Johnson v. Sw. Recovery Servs.

• Decision Date: 23 January 2023
• Docket Number: Civil Action 3:22-CV-242-X-BH
• Parties: KIMBERLY JOHNSON, Plaintiff, v. SOUTHWEST RECOVERY SERVICES INC., et al., Defendants.
• Court: U.S. District Court — Northern District of Texas

KIMBERLY JOHNSON, Plaintiff, v. SOUTHWEST RECOVERY SERVICES INC., et al., Defendants.

Civil Action No. 3:22-CV-242-X-BH

United States District Court, N.D. Texas, Dallas Division

January 23, 2023

FINDINGS, CONCLUSIONS, AND RECOMMENDATION

IRMA CARRILLO RAMIREZ UNITED STATES MAGISTRATE JUDGE ^[1]

Based on the relevant filings and applicable law, Defendant Experian Information Solutions, Inc.'s Motion to Compel Arbitration and Stay Proceedings Pending Arbitration and Memorandum of Law in Support of Motion, filed June 3 2022 (doc. 44), should be GRANTED in part and DENIED in part.

I. BACKGROUND

Kimberly Johnson (Plaintiff) brings this action against Experian Information Solutions, Inc. (Defendant) and other defendants for alleged violations of the Fair Credit Reporting Act (FCRA), the Fair Debt Collection Practices Act (FDCPA), the Texas Debt Collection Act (TDCA), and the Deceptive Trade Practices Act. (doc. 7 at 2.)^[2] She contends Defendant knew her credit report was not accurate but provided false reports anyway, and that it failed to update or delete inaccurate information despite receiving notice of the inaccuracies, conduct a lawful reinvestigation, forward all relevant information to the furnishers, and maintain reasonable procedures to verify information, instead relying on verification from unreliable sources. (Id. at 23-25.)

On March 21, 2018, Plaintiff enrolled in IdentityWorks, an online credit monitoring service provided by Experian Consumer Services (ECS), an affiliate of Defendant. (doc. 44-1 at 3.) To successfully complete the enrollment, a user had to enter her personal information on a webform before clicking the “Submit Secure Order” button at the bottom of the form. (Id.) Immediately above this button was the following disclosure: “By clicking ‘Submit Secure Order': I accept and agree to your Terms of Use Agreement, as well as acknowledge receipt of your Privacy Policy and Ad Targeting Policy.” (Id. at 3-4.) The phrase “Terms of Use Agreement” was a hyperlink (off-set in blue text) and, if clicked, the entire text of the current version of the Terms of Use Agreement would be displayed within the user's web browser. (Id.) The Terms of Use Agreement in effect on March 21, 2018 (2018 TOU Agreement), contained an amendment clause that states that the “Agreement may be updated from time to time” and that “[e]ach time you order, access or use any of the Services or Websites, you signify your acceptance and agreement, without limitation or qualification, to be bound by the then current Agreement.” (docs. 44-1 at 4-5; 44-5 at 4.)

From between March 21, 2018 and June 3, 2022, Plaintiff downgraded, upgraded, and switched into different ECS memberships and purchased products from ECS more than 65 times. (doc. 44-1 at 5.) When Plaintiff re-enrolled in IdentityWorks online on March 22, 2022, she completed a web upgrade form that asked for her credit card information. (Id. at 6.) Immediately below the boxes for the information was the following notice:

By clicking “Submit Secure Order”: I accept and agree to your Terms of Use Agreement, as well as acknowledge receipt of your Privacy Policy. I authorize Consumerinfo.com, Inc. also referred to as Experian Consumer Services (“ECS”) to obtain my credit report and/or credit score(s), on a recurring basis to provide them to me for review while I have an account with ECS. I also authorize ECS to obtain and use the information I provide, and my credit report and/ or credit score(s), on a recurring basis to notify me of credit opportunities and other products and services that may be available to me through ECS or through unaffiliated third parties. I understand that I may withdraw this authorization at any time by contacting ECS.

(doc. 44-1 at 7.) As with the March 2018 enrollment form, the phrase “Terms of Use Agreement” was hyperlinked, and if clicked, would display the current version of the Terms of Use Agreement. (Id.) To complete the transaction, Plaintiff had to click the “Yes, Upgrade Me to IdentityWorks Premium” button at the bottom of the form. (Id. at 6-7.)

