Ghouri v. Amsher Collection Servs.

• Decision Date: 19 October 2022
• Docket Number: Civil Action 1:22-cv-00503 (RDA/JFA)
• Parties: MOHAMMAD GHOURI, Plaintiff, v. AMSHER COLLECTION SERVICES INC., et al ., Defendants.
• Court: U.S. District Court — Eastern District of Virginia

MOHAMMAD GHOURI, Plaintiff,
v.
AMSHER COLLECTION SERVICES INC., et al ., Defendants.

Civil Action No. 1:22-cv-00503 (RDA/JFA)

United States District Court, E.D. Virginia, Alexandria Division

October 19, 2022

MEMORANDUM OPINION AND ORDER

ROSSIE D. ALSTON, JR., DISTRICT JUDGE

This matter comes before this Court on Defendant T-Mobile USA Inc.'s (“T-Mobile”) Motion to Stay and Compel Arbitration, or in the Alternative, to Stay Litigation (“Motion”). Dkt. 4. This Court has dispensed with oral argument as it would not aid in the decisional process. Fed.R.Civ.P. 78(b); Local Civil Rule 7(J). This matter has been fully briefed and is now ripe for disposition. Considering T-Mobile's Memorandum in Support of its Motion (Dkt. 4), Defendant AmSher Collection Services, Inc.'s (“AmSher”) Joinder in the Motion (Dkt. 7); pro se Plaintiff Mohammad Ghouri's (“Plaintiff”) Opposition (Dkt. 19), and T-Mobile's Reply (Dkt. 20), this Court GRANTS the Motion for the reasons that follow and DISMISSES the case without prejudice.

I. BACKGROUND

A. Factual Background

This matter arises from the Complaint Plaintiff originally filed on March 23, 2022, which Plaintiff later amended on August 29, 2022, alleging Defendants violated the Fair Credit Reporting Act, 15 U.S.C. § 1681, et seq. (“FCRA”). See Dkt. Nos. 2; 16.

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Beginning in June 2017, Plaintiff subscribed to T-Mobile's telephone services and enrolled in autopay. Dkt. 16 ¶ 13. On April 14, 2020, Plaintiff entered into a new service agreement with T-Mobile (“2020 Services Agreement” or “Contract”). On June 5, 2021, Plaintiff allegedly paid T-Mobile the outstanding balance on the account at T-Mobile's store in Stafford, Virginia. Id. ¶ 14. On June 10, 2021, Plaintiff switched providers and enrolled in a new mobile service plan with AT&T believing that his relationship with T-Mobile had terminated. Id. ¶ 15. But T-Mobile allegedly continued to charge differing amounts to Plaintiff's closed account for several additional months. Id. ¶¶ 16-18. During this period, Plaintiff allegedly made several efforts to address the charges with T-Mobile representatives. On each occasion, the representative allegedly assured Plaintiff the charges would be “fix[ed] [] on our end.” Id. ¶ 20.

On November 24, 2021 and again on November 28, 2021, Plaintiff allegedly received notice from T-Mobile alerting him that his account would be deactivated for failure to pay an outstanding balance of $930.00. Id. ¶ 21. Yet a company representative again assured Plaintiff the issue would be “elevate[d]” and “fix[ed].” Id. When T-Mobile allegedly requested bank statements evidencing that Plaintiff had made all payments for June and July, Plaintiff provided the documentation. Id. ¶ 22. Weeks later, on December 29, 2021, Defendant AmSher sent Plaintiff a collection notice for $1,163.65. Id. ¶ 23. On March 4, 2022, Plaintiff received notice that his credit score had decreased from 720 to 671. Id. ¶ 24. In two subsequent calls with additional T-Mobile representatives on March 5, 2022 and March 22, 2022, both representatives acknowledged that the outstanding balance on Plaintiff's account was a mistake. Id. ¶¶ 25-26. Plaintiff attached a credit report notice to the Amended Complaint, dated March 24, 2022, showing a 49 point increase in credit score to 745 following the removal of an account in collection by AmSher. See id. ¶ 30; Dkt. 16-5 at 2-3.

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Plaintiff now alleges that Defendants violated the FCRA by “negligently reporting derogatory information to the credit bureaus after [he] persistently provided documentation proving the information was false and inaccurate.” Dkt. 16 ¶ 34. As a result of these actions and the “emotional distress” Plaintiff alleges he suffered, id. ¶ 29, Defendant seeks actual, punitive, and statutory damages as well as an injunction to prohibit Defendants from repeating the alleged conduct with respect to Plaintiff's credit file.

B. Procedural Background

On March 23, 2022, Plaintiff filed the original complaint in Stafford County Circuit Court. Dkt. 2. On May 7, 2022, AmSher filed a notice of removal to this Court, joined by T-Mobile. Dkt. 1. On July 6, 2022, T-Mobile filed a Motion to Compel Arbitration and Stay the case, which AmSher joined on July 11, 2022. Dkt. Nos. 4; 7. Plaintiff sought leave to file an amended complaint on August 4, 2022 and an extension of time to file an opposition to the instant motion, which the Court granted on August 29, 2022. Dkt. Nos. 8; 16. T-Mobile filed its Answer and Plaintiff timely filed an opposition to the Motion to Compel Arbitration on September 9, 2022. Dkt. Nos. 17; 19. T-Mobile filed its reply to Plaintiff's opposition on September 15, 2022. Dkt. 20. AmSher filed its Answer on September 16, 2022. Dkt. 21. Plaintiff filed a supplemental reply brief on September 26, 2022 and moved for default judgment against Defendants that same day. Dkt. Nos. 22-23.

