United States District Court, S.D. California
ORDER GRANTING DEFENDANTS' MOTION TO COMPEL
ARBITRATION [DOC. NO. 8]
MICHAEL M. ANELLO UNITED STATES DISTRICT JUDGE
Anthony Oliver brings this putative class action against
Defendants First Century Bank, N.A. and Stored Value Cards,
Inc. (d/b/a Numi Financial) (“Defendants”),
alleging violations of his Fifth and Fourteenth Amendment
rights and California state law. See Doc. No. 1.
Defendants move to compel arbitration of Plaintiff's
claims. See Doc. No. 8. Plaintiff filed an
opposition to the motion, to which Defendants replied.
See Doc. Nos. 16, 17. The Court took the matter
under submission on the briefs pursuant to Civil Local Rule
7.1.d.1. See Doc. No. 18. For the reasons set forth
below, the Court GRANTS Defendants' motion and STAYS this
action arises out of events surrounding Plaintiff's
arrest and subsequent detention in a county jail in Savannah,
Georgia. In the process of booking Plaintiff into
custody, officers directed Plaintiff to deposit all cash on
his person into an automatic teller machine
(“ATM”) located at the jail. The funds were then
transferred into an inmate trust account for Plaintiff's
use during his period of incarceration. At the time of his
release, $985.00 remained in Plaintiff's inmate trust
account. Plaintiff was given a pre-paid debit card, referred
to as a “release card, ” issued by Defendants.
Officers advised Plaintiff that he could access the full
amount of his remaining funds by using the release card.
Other than a PIN number, Plaintiff claims to have received no
information regarding the terms and conditions of using the
card. Accordingly, Plaintiff alleges that he was unaware that
transaction/service fees would be debited from his account
balance for each use of the card. Nor was he advised that a
weekly maintenance fee would be deducted from his account
months later, Plaintiff was once again detained at the county
jail, forced to deposit his cash into an ATM at the jail, and
received a pre-paid debit card upon release. Plaintiff was
charged similar transaction/service fees for withdrawing
funds, as well as a weekly maintenance fee. Based on these
allegations, Plaintiff brings individual and class claims
against Defendants pursuant to 42 U.S.C. § 1983,
California Business and Professions Code Section 17200,
et seq., and common law.
Cardholder Agreements that accompanied both release cards
provided to Plaintiff include a broad arbitration provision.
See Def. Exs. 3, 4 at ¶ 24. Invoking this
provision, Defendant moves to compel arbitration. Defendants
argue that Plaintiff's claims are subject to the terms
and conditions of the release cards, including the agreement
to arbitrate. Plaintiff opposes the motion to compel, arguing
that the arbitration provision in the Cardholder Agreements
is invalid and unenforceable.
Federal Arbitration Act (“FAA”) provides that a
written provision in a “contract evidencing a
transaction involving commerce to settle by arbitration a
controversy thereafter arising out of such contract . . .
shall be 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. The FAA espouses a
general policy favoring arbitration agreements. See AT
& T Mobility v. Concepcion, 563 U.S. 333, 339
(2011). Nevertheless, an arbitration clause may be challenged
by “generally applicable contract defenses, such as
fraud, duress, or unconscionability.”
Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63,
68 (2010) (internal quotation marks omitted).
moving to compel arbitration must show “(1) the
existence of a valid, written agreement to arbitrate; and, if
it exists, (2) that the agreement to arbitrate encompasses
the dispute at issue.” Ashbey v. Archstone Prop.
Mgmt., Inc., 785 F.3d 1320, 1323 (9th Cir. 2015)
(citation omitted). “However, these gateway issues can
be expressly delegated to the arbitrator where ‘the
parties clearly and unmistakably provide
otherwise.'” Brennan v. Opus Bank, 796
F.3d 1125, 1130 (9th Cir. 2015) (citing AT&T
Technologies, Inc. v. Communications Workers of America,
475 U.S. 643, 649 (1986)); see also Rent-A-Ctr., 561
U.S. at 78 (“‘[Q]uestion[s] of arbitrability'
thus include questions regarding the existence of a legally
binding and valid arbitration agreement”).
issue as framed by the parties is whether a valid agreement
exists between the parties to arbitrate disputes arising out
of Plaintiff's use of the release cards. However, a close
reading of the arbitration provision demonstrates that this
is a question delegated in the agreement to the arbitrator:
This agreement to arbitrate covers all Claims under this
Agreement . . . including, but not limited to, Claims arising
out of or related to . . . the validity, enforceability or
scope of this Arbitration Provision or Agreement.
Def. Ex. 3 at ¶ 24(b)(1). This language
“delegating to the arbitrators the authority to
determine the validity or application of any of the
provisions of the arbitration clause constitutes an
agreement to arbitrate threshold issues concerning the
arbitration agreement, ” and in doing so “clearly
and unmistakably indicates [the parties'] intent for the
arbitrators to decide the threshold question of
arbitrability.” Momot v. ...