          Case: 14-12082   Date Filed: 10/28/2015   Page: 1 of 13


                                                                    [PUBLISH]



           IN THE UNITED STATES COURT OF APPEALS

                   FOR THE ELEVENTH CIRCUIT
                     ________________________

                            No. 14-12082
                      ________________________

                  D.C. Docket No. 4:14-cv-0024-HLM



JOSHUA PARNELL,

                    Plaintiff - Appellee,

versus

CASHCALL, INC.,

                    Defendant - Appellant,

WESTERN SKY FINANCIAL, LLC,
MARTIN A. (“BUTCH”) WEBB,

                    Defendants.

                      ________________________

               Appeal from the United States District Court
                  for the Northern District of Georgia
                     ________________________

                           (October 28, 2015)
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Before WILSON and MARTIN, Circuit Judges, and HODGES, ∗ District Judge.

WILSON, Circuit Judge:

       This case requires us to determine whether a plaintiff properly challenges an

arbitration agreement’s validity when he does not specifically challenge the

delegation provision contained therein. The Supreme Court has explained that

where an arbitration agreement contains a delegation provision—committing to the

arbitrator the threshold determination of whether the agreement to arbitrate is

enforceable—the courts only retain jurisdiction to review a challenge to that

specific provision. Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 72, 130 S.

Ct. 2772, 2779 (2010). Absent such a challenge, the Federal Arbitration Act

(FAA) requires that we treat a delegation provision as valid and permit the parties

to proceed to arbitration. Id. at 71–72, 130 S. Ct. at 2779; see 9 U.S.C. § 2. We

hold that when a plaintiff seeks to challenge an arbitration agreement containing a

delegation provision, he or she must challenge the delegation provision directly.

       The district court erred in neglecting to recognize the delegation provision in

the agreement in this case. Accordingly, we reverse and remand.

                                             I

       Upon completing his service in the United States Army and experiencing

less-than-ideal financial circumstances, Plaintiff-Appellee Joshua Parnell

   ∗
      Honorable Wm. Terrell Hodges, United States District Judge for the Middle District of
Florida, sitting by designation.
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responded to a television advertisement for short-term loans. Parnell, situated in

Georgia, logged onto his computer and applied for a loan from Western Sky

Financial, LLC (Western Sky), a South Dakota limited liability company with its

principal place of business in Timber Lake, South Dakota. Just ten minutes after

Parnell submitted his online loan application, a Western Sky employee called

Parnell to inform him that he had been approved for a $1000 loan and relevant

paperwork would be emailed to him shortly. The email Parnell received contained

a document titled “Western Sky Consumer Loan Agreement” (Loan Agreement),

which stated the terms of the contract between the parties. The Loan Agreement’s

Truth in Lending Act Disclosure Statement made plain the 232.99% annual

percentage rate and finance charge of $3,905.56. In total, after making twenty-five

scheduled repayments on the $1,000 loan, Parnell would pay $4,905.56.

      Most importantly, the Loan Agreement contained an agreement to arbitrate

any potential disputes between the parties. This provision stated in relevant part:

         WAIVER OF JURY TRIAL AND ARBITRATION.
         PLEASE READ THIS PROVISION OF THE AGREEMENT
         CAREFULLY. Unless you exercise your right to opt-out of
         arbitration in the manner described below, any dispute you have
         with Western Sky or anyone else under this loan agreement will
         be resolved by binding arbitration. Arbitration replaces the
         right to go to court, including the right to have a jury, to engage
         in discovery (except as may be provided in the arbitration
         rules), and to participate in a class action or similar proceeding.
         In Arbitration, a dispute is resolved by an arbitrator instead of a
         judge or jury. Arbitration procedures are simpler and more

