Elizabeth Belyea, et al. v. GreenSky, Inc., et al.

— 1 — — 2 — — 3 — 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA — 6 — 7 ELIZABETH BELYEA, et al., Case No. 20-cv-01693-JSC 8 Plaintiffs, ORDER FOLLOWING DECEMBER 17, 9 v. 2025 CASE MANAGEMENT CONFERENCE 10 GREENSKY, INC., et al., Re: Dkt. No. 374 Defendants. — 11 — — 12 — 13 As discussed at the December 17, 2025 case management conference, the Court rules as 14 follows: 15 I. ARBITRATION CONTRACT FORMATION QUESTION 16 A. Procedural History 17 Previously, GreenSky moved to compel arbitration as to named plaintiff David Ferguson, 18 and Mr. Ferguson appealed. (Dkt. Nos. 159, 166.) At the Ninth Circuit, Mr. Ferguson argued no 19 arbitration agreement could have been formed between himself and GreenSky because GreenSky 20 was a credit services organization (“CSO”) bound by the Credit Services Act (“Credit Act”), Cal. 21 Civ. Code §§ 1789.10 et seq, and the purported arbitration agreement did not include the 22 requirements for a CSO’s contract formation under Credit Act § 1789.16. (Dkt. No. 188 at 3-4.) 23 The Ninth Circuit held there was “no genuine factual dispute that GreenSky is a ‘credit services 24 organization’ under the Credit [] Act” because: 25 GreenSky admitted that contractors submit consumers’ loan applications to GreenSky ‘for underwriting and approval,’ that loans 26 are ‘funded through the bank partner to which GreenSky has allocated the loan,’ that GreenSky ‘arranges for the consumer to make 27 payments on the loan, which GreenSky also services,’ and that 1 (Id.) There was also “no genuine factual dispute that the parties’ agreement violates the formation 2 requirements in section 1789.16.” (Id. at 4.) So, the Ninth Circuit held GreenSky’s “factual 3 admissions establish that GreenSky is a credit services organization as a matter of law,” so “the 4 parties did not form an agreement under the applicable statutory requirements,” and there was no 5 basis to compel arbitration as to Mr. Ferguson. (Id.) 6 But Plaintiffs subsequently filed a third amended complaint, (Dkt. No. 216), and in its 7 answer, GreenSky denied the previously admitted facts the Ninth Circuit had relied upon to 8 conclude GreenSky was a CSO as a matter of law, (Dkt. No. 219 ¶¶ 31, 34, 36, 37). GreenSky 9 then moved to compel arbitration as to all class members whose loan agreements contain an 10 arbitration provision. (Dkt. No. 326.) In responding to GreenSky’s motion, this Court found “[a]s 11 the Ninth Circuit’s ruling was explicitly constrained to the factual record before it, and that record 12 has now changed, neither the law of the case doctrine nor the mandate rule requires the Court to 13 conclude GreenSky is a CSO.” (Dkt. No. 371 at 10.) See Habelt v. iRhythm Techs., Inc., 83 F.4th 14 1162, 1166 (9th Cir. 2023) (“An amended complaint supersedes the original, the latter being 15 treated thereafter as non-existent.” (cleaned up)). So, considering the amended record before it, 16 the Court concluded: 17 The parties’ factual disputes as to whether borrowers purchase GreenSky’s services through merchant pass-through fees or consent 18 to PII collection and marketing prevent the Court from determining whether borrowers are ‘consumers’ and, by extension, whether 19 GreenSky is a CSO under the Credit Act. Because whether GreenSky is a CSO will determine whether an arbitration agreement was 20 formed, these factual disputes are material. So, the Court cannot resolve GreenSky’s motion to compel arbitration until the question of 21 whether borrowers are ‘consumers’ under the Credit Act is resolved. 22 (Dkt. No. 371 at 19.) 23 The Court is therefore holding GreenSky’s motion to compel arbitration of unnamed class 24 members “in abeyance pending trial on the arbitration formation question, specifically, whether 25 GreenSky is a credit services organization under the Credit Act.” (Id. at 22.) See Hansen v. LMB 26 Mortg. Servs., Inc., 1 F.4th 667, 672 (9th Cir. 2021) (“To implement [ 9 U.S.C. § 4 ], once a district 27 court concludes that there are genuine disputes of material fact as to whether the parties formed an 1 motion to compel arbitration in abeyance until the factual issues have been resolved.”). 2 B. Arbitrability and Merits Trials 3 Whether GreenSky is a CSO under the Credit Act is a material issue both precluding the 4 Court’s finally ruling on GreenSky’s motion to compel arbitration and going to the merits of 5 Plaintiffs’ claims against GreenSky. Plaintiffs’ first cause of action against GreenSky asserts 6 violations of the Credit Act, but GreenSky is only liable for such violations if it is a CSO. (Dkt. 7 No. 216 ¶ 104.) And, in certifying Plaintiffs’ class, the Court found whether GreenSky is a CSO 8 is a common question which predominated. (Dkt. No. 294 at 34.) 