Barnett v. Am. Express Nat'l Bank

• Decision Date: 14 September 2021
• Docket Number: Civil Action 3:20-CV-623-HTW-LGI
• Parties: MICHELLE BARNETT PLAINTIFF v. AMERICAN EXPRESS NATIONAL BANK; EXPERIAN INFORMATION SOLUTIONS, INC.; EQUIFAX INFORMATION SERVICES, LLC; and TRANS UNION, LLC DEFENDANTS
• Court: U.S. District Court — Southern District of Mississippi

MICHELLE BARNETT PLAINTIFF v. AMERICAN EXPRESS NATIONAL BANK; EXPERIAN INFORMATION SOLUTIONS, INC.; EQUIFAX INFORMATION SERVICES, LLC; and TRANS UNION, LLC DEFENDANTS

Civil Action No. 3:20-CV-623-HTW-LGI

United States District Court, S.D. Mississippi, Northern Division

September 14, 2021

ORDER

Henry T. Wingate UNITED STATES DISTRICT COURT JUDGE

BEFORE THIS COURT is the defendant American Express National Bank's Motion to Compel Arbitration [Docket no. 55]. Plaintiff Michelle Barnett does not contest whether the arbitration agreement is valid and covers the dispute between the parties sub judice. Plaintiff, however, opposes such motion saying that defendant American Express National Bank waived its right to arbitration, after plaintiff several times before had requested arbitration, but the defendant had refused to participate. This court finds, in agreement with plaintiff, that the defendant American Express National Bank's Motion to Compel Arbitration [Docket no. 55] must be denied.

I. JURISDICTION

Federal courts are courts of limited jurisdiction. The parties have not challenged whether this court possesses subject matter jurisdiction. This court, nevertheless, has an independent obligation to verify it possesses subject matter jurisdiction.^[1]

Federal civil jurisdiction principally arises under Title 28 U.S.C § 1332^[2] and §1331^[3]. The former is commonly referred to as diversity jurisdiction, while the latter is hailed as federal question jurisdiction. Plaintiff, Michelle Barnett, filed, on August 24, 2020, her lawsuit in the Circuit Court of Madison County, Mississippi (hereinafter referred to as “state court”), alleging the defendants, American Express National Bank; Experian Information Solutions, Inc.; Equifax Information Services LLC; and Trans Union LLC, had violated the Fair Credit Reporting Act, a federal enactment, found at Title 15 U.S.C. § 1681^[4] et seq. Defendant Experian Information Solutions, Inc., on September 25, 2020, removed this lawsuit to this federal forum citing federal question jurisdiction. All defendants consented to the removal to this federal forum as required by Title 28 U.S.C. § 1446(b)(2)^[5]. No one disputes that the Fair Credit Reporting Act is a federal enactment; accordingly, this court finds that it possesses federal question subject matter jurisdiction which embraces lawsuits structured on the United States Constitution and federal enactments. See United States v. Eli Lilly & Co., Inc., 4 F.4th 255, 261 (5th Cir. 2021) and Washington v. Direct Gen. Ins. Agency, 130 F.Supp.2d 820, 825 (S.D.Miss. 2000).

II. FACTUAL BASIS

Plaintiff Michelle Barnett (hereinafter referred to as “Barnett”) requested, and defendant American Express National Bank (hereinafter referred to as “American Express”) opened an American Express Business Gold Rewards credit card account ending in 8001 (hereinafter referred to as the “Account”) on or about May 26, 2010. American Express mailed Barnett her credit card along with a copy of the cardmember agreement governing the Account when the Account was opened. All American Express cardmember agreements, including Barnett's, provide that use of the credit card constitutes acceptance of the agreement. Barnett, thereafter, began to use the card.

On or about July 12, 2011, and October 11, 2013, American Express mailed Barnett updates to the cardmember agreement governing the Account. The Arbitration Agreement, contained within the 2012 cardmember agreement and operative 2013 cardmember agreement (hereinafter referred to as the “Cardmember Agreement”), provides the following, relevant, language:

Claims Resolution

. . . You may reject the arbitration provision by sending us written notice within 45 days after your first card purchase, or by February 15, 2013, whichever is later. See Your Right to Reject Arbitration below.

