Dillon v. BMO Harris Bank, N.A., No. 16-1362 (4th Cir. 2017)Annotate this Case
The Fourth Circuit affirmed the district court's order denying BMO Harris's renewed motion to compel arbitration. Plaintiff filed suit against BMO Harris, alleging that BMO Harris violated the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C.1961 et seq., when BMO Harris used its role within a network of financial institutions to conduct and participate in the collection of unlawful payday loans. BMO Harris sought to enforce an arbitration agreement for the loan, which was entered into by plaintiff and the lender, Great Plains. The Fourth Circuit affirmed the denial of BMO Harris's motion to enforce the arbitration agreement in light of Hayes v. Delbert. In Hayes, the Fourth Circuit applied the prospective waiver doctrine and held that the entire arbitration provision at issue was unenforceable. The choice of law provisions in this case were indistinguishable in substance from the related provisions in the agreement in Hayes. These choice of law provisions were not severable from the broader arbitration agreement and rendered the entire arbitration agreement unenforceable.