9 Because the question for the factfinder, the parties’ evidence, and the relevant law are 10 “substantially overlapping,” if not identical, it does not make sense to proceed with two separate 11 trials. (Dkt. No. 374 at 3.) Neither party has identified a case, much less a Ninth Circuit case, in 12 which a court faced the present issue: how to structure the trials when a material dispute 13 dispositive of whether the parties formed an arbitration agreement also goes to the merits of the 14 case. However, the Ninth Circuit has made clear “where the jurisdictional issue and the 15 substantive issues are so intermeshed that the question of jurisdiction is dependent on decision of 16 the merits, a party is entitled to have the jurisdictional issue submitted to the jury, rather than 17 having the court resolve factual issues.” Thornhill Publ’g Co., Inc. v. Gen. Tel. & Elecs. Corp., — 18 — 594 F.2d 730, 735 (9th Cir. 1979) (citation omitted); see also Bowen v. Energizer Holdings, Inc., — 19 — 118 F.4th 1134, 1143 (9th Cir. 2024) (holding “when jurisdictional issues are ‘intertwined with an 20 element of the merits of the plaintiff’s claim,’ the court must . . . ‘leave the resolution of material 21 factual disputes to the trier of fact’” (citation omitted)); Ventura Packers, Inc. v. F/V Jeanine 22 Kathleen, 305 F.3d 913 , 924 (9th Cir. 2002) (reversing summary judgment and “leav[ing] for the 23 trier of fact to decide . . . inquiry [which] will determine whether there is admiralty jurisdiction 24 and whether [the plaintiff] prevails on the merits”). And, in the jurisdictional context, “[t]he 25 question of jurisdiction and the merits of an action are intertwined where a statute provides the 26 basis for both the subject matter jurisdiction of the federal court and the plaintiff’s substantive 27 claim for relief.” See Safe Air for Everyone v. Meyer, 373 F.3d 1035 , 1039-40 (9th Cir. 2004) 1 Here, the question whether GreenSky is a CSO under the Credit Act is “inextricably 2 wound up” in both the existence of a valid arbitration agreement and the ultimate merits decision. 3 (Dkt. No. 361 at 30-31; Dkt. No. 374 at 2-3.) So, the Court will hold a single trial in which the 4 first question may be whether GreenSky is a CSO. Then, if the factfinder determines GreenSky is 5 not a CSO, the class members with arbitration provisions in their loan agreements will be 6 compelled to arbitrate, and there will be no ruling on the merits for those class members. 7 GreenSky contends the Court’s approach is improper because the Court cannot proceed 8 with a trial on the merits until the formation question is resolved. See Jin v. Parsons Corp., 966 9 F.3d 821, 827 (D.C. Cir. 2020) (“The district court cannot postpone deciding the question of 10 arbitrability vel non and allow the case to proceed on the merits.”); Boykin v. Family Dollar Stores 11 of Michigan, 3 F.4th 832, 844 (6th Cir. 2021) (“The parties may not address other issues, 12 including merits issues, before the court resolves these formation questions and [the defendant]’s 13 motion to compel.”). But Greensky’s cited cases do not involve arbitration formation questions 14 intertwined with the merits, as is here. Further, a phased trial structure can ensure the case does 15 not proceed to trial on the merits as to class members with arbitration agreements until the 16 formation question is resolved. 17 C. Jury 18 GreenSky also contends a single phased trial is not feasible because Plaintiffs are not 19 entitled to a jury in the formation trial. GreenSky argues although Plaintiffs demanded a jury in 20 their complaint, and so are entitled to a jury for the merits of their Credit Act claim, they did not 21 demand a jury in their opposition to GreenSky’s motion to compel arbitration. 22 GreenSky relies on Burch v. P.J. Cheese, Inc., 861 F.3d 1338 (11th Cir. 2017), in which 23 the Eleventh Circuit held Federal Arbitration Act (“FAA”) Section 4, 9 U.S.C. § 4 , requires the 24 party opposing arbitration to “make a specific demand for a jury trial on [the] specific issue related 25 to the ‘making of the arbitration agreement’” “before the deadline set by the district court for filing 26 an opposition to the motion to compel arbitration.” Id. at 1349 & n.17. But Burch is not binding 27 on this Court. And, although several district courts in the Ninth Circuit have relied on Burch, 1 a jury trial satisfies the FAA’s procedure to preserve a right to a jury trial under § 4.” Klink v. 2 ABC Phones of North Carolina, Inc., No. 20-CV-06276-EMC, 2021 WL 3709167 , at *7 (N.D. 3 Cal. Aug. 20, 2021) (cleaned up) (citing cases); see also Wang v. Kahn, No. 20-CV-08033-LHK, — 4 — 2022 WL 36105 , at *13 (N.D. Cal. Jan. 4, 2022) (noting jury demand must be made by the 5 deadline for opposing a motion to compel arbitration); Gonzalez v. Food Mgmt. Partners, Inc., 6 No. 19-CV-08496-ODW (ASx), 2020 WL 4437267 , at *4 (C.D. Cal. Aug. 3, 2020) (citing jury 7 demand in plaintiffs’ complaint and ordering jury trial on arbitrability). 