For this section, [“]you and us[”] includes any corporate parents, subsidiaries, affiliates or related persons or entities. 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: (1) initial claims, counterclaims, crossclaims and third-party claims; (2) claims based upon contract, tort, fraud, statute, regulation, common law and equity; (3) claims by or against any third party using or providing any product, service or benefit in connection with any account; and (4) claims that arise from or relate to (a) any account created under any of the agreements, or any balances on any such account, (b) advertisements, promotions or statements related to any accounts, goods or services financed under any accounts or terms of financing, (c) benefits and services related to card membership (including fee-based or free benefit programs, enrollment services and rewards programs) and (d) your application for any account. . .

Arbitration

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

If arbitration is chosen by any 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.

Initiating Arbitration

. . . You or we may otherwise elect to arbitrate any claim at any time unless it has been filed in court and trial has begun or final judgment has been entered....

Continuation

This section will survive termination of your Account ....

After receiving the updated cardmember agreements in October 2012, and October 11, 2013, Barnett made purchases on the Account. Barnett did not elect to reject the Arbitration Agreement in the Cardmember Agreement.

Barnett alleges that consumer background reports issued by Equifax Information Services, LLC (hereinafter referred to as “Equifax”); Trans Union, LLC (hereinafter referred to as “TransUnion”); and Experian Information Solutions, Inc. (hereinafter referred to as “Experian”) (hereinafter collectively referred to as the “Bureaus”) contained inaccurate information about her Account. According to Barnett, sometime in 2016, an unknown person had made multiple fraudulent charges to her Account. She further claims she disputed the fraudulent charges multiple times with American Express. Allegedly, she says, despite knowing the charges were fraudulent, American Express charged off the Account as “an unpaid debt and reported [Barnett's] American Express account to Defendants Experian, Equifax, and Trans Union as a derogatory, charged-off account for inclusion on [Barnett's] Experian, Equifax, and TransUnion consumer reports, thereby damaging [her] credit history”.

Barnett ultimately paid in full the amount she says she believed she owed for all legitimate charges made on her American Express credit card, leaving unpaid the supposedly fraudulent charges as the only remaining balance on the credit card. American Express, either in 2017 or early 2018, reported the balance for the alleged fraudulent charges on Plaintiff's American Express credit card to Experian, Trans Union and Equifax for inclusion on the Plaintiff's credit reports as a charged-off, delinquent debt. According to defendants, the total charged-off amount is $2, 855.74.

On the dates: September 28, 2018; October 23, 2018; and October 29, 2018, Barnett informed American Express in writing, that she had elected to exercise her right to arbitrate American Express's claim that she owed the “fraudulent” charges.

Barnett's letters to American Express dated September 28, 2018, October 23, 2018, and October 29, 2018, all contain the following relevant language:

Dispute Reference Number NGN5076

This letter is in response to your letter dated [September 10, 2018; October 10, 2018; and October 17, 2018] (copy enclosed)

I dispute the fraudulent charges on this alleged (sic) account. American Express was made aware of these charges within 30 days of the alleged fraud. We have provided copies of the disputed charges to Angela Martin in November of 2016, and Antonio Martin in November[, ] 2017. Despite my attempts to dispute these charges, you have continued to attempt to collect these disputed, fraudulent charges and to report it (sic) to a credit agency. Please provide me with information and documentation of your investigation into these charges, including, without limitation, any information or correspondence between you and Apple.

As per the FDCPA, I have the right to request proper validation of the alleged debt.

I elect private contractual arbitration via JAMS to resolve any disputes between us.

[Docket nos. 65-1, 65-2, and 65-3] (Emphasis added).

In spite of Barnett's arbitration request, American Express filed a collections lawsuit against Barnett in the County Court of Madison County, Mississippi on May 9, 2019, seeking a judgment against her for the disputed balance on Barnett's American Express credit card.

Even after American Express' suit against her, Barnett disputed American Express' claims. On the dates of July 13, 2019; February 3, 2020; April 28, 2020; and July 14 2020, Barnett continued her challenge and questioned American Express' commitment to investigate the...