Alfortish, et al v. GreenSky, LLC, et al

Filing 37

ORDER AND REASONS: IT IS ORDERED that Defendants' 26 motion to compel arbitration is GRANTED. Plaintiffs are directed to submit all of their claims to arbitration. IT IS FURTHER ORDERED that this case is stayed and ADMINISTRATIVELY CLOSED. Eit her party may file a motion to reopen for good cause following the arbitration of the parties' claims. If the case is disposed of through arbitration, or any other means, Plaintiffs shall promptly file a motion to dismiss. IT IS FURTHER ORDERED that the pending motions, including Plaintiffs' 19 Motion to Certify Class and Defendants' Alternative 28 Motion to Dismiss Plaintiffs' First Amended Class Action Complaint are DISMISSED AS MOOT. Signed by Judge Ivan L.R. Lemelle on 2/21/2017.(mmv)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
TODD ALFORTISH, ET AL.

CIVIL ACTION

VERSUS

NO. 16-15084

GREENSKY, LLC, ET AL.

SECTION "B"(1)
ORDER AND REASONS

Before the Court is “Defendants’ Motion to Compel Arbitration
and Stay Proceedings Pending Arbitration.” Rec. Doc. 26. Plaintiff
timely filed an opposition memorandum. Rec. Doc. 29. Defendants
then requested (Rec. Doc. 30), and this Court granted (Rec. Doc.
31), leave to file a reply memorandum (Rec. Doc. 32). Thereafter,
Plaintiffs requested (Rec. Doc. 33), and this Court granted (Rec.
Doc. 35), leave to file a sur-reply memorandum (Rec. Doc. 36). For
the reasons discussed below,
IT IS ORDERED that the motion to compel arbitration (Rec.
Doc. 26) is GRANTED. Plaintiffs are directed to submit all of their
claims to arbitration.
IT

IS

FURTHER

ORDERED

that

this

case

is

stayed

and

ADMINISTRATIVELY CLOSED. Either party may file a motion to reopen
for good cause following the arbitration of the parties’ claims.
If the case is disposed of through arbitration, or any other means,
Plaintiffs shall promptly file a motion to dismiss.
IT IS FURTHER ORDERED that the pending motions, including
Plaintiffs’

“Motion

to

Certify

Class”

(Rec.

Doc.

19)

and

“Defendants’

Alternative

Motion

to

Dismiss

Plaintiffs’

First

Amended Class Action Complaint” (Rec. Doc. 28) are DISMISSED AS
MOOT.
I.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY
This case arises out of the marketing and sale of solar energy

systems. Several Louisiana solar companies, including Joule, LLC,
Southcoast

Solar,

A-1

Solar

Source,

and

SunPro

(“the

Solar

Companies”), sold energy systems to Todd and Sylvia Alfortish,
James Fincher, and a class of similarly situated individuals
(“Plaintiffs”). Rec. Doc. 13 at ¶¶ 1-3. These companies promised
their

customers

“energy

savings

and

guaranteed

federal

and

Louisiana state income tax refunds,” even though, by early 2015,
they knew or should have known that the state income tax refunds
were not guaranteed. Id. at ¶¶ 3-4. In fact, the companies were
purportedly actively lobbying against legislation designed to cap
the total amount of solar energy income tax credits—legislation
that

went

into

effect

on

June

19,

2015.

Id.

at

¶¶

29-30.

Ultimately, Plaintiffs’ applications for state income tax credits
were denied because of this legislation. Id. at ¶ 37.1

It was not alleged by the parties, but it is worth noting that, from records
submitted to the Court, it appears that Plaintiffs Todd and Sylvia Alfortish
agreed to purchase their solar energy system on November 16, 2015, while
Plaintiff James Fincher agreed to purchase his solar energy system on June 25,
2015—after the legislation apparently went into effect. See Rec. Docs. 32-1,
32-2.
1

2

The Solar Companies also presented Plaintiffs with eighteenmonth

“interest

free”

“bridge

loans”

from

GreenSky,

LLC

(“Defendant GreenSky”). Id. at ¶ 6. However, these loans were
“interest waivable,” not “interest free,” and carried an interest
rate of at least 17.99%. Id. at ¶¶ 7, 9. The interest would only
be waived “if the entire bridge loan was satisfied within 18 months
of the purchase.” Id. at ¶ 34. The “bridge loans” were “purportedly
designed to act like gap financing in order to allow [customers]
enough time to file their tax returns and receive their state
income tax credits to satisfy the loans in full before they would
ever have to pay interest.” Id. at ¶ 33. According to the amended
complaint,

