United States District Court, N.D. California
ORDER GRANTING MOTION TO TRANSFER
WILLIAM ALSUP UNITED STATES DISTRICT JUDGE
antitrust action, a defendant charge card company moves to
transfer the claims against it to the Southern District of
New York. For the reasons stated herein, the motion to
transfer is Granted.
Florida merchants filed this antitrust action against payment
card networks, card-issuing banks ("issuing banks), and
the standards-setting entity EMVCo. The complaint alleges
that defendants conspired to impose a "Liability
Shift" effective October 1, 2015, on any and all
merchants that failed to upgrade to EMV chip technology.
Pursuant to the Liability Shift, the merchants allegedly
became liable for fraudulent transactions that had previously
been absorbed by the issuing banks. Plaintiffs allege that
defendants violated Section 1 of the Sherman Antitrust Act
and the California Cartwright Act, codified at Business and
Professions Code Section 16700.
B & R Supermarket, Inc. (doing business as Milam's
Market) and plaintiff Grove Liquors LLC operate retail stores
in Florida (Compl. ¶¶ 3-4). Both companies operate
under B & R Supermarket's parent merchant account with
American Express. B & R Supermarket has been an American
Express merchant since 1997 (Spellman Decl. at ¶ 4). In
a motion to intervene, plaintiffs seek to add two new
plaintiffs - rue21, Inc., a nationwide retailer with 49
stores in California, and Strouk Group LLC (doing business as
Monsieur Marcel), a California restaurant and retail business
(Dkt. No. 255-2 at ¶¶ 4). Monsieur Marcel has been
an American Express merchant since 2014. rue21 has been an
American Express merchant since 1992 (Second Spellman Decl.
at ¶ 4, 5).
Express has included an arbitration provision in its Card
Acceptance Agreement since 1999. The October 2015 version of
the Agreement provided in relevant part (Spellman Decl., Exh.
You or we may elect to resolve any Claim by individual,
binding arbitration. Claims are decided by a neutral
If arbitration is chosen by any party, neither you nor we
will have the right to litigate that Claim in court or have a
jury trial on that Claim. Further, you and we will not have
the right to participate in a representative capacity or as a
member of any class pertaining to any Claim subject to
arbitration. . . . Except as set forth below, the
arbitrator's decision will be final and binding. Other
rights you or we would have in court may also not be
available in arbitration.
Agreement defined "claim" as follows:
Claim means any claim (including initial claims,
counterclaims, crossclaims, and third party claims), dispute,
or controversy between you and us arising from or relating to
the Agreement or prior Card acceptance agreements, or the
relationship resulting therefrom, whether based in contract,
tort (including negligence, strict liability, fraud, or
otherwise), statutes, regulations, or any other theory,
including any question relating to the existence, validity,
performance, construction, interpretation, enforcement, or
termination of the Agreement or prior Card acceptance
agreements, or the relationship resulting therefrom, except
for the validity, enforceability, or scope of section 7.c of
the General Provisions.
Agreement also included forum-selection and choice-of-law
The Agreement and all Claims are governed by and shall be
construed and enforced according to the laws of the State of
New York without regard to internal principles of conflicts
of law. Subject to [the arbitration provision], any action by
either party hereunder shall be brought only in the
appropriate federal or state court located in the County and
State of New York. Each party consents to the exclusive
jurisdiction of such court and waives any Claim of lack of
jurisdiction or forum non conveniens.
filed a complaint on March 8, 2016. American Express now
moves to compel arbitration and moves to sever and transfer
the claims against it to the Southern District of New York
pursuant to pursuant to Rule 21 and 28 U.S.C. 1404(a).
Express does not submit evidence that plaintiffs signed the
Agreement. Nonetheless, while plaintiffs attack the
Agreement's arbitration provision as being procedurally
unconscionable, plaintiffs do not dispute that they are
otherwise subject to the Agreement.
Express's motion to transfer as to the named plaintiffs
is Granted. All claims by the named plaintiffs against
American Express are severed and hereby transferred to the
United States District Court for the Southern District of New
York. American Express's motion to compel arbitration is
Denied without Prejudice to a motion there to compel
arbitration and a determination as to whether the arbitration
provision is unconscionable. This order also transfers the
claims without ...