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Anderson v. Credit One Bank, National Association

United States District Court, S.D. California

May 22, 2017



          HON. MICHAEL M. ANELLO United States District Judge

         Plaintiff Rodger Dean Anderson (“Plaintiff”) brings this action against Defendant Credit One Bank, National Association (“Defendant” or “Credit One Bank”) alleging three causes of action for: (1) violations of California's Rosenthal Fair Debt Collection Practices Act, California Civil Code § 1788 et seq.; (2) violations of the Telephone Consumer Protection Act, 47 U.S.C. § 227 et seq.; and (3) intrusion. See Complaint. Defendant moves to compel arbitration and stay this case pursuant to the Federal Arbitration Act. See Doc. No. 10. Plaintiff filed an opposition, to which Defendant replied. See Doc. Nos. 11, 12. The Court found the matter suitable for determination on the papers and without oral argument pursuant to Civil Local Rule 7.1.d.1. See Doc. No. 13. For the reasons set forth below, the Court DENIES Defendant's motion to compel arbitration and to stay.


         Plaintiff, a resident of California, applied for a credit card online with Credit One Bank. Upon approval, Credit One Bank mailed Plaintiff a credit card. The parties dispute whether Defendant included its Cardholder Agreement, Disclosure Statement and Arbitration Agreement in the same envelope as Plaintiff's credit card.

         Plaintiff activated his credit card in February 2015. See Doc. No. 10 at 6. Plaintiff began using his credit card for personal and household purposes. Plaintiff closed his credit card account in June 2015 “after paying off the remaining balance.” Complaint ¶ 15. Approximately four (4) months later, Credit One Bank began telephoning Plaintiff and demanding payment. Complaint ¶ 16. However, Plaintiff notified Credit One Bank that there was a $0.00 balance on his account. Complaint ¶ 16. Credit One Bank informed Plaintiff that Plaintiff had not paid the annual card fee. See Complaint ¶ 17. Plaintiff then paid the annual fee, but continued to receive phone calls from Credit One Bank demanding payment for the annual credit card fee. Complaint ¶ 19. Plaintiff contends Credit One Bank “continued making calls, frequently multiple times per day, in an attempt to collect this debt from Plaintiff.” Doc. No. 11 at 6; see Complaint ¶ 20.

         Plaintiff filed the instant action alleging Credit One Bank made these phone calls in violation of California's Rosenthal Debt Collection Practices Act and the Telephone Consumer Protection Act, and that the collection calls were an intrusion into Plaintiff's privacy. Credit One Bank seeks to compel arbitration asserting Plaintiff “expressly agreed” to Credit One Bank's arbitration policy. Doc. No. 10 at 7-8. Plaintiff opposes, contending that he never entered into an arbitration agreement with Credit One Bank.

         Legal Standard

         The Federal Arbitration Act (“FAA”) permits “[a] party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration [to] petition any United States District Court . . . for an order directing that . . . arbitration proceed in the manner provided for in [the arbitration] agreement.” 9 U.S.C. § 4. Upon a showing that a party has failed to comply with a valid arbitration agreement, the district court must issue an order compelling arbitration. Id.

         The Supreme Court has stated that the FAA espouses a general policy favoring arbitration agreements. AT & T Mobility v. Concepcion, 563 U.S. 333, 339 (2011). Federal courts are required to rigorously enforce an agreement to arbitrate. See Id. Courts are also directed to resolve any “ambiguities as to the scope of the arbitration clause itself . . . in favor of arbitration.” Volt Info. Scis., Inc. v. Bd. of Trs. of Leland Stanford Jr. Univ., 489 U.S. 468, 476-77 (1989).

         In determining whether to compel a party to arbitration, the Court may not review the merits of the dispute; rather, the Court's role under the FAA is limited “to determining (1) whether a valid agreement to arbitrate exists and, if it does, (2) whether the agreement encompasses the dispute at issue.” Cox v. Ocean View Hotel Corp., 533 F.3d 1114, 1119 (9th Cir. 2008) (internal quotation marks and citation omitted). If the Court finds that the answers to those questions are “yes, ” the Court must compel arbitration. See Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985). If there is a genuine dispute of material fact as to any of these queries, a district court should apply a “standard similar to the summary judgment standard of [Federal Rule of Civil Procedure 56].” Concat LP v. Unilever, PLC, 350 F.Supp.2d 796, 804 (N.D. Cal. 2004).

         Agreements to arbitrate are valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract. 9 U.S.C. § 2. Courts must apply ordinary state law principles in determining whether to invalidate an agreement to arbitrate. Ferguson v. Countrywide Credit Indus., 298 F.3d 778, 782 (9th Cir. 2002). As such, arbitration agreements may be invalidated by generally applicable contract defenses, such as fraud, duress, or unconscionability. Concepcion, 563 U.S. at 339-41.


         1. The Court May Consider Plaintiff's Challenge to the Arbitration Agreement

         As an initial matter, Defendant contends that to the extent “Plaintiff asserts any challenge to the existence of the arbitration agreement, that issue has been contractually delegated to the arbitrator to decide.” Doc. No. 10 at 9 n.1. Defendant relies on Fischer v. Rent-A-Ctr., ...

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