“[h]ad

Plaintiffs

known

about

the

potential

unavailability of the . . . tax credits, and therefore the . . .
risk that Plaintiffs would have to pay onerous interest rates which
began to accumulate from the date of purchase . . . Plaintiffs
would not have purchased the solar energy systems.” Id. at ¶ 38.
According to Plaintiffs, the Solar Companies were acting as
agents on behalf of Defendant GreenSky, which gave the companies
the authority to enter into finance agreements and represent the
terms of the loans. Id. at ¶ 11. Plaintiffs allege that Defendant
GreenSky knew that the Solar Companies were misrepresenting the
terms of the loans. Id. at ¶ 36. Further, Plaintiff alleges that
Synovus Bank (“Defendant Synovus”) and SunTrust Bank (“Defendant
SunTrust”) partnered with Defendant GreenSky. Id. at ¶¶ 14-15.
3

Specifically, Defendant Synovus was the lender for Plaintiffs Todd
and Sylvia Alforish, while Defendant SunTrust was the lender for
Plaintiff James Fincher. Id. at ¶ 25. Defendant GreenSky was merely
the servicer of the loans. Rec. Doc. 26-2 at 4 n.2.2
On November 22, 2016, Plaintiffs filed an amended complaint,
alleging a class action against Defendants GreenSky, Synovus, and
SunTrust, on behalf of “all Louisiana residents who entered into
finance agreements (‘bridge loans’) with GreenSky as a result of
purchasing solar energy systems from the Solar Companies and who
were denied the solar energy state income tax credit.” Rec. Doc.
13 at ¶ 40. Plaintiffs estimate that the class consists of more
than five hundred households. Id. at ¶ 41.3 Nonetheless, Plaintiffs
asserted

causes

of

action

under

the

Louisiana

Unfair

Trade

Practices and Consumer Protection Law (“LUTPA,” LA. REV. STAT. Ann.
§§ 51:1401-30); the Truth in Lending Act (“TILA,” 15 U.S.C.A. §
1638); the Louisiana Consumer Credit Law (“LCCL,” LA. REV. STAT.
Ann. §§ 9:3510-77.5); as well as a common law claim for unjust
enrichment. Id. at ¶¶ 48-73.

Citing Bentley v. GreenSky Trade Credit, LLC, 156 F. Supp. 3d 274, 292 (D.
Conn. 2015), reconsideration denied sub nom. Bentley v. Tri-State of Branford,
LLC, No. 14-1157, 2016 WL 2626805 (D. Conn. May 6, 2016) (where the court
recognized, based on GreenSky’s Rule 56 statement, that it is a “third-party
service provider that partners with lenders that fund loans under the GreenSky
program”).
3 There is a pending motion to certify the class, but it is not set for submission
until December 20, 2017. Rec. Doc. 19.
2

4

II.

THE PARTIES’ CONTENTIONS
Defendants

assert

that

the

contracts

entered

into

by

Plaintiffs contain an agreement to arbitrate all claims. Rec. Doc.
26-2 (citing Rec. Docs. 26-3, 26-4). On December 20, 2016, about
a month after the amended complaint was filed, Defendants’ counsel
informed Plaintiffs’ counsel that Defendants were invoking the
arbitration clause. Id. at 6 (citing Rec. Docs. 26-5, 26-6).
Defendants requested that the complaint be dismissed by January
10, 2017, but Plaintiffs neither dismissed the complaint nor
responded to Defendants’ letters. Id. at 7.
In response, Plaintiffs allege that
[i]t is only after the consumer is hoodwinked into
financing a solar energy system through these onerous
‘interest waivable’ balloon loans that Defendants send
the terms and conditions at issue in their pending Motion
– terms and conditions that the consumer never saw before
agreeing to the loan and that were never discussed with
them, and perhaps most importantly, terms contained in
a 10 page “Loan Agreement” that has never been signed by
them.
Rec. Doc. 29 at 2. They explicitly deny signing the loan agreements
relied upon by Defendants. Id. at 5. “GreenSky sends this Loan
Agreement . . . after the consumers have already been approved for
their loan and after the solar contractor receives the loan money
as payment . . . so that it can later have the opportunity to limit
consumers’ rights once they have caught on to Defendants’ deceptive
lending scheme.” Id. In essence, they argue that Defendants failed

5

“to show that Plaintiffs actually consented to arbitrate their
claims . . . .” Id. at 2.
In

their

reply,

Defendants

argue

that

(1)

Plaintiffs’

challenge should be decided by the arbitrator, but (2) even if it
is considered here, the challenge lacks merit. Rec. Doc. 32 at 1.
Plaintiffs address these arguments in their sur-reply. Rec. Doc.
36. To the extent that they help the Court resolve the issue before
it, the parties’ arguments will be discussed below.
III. LAW AND ANALYSIS
“Arbitration is favored in the law.” Grigson v. Creative
Artists Agency, L.L.C., 210 F.3d 524, 526 (5th Cir. 2000) (citing
Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1,
24-25 (1983)). Section 2 of the Federal Arbitration Act (“FAA”)
provides

that

evidencing

a

“[a]

written

transaction

provision
involving

in

any

commerce

.

