# Petition for Writ of Certiorari — Green Tree Financial Corp.-Ala. v. Randolph

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 2000
- **Citation:** 531 U.S. 79

## Text

99123 5 Jan 2 1 0099
Ne, 5——— OFFICE OF THE epg

IN THE
Supreme Court of the United States

GREEN TREE FINANCIAL CorP.—ALABAMA,
AND GREEN TREE FINANCIAL CORPORATION,
Petitioners,

Vv.

LARKETTA RANDOLPH,
Respondent.

On Petition for Writ of Certiorari to the
United States Court of Appeals
for the Eleventh Circuit

PETITION FOR WRIT OF CERTIORARI

ROBERT A. HUFFAKER CARTER G. PHILLIPS *
WILLIAM H. WEBSTER PAUL J. ZIDLICKY
RUSHTON, STAKELY, JOHNSTON SIDLEY & AUSTIN

& GARRETT, P.A. 1722 Eye Street, N.W.
184 Commerce Street Washington, D.C. 20006
Montgomery, AL 36101-0270 (202) 736-8000

(334) 206-3100
Counsel for Petitioners

January 21, 2000 * Counsel of Record

PEATE I TIN PP” TTT PEELE EEO OSM OY TORI SETI ELE A ATE TNE
WILSON-Epzs Printine Co., Inc. - (202) 789-0096 - WASHINGTON, D.C. 20001

QUESTIONS PRESENTED

1. Whether the court of appeals erred in concluding
that an order compelling arbitration and dismissing a law-
suit’s underlying claims is a “final decision with respect
to an arbitration” appealable under 9 U.S.C. § 16(a)(3).

2. Whether the court of appeals erred in concluding
that an arbitration provision that was “silent” on the issue
of costs and fees was unenforceable under the Federal
Arbitration Act because the risk that plaintiff “might” be
required to bear unknown costs and fees potentially
undermined her ability to vindicate statutory rights.

(i)

ii

STATEMENT REQUIRED BY RULE 29.6

Pursuant to Rule 29.6 of the Rules of this Court, peti-
tioners state that they are wholly owned subsidiaries of
Conseco, Inc., an Indiana corporation whose stock is
publicly traded. Petitioners further state that no publicly
owned company owns ten percent or more of the stock
of Conseco, Inc.

TABLE OF CONTENTS

QUESTIONS PRESENTED 2000.0... ..ec.eccccecesecteseeeseeeeses

STATEMENT REQUIRED BY RULE 29.6 ..................

TABLE OF AUTHORITIES ....0.00..............c.-csceseeeeeeesenes

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RELEVANT STATUTORY PROVISIONS

STATEMENT OF THE CASE ...................202..................
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Em Ree REST Be 1 OOS RE NE

Decision of the Court of Appeals ..........

REASONS FOR GRANTING THE PETITION ............

I.

II.

THE CASE SQUARELY PRESENTS AN IM-
PORTANT ISSUE REGARDING THE SCOPE
OF APPELLATE JURISDICTION OF OR-
DERS DISMISSING CASES IN FAVOR OF
ARBITRATION UNDER THE FEDERAL
ARBITRATION ACT THAT HAS SHARPLY
DIVIDED THE COURTS OF APPEALBS..........

THE COURT OF APPEALS’ DECISION
THAT THE ARBITRATION CLAUSE WAS
UNENFORCEABLE PRESENTS AN IMPOR-
TANT ISSUE OF FEDERAL LAW THAT
HAS GENERATED A CONFLICT AMONG
THE COURTS OF APPEALS .............................

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83

iv

TABLE OF AUTHORITIES

CASES Page
Altman Nursing, Inc. v. Clay Capital Corp., 84
if &. BF: | 3 | RRemreeences 18
Armijo v. Prudential Ins. Co., 72 F.3d 793 (10th
I a a i cealeieaeleaainl 12, 19, 20
Arnold v. Arnold Corp., 920 F.2d 1269 (6th Cir.
Ree erate ane ee eA ORIN NNER sh Daan 12, 19, 21
Cole v. Burns Int’l Sec. Servs., 105 F.3d 1465 (D.C.
aaa 25, 26
Dobbins v. Hawks Enters., No. 99-1582, 1999 WL
1256184 (8th Cir. Dec. 23, 1999) ...........000000000..... 25, 26
Dorsey Vv. H.C.P.S. Sales, Inc., 46 F. Supp. 2d 804
SE Is UII sciecisip cassia celeriac ieedlheeeiinmcicaed 25
Filanto, S.p.A. v. Chilewich Int'l Corp., 984 F.2d
. fe eee eee 2, 18, 21
Gammaro vy. Thorp Consumer Discount Co., 15
F.3d 93 (8th Cir. 1994) ................. 17
Ex Parte Gates, 675 So. 2d 371 (Ala. 1996) ............. 24
Gilmer v. Interstate/Johnson Lane Corp., 500 U.S.
5 ee es RO ey Denese 23, 25
Green Tree Agency, Inc. v. White, 719 So. 2d 1179
PI UI cinch tials delete oceaalaaa 24
Green Tree Financial Corp. v. Davis, 729 So. 2d
gg Se FRR rie er en 24

Green Tree Financial Corp. v. Vintson, No.
1972191, 1999 WL 778496 (Ala. Oct. 1, 1999)... 24

Green Tree Financial Corp. v. Wampler, Nos.
1970983, 1971029, 1999 WL 667292 (Ala. Aug.

Bs Fe in vd sees teacosachseaetienrnctiaendeadiieceaiindbincamaitiebansiianaenlbis 24, 25
Harris v. Green Tree Financial Corp., 183 F.8d

SR CT, Te pisiiissadeicitbabhademeeinniaccnnscbinaliiadioe 25
Humphrey v. Prudential Sec. Inc., 4 F.8d 313 (4th

| Serer Pere Sr a ee ee ORO ce 17, 18
John Hancock Mut. Life Ins. Co. v. Olick, 151 F.3d

153 (Oe Cot. See edit ceeds 18

Koveleskie vy. SBC Capital Markets, Inc., 167 F.3d
861 (7th Cir.), cert. denied, 120 S. Ct. 44

ID sssisin oedbaciighanaicaaiesicastteahesccuanidisaenseinihaligidalesidaimeitibiial 27, 28
Lackey v. Green Tree Financial Corp., 498 S.E.2d
898 (S.C. Ct. App. 1998) ..... is 25

a re re eae ne

v

TABLE OF AUTHORITIES—Continued

Page
McCarthy v. Providential Corp., 122 F.3d 1242
(9th Cir. 1997), cert. denied, 119 S. Ct. 275
ITI sxcevssnstinsenesinhsthiespebioiisoesisgteidshsnciieiiaaiaiaeaamaelieiinalacsss 16, 17, 22
Mitsubishi Motors Corp. vy. Soler Chrysler-Ply-
mouth, Inc., 473 U.S. 614 (1985) -....000220200.22-e. ee 24
Moses H. Cone Mem’l Hosp. vy. Mercury Constr.
SS 8! SS eee 23
Ex Parte Napier, 723 So. 2d 49 (Ala. 1998) .......... 24

Napleton v. General Motors Corp., 138 F.3d 1209
(7th Cir.), cert. denied, 119 S. Ct. 341 (1998) .... 15, 16,
18, 21, 22
Ex Parte Parker, 730 So. 2d 168 (Ala. 1999) ........ 24
In re Pate, 198 B.R. 841 (Bankr. S.D. Ga. 1996).... 25
Patrick Home Ctr. Inc. vy. Karr, 730 So. 2d 1171

EAT, SED (PI's
Opp. at 1.) The TILA requires the disclosure of certain
credit charges articulated in the Act. See 15 US.C.A.
§ 1601, et seq.

