Author Topic: Whitt v. Prosper Funding LLC (S.D.N.Y. July 14, 2015)  (Read 935 times)

0 Members and 1 Guest are viewing this topic.

rjaguar3

  • Valued Member
  • Posts: 95
Whitt v. Prosper Funding LLC (S.D.N.Y. July 14, 2015)
« on: July 21, 2015 03:32:34 PM »
Link: https://scholar.google.com/scholar_case?case=2173898833573507242

Whitt entered into an arbitration agreement with Prosper, which stated
Quote
[Prosper] will pay all filing and administration fees charged by the administrator and arbitrator fees up to $1,000, and [Prosper] will consider [the applicant's] request to pay any additional arbitration costs. If an arbitrator issues an award in [Prosper's] favor, [the applicant] will not be required to reimburse [Prosper] for any fees [Prosper has] previously paid to the administrator or for which [Prosper is] responsible. If [the applicant] [receives] an award from the arbitrator, [Prosper] will reimburse [the applicant] for any fees paid by [the applicant] to the administrator or arbitrator.
Whitt argued that the arbitration agreement was unconscionable because the costs of arbitration were cost-prohibitive, citing to JAMS Comprehensive Rule 31.  Although the court acknowledged Whitt's support of his indigence, the court said that Whitt has not carried his burden that arbitration would be prohibitively expensive because
  • Prosper argued the consumer minimum standards apply, which limit the fees charged to the consumer to $250; therefore, Prosper would be responsible for all arbitration fees.
  • Because the agreement required a prevailing consumer to be reimbursed for his arbitration expenses, the court said that determining the arbitration costs to be prohibitive was speculative since Whitt has not lost the arbitration
Of particular interest to DBers is this footnote:
Quote
As noted, under the Agreement, Prosper is required only to "consider" any request to pay costs in excess of $1,000. See Agreement 22(d). This portion of the Agreement is, at the very least, in tension with the above provision of the JAMS Consumer Standards. This tension, however, cannot be resolved in favor of the Agreement if arbitration is to proceed through JAMS. See JAMS Consumer Standards at pg. 1 ("JAMS will administer arbitrations pursuant to mandatory pre-dispute arbitration clauses between companies and consumers only if the contract arbitration clause and specified applicable rules comply with the following minimum standards of fairness." (emphasis added and footnote omitted)); see also Agreement 22(g) ("If any portion of this Section 22 [governing arbitration] is declared invalid or unenforceable for any reason, it shall not invalidate the remaining portions of this section.").

kevinmanheim

  • Valued Member
  • Posts: 11509
Re: Whitt v. Prosper Funding LLC (S.D.N.Y. July 14, 2015)
« Reply #1 on: July 21, 2015 04:14:44 PM »
Good find. This is what we have been saying all along -- a consumer cannot pay more than $250 in JAMS, no matter what the contract -- or the arbitrator -- say.

trick

  • Valued Member
  • Posts: 857
Re: Whitt v. Prosper Funding LLC (S.D.N.Y. July 14, 2015)
« Reply #2 on: July 21, 2015 06:21:57 PM »
from the order:

"Having concluded that Whitt's claims must be arbitrated, the Court must determine whether to dismiss the case or to stay it pending arbitration. See Robinson, 2015 WL 3486119, at *11. Courts in this Circuit have generally determined that, where, as here, all of the plaintiff's claims must be arbitrated, dismissal is preferable, since "no useful purpose [would] be served by granting a stay." Lewis Tree Serv., Inc. v. Lucent Technologies, Inc., 239 F. Supp. 2d 332, 340 (S.D.N.Y. 2002); accord Robinson, 2015 WL 3486119, at *11; Alemac Ins. Servs., Inc. v. Risk Transfer Inc., No. 03-cv-1162 (WHP), 2003 WL 22024070, at *3 (S.D.N.Y. Aug. 28, 2003); Johnson v. Tishman Speyer Properties, L.P., No. 09-cv-1959 (WHP), 2009 WL 3364038, at *4 (S.D.N.Y. Oct. 16, 2009); Duran v. J. Hass Grp. L.L.C., No. 10-cv-4538 (RRM) (SMG), 2012 WL 3233818, at *5 (E.D.N.Y. June 8, 2012); Milgrim v. Backroads, Inc., 142 F. Supp. 2d 471, 476 (S.D.N.Y. 2001). The Court agrees with the reasoning of these cases and opts to dismiss rather than stay Whitt's claims in favor of arbitration."

howucantoo

  • Valued Member
  • Posts: 7513
Re: Whitt v. Prosper Funding LLC (S.D.N.Y. July 14, 2015)
« Reply #3 on: July 21, 2015 06:52:08 PM »
from the order:

"Having concluded that Whitt's claims must be arbitrated, the Court must determine whether to dismiss the case or to stay it pending arbitration. See Robinson, 2015 WL 3486119, at *11. Courts in this Circuit have generally determined that, where, as here, all of the plaintiff's claims must be arbitrated, dismissal is preferable, since "no useful purpose [would] be served by granting a stay." Lewis Tree Serv., Inc. v. Lucent Technologies, Inc., 239 F. Supp. 2d 332, 340 (S.D.N.Y. 2002); accord Robinson, 2015 WL 3486119, at *11; Alemac Ins. Servs., Inc. v. Risk Transfer Inc., No. 03-cv-1162 (WHP), 2003 WL 22024070, at *3 (S.D.N.Y. Aug. 28, 2003); Johnson v. Tishman Speyer Properties, L.P., No. 09-cv-1959 (WHP), 2009 WL 3364038, at *4 (S.D.N.Y. Oct. 16, 2009); Duran v. J. Hass Grp. L.L.C., No. 10-cv-4538 (RRM) (SMG), 2012 WL 3233818, at *5 (E.D.N.Y. June 8, 2012); Milgrim v. Backroads, Inc., 142 F. Supp. 2d 471, 476 (S.D.N.Y. 2001). The Court agrees with the reasoning of these cases and opts to dismiss rather than stay Whitt's claims in favor of arbitration."

Yes, because it must have been filed under federal question, but case did not originate in the district court. This where DC will dismiss.
I am not an attorney, just  type" A" personality.
If you need legal help, you should seek legal counsel.
My PM is turned off.

 

credit