Coppock v. Citigroup, Inc.

• Decision Date: 22 March 2013
• Docket Number: CASE NO. C11-1984-JCC
• Court: U.S. District Court — Western District of Washington
• Parties: GLORIA I. COPPOCK, Plaintiff, v. CITIGROUP, INC., CITIBANK, N.A., successor in interest to Citibank (South Dakota), N.A., DOES 1-10 and COLLECTION AGENTS 1-10, Defendants.

GLORIA I. COPPOCK, Plaintiff,

v. CITIGROUP, INC., CITIBANK, N.A.,successor in interest to Citibank (South Dakota),N.A., DOES 1-10 and COLLECTION AGENTS 1-10, Defendants.

CASE NO. C11-1984-JCC

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE

DATED: March 22, 2013

THE HONORABLE JOHN C. COUGHENOUR

ORDER GRANTING

DEFENDANTS' MOTION TO

COMPEL ARBITRATION AND

DENYING PLAINTIFF'S MOTION

TO COMPEL DISCOVERY

This matter comes before the Court on Defendants Citigroup, Inc.'s and Citibank, N.A.'s ("Citi's") motion to compel arbitration and stay this action pending arbitration (Dkt. No. 43) and Plaintiff Gloria Coppock's motion to compel discovery (Dkt. No. 55). Having thoroughly considered the parties' briefing¹ and the relevant record, the Court finds oral argument unnecessary and hereby GRANTS Defendants' motion to compel arbitration (Dkt. No. 43) and denies Coppock's motion to compel discovery (Dkt. No. 55) for the reasons explained herein.

I. BACKGROUND

This is a putative class action asserting violations of the Telephone Consumer Protection Act ("TCPA"), the Fair Debt Collection Practices Act ("FDCPA"), and Washington's Consumer Protection Act ("CPA"). (Dkt. No. 40 § III.) Coppock alleges that, "on ten to fifteen occasions, [Citi] . . . plac[ed] calls to [her] cellular telephone" using "'automatic telephone dialing equipment,' including predictive dialer equipment," "in order to collect a debt allegedly owed by" her under her Citi credit card. (Id. at 3-4 ¶¶ 2.3, 2.5.) Citi moves to compel arbitration of Coppock's claims.

Coppock opened a credit card account with Citi in 1994. (Id. ¶ 7.) The card agreement governing the account authorized Citi to change the terms of the agreement at any time, with changes binding on the card holder. (Dkt. No. 44 Exs. 1 at 5, 9 at 2, 12 at 10, 15 at 12.) In October 2001, Citi mailed its card holders, including Coppock, a "Notice of Change in Terms Regarding Binding Arbitration to Your Citibank Card Agreement." (Dkt. No. 44 ¶¶ 10-11, 13-16 & Exs. 2 & 5.) Coppock's October and November 2001 billing statements also included messages in all-capital letters alerting Coppock to the notice of change in terms. (Id. ¶¶ 11-12 & Ex. 3-4.) The notice added to the card agreement an arbitration agreement allowing either party to demand individual (non-class) arbitration. (Id. Ex. 2.) It further provided:

If you do not wish to accept the binding arbitration provision contained in this change in terms notice, you must notify us in writing within 26 days after the Statement/Closing date indicated on your November 2001 billing statement stating your non acceptance . . . . If you notify us by that time that you do not accept the binding arbitration provisions contained in this change in terms notice, you can continue to use your card(s) under your existing terms until the end of your current membership year or the expiration date on your card(s), whichever is later. At that time your account will be closed and you will be able to pay off your remaining balance under your existing terms.

(Id. ¶ 17 & Ex. 2 at 5.) Coppock did not contact Citi to reject the arbitration provision. (Id. ¶¶ 18-19 & Ex. 6.) Citi sent another notice of change in terms, making certain amendments to the arbitration agreement, in 2005, and again alerted Coppock to the notice in her billingstatement and gave her the option of opting out of the changes. (Id. ¶ 21 & Exs. 7-8.) Citi sent Coppock several subsequent card agreements, all of which contained the arbitration agreement. (Id. ¶¶ 22-30, Exs. 9-10, 12-13, 15-16.) Coppock continued to use her Citi credit card following receipt of these agreements, until shortly after she began receiving the phone calls from Citi at issue in this case. (Id. ¶¶ 24, 27, 30; Dkt. No. 40 at 3 ¶ 2.4.)

II. DISCUSSION

The Federal Arbitration Act ("FAA") provides that arbitration agreements "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. In deciding a motion to compel arbitration, a court's role is "limited to determining (1) whether a valid agreement to arbitrate exists and, if it does, (2) whether the agreement encompasses the dispute at issue." Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 2000). The court applies a summary judgment-like standard to factual disputes. Concat LP v. Unilever, PLC, 350 F. Supp. 2d 796, 804 (N.D. Cal. 2004).