II. STANDARD OF REVIEW

Federal Rule of Civil Procedure 12(b)(3) allows for a party to move for dismissal for improper venue. Fed.R.Civ.P. 12(b)(3).^[1] Where a party moves for dismissal pursuant to a forum

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selection clause, such motions are “cognizable as motions to dismiss for improper venue.” Sucampo Pharm., Inc. v. Astellas Pharma, Inc., 471 F.3d 544, 549 (4th Cir. 2006). An arbitration clause is a “specialized kind of forum-selection clause.” Aggarao v. MOL Ship Mgmt. Co., Ltd., 675 F.3d 355, 365 n.9 (4th Cir. 2012) (quoting Scherk v. Alberto-Culver Co., 417 U.S. 506, 519 (1974)). Therefore, Federal Rule of Civil Procedure 12(b)(3) is the proper vehicle by which a party may move to dismiss an action due to an arbitration clause.

Further, “because a motion under 12(b)(3) is a disfavored 12(b) motion,” the Fourth Circuit has held that “a defendant will have to raise the forum selection issue in [its] first responsive pleading, or waive the clause.” Sucampo Pharm., Inc., 471 F.3d at 549. And in considering a 12(b)(3) motion, “the court is permitted to consider evidence outside of the pleadings.” Aggarao, 675 F.3d at 365-66. To defeat such a motion, the non-movant must make a “prima facie venue showing,” and the facts must be viewed “in the light most favorable to the plaintiff.” Id. at 366 (citing Mitrano v. Hawes, 377 F.3d 402, 405 (4th Cir. 2004)).

III. ANALYSIS

T-Mobile filed the instant motion (which AmSher joined) as the first responsive pleading to Plaintiff's Complaint. In doing so, Defendants argue that the 2020 Service Agreement, which Plaintiff admits he signed, compels arbitration for any disputes related to billing in connection with T-Mobile or third-parties like AmSher implicated by the billing dispute. They also contest that Plaintiff has submitted his claims to arbitration prior to filing the Complaint. Plaintiff maintains

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that the 2020 Service Agreement's arbitration clause does not control the dispute because that clause only operates for the duration of the existence of the contract, which Plaintiff argues ended in June of 2021. Plaintiff adds that Defendants have waived their right to arbitrate following their engagement in these proceedings.

A. Whether the Binding Arbitration Clause Applies and Therefore Warrants Compelling Arbitration

1. The Federal Arbitration Act as the Guiding Legal Framework for Reviewing Arbitration Clauses

The “preeminent concern of Congress in passing” the Federal Arbitration Act (“FAA”) “was to enforce private agreements into which parties had entered[.]” Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 625 (1985). The FAA requires that written arbitration agreements arising out of commercial contracting “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. The FAA “represents ‘a liberal policy favoring arbitration agreements.'” Murray, 289 F.3d at 301 (citing Moses H. Cone Mem'l Hop. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983)). Under such a policy, “any doubts concerning the scope of arbitral issues should be resolved in favor of arbitration[.]” Murray, 289 F.3d at 301.

To assess the validity of a governing arbitration provision subject to the FAA in a commercial dispute, the Fourth Circuit applies the test enunciated in Adkins v. Labor Ready, Inc.:

[i]n the Fourth Circuit, a litigant can compel arbitration under the FAA if he can demonstrate “(1) the existence of a dispute between the parties, (2) a written agreement that includes an arbitration provision which purports to cover the dispute, (3) the relationship of the transaction, which is evidenced by the agreement, to interstate or foreign commerce, and (4) the failure, neglect or refusal of the [nonmovant] to arbitrate the dispute.”

303 F.3d 496, 501 (4th Cir. 2002) (quoting Whiteside v. Teltech Corp., 940 F.2d 99, 102 (4th Cir. 1991)).

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If the court is satisfied that an arbitration provision was agreed to in writing, it must “make an order summarily directing the parties to proceed with the arbitration in accordance with the terms thereof.” 9 U.S.C. § 4; see also Connell v. Apex Sys., LLC, No. 3:19-cv-299, 2020 WL 354742, at *3 (E.D. Va. 2020) (“When a valid arbitration agreement exists and the issues in the case fall within the scope of that agreement, ‘[a] district court . . . has no choice but to grant a motion to compel arbitration.'” (quoting Adkins, 303 F.3d at 500)).

2. Applying the Adkins factors

i. The existence of a dispute between the parties

This Court finds that in this case the first element has been satisfied because there is clearly a dispute between Plaintiff and Defendants, as evidenced by Plaintiff's Amended Complaint.

ii. A written agreement that includes an arbitration provision which purports to cover the dispute

The second Adkins element is also satisfied as this Court finds that neither party contests that the 2020 Services Agreement is the...