.
to

.

contract

settle

by

arbitration a controversy thereafter arising out of such contract
or transaction . . . shall be valid, irrevocable, and enforceable,
save upon such grounds as exist at law or in equity for the
revocation of any contract.” 9 U.S.C. § 2. Thus, as a threshold
matter, the FAA applies where the transaction at issue involves
commerce. See, e.g. New Orleans Cold Storage & Warehouse Co., Ltd.
v. Grenzebach Corp., No. 15-6642, 2016 WL 279012, at *4 (E.D. La.
Jan. 22, 2016) (noting that “[t]he Fifth Circuit has held that
‘[c]itizens

of

different

states
6

engaged

in

performance

of

contractual operations in one of those states are engaged in a
contract

involving

commerce

under

the

FAA.’”)

(quoting

Mesa

Operating Ltd. P’ship v. La. Intrastate Gas Corp., 797 F.2d 238,
243 (5th Cir. 1986) (citing 9 U.S.C. § 2)).
According to the courts, § 2 “is a congressional declaration
of

a

liberal

federal

policy

favoring

arbitration

agreements,

notwithstanding any state substantive or procedural policies to
the contrary.” Moses H. Cone Mem’l Hosp., 460 U.S. at 24 (citing
9 U.S.C. § 2). It was “Congress’s clear intent, in the Arbitration
Act, to move the parties to an arbitrable dispute out of court and
into arbitration as quickly and easily as possible.” Id. at 22.
Essentially, the FAA “establishes that, as a matter of federal
law, any doubts concerning the scope of arbitrable issues should
be resolved in favor of arbitration . . . .” Id. at 24-25.
“[W]here the contract contains an arbitration clause, there
is a presumption of arbitrability.” Tittle v. Enron Corp., 463
F.3d 410, 418 (5th Cir. 2006) (quoting AT&T Techs., Inc. v.
Commc’ns

Workers

of

Am.,

475

U.S.

643,

650

(1986))

(citing

Primerica Life Ins. Co. v. Brown, 304 F.3d 469, 471 (5th Cir. 2002)
(noting that any doubts regarding arbitrability should be resolved
in favor of arbitration) (citing Southland Corp. v. Keating, 465
U.S. 1, 10 (1984))). Nonetheless, § 2 of the FAA contains a savings
clause,

which

provides

that

an

agreement

to

arbitrate

is

“enforceable, save upon such grounds as exist at law or in equity
7

for the revocation of any contract.” 9 U.S.C. § 2 (emphasis added).
Thus, “[d]etermining whether the parties agreed to arbitrate the
dispute in question involves two considerations:

(1) whether a

valid agreement to arbitrate between the parties exist; and (2)
whether the dispute in question falls within the scope of that
arbitration agreement.” Pennzoil Expl. & Prod. Co. v. Ramco Energy
Ltd.,

139

F.3d

1061,

1065

(5th

Cir.

1998)

(citing

Webb

v.

Investacorp, Inc., 89 F.3d 252, 258 (5th Cir. 1996); In re Hornbeck
Offshore (1984) Corp., 981 F.2d 752, 754 (5th Cir. 1993); Midwest
Mech. Contractors, Inc. v. Commonwealth Constr. Co., 801 F.2d 748,
750 (5th Cir. 1986)).
Under Louisiana law, “[a] contract is an agreement by two or
more

parties

whereby

obligations

extinguished.” LA. CIV. CODE

ANN.

are

created,

modified,

or

art. 1906. A valid contract in

Louisiana requires capacity, consent, a lawful cause, and a valid
object. Granger v. Christus Health Ctr. La., 12-1892 (La. 6/28/13);
144 So. 3d 736, 761 (internal citations omitted); see also LA. CIV.
CODE

ANN.

arts. 1918, 1927, 1966, 1971. Consent is “established

through offer and acceptance,” which may generally “be made orally,
in writing, or by action or inaction that under the circumstances
is clearly indicative of consent.” LA. CIV. CODE

ANN.

art. 1927.

“Thus, an enforceable contract requires a meeting of the minds.”
Read v. Willwoods Cmty., 14-1475 (La. 3/17/15); 165 So. 3d 883,
887, reh’g denied, (May 1, 2015) (citing State v. Pelas, 99-0150
8

(La. App. 1 Cir. 11/5/99); 745 So. 2d 1215, 1217). Further, “it is
the burden of the party seeking to enforce a contract to show the
contract exists.” FIA Card Servs., N.A. v. Weaver, 10-1372 (La.
3/15/11); 62 So. 3d 709, 719 (citing LA. CIV. CODE

ANN.

art. 1831;

