Eleventh Circuit Upholds Refusal To Compel Arbitration Due To Unavailable Forum

Carlton Fields
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A borrower had previously entered into a pay day loan agreement in August of 2012, which contained an arbitration provision mandating that all claims be arbitrated in the National Arbitration Forum (NAF), and under the Code of Procedure of the NAF. However, as of 2009, NAF did not accept consumer arbitrations. Under Section 5 of the Federal Arbitration Act, where a forum chosen is unavailable, the court may substitute another arbitrator. An agreement to arbitrate is only enforceable if the choice of forum provision was not integral to the agreement as a whole. The Eleventh Circuit affirmed the trial court’s ruling that the arbitration agreement’s choice of forum of the NAF was not an “ancillary logistical concern,” but was central to the arbitration agreement. Accordingly, the lender could not enforce the arbitration agreement, and the borrower’s lawsuit was permitted to proceed in court. Flagg v. First Premier Bank, Case No. 14-14052 (11th Cir. Feb. 23, 2016).

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