United States District Court, E.D. California
LORI ANN GONZALEZ, individually and on behalf of others similarly situated, Plaintiff,
COMENITY CAPITAL BANK, DOES 1-30, Defendants.
ORDER ON DEFENDANT COMENITY CAPITAL BANK'S MOTION
TO COMPEL ARBITRATION (DOC. NO. 20)
a putative class action in which Plaintiff Lori Ann Gonzalez
(“Gonzalez”) alleges that Defendant Comenity
Capital Bank (“Comenity Capital”) has violated
California statutes relating to identity theft in connection
with credit card accounts branded for retailers Blair and
Overstock.com (the “Accounts” or, individually,
the “Account”). Comenity Capital contends that
arbitration agreements apply to Gonzalez's claims as to
both Accounts and has brought a motion for an order
compelling arbitration pursuant to the terms of those
agreements. For the reasons set forth below, the Court will
deny Comenity Capital's motion to compel arbitration
without prejudice pending a summary determination as to the
existence of the arbitration agreements.
action involves a credit card accounts issued by Comenity
Capital and branded for retailers “Blair” and
“Overstock.com.” See Doc. No. 1, Ex. A
(Complaint). Gonzalez contends that she did not open the
Accounts and filed an action against Comenity Capital in
Fresno County Superior Court alleging various forms of
misconduct on Comenity Capital's part in connection with
her claims of identity theft. Id., Ex. A. For
example, Gonzalez alleges that Comenity Capital
“pursued [her] for a debts she did not owe” on
the Accounts; “ignored her when she said the accounts
were not hers”; and “ignored her requests for
information about the alleged debts, violating California
laws for how creditors and debt collector[s] must respond to
reports of identity theft.” Id., Ex. A ¶
1. Further, Gonzalez alleges that Comenity Capital failed to
notify her that her claims of identity theft with respect to
the Accounts “must be in writing, ” id.,
Ex. A ¶ 21; failed to provide “information and
documents” Gonzalez requested with respect to the
Accounts, id., Ex. A ¶ 47; improperly
threatened her with legal action to collect debts on the
Accounts, id. Ex. A ¶ 64; and “failed to
diligently investigate [Gonzalez's] notification of
identity theft” with respect to the Accounts.
Id., Ex. A ¶ 99.
on these and other such allegations, Gonzalez brought claims
against Comenity Capital under the California Identity Theft
Act (“CITA”), California's Rosenthal Fair
Debt Collection Practices Act (the “Rosenthal
Act”), the California Penal Code, and California's
Unfair Competition Law (“UCL”). Id., Ex.
A, pp. 10-15. The CITA claim is brought individually, while
the claims under the Rosenthal Act, Penal Code and UCL are
brought individually and on a class basis. Id.
Comenity Capital removed the action to this Court based on
diversity jurisdiction on March 14, 2019, see Doc.
No. 1, and later filed the instant motion to compel
arbitration. See Doc. No. 20. The Court denied
Gonzalez's motion to remand in an Order dated October 21,
2019, Doc. No. 39, and now addresses Comenity Capital's
motion to compel arbitration.
MOTION TO COMPEL ARBITRATION
Capital argues that the Court is required under the Federal
Arbitration Act (“FAA”) to send this action to
arbitration in its entirety because the agreements governing
the Accounts (the “Credit Card Agreements” or,
individually, the “Credit Card Agreement”)
include valid and enforceable arbitration provisions (the
“Arbitration Provisions” or, individually, the
“Arbitration Provision”) that encompass all of
Gonzalez's claims and bars her from arbitrating any of
the claims at issue on a class basis. Doc. No. 20, Part
III.A. Comenity Capital also seeks a stay of this action
pending arbitration of Gonzalez's claims. Id.,
to Comenity Capital, the “totality of the
evidence” shows that Gonzalez entered into the Credit
Card Agreements - and manifested assent to the Arbitration
Provisions - because she opened, used and managed the
Accounts; was provided with the Credit Card Agreements online
and by mail; and did not opt out of the Arbitration
Provisions. Id., Part III.A.3.
support of this argument, Comenity Capital filed, inter
alia, a declaration (the “Comenity Capital
Declaration”) supported by business records and
executed by a company paralegal with knowledge of Comenity
Capital's records and record-keeping practices, Doc.
