On February 10, 2015, a panel of the Eleventh Circuit issued a published decision, authored by Judge Gerald Tjoflat, limiting a district court's jurisdiction over, and a class representative's standing with respect to, unnamed class members prior to class certification. In Spears-Haymond v. Wells Fargo Bank, N.A., No. 13-12082 (11th Cir. Feb. 10, 2015), the Eleventh Circuit again visited questions arising from defendant banks' assertion of arbitration clause defenses in the In re Checking Account Overdraft multidistrict litigation. In this appeal, the panel reviewed the district court's denial of Wells Fargo Bank's conditional motion to dismiss the claims of the unnamed class members in favor of arbitration. Wells Fargo Bank's motion was filed and ruled on prior to class certification, and was conditioned on the district court certifying the class. The panel rejected the district court's jurisdiction to even consider the conditional, pre-certification motion, holding that "because a class including the unnamed putative class members had not been certified, Article III's jurisdictional limitations precluded the District Court from entertaining [the defendant's] conditional motions to dismiss those members' claims as subject to arbitration." Id. at 9. Only class certification "renders [unnamed class members] subject to the court's power." Id. at 10. In addition, the panel held that the class representatives did not have standing to assert arbitration waiver arguments on behalf of the unnamed class members prior to class certification Id. at 14. While the procedural posture of this particular appeal is rather unique, the broad jurisdictional principle set by the decision is significant. And the panel's reasoning may support the argument that while Wells Fargo Bank waived the assertion of an arbitration defense as to the named plaintiffs, that waiver will not preclude it from asserting the same defense as to a later certified class.
William J. Holley II is a partner with Parker Hudson Rainer & Dobbs in Atlanta, Georgia.
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