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         limited than court procedures. Any Arbitration will be limited
         to the dispute between yourself and the holder of the Note and
         will not be part of a class-wide or consolidated arbitration
         proceeding.
         Agreement to Arbitrate. You agree that any Dispute, except as
         provided below, will be resolved by Arbitration, which shall be
         conducted by the Cheyenne River Sioux Tribal Nation by an
         authorized representative in accordance with its consumer
         dispute rules and the terms of this Agreement.
         Arbitration Defined. Arbitration is a means of having an
         independent third party resolve a Dispute. A “Dispute” is any
         controversy or claim between you and Western Sky or the
         holder or servicer of the Note. The term Dispute is to be given
         its broadest possible meaning and includes, without limitation,
         all claims or demands (whether past, present, or future,
         including events that occurred prior to the opening of this
         Account), based on any legal or equitable theory (tort, contract,
         or otherwise), and regardless of the type of relief sought (i.e.
         money, injunctive relief, or declaratory relief). A Dispute
         includes, by way of example and without limitation, any claim
         based upon marketing or solicitations to obtain the loan and the
         handling or servicing of my account whether such Dispute is
         based on a tribal, federal or state constitution, statute,
         ordinance, regulation, or common law, and including any issue
         concerning the validity, enforceability, or scope of this loan or
         the Arbitration agreement. . . .

      Parnell digitally signed the Loan Agreement and, seventy-two hours later,

Western Sky directly deposited $1,000 in Parnell’s bank account. Prior to the due

date of his first repayment, Parnell received notification that Defendant-Appellant

CashCall, Inc. (CashCall) had taken over his loan and he should make all his

payments to CashCall, not Western Sky.




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      After sending his final payment to CashCall, Parnell filed suit in state court,

alleging that CashCall and Western Sky’s business practices exploit tribal

sovereign immunity and illicitly avoid federal and state regulations, including the

Georgia Payday Lending Act, O.C.G.A. § 16-17-2. CashCall removed the case to

federal court and moved to compel arbitration. The district court denied the

motion after determining that (i) Parnell articulated a challenge to the arbitration

provision in the parties’ contract and (ii) the arbitration provision was

unconscionable. CashCall now appeals.

                                          II

      We have jurisdiction under 9 U.S.C. § 16. “We review de novo the district

court’s denial of a motion to compel arbitration.” Jenkins v. First Am. Cash

Advance of Ga., LLC, 400 F.3d 868, 873 (11th Cir. 2005).

                                          III

      The district court erred in holding that Parnell properly challenged the Loan

Agreement. We hold that the Loan Agreement contains a delegation provision

and, though Parnell challenged the validity of the arbitration provision, he did not

articulate a challenge to the delegation provision specifically. Therefore, the FAA

requires that we treat the delegation provision as valid, enforce the terms of the

Loan Agreement, and leave to the arbitrator the determination of whether the Loan

Agreement’s arbitration provision is enforceable.

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                                         A

      The FAA places arbitration agreements on equal footing with all other

contracts and sets forth a clear presumption—“a national policy”—in favor of

arbitration. Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 443, 126 S.

Ct. 1204, 1207 (2006); accord AT&T Mobility LLC v. Concepcion, 563 U.S. 333,

___, 131 S. Ct. 1740, 1745 (2011); Rent-A-Center, 561 U.S. at 67, 130 S. Ct. at

2776; Inetianbor v. CashCall, Inc., 768 F.3d 1346, 1349 (11th Cir. 2014). The

FAA governs the Loan Agreement because the parties conducted their business

across state lines. See 9 U.S.C. § 2. From the State of Georgia, Parnell used the

Internet to contact and then contract with Western Sky and CashCall, which are

South Dakota and California corporations, respectively. Neither party disputes that

Western Sky and CashCall are engaged in interstate commerce.

      Section 2 of the FAA requires the courts to enforce an arbitration provision

within a contract unless “such grounds exist at law or in equity for the revocation

of any contract.” Arbitration provisions will be upheld as valid unless defeated by

fraud, duress, unconscionability, or another “generally applicable contract

defense.” Rent-A-Center, 561 U.S. at 67–68, 130 S. Ct. at 2776. Further, § 4 of

the FAA permits one party to seek the assistance of the district court when the

other party refuses to proceed with arbitration, and requires the court to “make an




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order directing the parties to proceed to arbitration in accordance with the terms of

the agreement.” 9 U.S.C. § 4.

      Importantly, parties may agree to commit even threshold determinations to

an arbitrator, such as whether an arbitration agreement is enforceable. The

Supreme Court has upheld these so-called “delegation provisions” as valid, Rent-

A-Center, 561 U.S. at 68–70, 130 S. Ct. at 2777–78, and explained that they are

severable from the underlying agreement to arbitrate, Buckeye, 546 U.S. at 445,

126 S. Ct. at 1209. When an arbitration agreement contains a delegation provision

and the plaintiff raises a challenge to the contract as a whole, the federal courts

may not review his claim because it has been committed to the power of the

arbitrator. Instead, the plaintiff must “challenge[] the delegation provision

specifically.” Rent-A-Center, 561 U.S. at 72, 130 S. Ct. at 2779 (emphasis added).