No. 20-1 ¶ 3, that shows the following:
• The Accounts were opened through online applications
containing Gonzalez's name, home address, date of birth,
social security number and phone number, Doc. No. 20-1,
¶¶ 6-8, 27-29;
• The Credit Card Agreements were displayed on-screen at
the time the online applications for the Accounts were
submitted, id. ¶¶ 7, 28;
• Comenity Capital mailed numerous items relating to the
Accounts to Gonzalez's home address after the
applications for the Accounts had been submitted online -
including the Credit Card Agreements, billing statements and
letters - and none of these items were returned to Comenity
Capital as undeliverable, id. ¶¶ 9-10, 26,
30-31, 37, 40;
• The Accounts were used to make multiple purchases that
posted in 2016 and 2017 and were shipped to Gonzalez's
home address, id. ¶¶ 13, 14, 20, 34;
• Online bill pay accounts were setup for the Accounts
using Gonzalez's email address, id. ¶ 15,
• The online bill pay accounts for the Accounts were
accessed on numerous occasions, id. ¶¶ 18,
• Numerous telephone calls were placed to Comenity
Capital from the phone number in the online applications for
the Accounts, id. ¶¶ 22-23, 25, 38; and
• Various payments and attempts to make payment were
made with respect to the Accounts. Id. ¶¶
16, 23-24, 38.
Comenity Capital Declaration also states:
During a phone call with Comenity Servicing on June 28, 2017,
Ms. Gonzalez stated that her kids like some of the items, but
the Overstock people told her that she couldn't keep some
items unless she paid for all of them.
Doc. No. 20-1 at 4:9-12.
the Comenity Capital Declaration attaches authenticated
copies of the Credit Card Agreements, as sent to
Gonzalez's home address and as displayed on-screen at the
time the online applications for the Accounts were submitted.
The Arbitration Provisions in the Credit Card Agreements
contain, inter alia, the following paragraphs:
C. Arbitration provision.
READ THIS ARBITRATION PROVISION CAREFULLY. IF YOU DO NOT
REJECT THIS ARBITRATION PROVISION IN ACCORDANCE WITH
PARAGRAPH C.1. BELOW, IT WILL BE PART OF THIS AGREEMENT AND
WILL HAVE A SUBSTANTIAL IMPACT ON THE WAY YOU OR WE WILL
RESOLVE ANY CLAIM WHICH YOU OR WE HAVE AGAINST EACH OTHER NOW
OR IN THE FUTURE.
2. Parties Subject to Arbitration: Solely as
used in this Arbitration Provision (and elsewhere in this
Agreement), the terms ‘we,' ‘us,' and
‘our' mean (a) Comenity Capital Bank, any parent,
subsidiary or affiliate of the Bank and the employees,
officers and directors of such companies (the ‘Bank
Parties'); and (b) any other person or company that
provides any services in connection with this Agreement if
you assert a Claim against such other person or company at
the same time you assert a Claim against any Bank Party.
3. Covered Claims: ‘Claim' means
any claim, dispute or controversy between you and us that in
any way arises from or relates to this Agreement, the
Account, the issuance of any Card, any rewards program, any
prior agreement or account. ‘Claim' includes
disputes arising from actions or omissions prior to the date
any Card was issued to you, including the advertising related
to, application for or approval of the Account.
‘Claim' has the broadest possible meaning, and
includes initial claims, counterclaims, cross-claims and
third-party claims. It includes disputes based upon contract,
tort, consumer rights, fraud and other intentional torts,
constitution, statute, regulation, ordinance, common law and
equity (including any claim for injunctive or declaratory
relief . . . .
4. Starting an Arbitration: Arbitration may
be elected by any party with respect to any Claim, even if
that party has already initiated a lawsuit with respect to a
different Claim. Arbitration is started by giving a written
demand for arbitration to the other party. . . .
7. Prohibition Against Certain Proceedings: IF YOU OR WE
ELECT TO ARBITRATE A CLAIM: (1) NEITHER YOU NOR WE MAY
PARTICIPATE IN A CLASS ACTION IN COURT OR IN CLASS-WIDE
ARBITRATION, EITHER AS A PLAINTIFF, DEFENDANT OR CLASS
MEMBER; (2) NEITHER YOUR NOR WE MAY ACT AS A PRIVATE ATTORNEY
GENERAL IN COURT OR IN ARBITRATION; (3) CLAIMS BROUGHT BY OR
AGAINST YOU MAY NOT BE JOINED OR CONSOLIDATED WITH CLAIMS
BROUGHT BY OR AGAINST ANY OTHER PERSON; AND (4) THE
ARBITRATOR SHALL HAVE NO ...