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Dasher v. RBC Bank (USA)

United States Court of Appeals, Eleventh Circuit

February 13, 2018

MICHAEL DASHER, Plaintiff - Appellee,
RBC BANK (USA), d.b.a. RBC Bank, Defendant-Appellant.

         Appeal from the United States District Court for the Southern District of Florida D.C. Docket Nos. 1:10-cv-22190-JLK; 1:09-md-02036-JLK

          Before TJOFLAT, JULIE CARNES, and MELLOY, Circuit Judges.[*]

          MELLOY, Circuit Judge:

          Defendant RBC Bank (USA) ("RBC") appeals the district court's denial of a motion to compel arbitration. We affirm, albeit for reasons different than those cited by the district court.


         Michael Dasher held a checking account with RBC and used a debit card for that account. Dasher asserts RBC failed to properly warn him of possible overdrafts at points of sale when he used his debit card. He also asserts RBC impermissibly rearranged the order of debit-card transactions so as to process larger transactions before smaller transactions. Through this practice, RBC more quickly drove account balances to zero, thus maximizing the number of separate overdrafts. RBC charged a fee for each overdraft regardless of the size of the overdraft. By rearranging transactions in a manner that maximized the number of separate overdrafts, RBC maximized total fees charged to Dasher.[1]

          Dasher and other account holders sued RBC, and the present case became part of the Checking Account Overdraft Litigation, MDL No. 2036. RBC moved to compel arbitration, seeking to invoke an arbitration provision in a 2008 customer account agreement. The district court denied the motion. See In re Checking Account Overdraft Litig., No. 09-MD-02036-JLK, 2010 WL 3361127 (S.D. Fla. Aug 23, 2010). RBC appealed. While the appeal was pending, the Supreme Court decided AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011). Perceiving the possible applicability of Concepcion, the parties moved to vacate and remand for reconsideration. The Eleventh Circuit granted the motion. See In re Checking Account Overdraft Litig., 425 Fed.Appx. 826 (11th Cir. 2011) (per curiam).

         Back at the district court, the parties conducted limited discovery related to the issue of arbitration. Discovery revealed PNC Bank, N.A. ("PNC") had acquired RBC and had issued a new version of its customer-account agreements in 2012.[2] In doing so, PNC relied upon provisions in the 2008 agreement authorizing RBC's successors to step into RBC's shoes and also authorizing RBC to make changes to the terms of the agreement. PNC's 2012 agreement lacked an arbitration provision. The 2012 agreement purported to become binding and effective upon account holders who continued to use their accounts without opting out. Dasher did not opt out of the 2012 agreement.

         PNC renewed the RBC motion to compel arbitration, arguing the 2008 agreement and its arbitration provision should apply. Dasher resisted, arguing PNC's more recent 2012 agreement wholly superseded the 2008 agreement, thus leaving the parties without a contractual duty to arbitrate. On January 11, 2013, the district court issued a written order agreeing with Dasher and denying the motion to compel. In re Checking Account Overdraft Litig., 915 F.Supp.2d 1334 (S.D. Fla. 2013). PNC filed a notice of appeal that same day.

         Shortly after the district court entered its order, PNC sent account holders an amended agreement inserting an arbitration provision into the otherwise operative 2012 agreement. The amendment purported to become effective February 1, 2013. The arbitration provision of the February 2013 amendment is not a model of clarity, but it contains language suggesting it might have retroactive effect upon existing claims. The February 2013 amendment indicates PNC deems account holders to accept the amendment if the account holders fail to opt out and continue to use their accounts. Dasher neither opted out nor ceased using his account.

         The parties then briefed and argued their appeal from the district court's January 2013 order. We affirmed the judgment of the district court on February 10, 2014, concluding the 2012 agreement wholly superseded the 2008 agreement, thus leaving the parties without a current duty to arbitrate. See Dasher v. RBC Bank (USA), 745 F.3d 1111, 1127 (11th Cir. 2014). PNC filed a motion for reconsideration on February 28, 2014. In that motion, PNC argued "the logic of the Panel Opinion" showed that "if PNC amended its account agreement to include an arbitration provision (which it did beginning in February 2013), Plaintiffs must arbitrate their claims, because the most-current version of the agreement 'supersedes' any prior agreement." We denied the motion for reconsideration on March 27, 2014.

         On April 1, 2014, PNC filed a motion to stay the mandate pending pursuit of a writ of certiorari in the Supreme Court. We granted the stay, PNC unsuccessfully sought review in the Supreme Court, and our Court issued the mandate on October 20, 2014. On November 10, 2014, pursuant to an October 29, 2014 scheduling order, Dasher filed an amended consolidated complaint in the district court.

         Then, on December 5, 2014, PNC moved to compel arbitration based upon the February 2013 amendment to the 2012 agreement. Prior to this motion, and throughout the lengthy appeal from the January 2013 order, PNC had not sought to enforce the arbitration provision from the February 2013 amendment. Further, PNC did not suggest it had directed the February 2013 amendment to Dasher's counsel in February 2013 during the window of time PNC designated for its account holders to accept or opt out of the proposed amendment. Similarly, PNC did not suggest it directed the proposed amendment to the attention of the court at that time. In fact, PNC does not suggest it attempted to supplement any record or notify the court or opposing counsel other than through the above-quoted and oblique parenthetical reference contained in the February 2014 motion for reconsideration.

         Dasher resisted the new motion to compel arbitration, arguing PNC had waived the right to rely upon the arbitration provision in the February 2013 amendment by failing to raise it at an earlier time. Dasher characterized the timing of the 2013 amendment and PNC's earlier failure to alert counsel and the court of the amendment as strategic ploys. PNC, on the other hand, argued the amendment was unrelated to Dasher's litigation and was merely a change to a standard form agreement sent to account holders as a matter of routine business. PNC argued further that waiver should not apply because the district court record had closed prior to the February 2013 amendment such that the amendment could not have become part of the appellate record.[3] According to PNC, there was no opportunity to raise the February 2013 amendment with the court prior to completion of the last appeal. The parties also presented arguments as to whether applicable state law permitted the insertion of an arbitration provision into an agreement in the absence of express acceptance by both parties.

         The district court denied the motion in August 2015, finding PNC waived the right to pursue arbitration under the 2013 amendment because PNC (1) did not create the amendment until almost three years after litigation commenced; (2) failed to assert the amendment for almost two years after it purportedly went into effect; and (3) vigorously pursued arbitration under a different provision throughout this time without seeking to rely on the 2013 amendment and without timely notifying counsel or the court of the amendment. In the alternative, citing cases arising under the Uniform Commercial Code, the district court held the addition of an ...

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