Additionally, Plaintiff contends that under 15 U.S.C A.
§ 1691(a)(3), a provision of the ECOA, “a consumer
who wishes to reserve the right to iudicial redress for such
violations cannot be denied credit.” (Pl.’s Opp. at 11.)
Plaintiff further cites regulation B implementing the
ECOA. which she contends “prohibits presenting terms
which violate the Act to a consumer in such a manner
as to convey the impression to a reasonable consumer that
thev are mandatory.” (PI.’s Renlv at 3 (citire 12 C.F R
§ 902.4(1). Commentarv).) Plaintiff argues that “in order
to finance with Green Tree. it is necessary to eybmit all
dicnntes .. . to arbitration.” (PI.’s Renlv at 1.) Accord-
ingly, “[blv reaviring consumers to sign a contract waiv-
ing statutory causes of action, Green Tree violates {the
ECOAI which prohibits a creditor from requiring 1 waiver
of rights.” (Am Compl. € 27.) Ecsentiallv. Plaintiff con-

5 Plaintiff contends that: (1) “Green Tree is a creditor within
the meaning of TILA;” (2) “The notes and security instruments
signed by plaintiff and borrowers for the purchase of mobile homes
were extensions of credit subject to TILA ;” (3) “The requirement
that insurance policies contain provisions covering Green Tree’s
possible repossession expenses are credit charges as defined by
TILA and occur annually when each policy is renewed ;” and (4)
“No TILA disclosures are given by Green Tree.” (See Am.Compl.
{| 21-23.) Green Tree does not rebut these contentions and instead
only addresses the merits of the arbitration issue. In this Memo-
randum Opinion and Order, however, the court only addresses the
question of whether Plaintiff may be compelled to arbitrate her
claims, not the merits of the underlying claims themselves.

27a

tends that “{a] creditor may not condition the ex-
tension of consumer credit upon the consumer’s waiving
his right to judicial redress for violations of [TILA].”
(Pl.’s Opp. at 19; see also Pl.’s Reply at 1.) In other
words, “a creditor cannot insist that the consumer sign
a predispute arbitration clause covering claims under
[TILA].” (Pl.’s Opp. at 12.).

Hence, Plaintiff contends that because Green Tree fails
to disclose the “vendors single interest” requirement in its
TILA disclosures, she is entitled to damages, including
attorney’s fees and litigation expenses pursuant to 15
U.S.C.A. § 1640. (Am.Compl. at 6.) She requests simi-
lar damages for the alleged ECOA violations. (Am.
Compl. at 7.)

Green Tree argues that “[e]nforcement of arbitration in
the context of TILA claims does not run afoul of any
of the provisions of the [ECOA]. Plaintiff has available to
her the full panoply of rights granted by the ECOA, and
the only limitation imposed is that her remedies be pur-
sued in arbitration rather than in the judicial arena.”
(Defs.’ Consolidated Mot. at 3.)

B. Analysis

In determining whether Congress intended to preclude
waiver of judicial remedies, the Supreme Court has pre-
scribed a two-step inquiry. First, the court must determine
whether the Parties’ agreement to arbitrate reaches the
Statutory issues, and then, upon finding it does, the court
must consider whether legal constraints external to the
Parties’ agreement foreclosed the arbitration of those
claims. Mitsubishi Motors, 473 U.S. at 629; see also Mc-
Mahon, 482 U.S. at 226-27.

As for the first prong of the Mitsubishi Motors test, and
resolving all doubts in favor of arbitration, Byrd, 470 U.S.

28a

at 218-21; Moses H. Cone, 460 U.S. at 24; Kelly, 985
F.2d at 1069, the court finds that the arbitration provision
at issue here reaches the statutory issues. The arbitration
provision provides for binding arbitration of “{ajll dis-
putes, claims or controversies arising from or relating to
this Contract or the relationships which result from this
Contract, or the validity of this arbitration clauses or the
entire contract.” (See supra, n. 1.) The provision also
provides that “[t]he parties agree and understand that all
disputes arising under case law, statutory law, and all
other laws, including, but not limited to, all contract, tort
and property disputes will be subject to binding arbitration
in accord with this Contract.” Jd. The court finds the
terms of the provision to be sufficiently broad to encom-
pass Plaintiff's TILA, ECOA, and other claims in this
suit, notwithstanding Plaintiffs’ protestations that the pro-
vision does not specifically reference applicable statutes.
(Pl.’s Reply at 4); see, e.g. Green Tree v. Lipham, CV-
96-D-208-N (M.D.AI=.1997) (De Ment, J.) (broadly
construing same provision at issue here); Ex parte Isbell,
1997 WL 531100 (Ala., August 29, 1997) (same); Ex
parte Gates, 675 So.2d 371 (Ala.1996) (same); see also
McCarthy v. Providential Corp., 1994 WL 387852 (N.D.
Cal. July 19, 1994) (enforcing arbitration provision ap-
plicable to “any controversy or claim arising out of or re-
lating to” loan documents even though it did not speci-
fiically reference any federal statute); Lopez v. Plaza Fi-
nance Co., 1996 WL 210073 (N.D.IIl. April 25, 1996)
(similar).

As for the second prong of the Mitsubishi Motors anal-
ysis, in McMahon, the Supreme Court stated that “[t]he
Arbitration Act, standing alone, . . . mandates enforce-
ment of agreements to arbitrate statutory claims.” 482
US. at 226. Indeed, as the Mitsubishi Motors court noted:

29a

By agreeing to arbitrate a statutory claim, a party
does not forgo the substantive rights afforded by the
strtute; it only submits to their resolution in an ar-
bitral, rather than a judicial, forum. It trades the
procedures and opportunity for review of the court-
room for the simplicity, informality, and expedition
of arbitration. We must assume that if Congress in-
tended the substantive protection afforded by a given
statute to include protection against waiver of the
right to a judicial forum, the intention will be de-
ductible from text or legislative history.®

Mitsubishi Motors, 473 U.S. at 628. The Supreme Court
found “no warrant in the Arbitration Act for implying in
every contract within its ken a presumption against ar-
bitration of statutory claims.” Jd. at 625.

Even though there is no presumption against the arbit-
rability of statutory claims, and courts are to “rigorously
enforce agreements to arbitrate,” Byrd, 470 U.S. at 221,
the party opposing arbitration may show that “Congress
intended to preclude a waiver of judicial remedies for the
statutory rights at issue,” and avoid arbitration. Mc-
Mahon, 482 US. at 227. “If Congress did intend to limit
or prohibit waiver of a judicial forum for a particular
claim, such an intent ‘will be deductible from [the stat-
ute’s] text or legislative history,’ . . . or from an inherent
conflict between arbitration and the statute’s underlying

6 See also Gilmer, 500 U.S. at 28 (holding that claims arising
under the Age Discrimination In Employment Act may be subject
to arbitration); Rodriguez de Quijas, 490 U.S. at 480-83 (holding
that claims arising under § 12(a)(2) of the Securities Act of 1933,
15 U.S.C.A. § 77l(a) (2), may be subject to arbitration) ; McMahon,
482 U.S. at 238-42 (holding that claims arising under the Racketeer
Influenced and Corrupt Organizations Act, 18 U.S.C.A. §§ 1961-
1968, may be subject to arbitration) ; Mitsubishi Motors, 473 U.S.
at 629 (holding that claims arising under the Sherman Act, 15
U.S.C.A. §§ 1-7, may be subject to arbitration).

