Archive for February, 2011

February 4, 2011…The Florida Fourth District Court of Appeal ruled Wednesday (February 2nd) that a payday lender cannot bar customers with grievances from participating in class action lawsuits by placing a waiver in an arbitration agreement.  Speaking for a unanimous court in McKenzie v. Betts, Case Nos. 4D08-493 and 4D08-494, Chief Judge Robert Gross wrote that the contract provision in issue defeats Florida’s public policy by preventing the consumer from hiring competent counsel.  The court distinguished other cases where provisions waiving class actions had been upheld primarily on factual grounds.  In McKenzie, three attorneys provided expert testimony that absent the class action mechanism, customers wanting to challenge the payday advance busines practices would not be able to obtain competent legal representation.  A second factor supporting the court’s reasoning was that the waiver provision precluded a customer from participating as a member of any class seeking redress against McKenzie.  In other suits the class action ban did not preclude the customer from participating in enforcing authority actions caused by violations of statutory enactments, such as Florida’s Deceptive and Unfair Trade Practices Act.  Noting the frequency of such cases involving Florida’s remedial statutes, the court has certified to the Florida Supreme Court the question of whether contractual waivers of claims asserted under such statutes violate public policy when an evidentiary basis is shown to preclude the customers from obtaining competent counsel.  The question is whether there will be a proliferation of evidentiary hearings in the future to determine the availability of counsel issue in order to skirt the class action preclusion.  The full opinion may be accessed at www.floridacourts.com under the District Courts, Fourth District’s “opinions” heading.