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The Florida District Court of Appeal held that a consumer protection claim was arbitrable, finding that the arbitrator could award the consumer a full range of remedies.
In Reeves v. Ace Cash Express, Inc., No. 2D05-5752, 2006 WL 2347789 (Fla. Dist. Ct. App. Aug. 11, 2006), Reeves sued Ace Cash Express (“ACE”), alleging a violation of the Florida Consumer Collection Practices Act (“FCCPA”). The trial court ordered the parties to arbitrate the dispute.
On appeal, Reeves argued that the arbitration agreement violated public policy because it “di[d] not provide her the panoply of rights available under the FCCPA.” Specifically, Reeves complained that the agreement did not give the arbitrator authority to award injunctive relief, would not allow an award of punitive damages, and prohibited class actions.
The Court took a markedly different view of the agreement. As the Court noted, the agreement did not specifically prohibit injunctive relief, and “[u]nless specifically prohibited, an arbitrator generally has the power to fashion equitable remedies.”
The agreement was similarly silent on the issue of punitive damages. The Court rejected Reeves’ contention that an arbitrator cannot award punitive damages unless the agreement expressly provides for them. Instead, the Court noted that the agreement required the arbitrator “to follow the substantive law” and that the FCCPA specifically allows punitive damages.
Regarding the agreement’s prohibition on class actions, the Court noted that Reeves was suing ACE in her individual capacity. Even if the prohibition on class actions were unenforceable under Florida law, which is doubtful in light of Fonte v. AT&T Wireless Services, Inc., 903 So.2d 1019 (Fla. Dist. Ct. App. 2005) (upholding prohibition on class-wide proceedings), the Court found that the severability clause would save the arbitration agreement.
Parties may remove any doubt about the availability of injunctive relief by adopting arbitration rules that explicitly authorize the arbitrator to award equitable relief. For example, Rule 20F of the National Arbitration Forum Code of Procedure provides that an arbitrator “may grant any legal, equitable or other remedy or relief provided by law.”
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