Kosmala v. Paul, 569 So. 2d 158, 162 (La. App. 1 Cir. 1990), writ
denied, 572 So. 2d 91 (La. 1991) (“The party seeking to enforce
arbitration provisions has the burden of showing the existence of
a valid contract to arbitrate”) (citing Ciaccio v. Cazayoux, 519
So. 2d 799, 800 (La. App. 1 Cir. 1987))).
Here,

the

loan

agreements

purportedly

entered

into

by

Plaintiffs contain an arbitration provision that provides, in
pertinent part, “UNLESS YOU OPT OUT OF THIS ARBITRATION PROVISION
(AS PROVIDED BELOW) NEITHER YOU NOR WE WILL HAVE THE RIGHT TO
LITIGATE A CLAIM IN COURT OR HAVE A JURY TRIAL ON A CLAIM.” Rec.
Docs. 26-3 at 5 (¶ 24); 26-4 at 5 (¶ 24) (emphasis in original).
The contract further defines “Claim” to “include any claim, dispute
or controversy of every kind and nature, whether based in law or
equity, between you and us arising from or relating to your
GreenSky Installment Loan Agreement as well as the relationship
resulting from such Agreement . . . including the validity,
enforceability or scope of this Arbitration Provision or the
Agreement.” Id. The arbitration provision also contains a class
action waiver, explicitly provides that it is governed by the FAA

9

(9 U.S.C. §§ 1-16), and informs the parties of the appropriate
manner in which to opt-out of the arbitration agreement. Id.
In the memorandum in support of their motion, Defendants argue
that

Plaintiffs

do

not

dispute

that

they

signed

the

loan

agreements, that they admitted to making payments pursuant to the
agreements, and that they did not opt-out of the agreements. Rec.
Doc. 26-2 at 9. They cite two cases in support. See, e.g. Garrett
v. Circuit City Stores, Inc., 449 F.3d 672, 675 n.2 (5th Cir. 2006)
(where the Fifth Circuit agreed with the district court that there
was an arbitration agreement because the plaintiff was aware that
the defendant adopted the arbitration policy; plaintiff had an
opportunity to opt-out, but he did not; the plaintiff worked for
the defendant for several years after the policy was implemented;
and Texas law presumes that the plaintiff understood and accepted
the terms);

Langlois v. Amedisys, Inc., No. 15-835, 2016 WL

4059670,

*2

at

arbitration

(M.D.

agreement

La.

July

existed

27,
and

2016)

(finding

consequently

that

an

compelling

arbitration where the plaintiff acknowledged receipt of an e-mail
that informed her that, unless she opted-out within thirty days,
she would be bound by the defendant’s arbitration agreement and it
was

undisputed

that

the

plaintiff

never

opted-out).

Thus,

Defendants argue that a valid agreement to arbitrate existed
between the parties.

10

Plaintiffs assert that they did not sign the agreements, did
not assent to the arbitration provision, and that Defendants have
failed to prove that they agreed to individually arbitrate their
claims. Rec. Doc. 29 at 7. Plaintiffs admit that they signed solar
contracts with SunPro and agreed to obtain financing from Defendant
GreenSky, but they deny ever having signed the loan agreements
containing the arbitration provision. Id. at 8 (citing Rec. Docs.
26-3 at 3; 26-4 at 3 (where signature spaces are available for
Plaintiffs, but left blank)). Plaintiffs allege that they were
completely unaware of the existence of the loan agreements and did
not have access to the documents at the time they signed the solar
contracts. Id. Plaintiffs thus conclude that they could not have
agreed to individual arbitration. Id. (citing Pennhurst State Sch.
& Hosp. Halderman, 451 U.S. 1 (1981)).4
Plaintiffs further argue that their failure to opt-out does
not evidence their assent to the arbitration agreement and that

We are not persuaded by the Pennhurst case relied upon by Plaintiffs. That
case involved questions of Congress’s power to legislate pursuant to the
spending power. 451 U.S. at 17. The Supreme Court noted that such legislation
is comparable to a contract: “in return for federal funds, the States agree to
comply with federally imposed conditions.” Id. The legitimacy of this power
“rests on whether the State voluntarily and knowingly accepts the terms of the
‘contract.’” Id. (internal citations omitted). It was then that the Supreme
Court noted that “[t]here can, of course, be no knowing acceptance if a State
is unaware of the conditions or is unable to ascertain what is expected of it.
Accordingly, if Congress intends to impose a condition on the grant of federal
moneys, it must do so unambiguously.” Id. (internal citations omitted). The
Supreme Court was not discussing the enforceability of arbitration agreements
or even the enforceability of a typical contract; rather, the Supreme Court was
discussing the validity of a particular type of legislation enacted pursuant to
Congress’ spending power. While the Supreme Court’s discussion is not wholly
unrelated to the dispute at issue, there are numerous other cases that are more
directly on point.
4

11

the

motion

Defendants

to
have

compel
not

arbitration

satisfied

should

their

be

burden

denied
of

because

showing

that

Plaintiffs assented to the agreement. Rec. Doc. 29 at 9-10 (citing
Davis ex rel. LaShonda D. v. Monroe Cty. Bd. of Educ., 526 U.S.
629, 640 (1999); One Beacon Ins. Co. v. Crowley Marine Servs.,
Inc., 648 F.3d 258, 269 (5th Cir. 2011); Weaver, 62 So. 3d at 71920; Chase Bank USA, N.A. v. Leggio, 43,567 (La. App. 2 Cir.
11/19/08); 997 So. 2d 887, 890).5