- 30a

purpose.” /d. (citing Mitsubishi Motors, 473 U.S. at
632-37; Byrd, 470 U.S. at 217). Accordingly, Plaintiff
must show that Congress intended to preclude a waiver of
judicial remedies from either the text of the statute(s),
their legislative histories, or from an inherent conflict be-
tween arbitration and the statutes’ underlying purposes.
Id. at 227; see also Gilmer, 500 U.S. at 26-27. Green
Tree argues, and the court agrees, that Plaintiff does not
meet her burden.

First, Plaintiff does not cite any provision of the text
or legislative history of either the TILA or the ECOA
that expressly precludes waiver of judicial remedies. In
other words, Plaintiff has not shown that Congress in-
tended for all disputes arising thereunder to be resolved
solely by the courts. Instead, Plaintiffs’ principal argu-
ment is based on her perceived conflict between arbitra-
tion and the statutes’ underlying purpose: “[u]nder TILA,
a consumer has a statutory right to judicial redress, in-
cluding the right to bring a class action.” (Pl.’s Opp. at
11 (citing 15 U.S.C.A. § 1640).) The possibility of class-
action exposure, argues Plaintiff, “ ‘is essential to the pro-
phylactic intent of the Act, and is necessary to elevate
truth-in-lending lawsuits from the ineffective nuisance
category to the type of suit which has enough sting to
insure that management will strive with diligence to
achieve compliance.’” (Pl.’s Opp. at 12 (citing Banto-
lina v. Aloha Motors, 419 F.Supp. 1116, 1120 (D.Haw.
1976);) see also Pl.’s Reply at 1-2). Plaintiff argues that
“flew, if any, borrowers will submit claims to arbitration
in this amount [$15-20 per year]. The purpose of the
Truth in Lending Act will thus be completely thwarted
by allowing an arbitration clause to stand.” (PI.’s Reply
at 2-3.)

Further, Plaintiff argues that under 15 U.S.C.A. § 1691.
“a consumer who wishes to reserve the right to judicial

3la

redress for such violations cannot be denied credit.”
(Pl.’s Opp. at 11.) Section 1691 provides in pertinent
part:
(a) It shall be unlawful for any creditor to dis-
criminate against any applicant, with respect to
any aspect of a credit transaction—

(3) because the applicant has in good faith exer-
cised any right under this chapter.

15 U.S.C.A. § 1691(a)(3). Plaintiff contends that this
provision prevents a creditor from requiring a consumer
to waive their “statutory right” to judicial redress under
the TILA. (PIl.’s Opp. at 11-12.) Because of this “statu-
tory right,” Plaintiff contends that “a creditor cannot dis-
criminate with respect to the extension of credit if the con-
sumer insists on preserving the right to seek judicial re-
dress.” In essence, Plaintiff's argument is that “a creditor
cannot insist that the consumer sign a predispute arbitra-
tion clause covering claims under [TILA].” (Pl.’s Opp.
at 12.)

As an initial matter, the court notes that contrary to
Plaintiffs’ assertion, a creditor insisting that a consumer
sign a predispute arbitration clause is not similar to a
creditor discriminating with respect to the extension of
credit if the consumer insists on preserving the right to
seek judicial redress. (See Id. at 12.) Indeed, Plaintiff
apparently recognizes as much when she argues that
Green Tree admits that: “fI]f Plaintiff had asked to
obtain credit without an arbitration clause so she could
nursue rights under TILA and been denied, plaintiff would
have an ECOA claim.’ (PIl.’s Reply at 3.) It is important

7Green Tree contends that contrary to Plaintiff's assertion, it
does not “admit” to anything. (Defs.’ Consolidated Mot. at 27,
n. 9.) Regardless of this dispute, the court merely utilizes Plain-
tiff’s statement to show that Plaintiff recognizes the distinction
between a creditor bargaining for an arbitration provision in its

32a

to note that Plaintiff’s statutory argument is not that she
was denied credit because she refused to sign an arbitra-
tion clause. Rather, Plaintiff concedes that she signed the
contract with the arbitration provision. Her contention
is merely that arbitration should not be required under
the TILA and the ECOA3

A creditor can bargain for any provision in a contract,
including an arbitration provision, as long as it is legal
or does not violate public policy. A consumer who volun-
tarily enters into a contract with a creditor is bound by
the terms and conditions of that contract, assuming no
applicable legal or equitable conditions work to render
the contract void or voidable. The situation where a con-
sumer enters into a contract containing an arbitration pro-
vision, and thus precludes judicial remedies, is much dif-
ferent from the consumer being denied credit because he
or she refuses to sign a contract with an arbitration pro-
vision. In this action, Green Tree is merely attempting to
enforce a predispute arbitration provision. Contrary to
Plaintiffs suggestions in her pleadings, she does not argue
that she was forced to sign an arbitration provision against
her will, or that she was denied credit because she refused
to sign a contract with an arbitration provision. She
merely contends that requiring arbitration, even though
she signed a contract agreeing to arbirate, would violate
the underlying purpose of TILA in two ways: (1) by
precluding class action litigation as provided for in the
statute: and (2) by thwarting the underlying consumer
protection purposes of the Act.

Plaintiff relies on the provisions of 15 U.S.C.A. § 1640
for the proposition that because Congress provided for

contract, and a creditor refusing to extend credit to a consumer
because the consumer refuses to accede to an arbitration provision.

8 Plaintiff also proffers various contractual grounds for not en-
forcing the arbitration provision which the court addressess infra.

—————————

33a

class actions under the TILA, Green Tree cannot condi-
tion credit on preclusion of class actions or other judicial
remedies. Plaintiff also contends that 15 U.S.C.A. § 1691
(a)(3) prohibits the conditioning of the extension of
credit on a consumer’s waiver of rights provided under
the TILA and other consumer protection statutes. How-
ever, § 1640 does not create a “statutory right” to pursue
class action litigation or other judicial redress, as Plaintiff
contends. Section 1640 merely provides for jurisdictional
requirements and liability limitations. See 15 U.S.C.A.
§ 1640; see also Lopez, 1996 WL 210073 at *3; Trucken-
brodt v. First Alliance Mortgage Co., 1996 WL 422150
(N.D.11.1996). Providing for class action litigation does
not necessarily preclude any other type of dispute resolv-
tion or provide Plaintiff with a substantive “right.” As the
Gilmer court noted: “the fact that the [statute] provides
for the possibility of bringing a collective action does not
mean that individual attempts at conciliation were in-
tended to be barred.” 500 US. at 32.

The underlying purposes of a statute may, however,
preclude waiver of class claims, regardless of contractual
provisions entered into between the parties. See Mitsu-
bishi Motors, 473 U.S. at 632-37; Byrd, 470 US. at 217.
But, a statute containing provisions governing class action
litigation, without more, does not provide a plaintiff with
the substantive right to bring her claims as the repre-
sentative of a similiarly situated class. The Supreme Court
addressed this argument in Gilmer, where, in the context
of the Age Discrimination In Employment Act, it stated
that submitting a claim to arbitration does not operate to
waive the consumer’s rights: “By agreeing to arbitrate a
statutory claim, a party does not forgo the substantive
rights afforded by the statute; it only submits to their
resolution in an arbitral, rather than a judicial forum.”
Gilmer, 500 U.S. at 26; see also Rodriguez de Quijas, 490

34a

U.S. at 480; McMahon, 482 U.S. at 229-30. Congress
did not explicitly preclude arbitration or other nonjudicial
resolution of TILA and/or ECOA claims, and Plaintiff
has not shown such intention discernible from the text or
legislative history.

