Spirit Airlines, Inc. v. Maizes et al

Filing 52

ORDER denying as moot 8 Motion for Preliminary Injunction; granting 25 Motion to Dismiss for Lack of Jurisdiction. Closing Case. Motions Terminated: 25 Defendant's MOTION to Dismiss for Lack of Jurisdiction 1 Complaint filed by Howard Madenberg, Steven Maizes, Vincent Anzalone, Lee Traylor, 8 Plaintiff's MOTION for Preliminary Injunction to Stay Class Arbitration Proceedings filed by Spirit Airlines, Inc. Signed by Judge Beth Bloom on 9/ 18/2017. (lrz1) NOTICE: If there are sealed documents in this case, they may be unsealed after 1 year or as directed by Court Order, unless they have been designated to be permanently sealed. See Local Rule 5.4 and Administrative Order 2014-69.

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Case No. 17-cv-61086-BLOOM/Valle
SPIRIT AIRLINES, INC.,
Plaintiff,
v.
STEVEN MAIZES, et al.,
Defendants.
_________________________________/
ORDER
THIS CAUSE is before the Court upon Plaintiff Spirit Airlines, Inc.’s (“Plaintiff” or
“Spirit Airlines”) Motion for Preliminary Injunction to Stay Class Arbitration Proceedings, ECF
No. [8] (“Motion for Preliminary Injunction”), and Defendants Steven Maizes, Vincent
Anzalone, Lee Traylor, and Howard Madenberg’s (collectively, “Defendants”) Motion to
Dismiss Complaint, ECF No. [25] (“Motion to Dismiss”). The Court had the benefit of oral
argument on the Motions at a hearing held on August 11, 2017. The Court has considered the
oral arguments made at that hearing, has reviewed the Motions, all opposing and supporting
submissions, the record and the applicable law, and is otherwise fully advised. For the reasons
set forth below, Spirit Airlines’ Motion for Preliminary Injunction is denied and Defendants’
Motion to Dismiss is granted.
I.

BACKGROUND
On April 12, 2017, Defendants filed an arbitration claim against Spirit Airlines with the

American Arbitration Association (“AAA”) in Broward County, Florida, purporting to represent
a class of consumers who paid a fee to join Spirit Airlines’ “$9 Fare Club.” ECF No. [1] at ¶ 11.

Case No. 17-cv-61086-BLOOM/Valle
The $9 Fare Club is a discount program allowing Spirit Airlines passengers to pay a fee for
access to reduced air fares and other discounted items. See ECF No. [8] at 4. In the arbitration
action, which is currently pending, Defendants—each of whom enrolled in the $9 Fare Club—
allege misrepresentations in the “$9 Fare Club Terms and Conditions” (the “Agreement”) that is
posted on Spirit Airlines’ website. See ECF No. [1] at ¶¶ 12-13. Of import here, the Agreement
contains an arbitration clause, which states as follows:
This Agreement and the terms of membership shall be governed and construed in
accordance with the laws of the State of Florida without giving effect to the
choice of law provisions thereof. Any dispute arising between Members and Spirit
will be resolved by submission to arbitration in Broward County, State of Florida
in accordance with the rules of the American Arbitration Association then in
effect. Notwithstanding the foregoing, nothing in this Agreement is intended or
shall be construed to negate or otherwise affect the consumer protection laws of
the state in which Members reside.
ECF No. [1-2] at ¶ 9.5 (emphasis added). Defendants relied on the Agreement’s arbitration
clause in filing their putative class arbitration claim with the AAA. See ECF No. [1-1] at ¶ 11.
On May 30, 2017, Spirit Airlines initiated this action by filing a Complaint against
Defendants seeking injunctive and declaratory relief—namely, a stay of the arbitration action
and a declaration that (i) the Agreement’s arbitration clause does not authorize class action
arbitration claims against Spirit Airlines, and (ii) the arbitration action is preempted by federal
law. ECF No. [1] at ¶ 1. Shortly thereafter, on June 16, 2017, Spirit Airlines filed its Motion for
Preliminary Injunction, urging the Court to enter an order enjoining Defendants from: “(i)
petitioning an arbitrator to rule on whether their claims are subject to class arbitration, or (ii)
proceeding with their putative class arbitration, until [the] Court decides whether claims arising
from the $9 Fare Club Agreement are subject to class arbitration.” ECF No. [8] at 3. On July
17, 2017, Defendants filed their Motion to Dismiss, arguing that the Court should dismiss Spirit

