Florida Record

Tuesday, December 10, 2019

Arbitrator can decide if arbitration is allowed in Spirit Airlines class action, appeals court rules

Lawsuits

By Charmaine Little | Aug 23, 2018

General court 09

MIAMI – The U.S. Court of Appeals for the 11th Circuit recently affirmed a Florida district court decision that said an arbitrator is the correct party to determine if an agreement Spirit Airlines Inc. had with its $9 Fare Club members allowed class members to file a claim via arbitration.

The appeals court filed its opinion Aug. 15 after Spirit had challenged the decision in the U.S. District Court for the Southern District of Florida that said an arbitrator was appropriate to decide on the matter instead of a judge.

The district court ruling came on case in which Steven Maizes and three other class representatives filed a claim via arbitration against the airline. They said Spirit breached its contract with those in the $9 Fare Club after it allegedly broke its advertised promises that participants would “experience the ultimate cost in savings” and were able to “cancel at any time.”

Spirit responded with a lawsuit against the class representatives, requesting a declaration that an arbitration clause in the agreement blocks the filing of class arbitration claims. Spirit subsequently petitioned the district court to block the arbitration of class claims through a preliminary injunction.

The class representatives asked for the district court to dismiss Spirit’s case.

The district court sided with the participants and stated, “the agreement’s choice of AAA rules incorporated Rule 3 of the Supplementary Rules for Class Actions, which designates the arbitrator to decide whether the arbitration agreement permits class arbitration.” Spirit then filed an appeal.

The appeals court cited a case, Palmer Ranch v. Terminex, in its decision. In that case, it reversed a lower court’s ruling that denied a motion to compel arbitration and stated that it recognized Rule 8(a) of the AAA Commercial Arbitration Rules. That section says, “The arbitrator shall have power to rule on his or her own jurisdiction, including any objections with respect to the existence, scope or validity of the agreement.”

The appeals court pointed out both Spirit and the class representatives had already decided to comply with the AAA rules. This is enough proof that both parties decided to have an arbitrator decide if the agreement allowed class arbitration.

While Spirit said more qualifications should be looked at to determine if arbitration is allowed in the case, the appeals court pointed out there’s no precedent for a higher burden of proof in cases like this in the Supreme Court.

Spirit also said the lower court made a mistake when it didn’t let its vice president testify about why Spirit chose to comply with the AAA rules. Still, the appeals court said this argument is irrelevant. It then affirmed the lower court’s decision.

U.S. Circuit Judge Beverly B. Martin authored the opinion.

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