Adam Wood v. Ascend Loans, LLC

Summary

The United States District Court for the Western District of Kentucky grants Ascend Loans, LLC’s motion to compel arbitration in Adam Wood’s class action concerning allegedly usurious tribal loans. The court concludes that the loan agreements clearly and unmistakably delegate arbitrability questions to the arbitrator and that Wood’s prospective-waiver challenge does not invalidate the delegation provision. The court further holds that Wood may present his choice-of-law and statutory-remedies arguments to the arbitrator.

Holdings

1. The loan agreements clearly and unmistakably delegated questions concerning the validity, scope, and enforceability of the arbitration agreement to an arbitrator.
2. Wood specifically challenged the delegation provision because he independently applied the prospective-waiver theory to the provision and argued that it prevented the arbitrator from considering state law when deciding arbitrability.
3. Wood's prospective-waiver challenge did not invalidate the delegation provision at the motion-to-compel stage because the agreement required application of the FAA to arbitrability, and the arbitrator could consider traditional contract defenses under FAA § 2.
4. The court compelled individual arbitration and stayed the action pending arbitration.

Questions Presented

1. Whether the loan agreements contained clear and unmistakable evidence that the parties delegated gateway arbitrability questions to an arbitrator.
2. Whether Wood specifically challenged the delegation provision on grounds distinct from his challenge to the arbitration agreement as a whole.
3. Whether the agreements' tribal and federal choice-of-law provisions rendered the delegation provision unenforceable under the prospective-waiver doctrine.
4. Whether the court should compel individual arbitration and stay the action.

Disposition

other