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Airlines’ Complaint for lack of subject matter jurisdiction pursuant to the Federal Arbitration
Act, 9 U.S.C. § 1, et seq. (“FAA”), and Federal Rule of Civil Procedure 12(b)(1).
In essence, the parties are at odds on two issues. First, as a threshold matter, whether the
arbitrator or the Court decides if arbitration may proceed on a class basis. And second, whether
the parties agreed to class arbitration by way of the Agreement’s arbitration clause. With respect
to the threshold issue, Spirit Airlines argues that the Court, not the arbitrator, should decide
whether the parties agreed to arbitrate on a class basis. See ECF No. [8] at 5-15; ECF No. [39].
As to the second issue, Spirit Airlines argues that the Agreement’s arbitration clause covers
bilateral claims only—i.e., Spirit Airlines “did not agree to class arbitration . . . .” ECF No. [8]
at 1. Defendants respond that, through the Agreement’s incorporation of the AAA Rules, the
parties agreed to allow the arbitrator (“not a judge”) to decide all issues of arbitrability, including
whether the parties agreed to submit to class arbitration. ECF No. [25] at 3-4. Defendants also
argue that the Agreement explicitly provides for arbitration over class or collective claims in that
the Agreement’s arbitration clause is made applicable to any dispute arising between “Members
and Spirit,” rather than, for example, any dispute “arising between any ‘Member’ and Spirit, or
between ‘You’ and Spirit.” Id. at 2-3. As such, regarding the threshold inquiry, the Court must
first address who the ultimate decision maker is, which requires an examination of the
Agreement to determine whether the parties agreed to submit the class arbitrability issue to the
arbitrator. If such an agreement was reached, this federal court action can proceed no further.
II.

DISCUSSION
The FAA, which applies to contracts that evidence transactions involving interstate

commerce, provides that contractual arbitration agreements “shall be valid, irrevocable, and
enforceable, save upon such grounds as exist at law or in equity for the revocation of any

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Case No. 17-cv-61086-BLOOM/Valle
contract.” 9 U.S.C. § 2. The FAA’s “primary” purpose is to ensure that “private agreements to
arbitrate are enforced according to their terms.” Volt Info. Scis., Inc. v. Bd. of Trs. of the Leland
Stanford Junior Univ., 489 U.S. 468, 479 (1989). With respect to class arbitration, “a party may
not be compelled under the FAA to submit to class arbitration unless there is a contractual basis
for concluding that the party agreed to do so.” Stolt-Nielsen S.A. v. AnimalFeeds Int'l Corp., 559
U.S. 662, 684 (2010).
As the Fifth Circuit has explained, “[p]reliminary issues in arbitration cases include
gateway disputes, which typically require judicial determination, and procedural questions,
which are to be reviewed by the arbitrator.” Robinson v. J & K Administrative Management
Services, Inc., 817 F.3d 193, 195 (5th Cir. 2016) (citing Green Tree Financial Corp. v. Bazzle,
539 U.S. 444, 451-53 (2003) (plurality opinion)). “The arbitrability of disputes—in other words,
the determination of whether the agreement applies to the parties' claims—is generally a gateway
issue to be determined by the courts.” Id. (citing AT & T Technologies, Inc. v. Comm’ns
Workers of Am., 475 U.S. 643, 649 (1986)). “‘[W]hether the parties have a valid arbitration
agreement at all or whether a concededly binding arbitration clause applies to a certain type of
controversy’ are two examples of questions of arbitrability.” Fed. Nat'l Mortg. Ass'n v. Prowant,
209 F. Supp. 3d 1295, 1309 (N.D. Ga. 2016) (quoting Green Tree Fin. Corp. v. Bazzle, 539 U.S.
444, 452 (2003)) (emphasis added) (alteration in original). “And if there is doubt about [whether
the arbitrator should decide a certain issue,] we should resolve that doubt ‘in favor of
arbitration.’” Bazzle, 539 U.S. at 452 (quoting Mitsubishi Motors Corp. v. Soler Chrysler–
Plymouth, Inc., 473 U.S. 614, 626 (1985)).
By way of background, in Bazzle, the Supreme Court addressed whether the underlying
question before it—namely, whether the governing contracts forbade class arbitration—was a

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substantive gateway issue for a judge to decide or a procedural issue for the arbitrator to decide.
A plurality of the Court found that it was procedural, characterizing the “relevant question [as]
what kind of arbitration proceeding the parties agreed to[,]” and reasoning that the question
“concerns contract interpretation and arbitration procedures.”

