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Erwin v. Citibank, N.A.

United States District Court, S.D. California

March 20, 2017

CITIBANK, N.A., Defendant.


          Hon. Gonzalo P. Curiel United States District Judge.

         Before the Court is Defendant Citibank, N.A.'s (“Defendant's” or “Citibank's”) motion to compel Plaintiff Charles Erwin (“Plaintiff) to arbitrate his claims in this action on an individual, non-class basis, and to stay the instant action pending the outcome of arbitration proceedings. (Dkt. No. 5.) The motion has been fully briefed. (Dkt. Nos. 7, 9.) The Court deems this motion suitable for disposition without oral argument pursuant to Civil Local Rule 7.1(d)(1). Having reviewed the parties' arguments and the applicable law, the Court DENIES WITHOUT PREJUDICE Defendant's motion to compel arbitration and GRANTS the parties 60 days leave to take limited discovery regarding the threshold question of Plaintiff s opt-out.


         A. Plaintiffs Complaint

         Plaintiff Charles Erwin opened a consumer credit card account with Defendant Citibank, N.A. (Dkt. No. 1-2, Compl. ¶ 14.) A Citibank Simplicity credit card account (“Account”) was issued to Plaintiff on or about May 22, 2014. (Dkt. No. 5-2, Booth Decl. ¶ 4.) At some point in 2015, Plaintiff fell behind on his credit card payments. (Dkt. No. 1-2, Compl. ¶ 15.) Plaintiff alleges that Citibank began calling him “numerous times” every day to collect the debt, amounting to “hundreds of calls in a matter of weeks.” (Id.) Plaintiff alleges that the calls caused him “stress and anxiety, ” which in turn “affected his work.” (Id. ¶ 16.) Plaintiff informed Citibank that he refused to pay the debt, on account of Citibank's repeated calls to Plaintiff. (Id.)

         Plaintiff alleges that Citibank “used an automated dialer to telephone Plaintiff, ” and that when Plaintiff picked up, or when Citibank left a message for Plaintiff, “Plaintiff was played a recording with an artificial, pre-recorded voice, ” requesting that Plaintiff return Citibank's call during a specified time period. (Id. ¶ 17.) Citibank made calls to Plaintiffs home, cell, and work phones, even after Plaintiff demanded that the calls cease. (Id. ¶¶ 18, 20.)

         On October 3, 2016, Plaintiff filed a Complaint against Citibank in the Superior Court of the State of California for the County of San Diego, asserting a claim for violation of the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227, et seq., and state law claims for violation of California's Rosenthal Fair Debt Collection Practices Act, Cal. Civ. Code § 1788, et seq., invasion of privacy, negligence, and intrusion upon seclusion. (Dkt. No. 1-2.) Defendant removed the instant action to federal court on December 16, 2016. (Dkt. No. 1.)

         Citibank filed the instant motion on January 26, 2017. (Dkt. No. 5.)

         B. The 2014 and 2015 Arbitration Agreements

         At the time Plaintiffs Account was opened in May 2014, Plaintiff was mailed the Card Agreement, which contains the written terms and conditions governing the use of the Account, including a choice-of-law provision calling for the application of federal and South Dakota law, and the Arbitration Agreement. (Dkt. No. 5-2, Booth Decl. ¶¶ 5-6l; Dkt. No. 5-3 at 13.) The Card Agreement specifies that the Agreement comprises the contract between Plaintiff and Citibank regarding the Account, and that the contract applies if Plaintiff uses or authorizes use of the card, or if he does not close the account within thirty days of the card's issuance. (Dkt. No. 5-3 at 10.) The Card Agreement authorizes Citibank to change the terms of the Agreement, and notifies cardholders that Citibank will provide “advance written notice of the changes and a right to opt out, to the extent required by law.” (Id.) It is undisputed that after opening the Account, Plaintiff used the card. (See Dkt. No. 1-2, Compl. ¶¶ 14-15; Dkt. No. 5-2, Booth Decl. ¶ 7; Dkt. No. 5-3 at 18-22.) The 2014 Arbitration Agreement stated, in pertinent part: “You or we may arbitrate any claim, dispute or controversy between you and us (called “Claims”). All Claims (whether based on contract, tort, state, or any other basis) arising out of or related to your account, a previous related account or our relationship may be arbitrated.” (Dkt. No. 5-3 at 13.)

         However, on September 10, 2015, Citibank mailed Plaintiff a new Card Agreement for the Account, along with a cover letter (“Cover Letter”) and an explanation of changes to the Card Agreement (“Summary”). (Dkt. No. 5-2, Booth Decl. ¶ 8; Dkt. No. 5-3 at 24-41.) Plaintiff was advised that the new Card Agreement, as well as the changes detailed in the Cover Letter and Summary, would be effective on November 14, 2015. (Id.) The new terms included changes to the Arbitration Agreement. (Dkt. No. 5-4 at 24.) In particular, the new terms gave Plaintiff the choice to opt-out of the arbitration provision:

You have the right to reject the change to arbitration. If you reject this change, your account will no longer be subject to an arbitration provision. You can reject the change to arbitration by writing to us at PO Box 6195, Sioux Falls, S.D. 57117-6195 stating that you would like to reject the arbitration provision. Your letter must be postmarked on or before 11/14/2015. We will not close your account if your reject this change.

(Id. at 26.) Plaintiff had the right to reject only the change to arbitration, and could not reject any other changes in the new Card Agreement. (Id.)

         Plaintiff asserts in a declaration that on or about October 28, 2015, he mailed an opt-out letter pursuant to Citibank's instructions, by first class mail, with proper postage prepaid, addressed to Citibank's stated address, and deposited it in a United States Postal Mailbox. (Dkt. No. 7-1, Erwin Decl. ¶¶ 4-5.) The letter was not returned to Plaintiff as undeliverable. (I ...

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