565 U.S. 95 (2012), 10-948, CompuCredit Corp. v. Greenwood

• Docket Nº: 10-948
• Citation: 565 U.S. 95, 132 S.Ct. 665, 181 L.Ed.2d 586, 80 U.S.L.W. 4034, 23 Fla.L.Weekly Fed. S 37
• Opinion Judge: Scalia Justice
• Party Name: COMPUCREDIT CORP. et al., Petitioners v. WANDA GREENWOOD, et al
• Attorney: Michael W. McConnell argued the cause for petitioners. Scott L. Nelson argued the cause for respondent.
• Judge Panel: Scalia, J., delivered the opinion of the Court, in which Roberts. C.J., and Kennedy, Thomas, Breyer, and Alito, JJ., joined. Sotomayor, J., filed an opinion concurring in the judgment, in which Kagan, J., joined. Ginsburg, J., filed a dissenting opinion. Justice Sotomayor, with whom Justice Kagan...
• Case Date: January 10, 2012
• Court: United States Supreme Court

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565 U.S. 95 (2012)

132 S.Ct. 665, 181 L.Ed.2d 586, 80 U.S.L.W. 4034, 23 Fla.L.Weekly Fed. S 37

COMPUCREDIT CORP. et al., Petitioners

v.

WANDA GREENWOOD, et al

No. 10-948

United States Supreme Court

January 10, 2012

Argued October 11, 2011

SYLLABUS

[181 L.Ed.2d 591] [132 S.Ct. 667] Although respondents' credit card agreement required their claims to be resolved by binding arbitration, they filed a lawsuit against petitioner CompuCredit Corporation and a division of petitioner bank, alleging, inter alia, violations of the Credit Repair Organizations Act (CROA) or Act). The Federal District Court denied the defendants' motion to compel arbitration, concluding that Congress intended CROA claims to be nonarbitrable. The Ninth Circuit affirmed.

Held: Because the CROA is silent on whether claims under the Act can proceed in an arbitral forum, the Federal Arbitration Act (FAA) requires the arbitration agreement to be enforced according to its terms. Pp. ___ - ___, 181 L.Ed.2d, at 592-597.

(a) Section 2 of the FAA establishes " a liberal federal policy favoring arbitration." Moses H. Cone Memorial Hospital v. Mercury Constr. Corp., 460 U.S. 1, 24, 103 S.Ct. 927, 74 L.Ed.2d 765. It requires that courts enforce arbitration agreements according to their terms. See Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 221, 105 S.Ct. 1238, 84 L.Ed.2d 158. That is the case even when federal statutory claims are at issue, unless the FAA's mandate has been " overridden by a contrary congressional command." Shearson/American Express Inc. v. McMahon, 482 U.S. 220, 226, 107 S.Ct. 2332, 96 L.Ed.2d 185. Pp. ___ - ___, 181 L.Ed.2d, at 592-593.

(b) The CROA provides no such command. Respondents contend that the CROA's disclosure provision--which requires credit repair organizations to provide consumers with a statement that includes the sentence " 'You have a right to sue a credit repair organization that violates the [Act],' 15 U.S.C. § 1679c(a)--gives consumers the right to bring an action in a court of law; and that, because the CROA prohibits the waiver of " any right of the consumer under this subchapter," § 1679f(a), the arbitration agreement's waiver of the " right" to bring a court action cannot be enforced. Respondents' premise is flawed. The disclosure provision creates only a right for consumers to receive a specific statement describing the consumer protections that the law elsewhere provides, one of which is the right to enforce a credit repair organization's " liab[ility]" for [181 L.Ed.2d 592] " fail[ure] to comply with [the Act]." § 1679g(a). That provision does not override the FAA's mandate. Its mere contemplation of judicial enforcement does not demonstrate that

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the Act provides consumers with a " right" to initial judicial enforcement. Pp. ___ - ___, 181 L.Ed.2d, at 593-596.

(c) At the time of the CROA's enactment in 1996, arbitration clauses such as the one at issue were no rarity in consumer contracts generally, or in financial services contracts in particular. Had Congress meant to prohibit these very common provisions in the CROA, it would have done so in a manner less obtuse than what respondents suggest. Pp. ___ - ___, 181 L.Ed.2d, at 596-597.

615 F.3d 1204, reversed and remanded.

Michael W. McConnell argued the cause for petitioners.

Scott L. Nelson argued the cause for respondent.

Scalia, J., delivered the opinion of the Court, in which Roberts. C.J., and Kennedy, Thomas, Breyer, and Alito, JJ., joined. Sotomayor, J., filed an opinion concurring in the judgment, in which Kagan, J., joined. Ginsburg, J., filed a dissenting opinion.

OPINION

[132 S.Ct. 668] Scalia Justice

We consider whether the Credit Repair Organizations Act (CROA) or (Act), 15 U.S.C. § 1679 et seq. , precludes enforcement of an arbitration agreement in a lawsuit alleging violations of that Act.