In sum, absent a challenge to the delegation provision itself, the federal courts must

treat the delegation provision “as valid under § 2, and must enforce it under §§ 3

and 4, leaving any challenge to the validity of the Agreement as a whole for the

arbitrator.” Id.

                                          B

      When federal courts interpret arbitration agreements, state contract law

governs and directs the courts’ analyses of whether the parties committed an issue

to arbitration. See First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 944, 115 S.

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Ct. 1920, 1924 (1995); Paladino v. Avnet Computer Techs., Inc., 134 F.3d 1054,

1061 (11th Cir. 1998); see also In re Checking Account Overdraft Lit., 685 F.3d

1269, 1275 (11th Cir. 2012) (applying South Carolina law to interpret an

arbitration agreement subject to the FAA). However, as the Supreme Court

explained in First Options, “[c]ourts should not assume that the parties agreed to

arbitrate arbitrability unless there is clear and unmistakable evidence that they did

so.” 514 U.S. at 944, 115 S. Ct. at 1924 (internal quotation marks omitted).

         Although the Loan Agreement expressly provides that the laws of the

Cheyenne River Sioux Tribe (the Tribe) govern the agreement,1 the parties

provided this court with no rule of tribal law regarding contract interpretation and

our research uncovered none. We faced similar circumstances in Paladino, where

we made an assumption regarding the proper choice of law based on one party’s

place of employment because neither party addressed which state’s law applied

and the relevant “principles of contract construction [were], in any event, matters


   1
       The Loan Agreement provides in relevant part:
            GOVERNING LAW. This Agreement is governed by the Indian
            Commerce Clause of the Constitution of the United States of America and
            the laws of the Cheyenne River Sioux Tribe. We do not have a presence
            in South Dakota or any other states of the United States. Neither this
            Agreement nor Lender is subject to the laws of any state of the United
            States of America. By executing this Agreement, you hereby expressly
            agree that this Agreement is executed and performed solely within the
            exterior boundaries of the Cheyenne River Indian Reservation, a sovereign
            Native American Tribal Nation. You also expressly agree that this
            Agreement shall be subject to and construed in accordance only with the
            provisions of the laws of the Cheyenne River Sioux Tribe, and that no
            United States state or federal law applies to this Agreement.
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of hornbook law.” See 134 F.3d at 1061 n.1. Here, the plain-meaning rule is a

foundational principle of common law contract interpretation widely adopted in the

United States, including in Georgia, the forum that Western Sky specifically

targeted with its television advertisement and in which Parnell viewed and signed

the Loan Agreement. Accordingly, we look to Georgia law for a statement of the

plain-meaning rule and apply it in this case.

      Under Georgia law, “[i]f the language of the contract is plain, unambiguous,

and capable of only one reasonable interpretation, that interpretation must control,

and no construction of the contract is required or even permissible.” See City of

Decatur v. DeKalb Cty., 713 S.E.2d 846, 849 (Ga. 2011). Applying this rule and

remaining cognizant of the requirement that a contractual commitment to arbitrate

arbitrability must be “clear and unmistakable,” we hold that the Loan Agreement’s

plain language contains an express delegation provision. This provision conveys

the parties’ intent to submit to an arbitrator the threshold issue of arbitrability.

      The delegation provision appears in the third sub-paragraph of the Loan

Agreement’s arbitration provision. The portion of the Loan Agreement titled

“Arbitration Defined” commits all “Disputes” to arbitration and expressly states

that a Dispute includes “any issue concerning the validity, enforceability, or scope

of this loan or the Arbitration agreement.” Though contained within a sub-




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provision, this language unambiguously commits to the arbitrator the power to

determine the enforceability of the agreement to arbitrate.

       Parnell urges us to hold that no delegation provision exists because this

language appears within a string citation of examples. However, there is no

requirement that a delegation provision be offset from other contractual language

or solely discuss arbitration of arbitrability in order to be valid. Moreover, the

Loan Agreement (i) requires that all Disputes be resolved in arbitration, with

Disputes construed broadly, and (ii) specifically defines Disputes to include at

least “issue[s] concerning the validity, enforceability, or scope of this loan or the

Arbitration agreement,” regardless of what other matters may also constitute a

Dispute. Thus, the Loan Agreement contains a delegation provision, providing

clear and unmistakable evidence that the parties intended to commit the issue of

arbitrability to the arbitrator.