Bazzle, 539 U.S. at 452-53

(citations omitted) (emphasis in original). The Bazzle plurality went on to explain: “Arbitrators
are well situated to answer that question. Given these considerations, along with the arbitration
contracts' sweeping language concerning the scope of the questions committed to arbitration, this
matter of contract interpretation should be for the arbitrator, not the courts, to decide.” Id. at
453.
Importantly, however, the Supreme Court has since explained that the Bazzle plurality
decision did not definitively decide the issue. See, e.g., Oxford Health Plans LLC v. Sutter, —
U.S. —, 133 S. Ct. 2064, 2068 n. 2 (2013) (“Stolt-Nielsen made clear that this Court has not yet
decided whether the availability of class arbitration is a question of arbitrability. . . . But this case
gives us no opportunity to do so . . . .”) (internal citation omitted). Likewise, the Eleventh
Circuit has yet to decide the issue directly. See S. Commc'ns Servs., Inc. v. Thomas, 720 F.3d
1352, 1358 n. 6 (11th Cir. 2013). But see Prowant, 209 F. Supp. 3d at 1310 (“However, that is
not to say Bazzle is worthless. Au contraire. It may have been a plurality decision, but it’s the
best we’ve got. Neither the Eleventh Circuit nor the Supreme Court has expressly rejected the
proposition that class availability could be a [] procedural issue, and the plurality in Bazzle found
it is. Of course, if class availability is a procedural issue, it was, as a matter of law, for the
arbitrator to decide in this case.”). As such, this Court is without any binding authority on

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whether the availability of class arbitration is an arbitrability question for a court or a procedural
question for an arbitrator. 1
In any event, the arbitrator may make arbitrability determinations—such as whether the
parties have agreed to submit a particular dispute to arbitration—when the parties “clearly and
unmistakably” delegate such determinations to the arbitrator. 2 AT & T Technologies, 475 U.S. at
649; see also Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 68-69 (2010) (“We have
recognized that parties can agree to arbitrate ‘gateway’ questions of ‘arbitrability[]’ . . . .”);
Communications Workers, 475 U.S. at 649 (“Unless the parties clearly and unmistakably provide
otherwise, the question of whether the parties agreed to arbitrate is to be decided by the court,
not the arbitrator.”); Terminix Int’l Co. LP v. Palmer Ranch Ltd. P’ship, 432 F. 3d 1327, 1332-33
(11th Cir. 2005). Thus, the availability of class arbitration, even if it is a question of arbitrability,
can be delegated to an arbitrator. The circuits to have considered the availability of class
arbitration agree on this much. See, e.g., Robinson, 817 F.3d at 197 (“[I]f the parties agree to
1

The Court nevertheless notes that several circuits have decided the issue, holding that the question of
whether an arbitration agreement permits class-wide arbitration is presumptively a gateway matter
reserved for judicial determination. See Robinson, 817 F.3d 193; Dell Webb Communities, Inc. v.
Carlson, 817 F.3d 867 (4th Cir. 2016); Opalinski v. Robert Half International Inc., 761 F.3d 326 (3d Cir.
2014); Reed Elsevier, Inc. v. Crockett, 734 F.3d 594 (6th Cir. 2013). Also noteworthy is that at least one
district court in this circuit has gone the other way. See Prowant, 209 F. Supp. 3d at 1310-12 (relying on
the Bazzle plurality and the absence of any Supreme Court or Eleventh Circuit precedent rejecting Bazzle;
holding that the plaintiff was not entitled, as a matter of law, to file its declaratory judgment action
seeking a declaration that its dispute resolution policy did not permit the defendants to arbitrate their
claims against the plaintiff as a class).

2

Somewhat related to this narrow contract interpretation principle, the Supreme Court held in StoltNielsen that a court may not presume that “parties’ mere silence on the issue of class-action arbitration
constitutes consent to resolve their disputes in class proceedings.” 559 U.S. at 687 (footnote omitted). It
must be noted, however, that the parties in Stolt-Nielsen “stipulated that there was ‘no agreement’ on [the]
question” of whether they agreed to permit class arbitration.” Id. Here, by contrast, the parties dispute
whether the Agreement demonstrates an agreement to allow class arbitration. See, e.g., Levy v. Lytx, Inc.,
2017 WL 2797113, at *3 (S.D. Cal. June 28, 2017) (“Plaintiff argues that the Agreement incorporates
class arbitration by reference to the AAA rules and references to ‘all parties’ and ‘all claims.’ . . . Because
a failure to mention class arbitration in the arbitration clause itself does not necessarily equate with the
‘silence’ discussed in Stolt-Nielsen, the Court finds it necessary to determine whether this question of
contract interpretation is one for the arbitrator.”) (citations and internal quotation marks omitted).

