Klein v. Experian Info. Sols.

HINDY KLEIN, Plaintiff, v. EXPERIAN INFORMATION SOLUTIONS, INC., et al., Defendants.

19-CV-11156 (PMH)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

October 29, 2020

MEMORANDUM OPINION AND ORDER

PHILIP M. HALPERN, United States District Judge:

Plaintiff Hindy Klein ("Plaintiff") brings this action against Experian Information Solutions, Inc. ("Experian"), Transunion, LLC¹ ("Transunion"), Equifax Information Services, LLC ("Equifax"), American Express Company² ("Amex"), and Chase Bank (USA), N.A. ("Chase" and collectively, "Defendants") alleging that each willfully or negligently violated the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681, et seq. (Doc. 1, "Compl.").³

Before the Court is Amex's motion to compel Plaintiff to arbitrate her claims and stay the action against Amex pursuant to the Federal Arbitration Act ("FAA"), 9 U.S.C. § 1, et seq. Amex filed its motion on June 18, 2020 (Doc. 44; Doc. 45, "Amex Br."), Plaintiff filed her opposition onJune 26, 2020 (Doc. 51, "Opp'n. Br."), and the motion was fully briefed with Amex's submission of a reply memorandum of law on July 15, 2020 (Doc. 54, "Reply Br.").⁴

For the reasons set forth below, Amex's motion to compel arbitration and stay the action against it pending the resolution of arbitration is GRANTED.

BACKGROUND

I. Plaintiff's Allegations Against Amex

Plaintiff complains that Amex furnished inaccurate information to Experian, Equifax, and Transunion, which, in turn, led those companies to produce credit reports about Plaintiff that contained inaccurate information. (See generally Compl. ¶¶ 18-30). Specifically, Plaintiff alleges that the credit reports produced by Experian, Equifax, and Transunion indicated that Plaintiff's Amex "account ha[d] the status as charged off but yet the account still include[d] a current past due balance"—which was illogical because "[t]he debt cannot be charged off and still be[] reflected [as] a past due balance"—and that, in any event, the "past due amount [was] different from the balance" that Plaintiff actually owed to Amex. (Id. ¶¶ 20-21). Although Plaintiff protested that the information regarding Amex was incorrect, Amex "failed to conduct a reasonable investigation and continued to report false and inaccurate, adverse information on the consumer report of the Plaintiff with respect to the disputed account, and is still reporting a past due balance owed different from the overall balance despite the charge off status." (Id. ¶ 25). On these allegations, Plaintiff maintains that Amex willfully or negligently violated the FCRA. (Id. ¶¶ 85-104).

II. The Cardmember Agreement

Plaintiff opened a credit card account with Amex "in or about May 2016." (Herr Decl. ¶ 3). When Plaintiff opened her account, Amex sent her a copy of a written Cardmember Agreement ("Cardmember Agreement") which "set[] forth the terms and conditions of the cardmember's account." (Id.). According to the Cardmember Agreement, Plaintiff accepted the terms of the contract by "us[ing] the Account" or by "sign[ing] or keep[ing] the card." (Id. Ex. A at 8). The Agreement contained an arbitration clause that advised as follows:

You or we may elect to resolve any claim by individual arbitration. Claims are decided by a neutral arbitrator.

If arbitration is chosen by either party, neither you nor we will have the right to litigate that claim in court or have a jury trial on that claim. Further, you and we will not have the right to participate in a representative capacity or as a member of any class pertaining to any claim subject to arbitration. Arbitration procedures are generally simpler than the rules that apply in court, and discovery is more limited. The arbitrator's decisions are as enforceable as any court order and are subject to very limited review by a court. Except as set forth below, the arbitrator's decision will be final and binding. Other rights you or we would have in court may also not be available in arbitration.

(Id. Ex. A at 13 (bold in original)). As for what constitutes a "claim," the Cardmember Agreement provided:

Claim means any current or future claim, dispute or controversy relating to your Account(s), this Agreement, or any agreement or relationship you have or had with us, except for the validity, enforceability or scope of the Arbitration provision. Claim includes but is not limited to . . . (2) claims based upon contract, tort, fraud, statute, regulation, common law and equity . . . .

(Id. (bold and italics in original, underline added)).

