Marsh v. First Usa Bank, N.A.
| Decision Date | 23 May 2000 |
| Docket Number | No. 3:99-CV-0783-T.,3:99-CV-0783-T. |
| Citation | 103 F.Supp.2d 909 |
| Parties | Curtis MARSH, et al., Plaintiffs, v. FIRST USA BANK, N.A., Defendant. |
| Court | U.S. District Court — Northern District of Texas |
Britton David Monts, Attorney at Law, Steven N. Williams, Attorney at Law, Jason T. Mackey, Attorney at Law, Monts & Ware, Dallas, TX, plaintiffs.
Jeffrey Mark Tillotson, Attorney at Law, Renee Skinner, Attorney at Law, Lynn Stodghill Melsheimer & Tillotson, Dallas, TX, for First USA Bank NA, defendant.
John Mitchell Nevins, Attorney at Law, Moseley & Standerfer, Dallas, TX, for National Arbitration Forum, amicus.
ORDER GRANTING MOTION TO COMPEL ARBITRATION, DISMISSING PLAINTIFFS' COMPLAINT, GRANTING IN PART DEFENDANT'S MOTION TO STRIKE, AND DENYING PLAINTIFFS' MOTION TO STRIKE
Before the Court is Defendant First USA Bank's Motion to Dismiss or Stay Proceedings and to Compel Arbitration filed on June 11, 1999. Also before the Court is Defendant First USA Bank's Motion to Strike, filed on February 23, 2000, and Plaintiffs' Motion to Strike, filed on March 9, 2000. After consideration, the Court is of the opinion that Defendant's motion to compel arbitration should be granted and, accordingly, Plaintiffs' complaint should be dismissed. Further, the Court believes that Defendant's motion to strike should be granted in part and Plaintiffs' motion to strike should be denied.
Defendant First USA Bank provides a revolving line of credit to its customers through the issuance of credit cards. Plaintiffs Curtis Marsh, Darrell Essary, Elizabeth Essary, and Susan Ellis are credit card holders, who bring this lawsuit in their individual capacities and on behalf of a class of similarly situated plaintiffs against Defendant First USA Bank, arising out of Defendant's imposition of late fees and other assessments to Plaintiffs' credit card accounts.1 Defendant contends that a mandatory arbitration provision contained either in the original Card-member Agreement or by subsequent amendment thereto, requires the parties to resolve their disputes through arbitration instead of litigation in this Court. Plaintiffs suggest that the arbitration provisions should not be given effect, and that this matter should proceed as a class action. As an ancillary matter, the parties have filed cross-motions to strike evidence submitted by the other in connection with the motion to compel. The primary issue presented for the Court's determination, therefore, is whether the arbitration provision in question compels arbitration.
The Court must first determine whether certain evidence submitted by the parties on the motion to compel arbitration should be considered in ruling on the motion. Defendant filed Objections and Motion to Strike, complaining that exhibits 3 through 8 of Plaintiffs' Opposition, which are newspaper and magazine articles, are inadmissible hearsay and irrelevant to the present matter under consideration. Additionally, Defendant objects to three affidavits submitted by Plaintiffs. Responding to Defendant's objections, Plaintiffs seek to exclude the affidavit of Defendant's employee.
Exhibit 3 of Plaintiffs' Opposition is a transcript of an episode of the ABC News program Nightline, concerning a segment on Defendant's practice of delaying posting of payments, which results in the imposition of late fees. Exhibit 4 is a written memorandum, dated February 18, 1998, from Bank One (Defendant's parent corporation) concerning timely posting of card member payments by the National Processing Company (NPC), a company contracted by Defendant to process credit card payments. Exhibit 5 is a report dated March 3, 1998, by a consultant hired by First USA to audit the payment posting process employed by NPC, which concludes that delays between receipt of card member payments and posting of those payments exist in some processing centers. Exhibit 6 comprises two documents: a comparison of credit card fees charged by Defendant and other banks, and a copy of a Dallas Morning News article, dated August 17, 1999, titled "Credit Card Users Face Higher Fees." Exhibit 7 is an article from the November 1999, edition of the personal finance magazine Kiplinger's, concerning the delayed posting practices of Defendant which result in the imposition of late fees. Exhibit 8 is a sample form letter from Bank One, advising credit card holders that inadvertent late fees assessed to them for the period November 1998, through March 1999, will be credited to their accounts.
