Class Action Waivers Redux: Ninth Circuit Upholds Arbitration Provision Delegating Enforceability Determination To Arbitrator

In Brice v. Haynes Investments LLC, No. 19-15707 (9th Cir. Sept. 16, 2021), the Ninth Circuit considered an appeal by shareholders in Native American tribe-linked online lenders of a district court order denying the shareholders' motion to compel arbitration. The Ninth Circuit reversed the order because, under the terms of the parties' agreement, the enforceability of the arbitration agreement was a question for the arbitrator, not the judge, to decide.

A class of consumers filed suit against investors in the now-defunct online lender Think Finance, alleging that investors violated federal racketeering law, charged consumers interest rates that were usurious under California law, and that tribal sovereign immunity did not apply. The borrowers' loan documents contained an arbitration agreement with a provision delegating to the arbitrator questions concerning its enforceability. The district court denied the defendant shareholders' motion to compel arbitration,