Notably, Plaintiff was not bound to accept the Cardmember Agreement's arbitration clause. Under the heading, "Your Right to Reject Arbitration," the contract outlined the processrequired to reject arbitration and noted that, "[i]f your rejection notice complies with these requirements, this Arbitration provision and any other arbitration provisions in the cardmember agreements for any other currently open American Express accounts you have will not apply to you . . . ." (Id. Ex. A at 13-14 (bold in original)). The Cardmember Agreement also warned that Amex would provide information to credit reporting companies. The contract explained, "You agree that we will give information about the Account to the credit reporting agencies. We will tell a credit reporting agency if you fail to comply with any term of this Agreement. This may have a negative impact on your credit report." (Id. Ex. A at 11; see also id. Ex. A at 2-3 (outlining how credit reports are used in issuing credit and Plaintiff's "right to dispute any inaccurate information" therein)). That same section provided an address for Plaintiff to contact in the event Plaintiff believed Amex provided incorrect information. (Id. Ex. A at 11).

The Cardmember Agreement also contained a severability clause which provided that "[t]his section will survive termination of your Account . . . . If any portion of this Claims Resolution section, except as otherwise provided in the Limitations on Arbitration subsection, is deemed invalid or unenforceable, it will not invalidate the remaining portions of this Claims Resolution section." (Id. Ex. A at 14). Finally, pertinent to the analysis herein, the contract states on its face that, "Utah law and federal law govern this Agreement and your Account. They govern without regard to internal principles of conflicts of laws. We are located in Utah. We hold your Account in Utah. We entered into this Agreement with you in Utah." (Id. Ex. A at 12). The parties agree that Utah law governs the agreement. (Amex Br. at 6 ("American Express cardmember agreements are expressly governed by a Utah choice-of-law provision."); Opp'n. Br. at 5 ("The applicable state law is Utah . . . .")).

STANDARD OF REVIEW

"In deciding motions to compel [arbitration], courts apply a 'standard similar to that applicable to a motion for summary judgment.'" Nicosia v. Amazon.com, Inc., 834 F.3d 220, 229 (2d Cir. 2016) (quoting Bensadoun v. Jobe-Riat, 316 F.3d 171, 175 (2d Cir. 2003)). "As on a motion for summary judgment, the parties may submit documents in support or opposition of their motion, and the court 'consider[s] all relevant, admissible evidence submitted by the parties and contained in pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, and draws all reasonable inferences in favor of the non-moving party.'" Cornelius v. Wells Fargo Bank, N.A., No. 19-CV-11043, 2020 WL 1809324, at *4 (S.D.N.Y. Apr. 8, 2020) (quoting Chambers v. Time Warner, Inc., 282 F.3d 147, 155 (2d Cir. 2002) (alteration in original)). "If the party seeking arbitration demonstrates its entitlement to arbitration by a showing of evidentiary facts, the burden then shifts to the opposing party to submit evidentiary facts demonstrating there is a dispute of fact showing that the agreement is inapplicable or invalid." Id.; see also Citadel Servicing Corp. v. Castle Placement, LLC, 431 F. Supp. 3d 276, 284 (S.D.N.Y. 2019) ("[T]he 'party to an arbitration agreement seeking to avoid arbitration generally bears the burden of showing the agreement to be inapplicable or invalid.'" (quoting Harrington v. Atl. Sounding Co., 602 F.3d 113, 124 (2d Cir. 2010))). Opposition "may not rest on a denial but must submit evidentiary facts showing that there is a dispute of fact to be tried." Citadel Servicing Corp., 431 F. Supp. 3d at 284 (quoting Oppenheimer & Co. v. Neidhardt, 56 F.3d 352, 358 (2d Cir. 1995)). "'If undisputed facts in the record require[] the issue of arbitrability to be resolved against the [p]laintiff as a matter of law,' then a district court must compel arbitration." Shetiwy v. Midland Credit Mgmt., 959 F. Supp. 2d 469, 473 (S.D.N.Y. 2013) (quoting Bensadoun, 316 F.3d at 175 (alterations in original)).

ANALYSIS

I. Motion to Compel Arbitration

The FAA—which the parties agree governs this dispute—provides in pertinent part:

A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction . . . 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. "This provision establishes 'a liberal federal policy favoring arbitration agreements,'" CompuCredit Corp. v. Greenwood, 565 U.S. 95, 98 (2012) (quoting Moses H. Cone Mem. Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983)), and "reflects the overarching principle that arbitration is a matter of contract," Am. Exp. Co. v. Italian Colors Rest., 570 U.S. 228, 233 (2013). See also Marmet Health Care Ctr., Inc. v. Brown, 565 U.S. 530, 532-33 (2013) (explaining that the FAA "requires courts to enforce the bargain of the parties to arbitrate" (internal quotation marks omitted)); AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 336 (2011) (noting that "courts must place arbitration agreements on an equal footing with other contracts"); Rent-A-Ctr., W...