The Terms of Use Agreement in effect on March 22, 2022 (2022 TOU Agreement) states:

You agree that by creating an account with ECS (as defined below), or accessing or using our Services (as defined below), website(s) (such as this website, https://usa.experian.com, or any affiliated website (including, but not limited to, Experian.com, FreeCreditReport.com, FreeCreditScore.com, CreditReport.com, Creditchecktotal.com, CreditScore.com, usa.experian.com, and experian.experiandirect.com)), or mobile applications (such as the Experian app), as well as any content provided or accessible in connection with the website(s) or mobile application(s), including information, user interfaces, source code, reports, images, products, services, and data (each website and mobile application referred to herein as a “Website,” and collectively, as “Websites”), you represent to ECS that you have read, understood, and expressly consent and agree to be bound by this Terms of Use Agreement, and the terms, conditions, and notices contained or referenced herein (“Agreement”) whether you are a “Visitor” (which means that you simply browse or access a Website), or a “Customer” (which means that you have created an account with ECS, or enrolled or registered with a Website, or are accessing or using a Service).

(doc. 44-6 at 2.) The agreement specifies that “the terms ‘we,' ‘us' or ‘ECS' refer to ConsumerInfo.com, Inc., an Experian company (also known as Experian Consumer Services), and referred to as ‘Experian' on the Websites, its predecessors in interest, successors and assigns, affiliates, and any of its third party service providers (including, without limitation, cloud service providers) who ECS uses in connection with the provision of the Services to you.” (Id. (emphasis added)).

The 2022 TOU Agreement has the same amendment clause found in the 2018 TOU Agreement. (Id. at 4-5.) It also contains an arbitration provision that provides, in relevant part:

ECS and you agree to arbitrate all disputes and claims between us arising out of or relating to this Agreement to the maximum extent permitted by law, except any disputes or claims which under governing law are not subject to arbitration. This agreement to arbitrate is intended to be broadly interpreted and to make all disputes and claims between us directly relating to the provision of any Service and/or your use of any Website subject to arbitration to the fullest extent permitted by law. The agreement to arbitrate includes, but is not limited to:

claims arising out of or relating to any aspect of the relationship between us arising out of any Service or Website, whether based in contract, tort, statute (including, without limitation, the Credit Repair Organizations Act) fraud, misrepresentation or any other legal theory; claims that arose before this or any prior Agreement (including, but not limited to, claims relating to advertising); claims that are currently the subject of purported class action litigation in which you are not a member of a certified class; and claims that may arise after the termination of this Agreement.

For purposes of this arbitration provision, references to “ECS,” “you,” and “us” shall include our respective parent entities, subsidiaries, affiliates (including, without limitation, our service providers), agents, employees, predecessors in interest, successors and assigns, websites of the foregoing, as well as all authorized or unauthorized users or beneficiaries of Services and/or Websites or information under this or prior Agreements between us relating to Services and/or Websites. Notwithstanding the foregoing, either party may bring an individual action in small claims court. You agree that, by entering into this Agreement, you and ECS are each waiving the right to a trial by jury or to participate in a class action to the maximum extent permitted by law. This Agreement evidences a transaction in interstate commerce, and thus the Federal Arbitration Act governs the interpretation and enforcement of this arbitration provision. This arbitration provision shall survive termination of this Agreement.

***

All issues are for the arbitrator to decide, including the scope and enforceability of this arbitration provision as well as the Agreement's other terms and conditions, and the arbitrator shall have exclusive authority to resolve any such dispute relating to the scope and enforceability of this arbitration provision or any other term of this Agreement including, but not limited to any claim that all or any part of this arbitration provision or Agreement is void or voidable.

(doc. 44-6 at 7-8.)

Based on that provision, Defendant moves to compel arbitration and stay the proceedings pending arbitration. (doc. 44.)

II. EVIDENTIARY OBJECTIONS

Plaintiff appears to challenge the admissibility of the declaration of David Williams and the supporting documents it references. (doc. 51 at 2-3.)

“To determine if evidence in support of a motion to compel arbitration is admissible, courts apply the same standard as that applied to a motion for summary judgment.” Domain Vault, LLC v. Rightside Group, Ltd., 3:17-CV-0789-B, 2018 WL 638013, at *3 (N.D. Tex. Jan 30, 2018). In the summary judgment context, evidence need not be in a form admissible at trial “so long as it is capable of being presented in an admissible form.” Trujillo v. Volt Mgmt. Corp., 846 Fed.Appx. 233, 236 (5th Cir. 2021) (citing Maurer v. Independence Town, 870 F.3d 380, 384 (5th Cir. 2017)).

A. Personal Knowledge

Plaintiff appears to argue that Williams lacks personal knowledge of the information contained in his declaration. (doc. 51 at 2.)

A “declaration used to support or...