Ranginwala v. Citibank, N.A.

• Decision Date: 19 November 2020
• Docket Number: Civil Action No.: 18-cv-14896
• Parties: OMAR F. RANGINWALA, Plaintiff, v. CITIBANK, N.A., Defendant.
• Court: U.S. District Court — District of New Jersey

OMAR F. RANGINWALA, Plaintiff, v. CITIBANK, N.A., Defendant.

Civil Action No.: 18-cv-14896

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

November 19, 2020

NOT FOR PUBLICATION

OPINION

CECCHI, District Judge.

This matter comes before the Court on the motion of Defendant CITIBANK, N.A. ("Defendant") to compel arbitration and stay the proceedings. ECF No. 20. Plaintiff Omar F. Ranginwala ("Plaintiff") filed an opposition (ECF No. 23) and Defendant replied (ECF No. 24). The Court decides this matter without oral argument pursuant to Federal Rule of Civil Procedure 78. For the reasons set forth below, Defendant's motion to compel arbitration is GRANTED.

I. BACKGROUND

This dispute arises out of Defendant closing Plaintiff's credit card account. ECF No. 19 ¶¶ 16-17. Plaintiff had a Citibank credit card account since October 19, 2001. Id. ¶ 11. When Plaintiff's credit card was declined in early 2017, he contacted Defendant via a chat on Defendant's website. Id. ¶¶ 12, 13. Plaintiff was told by a representative that "he/she had no information on [Plaintiff's] account other than that it was deemed a 'security risk.'" Id. ¶¶ 13-14. Plaintiff then contacted Defendant via telephone and was informed that Plaintiff's "account was closed" and "that Defendant had the right to close his account, and that Defendant did not have to provide a reason for doing so." Id. ¶¶ 15-16. Thereafter, Plaintiff received a letter dated February 3, 2017 from Defendant. Id. ¶ 17. The letter informed Plaintiff that Defendant closed the credit card account and stated, "Pursuant to the Citibank N.A., Credit Card Agreement, we have the right to close your account at any time at our discretion." Id. ¶¶ 17-18. The Credit Card Agreement ("the Agreement") states that Defendant "may close or suspend your account . . . for any reason or for no reason." Id. ¶ 20 (citing Exhibit A). The Agreement also states that Defendant may close a credit card holder's account "without notifying you, as allowed by law." Id.

As relevant here, the Agreement (ECF No. 20-4) includes an arbitration provision (the "Arbitration Agreement"), which provides:¹

Arbitration

Please read this provision of the Agreement carefully.

This section provides that disputes may be resolved by binding arbitration. Arbitration replaces the right to go to court, have a jury trial or initiate or participate in a class action. In arbitration, disputes are resolved by an arbitrator, not a judge or jury. Arbitration procedures are simpler and more limited than in court. This arbitration provision is governed by the Federal Arbitration Act (FAA), and shall be interpreted in the broadest way the law will allow.

Covered claims

• You or we may arbitrate any claim, dispute or controversy between you and us arising out of or related to your Account, a previous related account or our relationship (called "Claims").

• If arbitration is chosen by any party, neither you nor we will have the right to litigate that Claim in court or have a jury trial on that Claim.

Except as stated below, all Claims are subject to arbitration, no matter what legal theory they're based on or what remedy (damages, or injunctive or declaratory relief) they seek, including Claims based on contract, tort (including intentional tort), fraud, agency, your or our negligence, statutory or regulatory provisions, or any other sources of law; Claims made as counterclaims, cross-claims, third-partyclaims, interpleaders or otherwise; Claims made regarding past, present, or future conduct; and Claims made independently or with other claims. This also includes Claims made by or against anyone connected with us or you or claiming through us or you, or by someone making a claim through us or you, such as a co-applicant, Authorized User, employee, agent, representative or an affiliated/parent/subsidiary company.

ECF No. 20-4 at 3, 14.

On October 11, 2018, Plaintiff filed a complaint alleging that Defendant discriminated against him in closing his credit card account. ECF No. 1. Plaintiff then filed an amended complaint on February 3, 2020, which brings three causes of action against Defendant for violations of: (1) the Equal Credit Opportunity Act ("ECOA"), 15 U.S.C. § 1691; (2) 42 U.S.C. § 1981 (equal rights); and (3) the New Jersey Law Against Discrimination, N.J. Stat Ann. § 10:5-12. ECF No. 19 ¶¶ 47-63.

On February 18, 2020 Defendant filed the instant motion seeking to compel Plaintiff to arbitration. ECF No. 20. Defendant argues that Plaintiff's claims, from both the original complaint and the amended complaint, are subject to a valid and enforceable arbitration agreement. ECF No. 20-2 at 2. Plaintiff filed an opposition, objecting to arbitration and arguing that: (1) the Federal Arbitration Act does not apply; (2) the arbitration agreement is unenforceable; (3) the arbitration agreement is substantively unconscionable; (4) arbitration would limit recovery; and (5) the dispute falls outside the scope of the arbitration agreement. ECF No. 23 at 1-2. Defendant filed a reply, which argues that Plaintiff's arguments fail as a matter of law. ECF No. 24 at 1-2.