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submit the issue of arbitrability to the arbitrator, then the availability of class or collective
arbitration is a question for the arbitrator instead of the court.”); Dell Webb, 817 F.3d at 876
(observing that “those circuit courts to have considered the question have concluded that, unless
the parties clearly and unmistakably provide otherwise, whether an arbitration agreement permits
class arbitration is a question of arbitrability for the court”) (citation and internal quotation marks
omitted); Opalinski, 761 F.3d at 335-36 (“[T]he availability of class arbitration is a ‘question of
arbitrability’ for a court to decide unless the parties unmistakably provide otherwise.”); Reed
Elsevier, 734 F.3d at 599 (“[T]he question whether an arbitration agreement permits classwide
arbitration is a gateway matter . . . reserved for judicial determination unless the parties clearly
and unmistakably provide otherwise.”) (citation and internal quotation marks omitted). With that
in mind, the Court turns to the Agreement to determine whether the parties clearly and
unmistakably delegated to the arbitrator the question of whether the Agreement allows for class
arbitration. 3
In finding that the Agreement does establish the parties’ clear and unmistakable
delegation to the arbitrator the question of whether the Agreement allows for class arbitration,
this Court finds most persuasive the approach taken by the Fifth Circuit in Reed v. Florida
Metropolitan University, Inc., 681 F.3d 630 (5th Cir. 2012), abrogated in part on other grounds,
Sutter, 133 S. Ct. 2064. In Reed, the Fifth Circuit addressed whether the district court erred in
allowing an arbitrator to determine whether the parties had agreed to class arbitration pursuant to
their arbitration agreement, which explicitly adopted the AAA’s “Commercial Rules.” 681 F.3d
at 634. The Fifth Circuit began its analysis by observing that the AAA’s Commercial Rules “do
3

The Court need not decide on a more general level whether the availability of class arbitration is
presumptively a gateway question reserved for judicial determination, because ultimately, the Agreement
reflects that the parties indeed delegated that question to the arbitrator. See Reed v. Florida Metropolitan
University, Inc., 681 F.3d 630, 633-36 (5th Cir. 2012) (doing the same), abrogated in part on other
grounds, Sutter, 133 S. Ct. 2064.

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not contain class arbitration procedures[.]” Id. Rather, the collective AAA Rules—which
explicitly govern the Agreement in this case—include “various” rules governing specific actions
(e.g., the AAA Commercial Rules) and “separate Supplementary Rules for Class Arbitration”
(the “Supplementary Rules”), which were enacted after the Supreme Court’s decision in Bazzle.
Reed, 681 F.3d at 634. “By their plain terms, these Supplementary Rules apply ‘to any dispute
arising out of an agreement that provides for arbitration pursuant to any of the rules of the . . .
AAA[] where a party submits a dispute to arbitration on behalf of or against a class or purported
class, and shall supplement any other applicable AAA rules.’” Id. at 634-35 (quoting AAA
Supp. R. 1(a)) (emphasis added). Observing that “[c]ommentators and AAA arbitral tribunals
have consistently concluded that consent to any of the AAA’s substantive rules also constitutes
consent to the Supplementary Rules[,]” the Fifth Circuit concluded “that the parties’ agreement
to the AAA’s Commercial Rules also constitutes consent to the Supplementary Rules.” 4 Id. at
635.
The parties’ consent to the Supplementary Rules proved dispositive for the Fifth Circuit,
as “the substance” of the Supplementary Rules—in particular, Supplementary Rule 3—provides
that “the arbitrator shall determine as a threshold matter … whether the applicable arbitration
clause permits the arbitration to proceed on behalf of or against a class ….” Id. (quoting AAA
Suppl. R. 3) (emphasis in original). Finding that the parties’ consent to the Supplementary Rules
“therefore[] constitute[d] a clear agreement to allow the arbitrator to decide whether the party’s
[sic] agreement provide[d] for class arbitration[,]” the Fifth Circuit held that the district court
correctly referred the class arbitration issue to the arbitrator. Id. at 635-36.

4

To be sure, the “Reed parties’ agreement did not reference the Supplementary Rules, and the parties did
not stipulate that the Supplementary Rules would apply.” Langston v. Premier Directional Drilling, L.P.,
203 F. Supp. 3d 777, 787 (S.D. Tex. 2016).

