NOT PRECEDENTIAL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
                        _____________

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
                    Sharlene Johnson, Helena Love, Bonny Bleacher,
                                 Appellant in 09-3962

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

                     On Appeal from the United States District Court
                        for the Eastern District of Pennsylvania
                          District Judge: Hon. John P. Fullam
                                   _______________

                       Submitted Under Third Circuit LAR 34.1(a)
                                   February 8, 2011

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

                                (Filed: February 28, 2011)
                                    _______________

                               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, 

(3d Cir. 2010), and,


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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, 

, 395 (3d Cir. 2007), in which we suggested that




                                               3
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., 

, 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 

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.

                                             4
       On September 15, 2009, we stayed the appeals pending the United States Supreme

Court’s decision in Stolt-Nielsen S.A. v. AnimalFeeds Corp., 

(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 

. 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 stays 4 and now consider the appeals.

II.    Standard of Review

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

of an arbitration agreement”. Kaneff v. Delaware Title Loans, Inc., 

, 620

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

III.   Discussion 5

       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).

                                              5
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. 

(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.

                                              6
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.

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