Again, we are not persuaded by these cases. Davis, like Pennhurst, involved
questions of Congress’ spending power; it further involved interpretation of
Title IX. 526 U.S. at 639-50. In One Beacon, the Fifth Circuit noted that the
validity of a contract requires the court to consider “whether the party to be
bound had reasonable notice of the terms at issue and whether the party
manifested assent to those terms.” 648 F.3d at 269 (citations omitted). It
further recognized that there could be “situations involving online terms and
conditions where . . . the terms and conditions were not unambiguously
incorporated into the parties’ agreement or where there was insufficient notice
of the location of the terms and conditions such that a reasonable person would
not be expected to find them.” Id. (citations omitted). However, as is discussed
more fully infra, the document signed by Plaintiffs unambiguously referred to
the “GreenSky Installment Loan Agreement” that contained the arbitration
provision and further provided that the signatories acknowledged that they
“agree[d] to be legally bound by the TERMS AND CONDITIONS of” that agreement.
See Rec. Docs. 32-1, 32-2. In Weaver, the parties admitted that Weaver “never
actually signed a contract containing an arbitration clause.” 62 So. 3d at 718.
Instead, the plaintiff, the party seeking to compel arbitration, argued that,
under Louisiana law, “if a credit card company sends a notice of change in terms
of the agreement, the customer assents to the new terms by his continued use of
the card.” Id. Because the plaintiff failed to show “when or if the notices
were mailed to customers” and if, “after receiving these notices, Weaver
continued to use his credit card,” the court found that the plaintiff failed to
satisfy its burden of showing the existence of a valid arbitration agreement.
Id. at 718-19. The instant case simply is not comparable. Finally, in Leggio,
the plaintiff submitted an unsigned, generic agreement including an arbitration
clause and alleged that the defendant received a similar document. 997 So. 2d
at 890. The plaintiff then argued that the defendant implicitly consented to
the agreement because of his “use of the credit card as an acceptance of all of
the terms printed in the generic cardmember document.” Id. The court concluded
that “the mere use of a credit card would not logically give rise to the
presumption that the consumer thereby understood that he was consenting to
arbitration of any dispute concerning such use, particularly when there has not
been a showing that the debtor received notice of the alleged arbitration
clause.” Id. (emphasis added). Again, the instant case simply is not comparable.
5

12

In their reply, Defendants argue (1) Plaintiffs’ challenge to
the arbitration clause should be decided by the arbitrator and,
alternatively, (2) Plaintiffs’ challenge lacks merit.
Turning to their first argument, the loan agreements provide
that “claims” arising between the parties will be resolved through
binding arbitration. Rec. Docs. 26-3 at 5; 26-4 at 5. “Claim” is
further defined to include “any claim, dispute or controversy . .
. between you and us . . . , including the validity, enforceability
or scope of this Arbitration Provision or the Agreement.” Id. This
is a “delegation provision,” which “is an agreement to arbitrate
threshold issues concerning the arbitration agreement.” Rent-ACtr., W., Inc. v. Jackson, 561 U.S. 63, 68 (2010). The Supreme
Court has held that such provisions are valid under the FAA “under
§ 2 ‘save upon such grounds as exist at law or in equity for the
revocation of any contract,’ and federal courts can enforce the
agreement by staying federal litigation under § 3 and compelling
arbitration

under

§

4.”

Id.

at

70

(ultimately

upholding

a

delegation provision that provided “[t]he Arbitrator, and not any
federal, state, or local court or agency, shall have exclusive
authority

to

resolve

any

dispute

relating

to

the

.

.

.

enforceability . . . of this Agreement including . . . any claim
that all or any part of this Agreement is void or voidable”); see
also Reyna v. Int’l Bank of Commerce, 839 F.3d 373, 375 (5th Cir.
2016)

(upholding

a

delegation
13

provision

that

provided

the

arbitrator

with

“the

exclusive

authority”

to

“determine

the

arbitrability of any dispute” and “resolve any dispute relating to
the interpretation, applicability, enforceability or formation of
the [Policy]”).
In the Fifth Circuit, “if a party asserts that an arbitration
agreement contains a delegation clause, this court only asks (1)
whether the parties entered into a valid arbitration agreement
and, if so, (2) whether the agreement contains a valid delegation
clause.” Reyna, 839 F.3d at 378 (citing Kubala v. Supreme Prod.
Servs., Inc., 830 F.3d 199, 201-02 (5th Cir. 2016)). Significantly,
“[i]f

there

is

a

delegation

clause,

the

motion

to

compel

arbitration should be granted in almost all cases.” Id. (quoting
Kubala,

830

arguments,

F.3d

that

at

201-02).

Plaintiffs

do

Thus,

not

Defendants’

specifically

remaining

challenge

the

delegation clause and that the agreement’s reference to the rules
of JAMS and the American Arbitration Association (“AAA”) (both of
which provide that arbitrability issues are to be decided by the
arbitrator) (see Rec. Doc. 32 at 4-6), presume that “the parties
entered into a valid arbitration agreement” (as required by the
Fifth Circuit in Kubala and Reyna). Plaintiffs strongly refute the
existence of any such agreement. In both Kubala and Reyna, the
Fifth Circuit analyzed whether or not the parties entered into a
valid arbitration agreement. We must do the same here.

