Daugherty v. Experian Info. Solutions, Inc.
| Decision Date | 08 March 2012 |
| Docket Number | Case No: C 11-01285 SBA |
| Parties | BYRON D. DAUGHERTY, Plaintiff, v. EXPERIAN INFORMATION SOLUTIONS, INC.; TRANS UNION LLC; EQUIFAX INFORMATION SERVICES LLC; CITIBANK (SOUTH DAKOTA), N.A.; and DOES 1 through 30, inclusive, Defendants. |
| Court | U.S. District Court — Northern District of California |
Docket 23.
The parties are presently before the Court on Defendant Citibank, N.A.'s ("Defendant")1 motion to compel arbitration and stay action. Dkt. 23. Plaintiff Byron Daugherty ("Plaintiff) opposes the motion. Dkt. 37. Having read and considered the papers filed in connection with this matter and being fully informed, the Court hereby GRANTS the motion to compel arbitration and stay action. The Court, in its discretion, finds this matter suitable for resolution without oral argument. See Fed.R.Civ.P. 78(b); N.D. Cal. Civ. L.R. 7-1(b).
In 1998, Plaintiff opened a credit card account with Sears National Bank ("Sears"). Pl.'s Decl. ¶ 2, Dkt. 37-1. Plaintiff's credit card account was subject to a written credit card agreement, which included provisions that permitted Sears to change the terms of Plaintiff's account and to assign Plaintiff's account to another creditor. Pogwist Decl. ¶ 6, Exh. 1, Dkt. 44-2. The agreement, however, did not include an arbitration provision. Id., Exh. 1. In 1999, 2001, 2002, and 2003, Sears changed the terms of Plaintiff's credit card account by mailing him new credit card agreements. Id. ¶ 7, Exhs. 2-5. Each of these agreements contained a change of terms provision, an arbitration provision, and an assignment provision. Id., Exhs. 2-5.
In November 2003, Citibank USA, N.A. acquired the credit card accounts issued by Sears, including Plaintiff's account. Barnette Supp. Decl. ¶ 4, Dkt. 44-1. Citibank USA, N.A. subsequently merged into Citibank (South Dakota), N.A., which then merged into Citibank, N.A., i.e., Defendant. Id. In or about November 2003, Defendant mailed cardholders a written change-in-terms notice informing them of the change in ownership of the Sears Credit Card program ("2003 change-in-terms notice"). Id. ¶ 5, Exh. 3. The 2003 change-in-terms notice informed cardholders that Defendant was making certain changes to the cardholder agreement, including changes regarding binding arbitration of disputes and the law governing their credit card accounts. Id., Exh. 3. The notice advised cardholders to review the description of the changes and information regarding their right to reject the changes. Id.
As relevant here, the 2003 change-in-terms notice made the following changes to Plaintiff's credit card account. First, it provided that the "Governing Law" provision of the cardholder agreement is amended to read 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.' " Barnette Supp. Decl., Exh. 3. Second, the notice provided that the cardholder agreement is amended to include the following provision regarding binding arbitration:
Third, the notice provided that the "Change of Terms" provision was amended to read that Defendant may change the cardholder agreement at any time and such changes are binding, unless the cardholder notifies Defendant in writing within 25 days after the effective date of the change that the cardholder does not agree to abide by the change and pays the total balance, either at once or under the terms of the unchanged agreement. Barnette Supp. Decl., Exh. 3. This provision also provided that use of the card after the effective date of the change shall be deemed acceptance, even if the 25 days have not expired. Id. Though Plaintiff had the option to reject the changes described in the 2003 change-in-terms notice, he did not do so. Id. ¶¶ 6-7.
On September 12, 2006, Defendant notified Plaintiff by mail of changes made to the terms governing his account ("2006 cardholder agreement"). Barnette Decl. ¶ 4, Exh. 1;Barnette Supp. Decl. ¶ 8, Exh. 4. The 2006 cardholder agreement provided that the agreement is binding on a cardholder unless the cardholder cancels their account within 30 days after receiving the card and the cardholder has not used the account. Barnette Decl., Exh. 1. Notably, this agreement contains an arbitration provision that is similar to the arbitration provision contained in the 2003 change-in-terms notice. Id. It also includes a choice-of-law provision stating that the terms and enforcement of the agreement are governed by federal law and the law of South Dakota. Id.