A. Whether A Valid Arbitration Agreement Exists

1. Choice Of Law

"[A] federal court sitting in diversity applies the conflict-of-law rules of the state in which it sits," but where jurisdiction is based on the existence of a federal question, "federal common law applies to the choice-of-law rule determination." Daugherty v. Experian Info. Solutions, Inc., 847 F. Supp. 2d 1189, 1194 (N.D. Cal. 2012) (quoting Schoenberg v. Exportadora de Sal, S.A. de C.V., 930 F.2d 777, 782 (9th Cir. 1991)). This Court has jurisdiction over Coppock's complaint under both 28 U.S.C. §§ 1331 and 1367(a) (federal question and supplemental jurisdiction) and 1332(a) (diversity jurisdiction). Both Washington and the federal common law follow the Restatement (Second) of Conflict of Laws. Daugherty, 847 F. Supp. 2d at 1194; Erwin v. Cotter Health Ctrs., 167 P.3d 1112, 1121 (Wash. 2007). Restatement § 187(2) provides:

The law of the state chosen by the parties to govern their contractual rights and duties will be applied . . . unless either

(a) the chosen state has no substantial relationship to the parties or the transaction and there is no other reasonable basis for the parties' choice, or

(b) application of the law of the chosen state would be contrary to a fundamental policy of a state which has a materially greater interest than the chosen state in the determination of the particular issue and which, under the rule of § 188, would be the state of the applicable law in the absence of an effective choice of law by the parties.

Coppock's card agreement with Citi provides that "[t]he terms and enforcement of this Agreement shall be governed by federal law and the law of South Dakota, where we are located." (Dkt. No. 44 Exs. 1 at 5, 9 at 2, 12 at 10, 15 at 16.) Coppock asserts that, notwithstanding this forum selection clause, Washington law applies. The only argument she makes in support is that, under Restatement § 188, Washington would be the state of the applicable law in the absence of the forum selection clause. (Dkt. No. 47 at 9.) But even if Coppock were correct, in order for Washington law to apply under § 187(2)(b), South Dakota law would have to contravene a fundamental policy of Washington, and Washington would have to have a materially greater interest than South Dakota in determining whether Coppock agreed to the arbitration provisions. Coppock has argued nothing to that effect. And nor does the exception in § 187(2)(a) apply. South Dakota has a substantial relationship to Citi: The card agreement provides that South Dakota is "where we [Citi Defendants] are located" (Dkt. No. 44 Exs. 1 at 5, 9 at 2, 12 at 10, 15 at 16), and thus there is a "reasonable basis for the parties' choice" of South Dakota. Restatement § 187(2)(a). The Court thus applies South Dakota law. See, e.g., Daugherty, 847 F. Supp. 2d at 1195 (applying South Dakota law "to resolve the question of whether the arbitration provision is valid," where Citi card holder "has not argued, let alone established that South Dakota law is contrary to a fundamental policy of . . . California"); Guerrero v. Equifax Credit Info. Servs., Inc., No. CV 11-6555 PSG (PLAx), 2012 WL 7683512, at *6 (C.D. Cal. Feb. 24, 2012) (applying South Dakota law to resolve question of whether Citicard holder "entered into the arbitration agreement when he was mailed the 2001 Change-in-Terms, failed to take advantage of the optout provision, and continued to use the card").

Coppock confusingly cites to a case in which there was a "chicken and egg" problem in deciding which state's law applied—because the parties disputed whether the plaintiff had ever agreed to the contract that contained the forum selection clause in the first place—and in which the court concluded it did not need to decide which state's law governed because the outcome was the same under both. Nguyen v. Barnes & Noble, Inc., No. 8:12-cv-0812-JST (RNBx), 2012 WL 3711081, at *3 & n.3 (C.D. Cal. Aug. 28, 2012). Coppock says that here, as in Nguyen, "application of South Dakota law 'stems from the as-yet-undetermined proposition that [the] parties agreed to [Citi's] Terms of Use[,]' a question the Court need not decide now: . . .'the validity of the arbitration provision[] does not hinge on whether [Washington] or [South Dakota] law applies.'" (Dkt. No. 47 at 13 (quoting Nguyen, 2012 WL 3711081, at *3).) But there is no "chicken and egg" problem here as there was in Nguyen, since the forum selection clause here is in the card agreement—which undisputedly governs Coppock's account—not the arbitration agreement. Equally off-point is Coppock's citation to an inapposite case involving an "agreement [that was] ambiguous concerning whether English [or U.S.] law . . . applie[d] . . . ." Cape Flattery Ltd. v. Titan Mar., LLC, 647 F.3d 914, 921 (9th Cir. 2011) (emphasis added). Unlike in Cape Flattery, here, the agreement clearly provides for the application of South Dakota law, and Coppock has not shown that an exception to the general rule applying the law of the contractually-chosen state applies.

2. Analysis

"The party seeking to enforce an arbitration agreement bears the burden of showing that the agreement exists and that its terms bind the other party." Gelow v. Cent. Pac. Mortg. Corp., 560 F. Supp. 2d 972, 978 (E.D. Cal. 2008) (citing Sanford v. Memberworks, Inc., 483 F.3d 956, 962 (9th Cir. 2007), and Three Valleys Mun. Water Dist. v. E.F. Hutton & Co., 925 F.2d 1136, 1139-41 (9th Cir. 1991)). "This burden is a substantial one[.]" Id. at 979. "Be...