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Here, like the parties in Reed, Spirit Airlines and Defendants have consented to the
Supplementary Rules of the AAA by way of the Agreement’s explicit adoption of “the rules of
the American Arbitration Association.” ECF No. [1-2] at ¶ 9.5. Supplementary Rule 3 speaks
directly to the issue at hand by providing that “the arbitrator shall determine as a threshold matter
. . . whether the applicable arbitration clause permits the arbitration to proceed on behalf of or
against a class . . . .” AAA Suppl. R. 3. Of course, there is one notable difference between the
agreement in Reed and the Agreement in this case. Unlike the Reed agreement’s express
provision that the AAA Commercial Rules would govern, the Agreement here provides that the
AAA Rules will govern, but does not reference any subset of the AAA Rules.
In the Court’s view, however, the omission of a specific subset of the AAA Rules is
immaterial in this context. The AAA Commercial Rules, as a prime example, do not themselves
incorporate or even reference the Supplementary Rules. See generally Chesapeake Appalachia,
LLC v. Scout Petroleum, LLC, 809 F.3d 746, 763 (3d Cir. 2016) (finding that the Supplementary
Rules were not incorporated into the parties’ agreements in part because even if the AAA
Commercial Rules were incorporated therein—as was argued by the defendant—“[t]he
Commercial Rules do not even refer to the Supplementary Rules”).

As the Fifth Circuit

recognized in Reed, the incorporation of the Supplementary Rules works in the opposite
direction. That is, the Supplementary Rules, through its own unequivocal language, apply to all
AAA Rules (including the subsets); neither the AAA Rules generally nor the subsets need
specifically incorporate the Supplementary Rules because the incorporation exists by default.
That default incorporation, as mentioned, is achieved by Supplemental Rule 1(a), which provides
that the Supplementary Rules apply to “any dispute arising out of an agreement that provides for
arbitration pursuant to any of the rules of the [AAA].” AAA Suppl. R. 1(a) (emphasis added);

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see also Reed, 681 F.3d at 635 (collecting cases and recognizing that, in addition to the AAA
Commercial Rules, the AAA Wireless Industry Arbitration Rules and the AAA National Rules
also incorporate the Supplementary Rules). 5

If strictly adhered to, the language of

Supplementary Rule 1(a) would dictate that its inapplicability requires at the very least an
implicit recognition that the arbitration agreement at issue provides for arbitration pursuant to
none of the rules of the AAA.

See AAA Suppl. R. 1(a).

But the inapplicability of

Supplementary Rule 1(a) and an arbitration agreement’s express provision that the AAA Rules
govern, in this Court’s (and others’) view, make for an incompatible pairing. 6

See, e.g.,

5

It is worth noting that like Reed and cases cited to therein, courts in the Middle District of Florida have
taken the same view that an arbitration agreement’s incorporation of the AAA Commercial Rules
necessarily incorporates the Supplementary Rules. See, e.g., Marriott Ownership Resorts, Inc. v.
Sterman, 2015 WL 11251946, at *4 (M.D. Fla. Jan. 16, 2015) (“Pursuant to the Master Deed, the parties
have agreed to be bound by the AAA Commercial Arbitration Rules (“Commercial Rules”). In agreeing
to be bound by the Commercial Rules, the parties also agreed to the Supplementary Rules of Class
Arbitrations[.]”) (citing AAA Suppl. R. 1(a), and Reed, 681 F.3d at 635); Arcidiacono v. Limo, Inc., 2010
WL 4511083, at *1-2 (M.D. Fla. Nov. 2, 2010) (stating that the incorporation of the Commercial Rules
also incorporates the Supplementary Rules and the question of class arbitration is for the arbitrator)
(citing AAA Suppl. R. 1(a)). Focusing on the AAA Commercial Rules, Spirit Airlines urges this Court to
follow suit with this District’s ruling in JPay, Inc. v. Kobel, 2016 WL 2853537 (S.D. Fla. May 16, 2016).
The JPay Court rejected the argument that the agreement at issue’s reference to the AAA Commercial
Rules was sufficient to rebut the presumption that the Court is to decide arbitrability. Id. at *3. However,
although the JPay agreement explicitly referenced the AAA Commercial Rules, there appears to have
been no argument made that the AAA Commercial Rules (or the AAA Rules generally) incorporated the
Supplementary Rules, as the issue was never addressed. Indeed, nowhere in the JPay decision are the
Supplementary Rules, much less Supplementary Rule 1(a), mentioned. Cf. Reed, 681 F.3d at 635 n.5 (in
holding that consent to the AAA’s Commercial Rules constitutes consent to the Supplementary Rules,
“not[ing] that the parties have never specifically disputed the applicability of the Supplementary Rules”).
The distinction is far from insignificant, because as already discussed, the AAA Commercial Rules do not
actually refer to the Supplementary Rules. On that point, the JPay Court qualified its holding by noting
the utter absence in that case of the kind of clear and unambiguous language specifically geared towards
class arbitration that appears in the Supplementary Rules: “[A] reference to the AAA rules in an
arbitration provision – without any additional language regarding class arbitration – is insufficient . . . .”
2016 WL 2853537, at *3 (emphasis added). Here, by contrast, this Court must confront such language
(and its applicability) front and center, as the Supplementary Rules are a focal point of contention
between the parties. For this reason, the Court views JPay as distinguishable from this case.
6