Additionally, permitting binding arbitration of these
Statutory claims is consistent with statutory provisions,
such as 15 U.S.C.A. § 1640(e), that grant concurrent
State and federal jurisdiction for hearimg such claims.
Where Congress provides for alternate fora, it does not
necessarily follow that Congress intended tto preclude fora
not specifically provided for in the statutte. Nor does it
follow that Congress intended to limit fora to only those
specifically enunciated. Unless otherwise indicated, Con-
gress is merely providing procedural avenues of redress
that do not necessarily preclude other avenues; Congress
is not providing a substantive right to pursue a class ac-
tion. As the Gilmer court noted: “arbitration agreements,
‘like the provision for concurrent jurisdiction, serve to ad-
vance the objective of allowing [claimants] a broader
right to select the forum for resolving disputes, whether it
be judicial or otherwise.’” 500 U.S. at 29 (quoting Rod-
riguez de Quijas, 490 U.S. at 483). Cliass actions are
procedural devices, while “arbitration is contractual and
therefore substantive.” Sanders v. Robinson Humphrey/
American Exp. Inc., 634 F.Supp. 1048, 1065 (N.D.Ga.
1986), aff'd in part, Kirkpatrick v. J.C. Bradford & Co.,
827 F.2d 718, 725 n. 5 (11th Cir.1987) (noting the
Supreme Court’s holding in McMahon precluding class
treatment of plaintiffs subject to an arbitration agree-
ment). Procedural devices may not supersede substantive
rights. Jd.

The court finds unpersuasive Plaintiff's reliance on
case law holding that § 1691(a)(3) bars a creditor from
conditioning an extension of credit on the release of po-

354

tential claims for TILA violations arising in the past.
(Pl.’s Opp. at 12-14.) In this regard, Plaintiff relies
heavily on Parker v. DeKalb Chrysler Plymouth, 673 F.2d
1178 (11th Cir.1982). In that case, the sole issue be-
fore the Eleventh Circuit was “whether a general release
discharging [a creditor] from any claims arising out of the
purchase of an automobile constitutes a valid waiver of
(Plaintiff's) claims under TILA.” Jd. at 1179. More
specifically, the court was solely addressing the question
of “whether a person may waive a TILA claim.” Id. at
1180 (emphasis added). The court held that under the
Jacts of that case, the particular release executed by the
Plaintiff did not bar a claim under TILA. 7d. at 1182.
Although it discussed the statutory purpose behind TILA,
the court specifically held only that the plaintiff's release
“{did] not bar her TILA claim because we are convinced
that she was unaware that the release encompassed her
TILA rights.” Id. (emphasis added). The court did not
explicitly base its holding on the underlying purpose of
the TILA, but rather on the plaintiff’s level of knowledge.

As Green Tree notes, “there is a vast distinction be-
tween an instrument which completely absolves a creditor
from liability for a previously committed TILA violation
(a release) and an instrument which preserves the
debtor’s rights to pursue future claims against the cred-
itor but prescribes that these claims be resolved by arbi-
tration (an arbitration clause).” (Defs.’ Consolidated
Mot. at 14.) Preclusion of a claim through a release is
fundamentally different from an arbitration provision spe-
cifying the particular forum for resolution of a claim.
The former prevents a claim from being brought at all;
the latter merely provides the forum for its resolution—
it does not preclude the consumer from bringing a claim.
See Gilmer, 500 U.S. at 26; see also Rodriguez de Quijas,
490 U.S. at 480; McMahon, 482 US. at 229-30.

36a

In that context—the preclusion of bringing a TILA
claim—the Parker court noted that:

The public benefits from enforcement of TILA be-
cause it creates a system of disclosure that improves
the bargaining posture of all borrowers. To ensure
the realization of this goal, Congress granted con-
sumers a minimum recovery, plus costs and reason-
able attorney’s fees, without having to prove actual
damages. ... This type of remedy provides a deter-
rent comparable to exemplary damages because it
encourages individuals to bring TILA actions and
discourages noncompliance. Strict technical compli-
ance, regardless of actual injury, promotes the stand-
ardization of credit terms for the benefit of all bor-
rowers, not just the individual claimant.

Not only does TILA contemplate a public inter-
est in the enforcement of individual rights, but the
public must rely largely on the efforts of individual
consumers acting as “private attorneys general” to
achieve the disclosure system envisioned by the Act.
... If these private attorneys general are permitted
to waive TILA claims in circumstances such as those
presented in this case, the public interest in Ceterring
inconsistent and undecipherable lending practices
would be greatly hampered. The significance of this
possibility becomes clearer when we consider that
the confusion, and perhaps ignorance, that has led
consumers in the past to accept draconian credit
terms leaves them equally vulnerable when the len-
der gives them a general release of prospective
claims to sign. The Truth In Lending Act was nec-
essary exactly because borrowers could not force
creditors to provide voluntarily a system of credit
within which consumers could function intelligently.

AREA OM HEN IRR RYN wR EN AN OR TN RAUL RANTIM INL oe Se SS

37a

Parker, 673 F.2d at 1181 (citations omitted). Signifi-
cantly, the Parker court spoke only of the conflict be-
tween a release and the underlying purposes of the TILA.
Noticeably absent from the above quoted passage is any
discussion of conflict, actual or apparent, between arbi-
tration and the TILA’s underlying purpose. As noted,
a release precludes claims; in contrast, an arbitration pro-
vision merely prescribes the forum for hearing those
claims. See also Kelly vy. UHC Management, Co., Inc.,
967 F.Supp. 1240, 1258 (N.D. Ala.1997) (noting dis-
tinction between a complete release of liability and an
arbitration provision’s mere choice of forum).

Plaintiff also relies on Parker for the proposition that
“TILA is imbued with a public purpose with individuals
and their attorneys serving as private attorneys-general.
The specific grant of the right to bring class action litiga-
tion is part of enforcing that public purpose. ... {T]he
removal of class action relief through arbitration would
in essence eliminate compliance with TILA.” (Pl.’s Re-
ply at 4.) A close reading of Parker, however, shows that
the Eleventh Circuit noted that to “ensure realization”
of the enforcement of TILA’s system of disclosure (com-
pliance), “Congress granted consumers a minimum re-
covery, plus costs and reasonable attorney’s fees, without
having to prove actual damages. 15 U.S.C. § 1640(a).
This type of remedy provides a deterrent comparable to
exemplary damages because it encourages individuals to
bring TILA actions and discourage non-compliance.
Strict technical compliance, regardless of actual injury,
promotes the standardization of credit terms for the bene-
fit of all borrowers, not just the individual claimant.”
Parker, 673 F.2d at 1181.

Thus, although the language of Parker could be con-
strued to support the assertion that class action litigation
acts to ensure compliance in addition to the provisions

38a

for minimum recovery without having to prove actual
damages, the Eleventh Circuit has not expressly so held
An equally logical reading of the class action provisions
of the TILA, absent Parker, could be that because they
provide for limits on recovery in class actions, Congress
was actually concerned with consumers inundating credi-
tors with class actions and securing large recoveries, and
thus § 1640 was enacted to actually protect creditors as
opposed to ensuring compliance with the Act as Plaintiff
contends.