14

Accordingly, we turn to Defendants’ alternative argument that
Plaintiffs’ challenge to the arbitration agreement lacks merit.
Defendants

specifically

argue

that

the

documents

signed

by

Plaintiffs, titled the “GreenSky Authorization Form,” stated that
“I/We

acknowledge

Agreement

receipt

(‘Agreement’)

Agreement,

and

agree

to

of

the

GreenSky

with

the

Lender

be

legally

Installment
specified

bound

by

the

Loan

on

the

TERMS

and

CONDITIONS of the Agreement.” Rec. Doc. 32 at 7 (citing Rec. Docs.
32-1, 32-2). The documents containing the arbitration provision
are

clearly

headed

“GreenSky

Installment

Loan

Agreement”

and

provide that the “TERMS AND CONDITIONS CONTINUE ON NEXT PAGE.” See
Rec. Docs. 26-3 at 3-5; 26-4 at 3-5.
Plaintiffs argue that they never received a copy of the
“Greensky Installment Loan Agreement” at the time they signed the
“GreenSky Authorization Form[s].”
Whether

Plaintiffs

received

the

Rec. Docs. 29 at 2; 36 at 3-4.
“GreenSky

Installment

Loan

Agreement” before they signed the authorization form, after they
signed the authorization form, or never, it cannot be denied that
they signed a statement acknowledging receipt of the loan agreement
and thereby agreed to be bound by the loan agreement’s terms and
conditions. See Rec. Docs. 32-1, 32-2.
In Cowan v. Morgan Keegan and Company, the parties argued
about the existence of a valid arbitration agreement. 09-1644,
2010 WL 5103064, at *3 (W.D. La. Nov. 18, 2010), report and
15

recommendation adopted, 2010 WL 5141340 (W.D. La. Dec. 1, 2010).
Plaintiff signed a “Disclosure Statement” that provided that the
document was governed by an arbitration agreement located in the
“Client Agreement.” Id. Plaintiff argued that there was not a valid
arbitration agreement, because he was never presented with the
“Client Agreement.” Id. He also argued “that his poor vision and
the blurry fax copy of the Disclosure Statement that he signed
prevented him from being aware of the arbitration language.” Id.
The Magistrate Judge recognized that, under Louisiana law, “an
arbitration clause need not be contained in a single document to
be part of a contract. Instead, the document that contains the
arbitration requirement can be incorporated by reference.” Id.
Further, “a party who signs a written instrument is presumed to
know its contents and cannot avoid its obligations by contending
that he did not read it, that he did not understand it, or that
the

other

party

failed

to

explain

it

to

him.”

Id.

(quoting

Aguillard v. Auction Mgmt. Corp., 04-2804 (La. 6/29/05); 908 So.
2d 1, 17). “If a party is not aware of the contents of the
instrument he signed, he must establish with reasonable certainty
that he was ‘deceived.’” Id. (citing Aguillard, 908 So. 2d at 17;
Lamarque v. Barbara Enters., Inc., 06-1422 (La. App. 4 Cir.
4/25/07); 958 So. 2d 708, 713). In Cowan, the plaintiff did not
argue that he was deceived; rather “[h]e was given a legible
document, which he readily signed, and that document made specific
16

reference to an arbitration provision on the reverse side.” Id. at
4. Even though the plaintiff never actually received a copy of the
arbitration agreement, he “could have easily requested a copy . .
. and learned the exact terms of the arbitration clause.” Id.
Accordingly,

the

motion

to

compel

arbitration

and

stay

the

proceedings was granted. Id. at 5.
The instant case is indistinguishable. Even if there was some
allegation that Defendants deceived Plaintiffs into signing the
authorization form, there is no evidence of such deceit. Plaintiffs
were

given

forms

that

explicitly

referred

to

a

“GreenSky

Installment Loan Agreement” and stated that, if they signed that
form, they agreed to be bound by the terms and conditions in the
loan agreement. If they did not have a copy of the loan agreement,
they could have easily requested a copy. Thus, we find that there
was a valid agreement to arbitrate.
Having found that a valid arbitration agreement exists, we
will now consider whether or not the instant dispute falls within
the scope of the agreement.6 To determine if a dispute falls within
the scope of an arbitration agreement, courts must keep in mind
that any doubts should be resolved in favor of arbitration (see,

We are not ignoring Defendants’ argument about the delegation clause. Having
found that a valid arbitration agreement exists, we find no reason to conclude
that the delegation clause is invalid. Plaintiffs dispute the validity of the
agreement as a whole and present no other argument that would persuade this
Court to hold that the delegation clause is invalid. However, we are going to
continue our analysis under Pennzoil, 139 F.3d 1061.
6