Not to be understated, the parties agree here that at a general level the AAA Rules do govern the
Agreement. Taken to a logical extreme, in order to avoid rendering such governance a nullity while at the
same time finding Supplementary Rule 1(a) inapplicable, the Court would have to essentially recognize
that some particular rules or set of rules of the AAA Rules apply, but at the same time find that those rules

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Case No. 17-cv-61086-BLOOM/Valle
Langston, 203 F. Supp. 3d at 788-89 (“The court is not persuaded . . . that failure to reference a
particular subset of the AAA Rules removes the agreement from the rule in Reed. . . . . The
Supplementary Rules apply to any dispute arising out of an agreement that provides for
arbitration pursuant to any of the rules of the [AAA] where a party submits a dispute to
arbitration on behalf of or against a class or purported class, and shall supplement any other
applicable AAA rules. This language does not suggest that the parties must specify which rules
apply in order to incorporate the Supplementary Rules. Nor does it state that the primary rules
must cross-reference the Supplementary Rules in order for the Supplementary Rules to be
effective. Instead, the Supplementary Rules shall supplement any other applicable AAA rules.”)
(emphasis added) (footnotes and internal quotation marks omitted) (alteration in original); Levy,
2017 WL 2797113, at *1, *6 (finding dispositive an agreement’s mere incorporation of “the rules
of the American Arbitration Association” because “[a] reference to the AAA rules incorporates
the Supplementary Rules”) (internal citations omitted). 7
A final point bears mention. One of the main authorities Spirit Airlines relies on is the
Third Circuit’s decision in Chesapeake Appalachia, LLC v. Scout Petroleum, LLC, 809 F.3d 746
(3d Cir. 2016), in which the arbitration agreement at issue used language nearly identical to that
used in the Agreement in this case. Specifically, the Third Circuit examined an arbitration
provision in oil and gas leases that provided as follows: “In the event of a disagreement between
Lessor and Lessee concerning this Lease, performance thereunder, or damages caused by

or set of rules—whatever they may be—are somehow not the kind of AAA Rules contemplated by
Supplementary Rule 1(a).
7

At oral argument, the parties were at odds as to which specific subset or subsets of the AAA Rules
should apply under the Agreement, with Spirit Airlines arguing that the “Consumer Rules” of the AAA
“is really what [the parties] anticipated[.]” ECF No. [48] at 20. If accurate, Spirit Airlines’ position only
serves to bolster the Court’s conclusion that the Supplementary Rules were incorporated into the parties’
Agreement. See AAA Suppl. R. 1(a).

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Lessee's operations, the resolution of all such disputes shall be determined by arbitration in
accordance with the rules of the [AAA].” Id. at 748. Particularly relevant here, in holding that
the leases did not clearly and unmistakably delegate the question of class arbitrability to the
arbitrators, the Third Circuit emphasized, inter alia, that the leases did not explicitly reference
the AAA Commercial Rules—which the defendant asserted were incorporated into the leases—
nor did the AAA Commercial Rules in turn explicitly reference the Supplementary Rules. Id. at
762-63. The Third Circuit characterized the defendant’s ultimate reliance on the Supplementary
Rules as implicating “‘a daisy-chain of cross-references’—going from the Leases themselves to
‘the rules of the American Arbitration Association’ to the Commercial Rules and, at last, to the
Supplementary Rules.’” Id. at 762. The Third Circuit described what it viewed as a flaw in that
reliance as follows:
But, before we can even consider these Supplementary Rules, the “daisy-chain”
takes us from the Leases to the otherwise unspecified “rules of the American
Arbitration Association” to the Commercial Rules. The Commercial Rules do not
even refer to the Supplementary Rules and are phrased in terms of basic
procedural issues arising out of bilateral arbitration proceedings.
Id. at 763; see also Reed Elsevier, Inc. ex rel. LexisNexis Div. v. Crockett, 734 F.3d 594, 599 (6th
Cir. 2013) (concluding that the agreement, despite its incorporation of the AAA Commercial
Rules, was “silent or ambiguous as to whether an arbitrator should determine the question of
classwide arbitrability; and that is not enough to wrest that decision from the courts”). 8

