Belyea v. GreenSky

Background

GreenSky previously moved to compel arbitration for named plaintiff David Ferguson. The Ninth Circuit held, based on the factual record before it, that GreenSky was a credit services organization under California’s Credit Services Act and that the parties had not formed an arbitration agreement meeting that law’s requirements.

After Plaintiffs filed a third amended complaint, GreenSky denied facts on which the Ninth Circuit had relied and later moved to compel arbitration for class members whose loan agreements contain arbitration provisions. In an earlier order, this Court concluded that the amended record created factual disputes about whether borrowers purchased GreenSky’s services through merchant pass-through fees or consented to the collection and use of their personal information. Those disputes affect whether the borrowers are “consumers” and, in turn, whether GreenSky is a credit services organization.

Arbitration and trial structure

The Court continued to hold GreenSky’s motion to compel arbitration for unnamed class members in abeyance, meaning it did not decide that motion yet. The Court stated that whether GreenSky is a credit services organization is material both to the existence of an arbitration agreement and to the merits of Plaintiffs’ Credit Services Act claims.

Because the evidence and legal issues overlap, the Court ruled that the case should proceed through a single trial rather than separate arbitrability and merits trials. The first question may be whether GreenSky is a credit services organization. If the factfinder determines that GreenSky is not a credit services organization, class members with arbitration provisions will be compelled to arbitrate, and the Court will not rule on the merits for those class members. The Court rejected GreenSky’s argument that the proposed structure was improper because the arbitrability question must be resolved before any merits trial; it explained that phased procedures can prevent the merits from being tried for affected class members before that question is resolved.

GreenSky also argued that Plaintiffs were not entitled to a jury on the formation question because they had not made a specific jury demand in their opposition to the motion to compel arbitration. The Court was not persuaded that Section 4 of the Federal Arbitration Act eliminates Plaintiffs’ right to a jury on whether GreenSky is a credit services organization, because that issue is intertwined with the merits of the Credit Services Act claim. The Court further stated that, even if the formation issue must be tried to the Court, it would not hold a separate trial using the same evidence and law. The parties must propose how the credit-services-organization question should be resolved at the pretrial conference; if they cannot agree, they must submit competing proposals.

Plaintiffs’ request to establish facts

Plaintiffs asked the Court to treat facts previously found undisputed while considering arbitration as conclusively established for the upcoming trial, relying on Federal Rule of Civil Procedure 56(f) and (g). The Court denied that request. It explained that those provisions concern summary-judgment procedures and that Plaintiffs cited no authority allowing the Court, without a summary-judgment motion, to treat factual determinations from the arbitration analysis as conclusively established for the rest of the case.

Class notice and schedule

The Court clarified that the certified class includes people who secured GreenSky loans between January 9, 2016, and January 2, 2025. January 2, 2025, is the date the Court adopted Plaintiffs’ class definition and certified the class. Plaintiffs had not moved to amend the definition, and the Court was not inclined to do so. The Court stated that, if Plaintiffs prevail, they may assert issue preclusion in a later class action involving people who secured GreenSky loans after January 2, 2025.

The existing case schedule remains in place. Plaintiffs were directed to meet and confer with GreenSky about revised class notice. The next case management conference is scheduled for February 4, 2026, at 2:00 p.m. by Zoom, and an updated joint case management statement is due January 28, 2026.