17

e.g. Moses H. Cone Mem’l Hosp., 460 U.S. 24-25) and that “the Fifth
Circuit

distinguishes

between

broad

and

narrow

arbitration

clauses” (Broussard v. First Tower Loan, LLC, 150 F. Supp. 3d 709,
724 (E.D. La. 2015), as modified on denial of reconsideration, No.
15-1161, 2016 WL 879995 (E.D. La. Mar. 8, 2016)).
If the clause is broad, the action should be stayed and
the arbitrators permitted to decide whether the dispute
falls within the clause. On the other hand, if the clause
is narrow, the matter should not be referred to
arbitration or the action stayed, unless the court
determines that the dispute falls within the clause.
Hornbeck, 981 F.2d at 754-55 (citing Sedco, Inc. v. Petroleos
Mexicanos Mexican Nat’l Oil Co. (Pennex), 767 F.2d 1140, 1145 n.10
(5th Cir. 1985), holding modified by Freudensprung v. Offshore
Tech. Servs., Inc., 379 F.3d 327 (5th Cir. 2004) (citing Prudential
Lines, Inc. v. Exxon Corp., 704 F.2d 59, 64 (2d Cir. 1983))).
Clauses containing the “any dispute” language are of the broad
type. Id. (citing Sedco, 767 F.2d at 1144; Mar-Len of La., Inc. v.
Parsons-Gilbane, 773 F.2d 633, 634 (5th Cir. 1985);

Neal v.

Hardee’s Food Sys., Inc., 918 F.2d 34, 38 (5th Cir. 1990)).
Defendants urge the Court to classify the instant arbitration
provision as “broad.” Rec. Doc. 26-2 at 10-11 (citing Broussard,
150 F. Supp. 3d at 724 (finding that an arbitration provision was
broad when it applied to “all disputes ‘relating to the employment
relationship,’ and include[d] claims based on ‘sexual’ matters and
claims for ‘wrongful termination,” and that provided the “scope of

18

arbitration” was to be decided by the arbitrator); Pub. Payphone
Co. v. Wal-mart Stores, Inc., No. 13-2349, 2014 WL 793443, at *2
(E.D. La. Feb. 26, 2014) (finding that the dispute fell within the
scope of the arbitration provision because, “[w]here arbitration
provisions are so broad as that at issue here, which applies to
‘[a]ny dispute, claim or controversy arising out of[,] connected
with[,] or relating to this agreement . . . ’ the dispute need
only ‘touch matters that are covered by the [Arbitration Provision]
to be arbitrable”) (quoting Pennzoil, 139 F.3d at 1068); Planet
Beach Franchising Corp. v. Zaroff, 969 F. Supp. 2d 658, 666 (E.D.
La. 2013) (finding that the arbitration provision was broad where
it applied to “all disputes and claims relating to this Agreement
or any other agreement entered into between the parties, the rights
and obligations of the parties, or any other claims or cause of
action relating to the making, interpretation, or performance of
either party under this Agreement”) (emphasis deleted); Hill v.
Hornbeck Offshore Servs., Inc. 799 F. Supp. 2d 658, 663 (E.D. La.
2011) (finding that the provision was broad when it applied to
“disputes ‘arising out of or relating to this Agreement,” “any
challenge to or controversy or claim arising out of or relating to
your employment relationship with the company,” “all possible
claims or disputes,” and stated that arbitration “shall be the
sole

and

exclusive

means

for

resolving

any

other

covered

dispute”)). Further, the Second Circuit has previously noted that
19

“[i]t is difficult to imagine broader general language than

. .

. ‘any dispute . . . between Owners and Charterers’” (Caribbean
S.S. Co., S.A. v. Sonmez Denizcilik Ve Ticaret A.S., 598 F.2d 1264,
1266 (2d Cir. 1979)), and the Fifth Circuit has agreed (see, e.g.
Sedco, 767 F.2d at 1145; Hornbeck, 981 F.2d at 755).
Defendants also note that there is no reason why the specific
causes of action alleged by Plaintiffs should not be arbitrated.
Rec. Doc. 26-2 at 11-12 (citing, e.g. Daniels v. Va. Coll. at
Jackson, 478 F. App’x 892, 893 (5th Cir. 2012) (affirming the
district court’s order compelling arbitration of several claims,
including unjust enrichment, because they “arose ‘in relation to
[the plaintiff’s] enrollment and participation in courses at the
College,’” as mandated by the arbitration provision); Defreitas v.
Am. Gen. Fin., Inc., No. 01-2756, 2001 WL 1313203, at *3 (E.D. La.
Oct. 25, 2011) (“Courts have conclusively decided that there is no
legal impediment to arbitration agreements covering statutory
claims arising under TILA. As to the Defendants’ alleged violations
of LUTPA and Louisiana tort and usury laws, the Court is unaware
of any legal impediment that would prevent the arbitration of
Plaintiffs’

claims”)

(internal

citations

omitted);

Bollinger

Shipyards Lockport LLC v. Northrop Grumman Ship Sys., Inc., No.
08-4578, 2009 WL 86704, at *1 (E.D. La. Jan. 12, 2009) (the
district court granted the motion to compel arbitration where the

20

plaintiff sought damages for various claims, including unjust
enrichment).
Defendants
routinely

apply

agreements.