The court emphasizes that it is not indicating that this
was the actual intent of Congress. Parker, however, is
essentially inapplicable to the facts of this action. The
Eleventh Circuit addressed a preclusion of claims through
a release rather than an arbitration provision’s prescrip-
tion of a forum for hearing those claims. Further, the
Eleventh Circuit limited its holding in Parker to the facts
of the case before it. Parker, 673 F.2d at 1182. Con-
sequently, Parker falls out of the analysis, and the court
is left with Plaintiff's bare assertion, without supporting
authority, of what she perceives to be the Congressional
intent behind § 1640. While it is true that compliance
with TILA, and realization of its deterrent effect, is even
more likely if creditors are subject to class actions in
addition to Plaintiffs not being required to show actual
damages, Plaintiff fails to cite any compelling evidence
in support of her position. Absent such evidence, the
court finds that Plaintiff has failed to meet her burden of
showing why the arbitration provision in her contract
should not be enforced.®

9 Plaintiff also cites Prudential Ins. Co. v. Lai, 42 F.3d 1299
(9th Cir. 1994) in support of her position. The court deems it
sufficient to note that: (1) the factual situation in Lai was far
removed from the facts of this case, and are not analogous; (2)
Lai is not binding precedent in this Circuit; and (3) a multitude of

39a

II. Plaintiff's Contractual Arguments Fail

As noted supra, “arbitration is a matter of contract,
and a party cannot be required to submit to arbitration
any dispute which he has not agreed so to submit.”
United Steelworkers v. Warrior & Gulf Navig. Co., 363
U.S. 574, 582, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960);
see also, Volt Info. Sciences, Inc. y. Board of Trustees,
489 U.S. 468, 479, 109 S.Ct. 1248, 103 L.Ed.2d 488
(1989) (citing Byrd, 470 USS. at 219); AT & T Tech.,
475 U.S. at 648. Plaintiffs contends that there is no
consideration for the arbitration clause in her financing
documents because the arbitration clause requires the con-
sumer to arbitrate all suits, but gives Green Tree the
option of using judicial or non-judicial relief to enforce
a security agreement. (PI.’s Reply at 5; Pl.’s Opp. at 15.)
In other words, the arbitration provision “requires the
consumer to arbitrate everything but does not require
Green Tree to arbitrate anything.” (Pl.’s Opp. at 15-16.)
Plaintiff also contends that she did not knowingly agree
to arbitrate her statutory claims. (PI.’s Opp. at 20.)
Plaintiff argues that “a litigant can only be required to
arbitrate a federal Statutory claim ‘if she has knowingly
agreed to submit such disputes to arbitration.’ ” (7d.
(quoting Lai, 42 F.3d at 1305).) In response, Green
Tree admits that a contract generally requires considera-
tion, but argues that the provision at issue in this action
was amply supported by consideration. Green Tree also
contends that Plaintiff did, in fact, knowingly agree to
arbitrate her claims.

Because Plaintiff's contractua! arguments are directed
exclusively to the arbitration provisions, and not to her

courts have either limited Lai’s holding or restricted its applica-
tion. (See Defs.’ Consolidated Mot. at 16, n.4, and accompanying
text.)

40a

contract as a whole, the court may properly address these
issues. See Prima Paint Corp. v. Flood Conklin Mfg.
Co., 388 U.S. 395, 87 S.Ct. 1801, 18 L.Ed.2d 1270
(1967); Wheat, First Securities, Inc. v. Green, 993 F.2d
814 (11th Cir.1993); Boyd v. Homes of Legend, Inc.,
981 F.Supp. 1423, 1441-42 (M.D.Ala.1997). In doing
so, the court applies state law governing the formation of
contracts, keeping in mind the strong federal policy favor-
ing arbitration. See First Options of Chicago v. Kaplan,
514 U.S. 938, 115 S.Ct. 1920, 131 L.Ed.2d 985 (1995);
Volt Info., 489 U.S. at 468; American Express Fin. Ad-
visors v. Makareiwicz, 122 F.3d 936, 940 (11th Cir.
1997); Roberson v. Money Tree of Ala., 954 F.Supp.
1519, 1528 (M.D.Ala.1997).

A. The Arbitration Provision Is Supported By Consid-
eration

Plaintiff contends that the arbitration provision requires
the consumer to arbitrate everything, but does not re-
quire Green Tree to arbitrate anything. (Pl.’s Opp. at
15-16.) Pursuant to Hull v. Norcom, Inc., 750 F.2d
1547 (11th Cir.1985), Plaintiff argues such “one-way”
arbitration clauses are not enforceable. (/d.) Plaintiff's
consideration argument, essentially, is that the arbitration
provision is unenforceable for lack of mutuality of obli-
gation. See WMX Technologies, Inc. v. Jackson, 932
F.Supp. 1372, 1374 (M.D. Ala.1996) (“mutuality of ob-
ligation is properly viewed as an elaboration of the con-
cept of consideration”).

In Hull, the Eleventh Circuit, utilizing New York law,
addressed an arbitration agreement that required one
party to arbitrate but left the other party free to choose
between arbitration and judicial enforcement. 750 F.2d
at 1549-50. The Eleventh Circuit held that under New
York contract law, “the consideration exchanged for one

4la

Party’s promise to arbitrate must be the other party’s
Promise to arbitrate at least some specified class of claims.
Mere presence of an arbitration clause is insufficient to
enforce the arbitration provision.” Jd. at 1550. New
York law required mutuality; an arbitration provision was
unenforceable unless both parties to the contract ex-
changed reciprocal promises to arbitrate.

Hulls mutuality requirement, based on New York law,
has not been widely acepted. Indeed, New York itself
has subsequently overruled its mutuality requirement. See
Sablosky v. Edward S. Gordon Co., 73 N.Y.2d 133, 538
N.Y.S.2d 513, 535 N.E.2d 643, 646 (1989) (“mutuality
of remedy is not required in arbitration contracts. If
there is consideration for the entire agreement that is suffi-
cient; the consideration supports the arbitration option, as
it does every other obligation in the agreement”); see also
Latifi v. Sousa, 1996 WL 735260 at *5 ( recognizing
same and quoting Design Benefit Plans, Inc. vy. Enright,
940 F.Supp. 200, 204 (N.D. 111.1996) (“as far as New
York law is concerned, Hull is no longer good law”) ).
Latifi also notes Hull’s lackluster reception in a multitude
of jurisdictions, including distinguishment on the grounds
that Hull’s mutuality requirement was unique to New
York state, or outright rejection of its holding. See Latifi,
1996 WL 735260 at *4; see also Kelly, 967 F.Supp. at
1259 (declining to follow Hull because New York law
was inapplicable); W.L. Jorden & Co. v. Blythe Ind.,
Inc., 702 F.Supp. 282, 284 (N.D. Ga.1988) (same).
Because the Hull court was following New York law, and
Alabama law is applicable in the instant action, Plain-
tiff’s reliance on Hull is misplaced.

Contrary to Plaintiff's assertions, Alabama law is not
similar to pre-Sablosky New York law, the law interpreted
in Hull; in Alabama, mutuality in arbitration provisions
is not required. Under Alabama law, mutuality:

42a

[D]oes not mean equal rights under the contract, or
that each party is entitled to the same rights or cove-
nants under the contact. So long as there is a valu-
able consideration moving from one side to the other,
or there are binding promises on the part of each
party to the other, there is adequate consideration
for a valid contract.

