NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

_____________

Nos. 08-2212, 09-3961

_____________

RAYMOND KING; SANDRA COATES, ON BEHALF

OF THEMSELVES AND ALL OTHERS SIMILARLY SITUATED

v.

ADVANCE AMERICA, CASH ADVANCE CENTERS OF 

PENNSYLVANIA, LLC, d/b/a NATIONAL CASH ADVANCE 

d/b/a ADVANCE AMERICA, INC.

Advance America, Cash Advance Centers of Pennsylvania, LLC,

Appellant in 08-2212 & 09-3961

(E.D. Pa. No. 2-07-cv-00237)

_____________

_____________

Nos. 08-2213, 09-3962, 09-4070

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SHARLENE JOHNSON; HELENA LOVE; BONNY BLEACHER, 

on behalf of themselves and all others similarly situated,

Appellants in 09-3962

v.

ADVANCE AMERICA, CASH ADVANCE CENTERS, INC.; 

ADVANCE AMERICA, CASH ADVANCE CENTERS OF

PENNSYLVANIA, LLC; NCAS OF DELAWARE, LLC,

Advance America, Cash Advance Centers, Inc.;

Advance America, Cash Advance Centers of Pennsylvania, LLC;

NCAS of Delaware, LLC,

Appellants in 08-2213 and 09-4070
2

Sharlene Johnson, Helena Love, Bonny Bleacher,

Appellant in 09-3962

(E.D. Pa. No. 2-07-cv-03142)

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On Appeal from the United States District Court

for the Eastern District of Pennsylvania

District Judge: Hon. John P. Fullam

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Submitted Under Third Circuit LAR 34.1(a)

February 8, 2011

Before: JORDAN, GREENAWAY, JR., and STAPLETON, Circuit Judges.

(Filed: February 28, 2011)

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OPINION OF THE COURT

_______________

JORDAN, Circuit Judge.

Before us are the appeals of Advance America, Cash Advance Centers, Inc.; 

Advance America, Cash Advance Centers of Pennsylvania, LLC; and NCAS of 

Delaware, LLC (collectively “Advance America”) in two actions consolidated for 

purposes of appeal. Advance America challenges the January 2, 2008 orders of the 

United States District Court for the Eastern District of Pennsylvania directing that the 

claims in the two actions be submitted “to arbitration on an individual basis, unless the 

arbitrator determines otherwise.” (App. in No. 08-2122 [“King App.”] at 4; App. in No. 

08-2123 [“Johnson App.”] at 2.) As explained herein, those orders conflict with our 

recent decision in Puleo v. Chase Bank USA, 605 F.3d 172 (3d Cir. 2010), and, 
3

consequently, we will vacate both orders and remand the cases to the District Court for 

further proceedings.

I. Background

Named Plaintiffs Raymond King and Sandra Coates (the “King Plaintiffs”) and 

Sharlene Johnson, Helena Love, and Bonny Bleacher (the “Johnson Plaintiffs”; 

collectively, with the King Plaintiffs, the “Plaintiffs”), filed two separate class action 

complaints against Advance America on January 18, 2007 and August 1, 2007,

respectively. The complaints were filed on behalf of Plaintiffs and others who had 

obtained loans from Advance America under terms that Plaintiffs alleged violated 

Pennsylvania usury and consumer protection laws. Although the loan agreements signed 

by each Plaintiff contained binding arbitration and class action waiver provisions, 

Plaintiffs asserted that they were entitled to pursue class-wide relief in court because the 

arbitration and class action waiver provisions are unconscionable under Pennsylvania 

law. 

Advance America contested Plaintiffs’ assertions that the arbitration and class 

action waiver provisions are unconscionable and moved to stay the District Court

proceedings pending individual arbitration. On January 2, 2008, the District Court 

granted both motions, ordering the actions “stayed pending arbitration” to proceed “on an 

individual basis, unless the arbitrator determines otherwise.” In so ordering, the Court 

cited Gay v. CreditInform, 511 F.3d 369, 395 (3d Cir. 2007), in which we suggested that 
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Pennsylvania case law holding class action waivers unconscionable was preempted by 

the Federal Arbitration Act (“FAA”).

1

On April 23, 2008, Advance America filed notices of appeal regarding the January 

2, 2008 orders.2

 In its notices of appeal, Advance America asserted that although the 

January 2, 2008 orders “purport[ed] to grant [Advance America’s] motion[s] to compel 

individual arbitration,” they “effectively den[ied] said motion[s] by failing to enforce the 

arbitration agreement in accordance with its terms and the law of this Circuit including 

Gay v. CreditInform.” (King App. at 1; Johnson App. at 4.) The basis for that assertion 

was that the phrase “unless the arbitrator determines otherwise” opened the door for the 

arbitrator to decide whether the class action waiver was unconscionable under 

Pennsylvania law, whereas Gay had already deemed Pennsylvania’s law to be preempted 

by the FAA.3

 1 In our subsequent decision in Homa v. Am. Express Co., 558 F.3d 225, 229 (3d 

Cir. 2009), we stated that Gay’s discussion of FAA preemption of Pennsylvania law 

“appears to be dicta,” and we reaffirmed that view in our en banc Puleo decision, stating 

that “Gay’s discussion of Pennsylvania law was indeed dicta.” 605 F.3d at 177 n.2. 

