United States District Court, E.D. California
LORI ANN GONZALEZ, individually and on behalf of others similarly situated, Plaintiff,
COMENITY BANK, DOES 1-30, Defendants.
ORDER ON DEFENDANT COMENITY BANK'S MOTION TO
COMPEL ARBITRATION (Doc. No. 22)
a putative class action in which Plaintiff Lori Ann Gonzalez
(“Gonzalez”) alleges that Defendant Comenity Bank
(“Comenity”) has violated California statutes
relating to identity theft in connection with credit cards
branded for a clothing retailer called “The
Limited.” Comenity contends that an arbitration
agreement applies and has brought a motion for an order
compelling arbitration pursuant to the terms of that
agreement. For the reasons set forth below, the Court will
deny Comenity's motion to compel arbitration without
prejudice pending a summary determination as to the existence
of an arbitration agreement.
action involves a credit card account (the
“Account”) issued by Comenity and branded for a
clothing retailer called “The Limited.” Doc. No.
1, Ex. A (Complaint). Gonzalez contends that she did not open
the Account and filed an action against Comenity in Fresno
County Superior Court alleging various forms of misconduct on
Comenity's part in connection with her claim of identity
theft. Id., Ex. A. For example, Gonzalez alleges
that Comenity “pursued [her] for a debt she did not
owe” on the Account; “ignored her when she said
the account was not hers”; and “ignored her
requests for information about the alleged debt, 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
failed to notify her that her claim of identity theft with
respect to the Account “must be in writing, ”
id., Ex. A, ¶ 52; failed to provide
“information and/or documents” Gonzalez requested
with respect to the Account, id., Ex. A ¶ 55;
and “failed to diligently investigate [Gonzalez's]
notification of identity theft” with respect to the
Account. Id., Ex. A ¶ 69.
on these and other such allegations, Gonzalez brought claims
against Comenity 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.
7-10. 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 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. 22. The Court denied Gonzalez's
motion to remand in an Order dated October 21, 2019, Doc. No.
40, and now addresses Comenity's motion to compel
MOTION TO COMPEL ARBITRATION
argues that the Court is required under the Federal
Arbitration Act (“FAA”) to send this action to
arbitration in its entirety because the agreement governing
the Account (the “Credit Card Agreement”)
includes a valid and enforceable arbitration provision (the
“Arbitration Provision”) that encompasses all
four of Gonzalez's claims and bars her from arbitrating
any claims on a class basis. Doc. No. 22, Part III.A.
Comenity also seeks a stay of this action pending arbitration
of Gonzalez's claims. Id., Part III.C.
to Comenity, the “totality of the evidence” shows
that Gonzalez entered into the Credit Card Agreement - and
manifested assent to the Arbitration Provision - because she
opened, used and managed the Account; was provided with the
Credit Card Agreement on two occasions; and did not opt out
of the Arbitration Provision. Id., Part III.A.3.
support of this argument, Comenity filed, inter
alia, a declaration (the “Comenity
Declaration”) supported by business records and
executed by a company paralegal with knowledge of
Comenity's records and record-keeping practices,
Doc. No. 22-1 ¶ 3, that shows the
• The Account was opened on or about July 26, 2016
through an online application containing Gonzalez's name,
home address, date of birth, social security number and phone
number, Doc. No. 22-1, ¶¶ 6, 8, 21;
• The Credit Card Agreement was displayed on-screen at
the time the online application for the credit card was
submitted, id. ¶¶ 7-8;
• Comenity mailed numerous items relating to the Account
to Gonzalez's home address after the application for the
Account had been submitted online - including the Credit Card
Agreement, more than two dozen billing statements, several
letters, and the credit card itself - and none of these items
were returned to Comenity as undeliverable, id.
¶¶ 8-9, 18a;
• The Account was used to make purchases that posted in
November 2016 and December 2016, id. ¶ 16;
• An online bill pay account was setup for the Account
in December 2016 using Gonzalez's email address,
id. ¶ 15;
• Payments on the Account were scheduled through the
online bill pay account in December 2016, January 2017 and
April 2017, id. ¶ 16;
• Numerous telephone calls were placed to Comenity
between August 2016 and April 2017 from the phone number in
the online application for the Account, id. ¶
• On June 28, 2017, Comenity called Gonzalez at the
phone number in the online application for the Account and
spoke to her about the delinquent balance on the credit card.
Id. ¶ 17.
the Comenity Declaration attaches an authenticated version of
the Credit Card Agreement, as sent to Gonzalez's home
address and as displayed online at the time the online
application for the Account was submitted. The Arbitration
Provision in the Credit Card Agreement contains, 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.
1. Your Right to Reject: If you don't want this
Arbitration Provision (and any prior arbitration agreement
between you and us (“Prior Arbitration
Agreement”)) to apply, you may reject it by mailing us
a written rejection notice which gives the name of each
Cardholder and contains a statement that you (both of you, if
more than one) reject the Arbitration Provision of this
Agreement. The rejection notice must be sent to us at
Comenity Bank, PO Box 182422, Columbus, Ohio 43218-2422. A
rejection notice is only effective if it is signed by you
(all of you, if more than one) and if we receive it within
thirty (30) calendar days after the date we first provide you
with a credit card agreement or written notice providing you
a right to reject this Arbitration Provision. Your rejection
of this Arbitration Provision will not affect any other
provision of this Agreement or your ability to obtain credit.
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 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 ...