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Consumer Arbitration Agreements: 6.3.2.3 Debt Collection Lawsuit As Waiver of Arbitration Requirement for Subsequent Consumer Litigation

In general, courts are unlikely to find waiver of the arbitration requirement based on conduct in a different litigation unless “the litigation was between the same parties and involved essentially the same claim as the one to be arbitrated.”76 An important example of waiver involving conduct in a different litigation is when the collector uses the courts to pursue a collection action.

Consumer Arbitration Agreements: 6.3.2.4 Filing Pleadings

Many courts view a party’s filing of a complaint as inconsistent with that party seeking the right to arbitrate the case after the opposing party files counterclaims.87 Some courts, similarly, find waiver when a party files a counterclaim or a third-party complaint.88

Consumer Arbitration Agreements: 6.3.2.5 Motions to Dismiss or for Summary Judgment or Otherwise Asking the Court to Address the Merits

Courts hold that a party generally cannot seek to compel arbitration after submitting arguments on the merits of the case to a court by, for example, filing a motion to dismiss or a motion for summary judgment.97 Indeed, some courts suggest that taking an overt act to have a dispute decided on the merits in court automatically waives the right to arbitrate the same dispute.98 This principle of waiver through inconsistent conduct can also apply to threshold questions of arbi

Consumer Arbitration Agreements: 6.3.2.7 Delay

To “safeguard its right to arbitration, a party must do all it could reasonably have been expected to do to make the earliest feasible determination of whether to proceed judicially or by arbitration.”108 Put another way, a defendant “who has not invoked the right to arbitrate on the record at the first available opportunity, typically in filing his first responsive pleading or motion to dismiss, has presumptively forfeited that right.”109 Accordingly, a number of courts have held that a party a

Consumer Arbitration Agreements: 6.3.2.8 Waiver in the Class Action Context

Defendants may argue that they need not seek to compel arbitration over a named plaintiff’s individual claims to be able to compel arbitration of claims brought by absent class members. They may also argue that the named plaintiff with whom the defendant has not sought to arbitrate fails to meet the typicality requirement for class certification because of the possibility that the defendant might seek to compel arbitration of absent class members’ claims.

Consumer Arbitration Agreements: 6.3.2.10 Express Indications of Waiver

While the waiver question will normally turn on the “totality of the circumstances,” parties can expressly waive their right to arbitration by intentionally abandoning that right, regardless of whether their litigation conduct alone would constitute waiver.135 Such an intentional, express, or “subjective” waiver might occur when the party seeking to arbitrate the claims has opposed a prior motion to compel arbitration,136 has withdrawn a prior motion to compel arbitration, or has otherw

Consumer Arbitration Agreements: 6.3.4 No Waiver When Motion to Compel Arbitration Was Futile Prior to Change in the Law

Sometimes the state of the law at one point in time is such that an arbitration provision is unenforceable, so that a party decides not to seek to enforce the arbitration provision but engages in court litigation. If the law changes so that the arbitration provision is now enforceable, can that party then seek to enforce its arbitration requirement in the litigation or has its participation waived that right?

Consumer Arbitration Agreements: 9.4.1.4 California Law Protects Consumers When Business Fails to Pay

A California statute, effective January 1, 2020,70 provides significant rights to consumers and employees when the business they are in arbitration with fails to pay initial arbitration fees, or other costs assessed on the business during the arbitration. There are separate provisions depending on whether the business fails to pay initial fees or ongoing costs. This discussion, while applicable to employees as well as consumers, will use the term consumers.

Consumer Arbitration Agreements: 6.4.1 In General

When a party fails to participate in an arbitration or comply with the applicable rules of the arbitration forum, the other party has at least three options: ask the arbitrator to issue sanctions or award a default judgment, depending on the forum’s rules; go to court and seek a judicial order under section 4 of the Federal Arbitration Act (FAA) requiring the delinquent party to comply with the forum’s rules; or ask a court to find that the party’s conduct in failing to participate in the arb

Consumer Arbitration Agreements: 6.4.3 Failure to Pay Fees or Costs or Otherwise Participate in an Arbitration

Under both the American Arbitration Association (AAA) and JAMS rules, businesses must pay almost all of the hefty cost of consumer arbitration—around $5000 or more—while the consumer only pays a $200 or $250 filing fee. Many companies, such as smaller car dealerships, refuse to front this kind of money, and they are particularly unlikely to pay ongoing costs once an arbitrator starts ruling against them on preliminary issues like the scope of discovery.

Consumer Arbitration Agreements: 6.5 Arbitration Agreements Cannot Limit a Court’s Ability to Find Waiver

Some businesses seek to avoid waiver of their right to arbitrate by inserting “no-waiver” clauses into their arbitration agreements, stating that the parties’ institution of, or participation in, litigation shall not be considered a waiver of the right to arbitrate.217 Courts generally are skeptical of such provisions, holding that they do not prevent a court from finding that a party waived its right to compel arbitration.218

Consumer Credit Regulation: 2.1 Introduction

This chapter provides an overview of federal and state laws that apply to non-mortgage consumer credit. The application of these laws to particular types of credit transactions is analyzed in more detail in later chapters.

Consumer Credit Regulation: 2.2.1 Regulation of Federal Depository Institutions

The National Bank Act allows national banks to abide by either a federal interest rate ceiling or their home state’s ceiling, which they can export to other states. Supreme Court case law and the Office of the Comptroller of the Currency (OCC) regulations define “interest” broadly for purposes of rate exportation, allowing national banks to export a wide variety of fees and charges. The statutory scheme for federal savings associations is similar and they are now also regulated by the OCC.

Consumer Credit Regulation: 2.2.2.1 Disclosure and Substantive Protections for Non-Mortgage Lending

The federal Truth in Lending Act (TILA)6 was adopted in 1968. TILA requires creditors to give consumers a standardized disclosure statement before a closed-end transaction is consummated.7 Among other disclosures, this statement must contain the “Amount Financed,” which is the amount of money of which the consumer will have actual use, the “Finance Charge,” which is the total dollar cost of the credit, and the “Annual Percentage Rate” (APR), which expresses the cost of the credit on a yearly basis.