On November 19, 2006, Defendant received a letter from Plaintiff requesting that his account be cancelled. Barnette Supp. Decl. ¶ 11. In June 2007, Plaintiff entered into a written payment plan with Defendant to make monthly payments to satisfy his delinquent account. Compl. ¶ 15, Dkt. 1.
In 2008, Plaintiff discovered that Defendant was reporting Plaintiff as delinquent to several credit reporting agencies, including Experian Information Services, Inc. ("Experian"), Trans Union LLC ("Trans Union"), and Equifax Information Services LLC ("Equifax"). Compl. ¶ 18. In 2009, Plaintiff discovered that Equifax was falsely reporting his account with Defendant as "Account Included in Bankruptcy," "Bankruptcy Chapter 7," and "Bankruptcy Discharged," when in fact the account had not been discharged in bankruptcy. Id. ¶ 19. On numerous occasions in 2008, 2009, and 2010, Plaintiff disputed the accuracy of the credit reporting with Experian, Trans Union, and Equifax, but they failed to conduct the investigations and make corrections as required by law. Id. ¶¶ 20-21. Plaintiff claims that Defendant received his disputes from the credit reporting agencies, but failed to conduct investigations and make corrections required by law. Id. ¶ 22. Plaintiff also claims that he notified Defendant on numerous occasions that Defendant was inaccurately reporting his account, but Defendant failed to conduct a proper investigation as required by law. Id. ¶ 23. According to Plaintiff, as a result of the inaccurate reporting of his accounts and failed reinvestigations, he has been denied credit, obtained credit at a higher cost, and has abstained from applying for credit. Id. ¶ 25.
On March 16, 2011, Plaintiff filed the instant action against Experian, Trans Union, Equifax, and Defendant. See id. Through this action, Plaintiff seeks actual, statutory, and punitive damages, costs and attorney's fees pursuant to the Federal Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq., and the California State Consumer Credit Reporting Agencies Act, Cal. Civ. Code §§ 1785.1-1785.36. Id. ¶ 3. Plaintiff generally alleges that Experian, Trans Union, and Equifax willfully and negligently failed to establish or follow reasonable procedures to ensure accuracy in the preparation of credit reports and credit files they published and maintained concerning Plaintiff, and to conduct a reasonable investigation into Plaintiff's disputes regarding Defendant's credit reporting. See id. ¶¶ 26-41. Plaintiff further alleges that Defendant failed to properly investigate Plaintiffs dispute with respect to his account, to delete, modify or block information disputed by Plaintiff, to correctly report the results of an accurate investigation to credit reporting agencies, to refrain from publishing disputed account information, and to conform to a standard of conduct in assembling, evaluating, and disbursing consumer credit information about Plaintiff to third parties. See id. ¶¶ 42-58.
On August 19, 2011, Defendant moved to compel arbitration on the ground that Plaintiff is bound by the arbitration provision contained in the 2006 cardholder agreement. Def.'s Mtn. at 8-12, Dkt. 23. Additionally, Defendant requests that this Court stay the instant action pending the outcome of the arbitration proceedings. Id. at 12. On October 14, 2011, Plaintiff filed an opposition. A reply was filed on December 2, 2011. Dkt. 44.
In connection with its motion to compel arbitration and stay action, Defendant submitted a Request for Judicial Notice, asking the Court to take judicial notice of two California district court cases and an opinion letter from the South Dakota Attorney General's Office. Def.'s Request for Judicial Notice, Dkt. 24. A court may judicially notice a fact that is not subject to reasonable dispute because it: (1) is generally knownwithin the trial court's territorial jurisdiction; or (2) can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned. Fed.R.Civ.P. 201(b).
Because the Court may consider the district court cases without taking judicial notice of them, the Court DENIES Defendant's request to take judicial notice of these cases. See Taylor v. Pinnacle Credit Serv's, LLC, 2011 WL 1303430, at *5 n. 3 (N.D. Cal. 2011). The Court, however, GRANTS Defendant's request to take judicial notice of a document...
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