Barnett v. American Express National ( 2022 )

Case: 21-60799 Document: 00516376016 Page: 1 Date Filed: 06/29/2022
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
FILED
No. 21-60799 June 29, 2022
Lyle W. Cayce
Clerk
Michelle Barnett,
Plaintiff—Appellee,
versus
American Express National Bank,
Defendant—Appellant.
Appeal from the United States District Court
for the Southern District of Mississippi
USDC No. 3:20-CV-623
Before Higginbotham, Haynes, and Wilson, Circuit Judges.
Per Curiam:
American Express National Bank (“AmEx”) filed suit for breach of
contract in Mississippi state court to recover $2,855.74 of unpaid credit card
debt incurred on Michelle Barnett’s account. Barnett contends an unknown
person incurred this debt fraudulently. Barnett then filed Fair Credit
Reporting Act (“FCRA”) claims against AmEx and other defendants in
Mississippi state court. After removal to the Southern District of Mississippi,
AmEx moved to compel arbitration of the FCRA claims, which the district
court denied. Applying this Court’s test for waiver of the right to compel
Case: 21-60799 Document: 00516376016 Page: 2 Date Filed: 06/29/2022
No. 21-60799
arbitration, 1 the district court held that AmEx substantially invoked the
judicial process by filing the breach of contract lawsuit where “the validity of
the disputed indebtedness [is a] married feature[] to” AmEx’s breach of
contract claim and Barnett’s FCRA claims. The district court also found
resulting prejudice to Barnett, leading it to deny AmEx’s motion to compel
arbitration.
On the same day and after the district court’s ruling, two cases of
relevance to this dispute were decided. In Forby v. One Techs., L.P., this Court
clarified the test for waiver by a party of the right to compel arbitration and
reiterated that waiver analysis occurs on a claim-by-claim basis.2 In addition
to Forby, the Supreme Court decided Morgan v. Sundance, Inc. while the
appeal in this case was pending. 3 Morgan addressed this and eight of our sister
circuits’ tests for waiver by a party of the right to compel arbitration. 4 While
we can apply subsequent precedent to cases before us, “[a]s a court for
review of errors, we are not to decide facts or make legal conclusions in the
first instance. Our task is to review the actions of a trial court for claimed
errors.” 5 As the able district court did not have the benefit of these two
decisions, we VACATE the decision of the district court and REMAND for
reconsideration in the first instance in light of Morgan and Forby.
1
Miller Brewing Co. v. Fort Worth Distrib. Co., 781 F.2d 494, 497 (5th Cir. 1986).
2
Forby v. One Techs., L.P., 13 F.4th 460, 462 (5th Cir. 2021).
3
Morgan v. Sundance, Inc., 596 U.S. ––––, 142 S. Ct. 1708 (May 23, 2022).
4
Id., 142 S. Ct. at 1712, n.1.
5
Browning v. Kramer, 931 F.2d 340, 345 (5th Cir. 1991).
2