The Court concludes that Plaintiffs' exhibits 3 through 8 concern the merits of the underlying dispute between the parties and, therefore, are irrelevant to the question of arbitration. Plaintiffs suggest that exhibits 3 through 8 are merely provided as background information. The only issue presented, however, is whether arbitration should be compelled under the terms of the Cardmember Agreement. As such, background information related to the merits of the dispute will be stricken as immaterial.
Defendant also objects to the affidavit of Todd B. Hilsee (exhibit 11). Hilsee's affidavit was executed in connection with another class-action lawsuit against Defendant in an Oregon state court.2 In that case, Hilsee was offered by the plaintiffs as an expert witness in the field of direct-mail notification. He gave opinions on the method by which Defendant sent notice of the arbitration amendment to card holders in that lawsuit. Defendant complains that Hilsee's affidavit constitutes inadmissible hearsay and it is irrelevant because Delaware law (applied under the terms of a choice-of-law provision in the Cardmember Agreement) prescribes the manner for amendments to credit card agreements.
The Court disagrees with Defendant's assessment of the Hilsee affidavit. To the extent that Hilsee's statements illuminate facts which bear on the issue of whether the notices were more likely or less likely to have been sent by Defendant, such affidavit is relevant. See FED.R.EVID. 401. Additionally, while Hilsee's affidavit may meet the technical definition of hearsay, such is true of every non-party witness affidavit submitted in support of a motion because it is offered to prove matters asserted therein. The Court cannot accept such a rigid application of the hearsay rule under these circumstances. See FED. R.EVID. 807. That Hilsee's affidavit was offered in another proceeding does not make it less trustworthy. Thus, the Court will consider Hilsee's affidavit.
Defendant's last evidentiary objection is directed to the affidavits of Plaintiffs Susan Ellis and Curtis Marsh. Defendant simply suggests that some of the statements contained in the affidavits of these two Plaintiffs are "self-serving" and conclusory. The self-serving nature of the affidavits is no basis for striking them. Indeed, it would be a curiously ineffectual affidavit of a party that did not in some manner advance that party's cause.
Defendant further suggests that the affidavits must comply with the requirements for the admissibility of affidavits for purposes of summary judgment. Specifically, Defendant argues that the conclusions contained in Plaintiffs' affidavits should be stricken. Defendant urges its objections on the basis of the following language in FED.R.CIV.P. 56: "Supporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein." Defendant's reliance on Rule 56(e) is misplaced. While the affiant must set forth facts in support of his contention, the witness is not prohibited from further elaborating upon and drawing reasonable conclusions based upon those facts. To the extent that the conclusions of Plaintiff Marsh, who is an attorney, contain ultimate conclusions of law, the Court will simply disregard those portions of the affidavit.
Plaintiffs' motion to strike targets the affidavit of Donna Barrett, an employee of Defendant. In her affidavit, Barrett states that she has personal knowledge of all matters contained therein, including her familiarity with Plaintiffs' credit card accounts and her knowledge of facts concerning Defendant's mailing of the arbitration amendment. Plaintiffs contend that Barrett's subsequent deposition contradicts her affidavit. During her deposition, Barrett testified that she did not have specific first hand knowledge that each Plaintiff's billing statement contained the subject arbitration amendment because an independent statement processing company actually placed the notices in the billing statements.
While Barrett's later deposition testimony appears to conflict with her affidavit, the affidavit should not be stricken solely for that reason. Rather, the Court will consider Barrett's affidavit in conjunction with her later testimony and give both due consideration in light of the inconsistencies. Accordingly, Plaintiffs' objections to Barrett's affidavit are overruled and their motion to strike is denied.
A resolution of the present dispute necessarily demands an examination of the Federal Arbitration Act, 9 U.S.C. § 1 et seq.3 Section 2 of the Act provides:
A written provision in ... a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.
Through express language, the Supreme Court has left no doubt that the FAA evinces a federal policy favoring...
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