II. LEGAL STANDARD

The Federal Arbitration Act ("FAA") reflects the strong federal policy in favor of arbitration and "places arbitration agreements on equal footing with all other contracts.'" Bacon v. Avis Budget Grp., Inc., 959 F.3d 590, 599 (3d Cir. 2020) (quoting Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 443 (2006)). Under the FAA, courts "compel arbitration of claimscovered by a written, enforceable arbitration agreement." Bacon, 959 F.3d at 599 (citing FAA, 9 U.S.C. §§ 3, 4). Yet despite the strong presumption of arbitrability, "[a]rbitration is strictly a matter of contract" and is thus governed by state law. Bel-Ray Co. v. Chemrite (Pty) Ltd., 181 F.3d 435, 441, 444 (3d Cir. 1999) ("If a party has not agreed to arbitrate, the courts have no authority to mandate that he do so."). Accordingly, when deciding whether to compel arbitration under the FAA, the Court must determine "(1) whether there is a valid agreement to arbitrate between the parties and, if so, (2) whether the merits-based dispute in question falls within the scope of that valid agreement." Flintkote Co. v. Aviva PLC, 769 F.3d 215, 220 (3d Cir. 2014) (citation omitted). In conducting this inquiry, the Court applies state law principles of contract formation. Torres v. Rushmore Serv. Ctr., LLC, No. 18-9236, 2018 WL 5669175, at *2 (D.N.J. Oct. 31, 2018).

III. DISCUSSION

In determining whether a valid arbitration agreement exists between the parties, the Court must first decide whether to apply the Rule 12(b)(6) or Rule 56 standard of review. Sanford v. Bracewell & Guiliani, LLP, 618 F. App'x 114, 117 (3d Cir. 2015). The Court will review a motion to compel arbitration under the Rule 12(b)(6) standard "when it is apparent, based on 'the face of a complaint, and documents relied upon in the complaint,' that certain of a party's claims 'are subject to an enforceable arbitration clause.'" Guidotti v. Legal Helpers Debt Resolution, L.L.C., 716 F.3d 764, 776 (3d Cir. 2013) (citation omitted). Conversely, the Rule 56 standard will apply when "'the motion to compel arbitration does not have as its predicate a complaint with the requisite clarity' to establish on its face that the parties agreed to arbitrate." Id. at 774. Where a complaint does not plead or attach the relevant terms of an arbitration provision, courts apply a summary judgment standard, and should compel arbitration where there is no material issue of factthat "a valid agreement to arbitrate exists" and "the particular dispute falls within the scope of that agreement." Trippe Mfg. Co. v. Niles Audio Corp., 401 F.3d 529, 532 (3d Cir. 2005).

Here, the Court will consider Defendant's motion to compel arbitration under the summary judgment standard. See Fed. R. Civ. P. 56(c). Defendant contends that this standard applies as the amended complaint does not attach the Agreement as an exhibit. ECF No. 20-2 at 7. Accordingly, as the amended complaint does not make clear that the parties entered into an agreement to arbitrate, summary judgment is the appropriate standard of review. See Ahmetasevic v. Citibank, N.A., No. 19-5707, 2020 WL 5146124, at *3 (E.D. Pa. Aug. 31, 2020); Bey v. Citi Health Card, No. 15-6533, 2017 WL 2880581, at *3 (E.D. Pa. July 6, 2017) (citations omitted) ("A court will compel arbitration only when there is 'no genuine issue of fact concerning the formation of the agreement' to arbitrate. The court must consider all evidence provided by the party opposing arbitration and draw all reasonable inferences in that party's favor."). In his opposition, Plaintiff does not appear to contest that he entered into the Agreement and its attendant Arbitration Agreement. See ECF No. 23 at 1-3, 5 ("Under the terms of the credit card agreement between Defendant and Mr. Ranginwala, all claims arising out of their relationship are subject to arbitration. However, by taking the adverse action of terminating his credit card account, any contractual relationship between the parties, including any agreement to arbitrate, ceased to exist."); see also ECF No. 19 ¶¶ 19, 49, 51, 56 (the amended complaint also refers to the contractual relationship between the parties based on the Agreement). Plaintiff argues instead that the Court should not compel arbitration because: (1) the FAA does not apply as the contractual relationship between the parties ended when Defendant closed Plaintiff's credit card account; (2) the Arbitration Agreement is contrary to congressional intent and therefore unenforceable; (3) the class action waiver renders the Arbitration Agreement unconscionable; (4) compelling arbitration would limitdiscovery and deprive Plaintiff of remedies; and (5) even if the Arbitration Agreement is enforceable, Plaintiff's claims fall outside its scope. ECF No. 23 at 5-15. Accordingly, there is no material dispute of fact to indicate that Plaintiff did not sign the...