Second Federal Circuit Court Refuses To Enforce Arbitration By South Dakota Tribe
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Using a different analysis, but reaching the same result as a recent decision from the Seventh Circuit, the Eleventh Circuit agreed that a defendant could not compel arbitration of consumer claims before the Cheyenne River Sioux Tribal Nation in South Dakota. Inetianbor v. CashCall, __ F.3d__, 2014 WL 4922225 (11th Cir. Oct. 2, 2014). The Eleventh Circuit found that arbitral forum was integral to the parties’ agreement, but unavailable, and therefore the dispute could remain in federal court.
The consumer in this case sued the loan servicer in federal court and the servicer moved to compel arbitration. The loan agreement called for disputes to be “resolved by Arbitration, which shall be conducted by the Cheyenne River Sioux Tribal Nation by an authorized representative in accordance with its consumer dispute rules.” The district court initially compelled arbitration and the consumer twice tried to demand arbitration. In response, the Tribe explained it did not conduct arbitration. (In fact, the Tribal Elder that the servicer chose as an arbitrator explained that the “Tribe has nothing to do with any of this business.”) Based on that evidence, the district court changed course and refused to compel arbitration.
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