Crystal Brown, On Behalf of Herself and Those Similarly Situated v. Santander Consumer USA Inc.

Summary

The United States District Court for the Southern District of Illinois denied Crystal Brown’s motion to lift a stay pending arbitration in her putative class action against Santander Consumer USA, Inc. The court held that arbitration had not yet been “had” under Section 3 of the Federal Arbitration Act because the AAA was willing to reopen the arbitration, and that Santander’s failed payment did not constitute default or waiver of its right to arbitrate. The court maintained the stay and stated that the parties could proceed with arbitration.

Holdings

1. Arbitration had not been had because the AAA's refusal to administer the matter was not an endpoint comparable to termination after a party refused or was unable to pay; the AAA remained willing to reopen the arbitration with Brown's consent.
2. Santander was not in default because its failed payment resulted from a good-faith human error and its conduct consistently demonstrated an intent to arbitrate rather than an inconsistent choice of litigation.

Questions Presented

1. Whether arbitration had been had under section 3 of the Federal Arbitration Act when the AAA declined to administer the arbitration because Santander's filing-fee payment failed but indicated that it would reopen the case with Brown's consent.
2. Whether Santander was in default of the arbitration proceedings under section 3 because its failed payment constituted waiver of its contractual right to arbitrate.

Disposition

other