Marcrum v. Embry, 291 Ala. 400, 282 So.2d 49 (1973).
“If there is consideration, there need to be” mutuality of
obligation. Sherrill v. Alabama Appliance Co., 240 Ala.
46, 197 So. 1 (1940). Further, in a recent decision, the
Alabama Supreme Court acknowledged that no severable
or identical consideration is required for an arbitration
provision to be enforceable. Northcom, Ltd. v. James, 694
So.2d 1329, 1335-36 (Ala.1997). The court merely re-
quired ample consideration between the parties in the
contract the arbitration provision governs. /d.; see also
Goodwin v. Ford Motor Credit Co., 970 F.Supp. 1007,
1011 (M.D.Ala.1997).

Alabama contract law does not require mutuality—
“equal or reciprocal consideration is not required... . So.
under Alabama law, even a unilateral arbitration agree-
ment is enforceable, so long as the contract in which it is
contained contains some consideration given by each side.”
Latifi, 1996 WL 735260 at *5 (citing in accord WMX
Technologies, 932 F.Supp. at 1375). Having noted that
Plaintiff's contentions are unsupported by Hull or by Ala-
bama law, the court finds that the contract between the
parties at issue here—and consequently the arbitration
provision contained therein—is supported by ample con-
sideration. There are mutually enforceable promises in
the contract. Plaintiff's argument accordingly fails.

43a

B. Plaintiff Knowingly Consented To Arbitration

Plaintiff contends that “a litigant can only be required
to arbitrate a federal Statutory claim if ‘she knowingly
agreed to submit such disputes to arbitration.’ ” (P1.’s
Opp. at 20 (citing Lai, 42 F.3d at 1305) (emphasis
added).) She argues that Parker supports her contentions
because the Eleventh Circuit “held that a release was in-
effective to bar plaintiff's TILA claim ‘because we are con-
vinced that she was unaware that the release encom-
passed her TILA rights.’” (Jd. at 20-22 (citing Parker,
673 F.2d at 1182) (emphasis added).) Essentially, Plain-
tiff is arguing that she has to have “knowledge” of any
“right” that she is waiving.

Green Tree contends that “if Plaintiff did not know of
the existence of the arbitration provision, it was because
she did not take the time to read the installment contract.”
(Defs.’ Consolidated Mot. at 47.) Green Tree points to
portions of Plaintiff's deposition which it contends estab-
lishes that “any lack of knowledge on her part was not
because she could not have read and understood the ar-
bitration clause when she entered into it but, instead, was
because of her lack of diligence in taking the time to read
the contract when she signed.” (Jd. at 48.)

In arguing that Parker precludes enforcement of the
arbitration provision, Plaintiff is arguing that enforcement
is only appropriate if she “knowingly” agreed to arbitra-
tion. In other words, Plaintiff contends that the arbitration
provision requires her to waive what she contends to be a
substantive right (the right to proceed with a class ac-
tion), and Parker requires the waiver of a substantive
right to be made with knowledge. In Parker, the Eleventh
Circuit held that the plaintiffs release did not bar her
TILA claims because “she was unaware that the release
encompassed her TILA rights.” Parker, 673 F.2d at 1182

(emphasis added).

44a

As noted, supra, a release operates as a waiver of
substantive rights—the right to pursue claims. In con-
trast. an arbitration provision docs not operate to waive
substantive rights (claims), it merely prescribes the forum
for enforcing those rights and resolving those claims.
Accordingly, Parker's holding that on the facts of that
case the release did not bar plaintiff's TILA claims be-
cause the plaintiff was unaware that the ;elease operated
to waive such claims, is inapplicable to the facts of this
action. Plaintiff's argument that because Parker requires
a knowing waiver of rights in a release, the same standard
of knowledge should be applied to an arbitration provision
is simply incongruous. Again, the court notes the Supreme
Court's language in Gilmer: [A] party does not forgo the
substantive rights afforded by the statute, it only submits
to their resolution in an arbitral, rather than a judicial,
forum.” 500 U.S. at 26 (citing Mitsubishi Motors, 473
U.S. at 628). Plaintiff's agreement to arbitrate does not
involve a waiver of a substantive right, and the heightened
knowledge standard articulated in Parker is not applicable
to the case at bar. See also Puentes v. United States Serv.,
Inc., 86 F.3d 196, 198 (11th Cir.1996) (applying know-
ing and voluntary standard to employee’s release of em-
ployer from Title VIT and 42 U.S.C. § 1981 liability);
Kelly, 967 F.Supp. at 1257-58.

In her deposition, Plaintiff states that when she received
the contract containing the arbitration provision, she “went
over the front and glanced over the back.” (Randolph
Dep. at 51, See Green Tree Evidentiary Submission In
Supp.. Ex 3.) At that time, she did not see anything that
caused her any concern. (/d.) Plaintiff admits that she
could have taken the time to look at the hack of the cen-
tract if she had wanted to. (/d. at 79.) Plaintiff also ad-
mits that Green Tree representatives did not say anything
to her on a visit to her home that she now contends was

VY ROR

45a

false or untrue. (Pl.’s Dep. at 73.) Nor is there any
contention elsewhere in Plaintiff's deposition or pleadings
that Green Tree intentionally misled her, made statements
that she now contends are false or untrue, or coerced
her in anyway into signing her contract.

Plaintiff's deposition testimony establishes that she read
the front of her contract, and “glanced” at the back.
Green Tree did not pressure Plaintiff or force her to sign
the contract without reading it—she admits she could
have taken more time if she had wanted to. Nothing con-
cerned her at that time. There is no evidence that Green
Tree made any false statements to Plaintiff, or misled her
in any way. The evidence merely shows that Plaintiff did
not read the back page of her contract—where the arbi-
tration provision was located.

Plaintiff cannot complain now about an agreement to
arbitrate she admittedly did not read at the time she
signed the contract. Kelly, 967 F.Supp. at 1257. Plain-
tiff’s failure to read what she signed does not insulate her
from her contractual obligations, including the agreement
to arbitrate. Coleman v. Prudential Bache Sec. Inc., 802
F.2d 1350 1352 (11th Cir.1986) (per curiam) (“absent
a showing of fraud or mental incompetence, a person who
signs a contract cannot avoid her obligations under it by
showing that she did not read what she signed”); Ex parte
Stripling, 694 So.2d 1281, 1283-84 (Ala.1997) (holding
that even though plaintiffs did not read the contracts be-
fore signing, “ordinarily when a competent adult, having
the ability to read and understand an instrument, signs a
contract, he will be held to be on notice of all the pro-
visions contained in that contract and will be bound

thereby”).
This action does not involve a release of liability. as

did Parker. Instead, it involves an agreement to arbitrate
claims arising out of or related to Plaintiff's contract

46a

rather than pursuing those claims in a court of law. Plain-
tiff had an unfettered opportunity to read her contract.
Yet, by Plaintiff's own admission, she merely “glanced
over” the back—the page with the arbitration provision.
Plaintiff! cannot argue that she did not knowingly enter
into the arbitration provision based on her admitted failure
to read those provisions dealing with arbitration. Under
these facts. the court finds that Plaintiff voluntarily and
knowingly entered into her contract, including the arbitra-
tion provisions contained therein, notwithstanding Plain-
tiffs contentions that Parker's heightened knowledge re-
quirement applies. The court finds that a release is suffi-
ciently dissimilar in terms of legal effect so as to distin-
guish the facts and holding of Parker from the facts
of this case. Accordingly, Plaintiff's argument that she
did not knowingly enter into an agreement to arbitrate
must fail.