8

The Sixth Circuit’s decision in Reed Elsevier warrants a closer review. In holding as it did, the Sixth
Circuit rejected the argument that the underlying arbitration clause’s reference to the AAA Commercial
Rules was sufficient to incorporate the Supplementary Rules, explaining that “the Supplemental Rules
expressly state that one should ‘not consider the existence of these Supplementary Rules, or any other
AAA rules, to be a factor either in favor of or against permitting the arbitration to proceed on a class
basis.” 734 F.3d at 599-600. Of course, that same observation was made by the Fifth Circuit in Reed.
See 681 F.3d at 636 n.6 (“The parties’ adoption of the AAA Commercial Rules and the Supplementary
Rules cannot, however, be considered in deciding whether they agreed to arbitrate a class.”) (citing AAA
Suppl. R. 3). However, as this Court believes the Fifth Circuit correctly recognized, the precise issue at
hand is who the decision maker as to class arbitration should be—not the secondary question of whether

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As already discussed, this Court views an arbitration agreement’s reference to the AAA
Rules much differently than above. Aside from that, the final point to be made is that the Third
Circuit in Chesapeake appeared to group the Eleventh Circuit’s treatment of the AAA Rules with
that of the Fifth Circuit—particularly in the Reed decision—and in doing so drew a distinction
with its own treatment of the AAA Rules. See 809 F.3d at 765 n.7 (citing S. Commc'ns, 720 F.3d
at 1358 n. 6, and Reed, 681 F.3d at 635 n.5). The Third Circuit reiterated that the proper inquiry
of whether the leases at issue clearly and unmistakably delegated the question of class
arbitrability to the arbitrators was “not merely whether the parties have somehow ‘consented’ to
the Supplementary Rules.” Id. at 765. Then, in a footnote, the Third Circuit observed that the
Eleventh Circuit in Southern Communications had, like the Fifth Circuit in Reed, “refrained from
deciding whether the availability of class arbitration is a question of arbitrability because the
appellant ‘gave the question of whether the contract allowed for class arbitration to the arbitrator
through its choice of rules and by failing to dispute th[e] [a]rbitrator’s jurisdiction to decide the
threshold issue.’” Id. at 765 n.7 (quoting S. Commc'ns, 720 F.3d at 1358 n. 6) (emphasis added)
(internal quotation marks omitted) (alteration in original). The Third Circuit appeared to view
the Eleventh Circuit’s treatment of the appellant’s “choice of rules” as problematic, stating in
relevant part that “[l]Like the Fifth Circuit, the Eleventh Circuit did not reference the ‘onerous’
burden that applies in the current context”—i.e., whether the agreement clearly and unmistakably
delegated the specific question of class arbitrability to the arbitrator. Id. at 754, 765 n.7.
The “choice of rules” that the Third Circuit was referring to was the AAA Wireless
Industry Arbitration Rules.

Id.

Importantly, like the AAA Commercial Rules, the AAA

class arbitration is indeed available (regardless of who is to decide). See id. at 636; see also Langston,
203 F. Supp. 3d at 782 n.23 (“[The defendant] may be right that the agreement does not allow class or
collective arbitration, but that is not the issue before the court. The issue is who decides if the arbitration
agreement permits class or collective procedures.”) (alteration in original) (citation omitted).

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Wireless Industry Arbitration Rules do not explicitly reference the Supplementary Rules. 9
Nonetheless, the Eleventh Circuit in Southern Communications appeared to tacitly recognize that
the AAA Wireless Industry Arbitration Rules necessarily incorporate the Supplementary Rules.
More specifically, the issue in Southern Communications, somewhat related to but different than
the issue here, was whether an arbitrator’s issuance of two arbitration awards—one of which
construed the applicable arbitration clause as allowing for class arbitration—was beyond the
scope of the arbitrator’s powers under § 10(a)(4) of the FAA. 720 F.3d at 1354. In reviewing
the arbitration awards, the Eleventh Circuit observed that the arbitrator had concluded that
although the underlying contract was silent as to class actions, “AAA Supplementary Rule 3[] []
was incorporated by reference into the contract by the parties’ choice, stated in the arbitration
clause, to ‘conduct the arbitration … pursuant to applicable Wireless Industry Arbitration Rules
of the American Arbitration Association.’”

