Trial Lawyers for Public Justice is seeking access to justice for thousands of consumers before the U.S. Supreme Court in Buckeye Check Cashing, Inc. v. Cardegna, a key federal preemption and mandatory arbitration case being argued on November 29, 2005. The class action lawsuit, originally filed in Florida state court, seeks to hold a payday lender liable for charging low-income consumers interest rates of up to 1,300 percent, which violates Florida criminal law.

In Buckeye, the U.S. Supreme Court will rule on a January 2005 decision by the Supreme Court of Florida that held that, under Florida law, Florida state courts must first determine whether a contract is criminal and void ab initio before enforcing any provision in it, including a mandatory arbitration provision. The lender, Buckeye Check Cashing, insists that the Federal Arbitration Act preempts – i.e., wipes out – that law and requires Florida judges to enforce the contract’s arbitration clause even if the contract is illegal in Florida.

TLPJ represents plaintiff John Cardegna, who sued Buckeye on behalf of a class of Florida consumers for violating a Florida anti-usury statute that prohibits exorbitant interest rates. Buckeye responded to the suit by trying to force Cardegna – and the thousands of others who could be affected – out of court and into mandatory arbitration, citing a binding mandatory arbitration ("BMA") clause in its payday lending contract. On January 20, 2005, however, as TLPJ urged, the Supreme Court of Florida held that no part of a payday lending contract – including an arbitration clause – can be enforced by the Florida courts until the courts determine whether the contact is illegal.

The ruling represents a key procedural victory that preserves access to justice for thousands of low-income customers who remain mired in debt after borrowing money from Buckeye – a nationwide payday lender with over 90 locations. The Supreme Court of Florida held that, if the whole contract is illegal and void under Florida law, then Buckeye cannot use a BMA clause in the contract to force the consumers out of state court and into private arbitration.

"If the Court rules that a check cashing company can illegally gouge consumers with exorbitant interest rates, then barricade the courthouse doors so consumers cannot get a court hearing on whether the whole contract should be thrown out, it will deprive consumers of vital protections under state law," said TLPJ Staff Attorney F. Paul Bland, Jr., who will argue the case before the U.S. Supreme Court. (Bland also briefed and argued the plaintiffs’ appeal to the Florida Supreme Court, along with lead counsel Clayton Yates of Fort Pierce, Florida.) "If the Justices rule that arbitration clauses trump traditional requirements that a contract be fair and reasonable – and comply with state criminal laws – then borrowers will have almost no court protection from Tony Soprano and his friendly neighborhood loan sharks."

Buckeye will be TLPJ’s third federal preemption argument before the U.S. Supreme Court in the last six years. In addition to Bland and Yates, the plaintiffs’ legal team in Buckeye includes co-counsel Richard M. Fisher of Cleveland, Tennessee, and Christopher C. Casper of James, Hoyer, Newcomer & Smiljanich in Tampa.

The plaintiffs’ brief in the U.S. Supreme Court was written by these attorneys, along with TLPJ’s Executive Director Arthur H. Bryant, Brayton-Baron Fellow Leslie A. Bailey, and Power-Cotchett Attorney Michael J. Quirk. Forty states, through their Attorneys General, have filed an amici brief on behalf of the plaintiff, asking the Court to protect states’ freedom to adopt and enforce consumer protection laws.

TLPJ’s key legal briefs in Buckeye Check Cashing, Inc. v. Cardegna are posted online at www.tlpj.org.

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Trial Lawyers for Public Justice is the only public interest law firm dedicated to using trial lawyers’ skills and resources to advance the public good. Founded in 1982, TLPJ utilizes a network of more than 3,000 of the nation’s outstanding trial lawyers to pursue precedent-setting and socially significant litigation. TLPJ has a wide-ranging litigation docket in the areas of consumer rights, worker safety, civil rights and liberties, toxic torts, environmental protection, and access to the courts. TLPJ is the principal project of The TLPJ Foundation, a not-for-profit membership organization headquartered in Washington, DC, with a West Coast office in Oakland, California. The TLPJ web site address is www.tlpj.org. TLPJ’s Florida State Coordinators are James L. Ferraro of Miami, tel. (305) 375-0111, and Stacey Mullins of Boca Raton, tel. (561) 395-0000.