Rec.

Incorporated
determined

also

v.
that

unconscionable

or

note

class
Doc.

action
26-2

Cingular
an

that

courts

the

Fifth

Circuit

waivers

at

found

in

13.

Iberia

Credit

Bureau,

Fifth

Circuit

Wireless

arbitration

otherwise

in

In

LLC,

agreement

unenforceable

the
was

arbitration

not

merely

rendered

because

it

contained a class action waiver. 379 F.3d 159, 174-75 (5th Cir.
2004). The Fifth Circuit made the following observations:
A highly relevant factor in considering the equities of
the arbitration clauses in this case is that the
Louisiana Unfair Trade Practices Act (LUTPA), which is
one basis of the plaintiffs’ claims, does not permit
individuals to bring class actions. See LA. REV. STAT.
Ann. § 51:1409(A) (authorizing an aggrieved individual
to sue “but not in a representative capacity”); Morris
v. Sears, Roebuck & Co., [99-2772 (La. App. 4 Cir.
5/31/00); 765 So. 2d 419, 421-22]. Although this
prohibition does not apply to the plaintiffs’ breachof-contract cause of action, it does significantly
diminish the plaintiffs’ argument that prohibiting class
proceedings in consumer litigation is unconscionable
under Louisiana law. Moreover, LUTPA does permit the
state attorney general to sue on behalf of the state and
its consumers and to pursue restitutionary relief on
behalf of a class of aggrieved consumers. La. Rev. Stat.
Ann. §§ 51:1404(B), 1407, 1408, 1414; State ex rel. Guste
v. Gen. Motors Corp., 370 So. 2d 477, 487 (La. 1978).
This further tends to show that the arbitration clause
does not leave the plaintiffs without remedies or so
oppress
them
as
to
rise
to
the
level
of
unconscionability.
379 F.3d at 174-75; see also Dismuke v. McClinton, No. 16-50674,
2016 WL 6122763, at *1 (5th Cir. Oct. 19, 2016) (where the Fifth
21

Circuit noted that it “is not compelled to reverse its holding
that

class

action

waivers

in

arbitration

agreements

are

enforceable”) (citing D.R. Horton, Inc. v. NLRB, 737 F.3d 344, 362
(5th Cir. 2013)); Vigil v. Sears Nat’l Bank, 205 F. Supp. 2d 566,
572-73 (E.D. La. 2002).
Based on the broad language of the arbitration agreement at
issue (applying to “any claim, dispute or controversy of every
kind and nature”) and the existing precedent (see, e.g. Hornbeck,
981 F.2d 752; Broussard, 150 F. Supp. 3d 709), we find that the
instant

dispute

(including

any

dispute

regarding

the

enforceability of the arbitration clause) falls within the scope
of the arbitration agreement.
Further, the FAA provides that
If any suit or proceeding be brought in any of the courts
of the United States upon any issue referable to
arbitration . . . the court in which such suit is
pending, upon being satisfied that the issue involved in
such suit or proceeding is referable to arbitration
under such an agreement, shall on application of one of
the parties stay the trial of the action until such
arbitration has been had in accordance with the terms of
the agreement, providing the applicant for the stay is
not in default in proceeding with such arbitration.
9 U.S.C. § 3 (emphasis added). “This provision is mandatory and
demands a stay of the proceedings, at the request of a party, if
the dispute is arbitrable and referred to arbitration.” Broussard
150 F. Supp. 3d at 721 (citing Tittle, 463 F.3d at 417 n.6).

22

IV.

CONCLUSION

Because there is a valid arbitration agreement, Plaintiffs’
claims fall within the scope of that agreement, and Defendants
have requested that arbitration be compelled and this matter
stayed,
IT IS ORDERED that Defendants’ motion to compel arbitration
(Rec. Doc. 26) is GRANTED. Plaintiffs are directed to submit all
of their claims to arbitration.
IT

IS

FURTHER

ORDERED

that

this

case

is

stayed

and

ADMINISTRATIVELY CLOSED. Either party may file a motion to reopen
for good cause following the arbitration of the parties’ claims.
If the case is disposed of through arbitration, or any other means,
Plaintiffs shall promptly file a motion to dismiss.
IT IS FURTHER ORDERED that the pending motions, including
Plaintiffs’
“Defendants’

“Motion

to

Alternative

Certify
Motion

Class”
to

(Rec.

Dismiss

Doc.

19)

Plaintiffs’

and
First

Amended Class Action Complaint” (Rec. Doc. 28) are DISMISSED AS
MOOT.
New Orleans, Louisiana, this 21st day of February, 2017.
___________________________________
SENIOR UNITED STATES DISTRICT JUDGE

23