                                            C

       Because the Loan Agreement contains a delegation provision, we only retain

jurisdiction to review a challenge to that particular provision. Absent a direct

challenge, we must treat the delegation provision as valid and allow the arbitrator

to determine the issue of arbitrability. Rent-A-Center, 561 U.S. at 72, 130 S. Ct. at

2779. Parnell’s complaint only challenges the arbitration provision generally, and

therefore falls short of the Rent-A-Center pleading requirement.

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      In Rent-A-Center, Plaintiff Jackson brought a discrimination suit against his

former employer, who responded with a motion to compel arbitration based on the

signed employment agreement between the parties. In opposing the motion to

compel arbitration, Jackson stated that “the entire agreement seems drawn to

provide Rent-A-Center with undue advantages should an employment-related

dispute arise” and that “the arbitration agreement as a whole is substantively

unconscionable.” Id. at 73, 130 S. Ct. at 2779. The Supreme Court determined

that the arbitration agreement contained a delegation provision because it gave the

arbitrator “exclusive authority to resolve any dispute relating to the . . .

enforceability . . . of this Agreement,” id. at 71, 130 S. Ct. at 2779, and Jackson’s

opposition to the motion only challenged the arbitration agreement as a whole.

Accordingly, the Court ignored Jackson’s arguments that the agreement was

procedurally and substantively unconscionable because at no point did Jackson

make out a challenge to the delegation provision itself, id. at 72, 130 S. Ct. at 2779,

and enforced the arbitration agreement as § 2 of the FAA required.

      Parnell’s complaint largely parallels the shortcomings of Jackson’s

opposition to the motion in Rent-A-Center. Parnell includes in the final paragraphs

of his complaint that the Loan Agreement contains an arbitration provision that

violates substantive Georgia law. The cited Georgia law states that “[a]n

arbitration clause in a payday loan contract shall not be enforceable if the contract

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is unconscionable” and lists a variety of factors the courts should consider when

evaluating unconscionability under state law. O.C.G.A. § 16-17-2(c)(2) (emphasis

added). Echoing the generalized allegations in Rent-A-Center, Parnell’s complaint

further alleges that “[t]he Loan Agreement is unconscionable” because the interest

rate is usurious; the designation of tribal law and jurisdiction is contrary to Georgia

law and public policy; the forum selection clause “is unconscionable as such a

forum deprive[s] Plaintiff and the putative class of their day in court”; arbitration is

prohibitively expensive; and the Loan Agreement prohibits class actions. These

allegations all address the validity of the underlying agreement and reflect the

extent of Parnell’s challenge. At no point in his complaint does Parnell

specifically challenge the parties’ agreement to commit to arbitration the question

of the enforceability of the arbitration agreement. Rather, he asks us to review the

validity of the arbitration agreement as a whole, a task which the delegation

provision expressly commits to an arbitrator.

      Our holding in this case does not, as Parnell suggests, require future

plaintiffs to “file one challenge to an agreement as a whole, followed by a

challenge to a certain clause, followed by challenges to single sentences, followed

by challenges to words tacked onto conjunctions at the end of a sentence.” To the

contrary, the result in this case merely follows the directive set forth in Rent-A-

Center and emphasizes that when a would-be plaintiff seeks to challenge an

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arbitration agreement containing a delegation provision, he or she must challenge

the delegation provision directly.

                                              IV

       We hold that the Loan Agreement between the parties contained a delegation

provision and because Parnell did not directly challenge that provision, § 2 of the

FAA requires us to treat it as valid and enforce the Loan Agreement according to

its terms. Thus, we reverse the district court’s denial of CashCall’s motion to

compel arbitration and remand for proceedings consistent with this opinion. As

this case remains in its pre-trial stages, Parnell may still seek leave from the district

court to amend his complaint to reflect a proper challenge to the delegation

provision.2

       REVERSED and REMANDED for proceedings consistent with this opinion.




   2
     The record reflects that Parnell already once amended his complaint. However, before trial,
the Federal Rules of Civil Procedure permit a party to amend his or her complaint with the
court’s leave, which should be “freely give[n].” Fed. R. Civ. Pro. 15(a)(2).
                                              13