8 More importantly, none of the cases GreenSky cites addresses the right to a jury in the 9 present situation, when the arbitrability issue is intertwined with a merits issue. In light of 10 Supreme Court and Ninth Circuit law regarding the right to a jury trial on intertwined issues, the 11 Court is not persuaded FAA Section 4 displaces Plaintiffs’ right to a jury trial on the question 12 whether GreenSky is a CSO. See In re Google Play Store Antitrust Litig., 147 F.4th 917 , 940-41 13 (9th Cir. 2025) (explaining because the “factual issues underlying Google’s legal counterclaims 14 overlapped and intertwined extensively with the factual issues underlying Epic’s equitable 15 antitrust claims,” the district court did not err in sending the claims together to the jury); Perttu v. 16 Richards, 605 U.S. 460, 470-71 (2025) (“It [is] well established that when a factual dispute is 17 intertwined with the merits of a claim that falls under the Seventh Amendment, that dispute should 18 go to a jury, even if that requires judges to defer determinations they would ordinarily make on 19 their own. We have accordingly held in various contexts that, in cases of intertwinement, district 20 courts should structure their order of operations to preserve the jury trial right.”). 21 But, even if the arbitration formation trial must proceed as a bench trial, the Court declines 22 to hold a separate trial on the exact same question with the exact same evidence and exact same 23 law. Instead, the Court will try the issue whether GreenSky is a CSO at one time for both 24 arbitrability and liability purposes, and, perhaps, the jury verdict could be advisory if a bench trial 25 is required on the arbitrability question. See Columbia Ins. Co. v. Simpson Strong-Tie Co., Inc., 26 No. 19-CV-04683-TSH, 2025 WL 2430417 , at *5 (N.D. Cal. Aug. 21, 2025) (“[A] district court 27 may permit juries to return advisory verdicts on equitable claims. . . . Notably, not only is the 1 is not binding on the court.” (cleaned up)). So, in connection with the pretrial conference, the 2 parties should propose how the CSO question should be resolved and, if they do not agree, then 3 submit competing proposals. 4 II. PARTIAL SUMMARY JUDGMENT 5 Plaintiffs also ask the Court to treat facts related to whether GreenSky is a CSO, which it 6 found undisputed in evaluating GreenSky’s motion to compel arbitration, as “conclusively 7 established for purposes of the upcoming trial.” (Dkt. No. 374 at 10.) 8 Plaintiffs rely on Federal Rule of Civil Procedure 56(f) and 56(g). See Fed. R. Civ. P. 9 56(f) (“After giving notice and a reasonable time to respond, the court may: (1) grant summary 10 judgment for a nonmovant; . . . or (3) consider summary judgment on its own after identifying for 11 the parties material facts that may not be genuinely in dispute.”); Fed. R. Civ. P. 56(g) (“If the 12 court does not grant all the relief requested by the motion, it may enter an order stating any 13 material fact – including an item of damages or other relief – that is not genuinely in dispute and 14 treating the fact as established in the case.”). However, Federal Rule of Civil Procedure 56 15 encompasses procedures for a party’s motion for summary judgment. Plaintiffs cite no authority 16 by which a court—absent any motion for summary judgment—may treat factual determinations 17 made in the course of determining whether a valid arbitration agreement exists as conclusively 18 established for the remainder of the case. 19 So, the Court DENIES Plaintiffs’ request. 20 III. CLASS NOTICE 21 GreenSky has provided Plaintiffs with contact information for class members through 22 March 10, 2025. However, because the class is defined as persons securing GreenSky loans 23 “between January 9, 2016, and the present,” (Dkt. No. 279 at 44 (sealed); Dkt. No. 294 at 44 24 (unsealed)), Plaintiffs now seek contact information through December 31, 2025. 25 The Court clarifies the class includes an end date of January 2, 2025, the date the Court 26 adopted Plaintiffs’ class definition and certified the class. (Dkt. No. 279.) See Cruz v. Dollar 27 Tree Stores, Inc., Nos. 07-2050 SC, 07-4012 SC, 2009 WL 1974404 , at *2 (N.D. Cal. July 2, 1 the class.”). Plaintiffs have not moved to amend the class definition, and the Court is not inclined 2 to do so. Ultimately, if Plaintiffs succeed, they may assert issue preclusion in a subsequent class 3 action with class members securing GreenSky loans after January 2, 2025. 4 || IV. SCHEDULE 5 The case schedule remains in place. Plaintiffs should meet and confer with Greensky 6 || regarding a revised class notice. 7 A further Case Management Conference is scheduled for Wednesday, February 4, 2026 at 8 2:00 p.m. via Zoom video. An updated Joint Case Management Conference Statement is due 9 January 28, 2026. 10 || ISSO ORDERED. 11 Dated: December 22, 2025 , td aq 12 ne JACQUELINE SCOTT CORLE 13 United States District Judge («4 — 15 — — 16 — — 17 — Z 18 — 19 — — 20 — — 21 — — 22 — — 23 — — 24 — — 25 — — 26 — — 27 — — 28 —