II. Discussion
Defendant moves, based on the plain language of the identical arbitration clauses contained in each loan agreement, to dismiss plaintiff’s complaint in favor of, or to compel, arbitration. Plaintiff responds, first, that the arbitration clause, in particular its class action waiver, is procedurally and substantively unconscionable, so it is unenforceable under Pennsylvania law. Second, plaintiff argues that the arbitration clause is unenforceable because the National Arbitration Forum (“NAF”) is designated as the exclusive arbitral forum, but the NAF ceased administering arbitrations between consumers and businesses in , so it is no longer available as an arbitral forum.
A court, not an arbitrator, decides issues of arbitrability, i.e., whether the parties have submitted a particular dispute to arbitration by a valid arbitration clause. Green Tree Fin. Corp. v. Bazzle, 539 U.S. 444, 452 (2003); Harris v. Green Tree Fin. Corp., 183 F.3d 173, 179 (3d Cir. 1999). A motion to compel arbitration is granted if there are no genuine disputes of material fact that: (1) a valid agreement to arbitrate was entered by the parties; and (2) the parties’ claims are within the scope of the arbitration agreement. Kaneff v. Del. Title Loans, 587 F.3d 616, 620 (3d Cir. 2009); Trippe Mfg. Co. v. Niles Audio Corp., 401 F.3d 529, 532 (3d Cir. 2005).
There are no disputes of material fact on the issues before the court. See Def.’s Mot. to Dismiss or Compel Arbitration, Ex. A. Plaintiff’s claims are within the scope of the arbitration clause; the clause states that “all claims, disputes, or controversies between You and Us . . . shall be resolved by binding individual (and not class, consolidated or representative) arbitration.” Id. The only issue is the validity of the arbitration clause.
The FAA “establishes a strong federal policy in favor of the resolution of disputes through arbitration.” Alexander v. Anthony Int’l, L.P., 341 F.3d 256, 263 (3d Cir. 2003). The FAA “creates a body of federal substantive law establishing and regulating the duty to honor an agreement to arbitrate.” Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 25 n.32 (1983). Section 2 of the FAA provides that a “written provision in . . . a contract evidencing a transaction involving commerce 2 to settle by arbitration a controversy thereafter arising out of such contract or transaction . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2 (emphasis added). “This saving clause permits agreements to arbitrate to be invalidated by generally applicable contract defenses, such as fraud, duress, or unconscionability, but not by defenses that apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue.” AT&T Mobility, LLC v. Concepcion, 131 S.Ct. 1740, 1746 (2011).
A. Unconscionability
Plaintiff argues the arbitration clause is unenforceable because it contains a class action waiver that is unconscionable under Pennsylvania law. It is not necessary to consider whether or not Pennsylvania law applies to determine the validity of the arbitration clause, and whether or not the arbitration clause would be unconscionable under Pennsylvania law; under the Supreme Court’s recent decision in AT&T Mobility, LLC v. Concepcion, 131 S.Ct. 1740 (2011), the FAA preempts Pennsylvania unconscionability law as stated in Thibodeau v. Comcast Corp., 912 A.2d 874, 885-86 (Pa. Super. Ct. 2006).
In Concepcion, the Supreme Court held that the FAA preempted California unconscionability law set forth in Discover Bank v. Superior Court, 113 P.3d 1100 (Cal. 2005)). 131 S. Ct. at 1753. The plaintiffs in Concepcion each entered into a cell phone agreement with defendant AT&T Mobility, LLC (“AT&T”). Id. at 1744. AT&T advertised that purchase of its cell phone service entitled plaintiffs to free phones. Id. Plaintiffs received free phones but were charged $ in sales tax based on the phones’ retail value. Id. Plaintiffs filed a complaint against AT&T in federal court; their complaint was later consolidated with http://onedayloan.net/payday-loans-ms a putative class action alleging, among other things, that charging sales tax on phones advertised as free constituted false advertising and fraud. Id.
