Attempt To Add An Arbitration Clause To A Customer Agreement During Litigation Is Ineffective

In Dasher v. RBC Bank (USA), Case No. 15-13871 (decided February 13, 2018), the United States Court of Appeals for the Eleventh Circuit considered whether a bank could invoke an arbitration clause to block litigation when the bank had added the arbitration clause to its customer agreement by amendment while the litigation was in progress. The Eleventh Circuit held that the bank could not.

Mr. Dasher filed a lawsuit against RBC Bank regarding the bank's overdraft practices. A 2008 customer agreement contained an arbitration agreement, but a 2012 amendment to the customer agreement, issued while the case was pending, had removed the arbitration clause. The district court ruled that the 2012 amendment controlled and refused to compel arbitration. While the parties continued to litigate over arbitration under the 2012 agreement, and after the district court had issued its ruling regarding the 2012 agreement, the bank in February 2013 issued an amendment to its customer