The opinion of the court was delivered by: Honorablelarryalanburns United States District Judge
ORDER GRANTING PETITION TO COMPEL ARBITRATION
Plaintiff Douglas Bellows, a credit card holder, brought this putative class action*fn1 alleging violations of the Fair Debt Collection Practices Act. The complaint alleges Defendants Midland Credit Management and Midland Funding LLC (collectively, "Midland") purchased Bellows' credit card debt, then used harassing and abusive methods to collect it. Midland then filed a petition (the "Petition") seeking to compel arbitration, pursuant to an arbitration clause in the credit card user's agreement.
The Petition attached supporting evidence in an effort to show what that Bellows had entered into the card user's agreement, and that Midland was the successor to that agreement. Bellows resisted arbitration on two grounds. His opposition first briefly questioned Midland's evidence and whether he and Midland had an agreement to arbitrate.
The bulk of his opposition opposed arbitration as a matter of state law and public policy. Specifically, Bellows cited Discover Bank v. Superior Court, 36 Cal.4th 148 (2005) for the principle that arbitration clauses that are unconscionable under state law will not be enforced.
The party seeking arbitration (here, Midland) bears the burden of proving the existence of a valid arbitration agreement, and a party opposing the petition (here, Bellows) bears the burden of proving any fact necessary to its defense. Bridge Fund Capital Corp. v. Fastbucks Franchise Corp., 622 F.3d 996, 1005 (9th Cir. 2010) (quoting Engalla v. Permanente Med. Grp., Inc., 15 Cal.4th 951 (1997)). For this purpose, unconscionability is a defense and Bellows therefore bears the burden of proving any fact necessary to support that defense. See Smith v. Americredit Financial Servs, Inc., 2009 WL 4895280, at *4 (S.D.Cal., Dec. 11, 2009) (citing Crippen v. Central Valley RV Outlet, Inc., 124 Cal.App.4th 1159, 1165 (Cal. App. 5 Dist. 2004)).
I. Whether the Arbitration Clause Was Validly Entered into and Is Enforceable by Midland
Midland has submitted the affidavit of Stuart Austin, the Bad Debt Sales Manager for HSBC Bank Nevada, N.A. (Petition at 9--10.) Austin declares Bellows opened an account with HSBC on July 22, 2003, that he was issued a credit card, and that as part of the issuance oft he card, Bellows agreed to the terms of the Cardmember Agreement and Disclosure Statement (the "Agreement"). (Austin Decl., ¶ 2.) The declaration also authenticated the Agreement, which is attached as Exhibit A to the Petition. The declaration says Austin either has personal knowledge of the facts he declares, or that he obtained them from HSBC's business records. (Id., ¶ 1.) A second, more legible copy of the Agreement, is attached to Midland's reply brief, authenticated by the declaration of Todd Stevens as a true and correct copy of the Agreement Austin declared to be genuine.
The Agreement includes an arbitration clause providing for mandatory binding arbitration by the National Arbitration Forum, the American Arbitration Association, or JAMS if either party elects it. (Reply, Docket no. 22-1, at 10.)*fn2 Issues to be arbitrated include "any claim, dispute, or controversy . . . arising from or relating to this Agreement, including the validity or enforceability of this arbitration clause . . . ." (Id.) The Agreement also provides that both it and the account are assignable: "We may sell, assign or transfer your Agreement and Account or any portion thereof without notice to you." (Id. at 8.) By its terms, the Agreement would be entered into as soon as the card holder used the card: "You and we are bound by this Agreement from the date of your first transaction. You may cancel your Account before using it without paying any fees." (Id. at 4.)
Bellows, for his part, presents no evidence. Rather, he raises numerous objections to the admissibility of this evidence, and argues that more evidence is needed to prove Midland is a party to the Agreement and that the Agreement was validly entered into. These arguments fail, for two reasons. First, the evidentiary objections lack merit. Bellows argues the declarations 'are not based on personal knowledge, contain hearsay, and . . . violate the best evidence rule." The declarations, however, are based either on personal knowledge or on business records (bringing them within the business records exception). The authenticated copy of the Agreement is not rendered inadmissible by the best evidence rule merely because it is a duplicate and not the original. See Fed. R. Evid. 1003.*fn3
Bellows also demands better evidence of the chain of title, to show that Midland duly purchased his account. This fails both because the evidence presented is adequate, and because Bellows himself, in the complaint, alleged that Midland bought the account. While Bellows admits Midland might be an assignee of the Agreement, he demands documentary proof of it, in the form of a bill of sale or the like. (See, e.g., Opp'n at 9:28 ("At best Defendants may be assignees of the agreement, but even that proof is missing.")) But there is no reason to suppose that a formal written assignment was required or even contemplated. The Agreement's provision that the assignment could be accomplished even without notice to Bellows underscores this. Bellows admits he has no evidence that Midland is not an assignee; he simply demands documentary proof.
Where a party to a purported agreement to arbitrate attacks the existence of the agreement, whether the agreement was formed is ordinarily a question for the Court. Three Valleys Mun. Water Dist. v. E.F. Hutton & Co., 925 F.2d 1136, 1140 (9th Cir. 1991). Even if this were such a case, the Court would find that the Agreement was properly entered into, and that Midland is a successor to the Agreement. Midland has submitted adequate evidence to support these findings, and Bellows has submitted none. Compare Cadaval v. Dean Witter Reynolds, Inc., 703 F. Supp. 922, 924 (S.D.Fla., 1989) (mere allegations that signatures on arbitration agreement might have been forged were insufficient to support a finding of invalidity).
But the decision is even easier here, because the arbitration agreement provides that the arbitrator is to decide questions concerning the validity of the arbitration agreement. See Madrigal v. New Cingular Wireless Servs., Inc., 2009 WL 2513478, slip op. at *6 (E.D.Cal., Aug. 17, 2009) (citing Awuah v. Coverall N. Am., Inc., 554 F.3d 7, 11 (1st Cir. 2009) ("[T]he validity of an arbitration clause is itself a matter for the arbitrator where the agreement so provides."); Terminix Int'l Co. v. Palmer Ranch Ltd. P'Ship, 432 F.3d 1327, 1332 (11th Cir. 2005); Monex Deposit Co. v. Gilliam, 616 F. Supp. 2d 1023, 1026 (C.D.Cal., 2009)). As provided in the Agreement the determinations of whether the arbitration agreement was validly entered into, and whether Midland can enforce it, are committed to the arbitrator.
II. Whether the Agreement to Arbitrate is Unenforceable Under California Law
Bellows devotes the bulk of his opposition to this question, arguing that the agreement to arbitrate is both procedurally and substantively unconscionable under California law,*fn4 and that federal law-specifically, the Federal Arbitration Act-does not preempt it. Bellows also argues that Nevada law may ...