Ill. The Court Declines To Certify A Class

It is true that compelling arbitration in this instance
will eliminate Plaintiff's ability to arbitrate her claims on
behalf of a class. Nevertheless, Congress has not created
a statutory right—as opposed to a procedural mechanism
—to bring class actions under the TILA. Further, the
Supreme Court has repeatedly emphasized that courts are
to rigorously enforce the partics’ agreement as they wrote
it; the FAA “requires piecemeal resolution when necessary
to give effect to an arbitration agreement.” Moses H.
Cone, 460 U.S. at 21 (emphasis in original); see also
Byrd, 470 US. at 221.

In addition, Plaintiff mistakenly asserts that “the Court's
authority to certify a class to proceed in arbitration is
questionable.” (Pl.’s Opp. at 22.) It is not. In Protective
Life Ins. v. Lincoln Nat. Life Ins., 873 F.2d 281 (11th
Cir.1989) (per curiam), the Eleventh Circuit addressed

poh ented Pichi the

47a

the issue of “whether a district court may consolidate ar-
bitration proceedings if the parties have not provided for
consolidation in their arbitration agreements.” Jd. at 282.
The Eleventh Circuit concluded “that [a district court]
may not.” /d. The court noted that § 4 of the FAA “lim-
its the power of the court to determining whether a writ-
ten arbitration agreement exists, and if it does, to enforc-
ing it ‘in accordance with its terms.’" /d. (citing 9 U.S.C.
§ 4). The court quoted the Ninth Circuit’s observation in
Weyerhaeuser Co. v. Western Seas Shipping Co., 743 F.2d
635, 637 (9th Cir.1984), cert. denied, 469 U.S. 1061,
105 S.Ct. 544, 83 L.Ed.2d 431 (1984), that:

this interpretation of section 4 “comports with the
statute’s underlying premise that arbitration is a
creature of contract, and that ‘[a]n agreement to
arbitrate before a special tribunal is, in effect. a
specialized kind of forum-selection clause that posits
not only the situs of suit but also the procedure to be
used in resolving the dispute.’" /d. (quoting Scherk
v. Alberto-Culver Co., 417 U.S. 306, 94 S.Ct. 2449,
41 L.Ed.2d 270 (1974)). Parties may negotiate for
and include provisions for consolidation of arbitra-
tion proceedings in their arbitration agreements, but
if such provisions are absent, federal courts may
not read them in.

Protective Life, 873 F.2d at 282.

The court went on to hold that the agreements between
the parties in Protective Life “contain their own arbitra-
tion clauses, and each clause requires arbitration only
between the parties to that agreement. The [parties]
never agreed to consolidated arbitration.” J/d.; see also
Kirkpatrick, 827 F.2d at 725, n. 5. Therefore, because
the contracts did not provide for arbitration on a class
basis, the Eleventh Circuit declined to read such a pro-

48a

vision into them, and instead, merely enforced the terms
of the contract requiring individualized arbitration. The
Second, Fifth, Sixth, Seventh, Eight and Ninth Circuits
have also held that absent either an express provision in
an arbitration clause or statutory authority, courts should
not order consolidated arbitration. See, ¢.g., Champ v.
Siegel Trading Co., Inc., 55 F.3d 269 (7th Cir.1995);
Government of United Kingdom v. Boeing Co., 998 F.2d
68 (2d Cir.1993); American Centennial Ins. v. National
Casualty Co., 951 F.2d 107 (6th Cir.1991); Baesler v.
Continental Grain Co., 900 F.2d 1193 (8th Cir.1990);
Del E. Webb Constr. v. Richardson Hosp. Auth., 823
F.2d 145 (5th Cir.1987); Weyerhaeuser Co., 743 F.2d at
635: c.f. Compania Espanola de Petroleos S.A. v. Nereus
Shipping, S.A., 527 F.2d 966, 975 (2d Cir.1975), cert.
denied. 426 U.S. 936, 96 S.Ct. 2650, 49 L.Ed.2d 387
(1976) (holding that a district court could order consoli-
dated arbitration pursuant to Federal Rules of Civil Pro-
cedure 42(a) and 81(a)(3)).

Accordingly, regardless of the wisdom of denying class
certification because the agreement between the parties
did not provide for class certification for arbitration pur-
poses, see Champ, 55 F.3d at 277-78 (Ilana Diamond
Rovner, J., concurring), this court is bound by circuit
precedent, and thus is required to decline Plaintiff's invi-
tation to certify a class.

TV. Conclusion

Section 3 of the FAA allows a court to stay the pro-
ceeding in an action and compel arbitration. 9 U.S.C.A.
§ 3. However, where all of the issues raised in a com-
plaint must be submitted to arbitration, dismissal of an
action is appropriate. See Alford v. Dean Witter Revn-
olds. Inc.. 975 F.2d 1161. 1164 (Sth Cir.1992): Bovd v.
Homes Of Legend, Inc., 981 F.Supp. 1423, 1997 WL

toed Mahl Ey ob tabs

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'

49a

619208 *20 (M.D.Ala. 1997); McCarthy, 1994 WL
387852 at *9. Accordingly, the court will dismiss Plain-
tiffs’ claims, with prejudice, and compel her to submit
them to binding arbitration pursuant to the arbitration
provision in her contract.

Based

50a

ORDER
on the foregoing, it is CONSIDERED and

ORDERED that:

(1)

(2)

(3)

(4)

(5)

The collective Defendants’ Motion To Compel
Arbitration be and the same is_ hereby
GRANTED.

The collective Defendants’ Motion To Stay Ac-
tion be and the same is hereby DENIED.

The collective Defendants’ Motion To Dismiss
be and the same is hereby GRANTED. Such
dismissal is WITH PREJUDICE.

Defendant Green Tree Financial Servicing Cor-
poration be and the same is hereby DISMISSED
as a party Defendant to this action.

Plaintiff is herewith ENJOINED and RE-
STRAINED from failing forthwith to arbi-
trate her claims against the remaining Green
Tree Defendants.

sea!

Sia

APPENDIX C
[Filed Jan. 5, 1998]

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF ALABAMA
NORTHERN DIVISION

Case No. 96-D-11-N

LARKETTA RANDOLPH, et al.,
Plaintiff,
Vv.

GREEN TREE FINANCIAL CoRP.—ALABAMA, et al.,
Defendants.

ORDER

Before the court is Plaintiff's Motion For Reconsidera-
ation filed December 10, 1997. Defendants filed a re-
sponse on December 29, 1997. Plaintiff initially filed suit
alleging violations of the Truth In Lending Act (“TILA”)
and the Equal Credit Opportunity Act (““ECOA”). Plain-
tiff also brought this action on behalf of a similarly situ-
ated class. On November 26, 1997, the court issued a
Memorandum Opinion and Order (“Order”) granting
Defendants’ Motion To Compel Arbitration, denying
Plaintiff's request to certify a class, dismissing this action,
with prejudice, and enjoining Plaintiff from failing to arbi-
trate her claims against the Defendants.

In its November 26, 1997 Order, the court noted that
the only way Plaintiff could avoid arbitration would be
through a showing of Congress’ intent to preclude arbi-
tration of TILA or ECOA claims. (Order at 9-11.) Such

52a

an intent must be shown either through the text of the
Acts, their legislative histories, or from an inherent con-
flict between arbitration and the Acts’ underlying pur-
poses. (Order at 11.) Plaintiff bore the burden of show-
ing why the arbitration agreement at issue in this case
should not bind the parties. (Order at 6.)