Id. at 1359 (emphasis added).

The Eleventh

Circuit’s tacit approval of the arbitrator’s conclusion that the AAA Wireless Industry Arbitration
Rules necessarily incorporated the Supplementary Rules is illuminated in light of the standard of
review that governed the decision: so long as a reviewing court finds that the arbitrator even
arguably interpreted the parties’ contract, the court can only proceed to a further analysis as to
whether the arbitrator somehow erred in that interpretation “in the rare instance where a court
finds that a contract ‘lack[s] any contractual basis for ordering class procedures[.]’” 10

Id.

(quoting Sutter, 133 S. Ct. 2069) (emphasis in original). Pointing to the arbitrator’s “recounting

9

The Court takes judicial notice of the AAA Wireless Industry Arbitration Rules. See AAA Wireless
Industry
Arbitration
Rules,
available
at
https://www.adr.org/sites/default/files/AAA_Wireless_Rules%20%283%29.pdf.

10

The further analysis to be conducted in that context is an examination into “whether the arbitrator
‘identified and applied a rule of decision derived from the FAA or other applicable body of law or,
alternatively, merely imposed its own policy choice and thus exceeded its powers[.]” Id. (quoting StoltNielsen, 130 S. Ct. at 1770) (internal quotation marks omitted) (alterations in original).

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Case No. 17-cv-61086-BLOOM/Valle
the text of the contract’s arbitration clause” (including the arbitration clause’s adoption of the
AAA Wireless Industry Rules), the Eleventh Circuit held that the arbitrator arguably interpreted
the contract. Id. at 1359. Significantly, the Eleventh Circuit ended its inquiry there. See id. at
1359-60 (“The arbitrator’s construction holds, however good, bad, or ugly.”). And by electing
not to proceed with any further analysis, the Eleventh Circuit necessarily concluded that the
underlying contract and its adoption of the AAA Wireless Industry Rules did not lack any
contractual basis for ordering class procedures. See id. at 1359; see also generally Terminix, 432
F.3d at 1332-33 (11th Cir. 2005) (collecting cases and finding that the parties’ incorporation of
the AAA Commercial Rules into their agreement evinced a clear and unmistakable agreement
that the arbitrator should decide the arbitrable question of whether the agreement’s arbitration
clause was valid); id. at 1333 (“when ... parties explicitly incorporate rules that empower an
arbitrator to decide issues of arbitrability, the incorporation serves as clear and unmistakable
evidence of the parties' intent to delegate such issues to an arbitrator”) (quoting Contec Corp. v.
Remote Solution, Co., 398 F.3d 205, 208 (2d Cir. 2005)). It would seem to follow, then, that this
Court is left with but one conclusion: that the Agreement’s incorporation of the AAA Rules
necessarily incorporated the Supplementary Rules.
The Court finds highly persuasive the Fifth Circuit’s view in Reed that inclusion of any
of the AAA Rules in an arbitration agreement necessarily incorporates the Supplementary Rules,
which in turn specifically delegate the class arbitrability issue to the arbitrator. See AAA Suppl.
R. 1(a); AAA Suppl. R. 3. Furthermore, as alluded to by the Third Circuit in Chesapeake, the
Court believes that the Eleventh Circuit, if squarely confronted with the issue, would follow suit
with the Fifth Circuit’s Reed decision—to the extent that it has not already done so.
Accordingly, the Court finds that the parties Agreement, through its adoption of the AAA Rules,

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Case No. 17-cv-61086-BLOOM/Valle
clearly and unmistakably delegated to the arbitrator the question of whether the Agreement
allows for class arbitration. And because “the parties have contracted around the default rule”
that the Court rule on the class arbitrability issue, “it is[] [] unnecessary for [the Court] to reach”
the secondary issue of whether Defendants may, pursuant to the Agreement, pursue their claims
against Spirit Airlines through class arbitration. Terminix, 432 F.3d at 1333. Indeed, it would be
improper for the Court to do so.
III.

CONCLUSION
Based on the foregoing, it is ORDERED AND ADJUDGED as follows:
1. Defendants’ Motion to Dismiss, ECF No. [25], is GRANTED.
2. Plaintiff’s Motion for Preliminary Injunction to Stay Class Arbitration Proceedings,
ECF No. [8], is DENIED as moot.
3. The Clerk is instructed to CLOSE this case.
DONE AND ORDERED in Miami, Florida, this 18th day of September, 2017.

BETH BLOOM
UNITED STATES DISTRICT JUDGE

Copies to: Counsel of Record

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