 

2 Advance America had also filed two motions for clarification of the January 2, 

2008 orders, which the District Court denied. The notices of appeal also encompassed 

the denial of those orders.

3 After Advance America filed its appeal, this Court asked the parties to submit 

briefing on whether the appeals should be dismissed for lack of appellate jurisdiction 

over the District Court’s interlocutory orders. Subsequently, on May 5, 2008, the District 

Court entered orders certifying interlocutory appeals, and on September 15, 2009, this 

Court granted petitions in both cases for permission to appeal. While the jurisdictional 

question regarding the direct appeals has not yet been resolved, our allowance of the 

interlocutory appeals effectively moots the direct appeals and, therefore, we do not 

address the jurisdictional question. 
5

On September 15, 2009, we stayed the appeals pending the United States Supreme 

Court’s decision in Stolt-Nielsen S.A. v. AnimalFeeds Corp., 130 S.Ct. 1758 (2010). 

During that stay, this Court issued its opinion in Puleo, wherein we held that the validity 

of a class action waiver must be determined by the court, not an arbitrator. 605 F.3d at 

182-83. In light of Puleo, the Plaintiffs acknowledged that the District Court had erred 

by allowing an arbitrator to determine the validity of the class action waivers, and, on 

May 17, 2010, moved for summary vacatur of the District Court’s orders and for remand 

to the District Court.

On May 28, 2010, we lifted the stays4

II. Standard of Review

and now consider the appeals.

We review de novo a district court’s determination of the “applicability and scope 

of an arbitration agreement”. Kaneff v. Delaware Title Loans, Inc., 587 F.3d 616, 620 

(3d Cir. 2009) (internal quotation marks and citation omitted).

III. Discussion5

Although all parties agree that the District Court’s January 2, 2008 orders 

erroneously allowed the question of the class action waivers’ validity to be decided by an 

arbitrator, the parties do not agree on the appropriate remedy. Plaintiffs argue that the 

orders should be vacated and the cases remanded for the District Court to consider the 

validity of the class action waivers. Advance America argues that the District Court has 

 4 Stolt-Nielsen had been decided on April 27, 2010.

5 The District Court had jurisdiction pursuant to 28 U.S.C. § 1332(d)(2) and we 

have jurisdiction over the interlocutory appeals pursuant to 28 U.S.C. § 1292(b).
6

already held that the class action waivers are valid and that there is no need to remand. It 

argues that we need only strike the phrase “unless the arbitrator determines otherwise” 

from the orders and should enforce the remaining portions stating that “arbitration shall 

proceed on an individual basis.”

The Plaintiffs have the better of this particular dispute. First, we do not view the 

District Court as having held that the class action waivers are valid, because, if it had, 

there would have been no reason for the Court to have left that question open for the 

arbitrator. Rather, we view the District Court’s order as acknowledging that, under Gay, 

the class action waivers could be valid, but then leaving it to the arbitrator to actually 

decide that issue. Second, to the extent the District Court relied on Gay, it relied on 

language that has since been deemed dicta by Homa and Puleo. See supra note 1. 

Consequently, even if the District Court had held that the class action waivers were valid, 

vacating the orders would be warranted in light of our more recent decisions. 

Accordingly, we will vacate the District Court’s orders and remand for consideration of

the validity of the class action waivers.

6

 6 Advance America has also moved to hold these appeals in abeyance pending the 

Supreme Court’s decision in AT&T Mobility LLC v. Concepcion, for which certiorari was 

granted on May 24, 2010. 130 S.Ct. 3322 (2010) (No. 09-893). While we recognize that 

the decision in AT&T may influence the determination of the class action waivers’ 

validity, we are not confronted with that question. Rather, the only question we are 

deciding today is who gets to determine the waivers’ validity – the District Court or the 

arbitrator – and that question has been unambiguously answered by Puleo. 

Consequently, no stay of these appeals is warranted. On remand, however, the District 

Court will have to decide the validity of the class action waivers and would be well 

justified in considering a stay of the proceedings pending the decision in AT&T.

However, we leave that decision to the District Court.
7

IV. Conclusion

For the foregoing reasons we will vacate the District Court’s January 2, 2008 

orders and remand to the District Court for a determination of the validity of the class 

action waivers.7

 7 As discussed earlier supra note 3, Advance America’s direct appeals are moot in 

light of our allowance of the interlocutory appeals, and, therefore, we will also dismiss 

the direct appeals. Likewise, we will deny the Plaintiffs’ motions for summary vacatur as 

moot.