I

Respondents are individuals who applied for and received an Aspire Visa credit card marketed by petitioner CompuCredit

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Corporation and issued by Columbus Bank and Trust, now a division of petitioner Synovus Bank. In their applications they agreed to be bound by a provision which read: " Any claim, dispute or controversy (whether in contract, tort, or otherwise) at any time arising from or relating to your Account, any transferred balances or this Agreement (collectively, 'Claims'), upon the election of you or us, will be resolved by binding arbitration ...." App. 62.

In 2008, respondents filed a class-action complaint against CompuCredit and Columbus in the United States District Court for the Northern District of California, alleging, as relevant here, violations of the CROA. The claims largely involved the defendants' allegedly misleading representation that the credit card could be used to rebuild poor credit and their assessment of multiple fees upon opening of the accounts, which greatly reduced the advertised credit limit.

The District Court denied the defendants' motion to compel arbitration of the claims, concluding that " Congress intended claims under the CROA to be non-arbitrable." 617 F.Supp.2d 980, 988 (2009). A panel of the United States Court of Appeals for the Ninth Circuit affirmed, Judge Tashima dissenting. 615 F.3d 1204 (2010). We granted certiorari, 563 U.S. 973, 131 S.Ct. 2874, 179 L.Ed.2d 1187 (2011).

II

The background law governing the issue before us is the Federal Arbitration Act (FAA), 9 U.S.C. § 1 et seq., enacted in 1925 as a response to judicial hostility to arbitration. AT& T Mobility LLC v. Concepcion, [181 L.Ed.2d 593] 563 U.S. 333, 339, 131 S.Ct. 1740, 179 L.Ed.2d 742, 750 (2011). As relevant here, the FAA provides: " A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle [132 S.Ct. 669] 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.

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This provision establishes " a liberal federal policy favoring arbitration agreements." Moses H. Cone Memorial Hospital v. Mercury Constr. Corp., 460 U.S. 1, 24, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983). See also,

e.g., Concepcion, supra, at 339, 131 S.Ct. 1740, 179 L.Ed.2d 742, 755; Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 25, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991). It requires courts to enforce agreements to arbitrate according to their terms. See Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 221, 105 S.Ct. 1238, 84 L.Ed.2d 158 (1985). That is the case even when the claims at issue are federal statutory claims, unless the FAA's mandate has been " overridden by a contrary congressional command." Shearson/American Express Inc. v. McMahon, 482 U.S. 220, 226, 107 S.Ct. 2332, 96 L.Ed.2d 185 (1987). See also Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 628, 105 S.Ct. 3346, 87 L.Ed.2d 444 (1985). Respondents contend that the CROA contains such a command.

That statute regulates the practices of credit repair organizations, defined as certain entities that offer services for the purpose of " (i) improving any consumer's credit record, credit history, or credit rating; or (ii) providing advice or assistance to any consumer with regard to any activity or service described in clause (i).." ¹ 15 U.S.C. § 1679a(3). In its principal substantive provisions, the CROA prohibits certain practices, § 1679b, establishes certain requirements for contracts with consumers, § 1679d, and gives consumers a right to cancel, § 1679e. Enforcement is achieved through the Act's provision of a private cause of action for violation, § 1679g, as well as through federal and state administrative enforcement, § 1679h.

III

Like the District Court and the Ninth Circuit, respondents focus on the CROA's disclosure and nonwaiver provisions. The former, which is reproduced in full in the Appendix, infra, sets forth a statement that the credit repair organization

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must provide to the consumer before any contract is executed. § 1679c(a). One sentence of that required statement reads, " 'You have a right to sue a credit repair organization that violates the Credit Repair Organization Act.'" The Act's nonwaiver provision states, " Any waiver by any consumer of any protection provided by or any right of the consumer under this subchapter--(1) shall be treated as void; and (2) may not be enforced by any Federal or State court or any other person." § 1679f(a).

The Ninth Circuit adopted the following line of reasoning, urged upon us by respondents here: The disclosure [181 L.Ed.2d 594] provision gives consumers the " right to sue," which " clearly involves the right to bring an action in a court of law." 615 F.3d, at 1208. Because the nonwaiver provision prohibits the waiver of " any right of the consumer under this subchapter," the arbitration agreement--which waived the right to bring an action in a court of law--cannot be enforced. Id., at 1214.

The flaw in this argument is its premise: that the disclosure provision provides consumers with a right to bring an [132 S.Ct. 670] action in a court of law. It does not. Rather, it imposes an obligation on credit repair organizations to supply consumers with a specific statement set forth (in quotation marks) in the statute. The only consumer right it creates is the right to receive the statement, which is meant to describe the consumer protections that the law elsewhere provides. The statement informs consumers, for instance, that they can dispute the accuracy of information in their credit file and that " '[t]he credit bureau must then reinvestigate and modify or remove inaccurate or incomplete...