the aggregate amount in controversy exceeds $5, 000, 000.[7] (Doc. 1 at 3). On February 5, 2021, WLCC moved to dismiss Easley's case for improper venue and to compel arbitration. (Doc. 2).
Easley requests issuance of an order confirming the October 8, 2020 arbitration award and directing the Clerk to promptly enter same as final judgment (under Alabama Rules of Civil Procedure Rule 71C, as the Complaint was filed in state court - Mobile County Circuit Court). (Doc. 1-2 at 13-14). WLCC does not object to confirmation of the award. (Doc. 2 at 2; Doc. 10 at 3, 6-7, 13).
Section 9 of the Federal Arbitration Act (“FAA”) (9 U.S.C. § 1, et seq.), governs confirmation of an arbitrator's award and provides:
If the parties in their agreement have agreed that a judgment of the court shall be entered upon the award made pursuant to the arbitration, and shall specify the court, then at any time within one year after the award is made any party to the arbitration may apply to the court so specified for an order confirming the award, and thereupon the court must grant such an order unless the award is vacated, modified, or corrected as prescribed in sections 10 and 11 of this title. If no court is specified in the agreement of the parties, then such application may be made to the United States court in and for the district within which such award was made.
9 U.S.C. § 9 (emphasis added). See also Frazier v CitiFinancial Corp., LLC, 604 F.3d 1313, 1322 (11th Cir. 2010) ( ). “There is nothing malleable about [the] ‘must grant' [language in the FAA] which unequivocally tells courts to grant confirmation in all cases, except when one of the ‘prescribed' exceptions applies.” Hall St. Assoc., L.L.C. v. Mattel, Inc., 552 U.S. 576, 587 (2008). As summarized in Torres v. Morgan Stanley Smith...
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