On May 21, the U.S. Court of Appeals for the Eleventh Circuit affirmed the lower court’s denial of the defendant’s motion to compel arbitration in a lawsuit against a credit union over alleged improper fees charged to the plaintiffs’ accounts. The trial court held the defendant waived its right to arbitration by failing to register its arbitration agreement and by failing to timely rectify that issue. The appellate court rejected all four arguments, affirming the district court’s denial of the motion to compel arbitration and remanding the case for further proceedings.
The defendant appealed the decision, arguing the district court erred in four ways. First, the credit union argued that the arbitration provision still obligated the plaintiffs to arbitrate, barring them from suing in federal court, despite the arbitration association’s refusal to administer the arbitration. Second, it argued the district court incorrectly determined that the credit union was “in default” on its arbitration rights and therefore not entitled to a stay. Third, the credit union claimed the court erred in excusing one plaintiff from attempting arbitration due to perceived futility, given the other plaintiff’s unsuccessful arbitration attempt. Finally, it argued that the district court erred in concluding that neither plaintiff was entitled to an affirmative order directing arbitration under Section 4 of the Federal Arbitration Act.
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