In her Motion For Reconsideration, Plaintiff asserts that
the court ignored “the only binding precedent with respect
to this particular issue,” namely Wilson v. Waverlee
Homes, Inc., 954 F. Supp. 1530 (M.D. Ala. 1997), aff'd
127 F.3d 40 (11th Cir. 1997). (Mot. For Recons. at 1
(emphasis in original).) Plaintiff contends that Waverlee
Homes, a decision rendered pursuant to the Magnuson-
Moss Warranty-Trade Commission Improvement Act, con-
trols the court’s disposition of this action. In Waverlee
Homes, the court analyzed highly detailed and specific
provisions of the Magnuson-Moss Act and concluded that
Congress intended to preclude binding arbitration of writ-
ten warranty claims arising under the Act. Id. at 1537-39;
see also Boyd v. Homes of Legend, Inc., 1997 WL 619-
208, *12-13 (M.D. Ala. 1997). In Boyd, however, the
court concluded that non-written and implied warranty
claims arising under the Magnuson-Moss Act could be
subject to arbitration. Boyd, 1997 WL 619208 at *18.
In other words, the court found that even though Con-
gress intended to preclude arbitration of written warranty
claims under the Magnuson-Moss Act, it did not intend
to preclude arbitration of non-written or implied warranty
claims. Boyd, 1997 WL 619208 at *14, *18.

Significantly, these findings were made even though the
Congressional intent of the Magnuson-Moss Act was to
“improve the adequacy of information available to con-
sumers, [and] prevent deception,” see Boyd, 1997 WL
619208 at *11. The court in Waverlee Homes rested its
findings on other, specific provisions of the Act, not solely

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534

on Congress’ stated intent in passing the Act. If it had,
Boyd may have been decided differently. Indeed, in Boyd,
the court ordered the arbitration of non-written and im-
plied warranty claims arising under the Magnuson-Moss
Act, see Boyd, 1997 WL 619208 at *14, even though it
declined to do so for written warranties in Waverlee
Homes. Waverlee Homes, 954 F. Supp. at 1537-39. Ac-
cordingly, not only are Waverlee Homes and Boyd in-

. applicable to the court’s analysis under the TILA and the

ECOA, Plaintiff is simply wrong in asserting that “[i]n
both Boyd and [Waverlee Homes], the Court found that
enforcement of the arbitration clause at issue would over-
ride the desires of Congress in creating the legislation,”
(Mot. For Recons. at 2); wrong in asserting that “there
is no distinction to be drawn between [Magnuson-Moss
and TILA] (/d. at 7); and misguided in asserting as sup-
port the fact that “all of these consumer protection statutes
were passed in a relatively short period of time between
1968-1974.” (1d.)

The court finds unpersuasive Plaintiff's assertions re-
garding class certification and finds it unnecessary to re-
visit that portion of its Order denying Plaintiff's request
to certify a class. (Mot. For Recons. at 7-9.) Finally,
Plaintiff requests that the court reconsider its Order en-
joining Plaintiff from failing to arbitrate her claims against
the Defendants. (Mot. For Recons. at 9.) Plaintiff asserts
that she does not have the resources to arbitrate and that
consequently her “only option... is to forego any
claims that she may have . . . which is precisely why this
defendant requires an arbitration agreement in each and
every one of its contracts.” (/Jd.) While mindful of the
apparent inequitable result of requiring arbitration of
TILA and ECOA claims and of not certifying a class. par-
ticularly in light of the consumer protection purposes of
the Acts, this court finds and does not make law, and is
bound by precedent and the mandates of the Eleventh

543

Circuit Court of Appeals and the United States Supreme
—~Court as it reads them. When and if either the Eleventh
Circuit or the Supreme Court hold that Congress intended
to preclude arbitration of TILA and/or ECOA claims, or
Congress expressly passes such legislation, this court will
gladly modify and/or vacate its Order. Until then, it
is CONSIDERED and ORDERED that Plaintiff's Motion
For Reconsideration be and the same is hereby DENIED.

DONE this the 5th day of January, 1998.

/s/ [Illegible] De Ment
United States District Judge

a Sawa

55a
APPENDIX D
[Filed Oct. 28, 1999]

IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT

No. 98-6055 FF

LARKETTA RANDOLPH, on behalf of herself
and all others similarly situated,
Plaintiff-A ppellant,
versus

GREEN TREE FINANCIAL CorP.—ALABAMA; and
GREEN TREE FINANCIAL CORPORATION,
Defendants-A ppellees.

On Appeal from the United States District Court
for the
Middle District of Alabama

ON PETITION(S) FOR REHEARING AND
PETITION(S) FOR REHEARING IN BANC

Before: CARNES, Circuit Judge, and FARRIS*, Senior
Circuit Judge.

* Honorable Jerome Farris, Senior U.S. Circuit Judge for the
Ninth Circuit, sitting by designation.

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PER CURIAM:

The Petition(s) for Rehearing are DENIED and no mem-
ber of this panel nor other Judge in regular active service
on the Court having requested that the Court be polled
on rehearing en banc (Rule 35, Federal Rules of Appel-
late Procedure; Eleventh Circuit Rule 35-5), the Peti-
tion(s) for Rehearing En Banc are DENIED.

ENTERED FOR THE COURT

/s/ [Mllegible]
United States Circuit Judge

‘S7a
APPENDIX E

ARBITRATION AGREEMENT CONTAINED IN
RETAIL INSTALLMENT CONTRACT

“17. All disputes, claims, or controversies arising from or
relating to this Contract or the relationships which result
from this Contract, or the validity of this arbitration clause
or the entire Contract, shall be resolved by binding arbitra-
tion by one arbitrator selected by Assignee with consent of
Buyer(s). This arbitration Contract is made pursuant to a
transaction in interstate commerce, and shall be governed
by the Federal Arbitration Act at 9 U.S.C. Section 1.
Judgement upon the award rendered may be entered in
any court having jurisdicton. The parties agree and under-
stand that they choose arbitration instead of litigation to
resolve disputes. The parties understand that they have
a right or opportunity to litigate disputes through a court,
but that they prefer to resolve their disputes through arbi-
tration, except as provided herein. THE PARTIES VOL-
UNTARILY AND KNOWINGLY WAIVE ANY RIGHT
THEY HAVE TO A JURY TRIAL EITHER PURSU-
ANT TO ARBITRATION UNDER THIS CLAUSE OR
PURSUANT TO A COURT ACTION BY ASSIGNEE
(AS PROVIDED HEREIN). The parties agree and un-
derstand that all disputes arising under case law, statu-
tory law, and all other laws including. but not limited to,
all contract, tort, and property disputes. will be subject to
binding arbitration in accord with this Contract. The
parties agree and understand that the arbitrator shall have
all nowers provided by the law and the Contract. These
powers shall include all legal and equitable remedies, in-
cluding, but not limited to, money damages, declaratory re-
lief, and injunctive relief. Notwithstanding anything here-
unto the contrary. Assignee retains an option to use ju-
dicial or non-judicial relief to enforce a security agree-
ment relating to the Manufactured Home secured in a

58a

transaction underlying this arbitration agreement, to en-
force the monetary obligation secured by the Manu-
factured Home or to foreclose on the Manufactured Home.
Such judicial relief would take the form of a lawsuit. The
institution and maintenance of an action for judicial relief
in a court to foreclose upon any collateral, to obtain a
monetary judgement, or to enforce the security agreement
shall not constitute a waiver of the right of any party to
compel arbitration regarding any other dispute or remedy
subject to arbitration in this Contract, including the filing
of a counterclaim in a suit brought by Assignee pursuant
to this provision.”

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386004_0917%3A02. Public record. Not legal advice.