Adam Wood, on behalf of himself and all others similarly situated v. Niswi, LLC d/b/a LendUMo

Summary

The United States District Court for the Western District of Kentucky grants Niswi, LLC’s motion to compel arbitration and stay Adam Wood’s putative class action concerning allegedly usurious loan agreements. The court holds that the agreements clearly and unmistakably delegate arbitrability issues to the arbitrator and that Wood’s prospective-waiver and other challenges do not require the court to invalidate the delegation provisions. The alternative motion to dismiss is denied as moot, and the case is stayed pending arbitration.

Holdings

1. The loan agreements contained clear and unmistakable evidence that the parties agreed to delegate questions of arbitrability to the arbitrator.
2. Wood made a specific challenge to the delegation provisions only to the extent he independently argued that their choice-of-law terms prevented the arbitrator from applying state law; his generalized argument that the delegation provisions were invalid for the same reasons as the arbitration agreements as a whole was insufficient.
3. Wood's prospective-waiver challenge was premature because the agreements permitted application of federal law, including the Federal Arbitration Act, when the arbitrator determined arbitrability; the arbitrator must decide in the first instance whether the choice-of-law provisions deprive Wood of substantive statutory remedies.
4. The court compelled individual arbitration and stayed the action pending arbitration.

Questions Presented

1. Whether the loan agreements clearly and unmistakably delegated threshold arbitrability questions to an arbitrator.
2. Whether Wood specifically challenged the delegation provisions rather than merely challenging the arbitration agreements as a whole.
3. Whether the agreements' tribal-law and federal-law provisions prospectively waived Wood's statutory rights so as to invalidate the delegation provisions.
4. Whether the court should compel individual arbitration and stay the action under the Federal Arbitration Act.
5. Whether LendUMo's alternative motion to dismiss for lack of subject matter jurisdiction remained operative after arbitration was compelled.

Disposition

other