St. Pierre v. Advanced Call Ctr. Techs., LLC
| Decision Date | 22 November 2016 |
| Docket Number | 2:15-cv-02415-JAD-NJK |
| Parties | Vanessa St. Pierre, Plaintiff v. Advanced Call Center Technologies, LLC, Defendant |
| Court | U.S. District Court — District of Nevada |
Order Granting Defendant's Motion to Dismiss and Compelling Arbitration
Synchrony Bank issued plaintiff Vanessa St. Pierre a credit card. St. Pierre allegedly stopped making her payments, so Synchrony hired Advanced Call Center Technologies (ACCT) to endeavor to collect from her. St. Pierre alleges that in attempting to collect on her debt, ACCT harassed her in violation of the Fair Debt Collection Practices Act (FDCPA).
ACCT now seeks to compel St. Pierre to arbitration. Synchrony and St. Pierre's credit agreement says that all claims related to St. Pierre's account are subject to arbitration. But the agreement only refers to Synchrony or St. Pierre compelling arbitration, it makes no mention of ACCT. ACCT nevertheless contends that it should be permitted to stand in Synchrony's shoes, as its agent, and assert Synchrony's arbitration rights.
Utah law governs whether ACCT can invoke Synchrony's arbitration rights on the basis that ACCT is its agent—and while Utah's caselaw is unclear on this point—the weight of authority suggests that ACCT should be permitted to compel arbitration here. Where an agreement contemplates that a party's alleged wrongdoing would be subject to arbitration, it makes little sense to treat that party's agent any different. After all, companies typically act through employees and agents, and allowing plaintiffs to avoid arbitration by simply suing an agent instead of its principal would nullify much of the value derived from arbitration agreements. This is particularly true in light of the Federal Arbitration Act's mandate that agreements must be interpreted in favor of arbitration. It is also particularly true given that the party being compelled here, St. Pierre, agreed to arbitrate the substance of her FDCPA claim in her agreement with Synchrony. ACCT may therefore compel St. Pierre to arbitration.1 I grant the motion to compel, dismiss this case without prejudice to the arbitration of St. Pierre's claim, and deny all other pending motions without prejudice as moot.
St. Pierre and Synchrony entered into a credit agreement and Synchrony issued St. Pierre a J.C. Penney credit card. St. Pierre allegedly fell behind on her payments, and Synchrony placed her account with ACCT for collection. ACCT called St. Pierre to encourage her to pay her debt, and St. Pierre alleges that these calls violated the FDCPA. ACCT's motion to compel relies on the arbitration agreement's terms and ACCT's relationship with Synchrony.
St. Pierre's credit agreement provides that any claim "related to" St. Pierre's "account" is subject to arbitration—not merely claims related to the terms of the agreement itself.2 It further states that St. Pierre agrees to arbitrate claims against Synchrony's "affiliates" and "agents."3 The agreement goes on to explain that Synchrony is empowered to use "all channels of communication" to contact St. Pierre, and that Synchrony could "request payment of the full amount due" and use "any other action" to collect what St. Pierre owes on her account.4
The relationship between ACCT and Synchrony was governed by a Statement of Work. The Statement of Work provides that Synchrony would "place Accounts" with ACCT "for collection Services."5 Synchrony paid ACCT by the hour.6 Synchrony retained the right to recallaccounts from ACCT at any time.7 ACCT was allowed to negotiate and settle accounts on behalf of Synchrony, but only within strict guidelines.8 Otherwise, "[a]ll other settlements and settlement amounts and terms" were required to "receive prior written approval of [Synchrony]."9
ACCT agreed to "perform the [collection] Services in accordance with . . . written instructions provided . . . by [Synchrony]."10 Synchrony issued written settlement guidelines that further defined the step-by-step process that ACCT's employees were required to walk through when negotiating settlements with customers.11 Among other things, these guidelines specified different scripts to be followed in different scenarios, defined minimum percentage settlement values that varied depending on the stage of the debt and the type of credit card, established deadlines for offering settlements, and provided instructions for creating mandatory documentation in Synchrony's proprietary computer program.12 Synchrony even created training materials for ACCT and required ACCT to comply with specific record-keeping practices.13
Generally, the right to compel arbitration "may not be invoked by one who is not a party to the agreement."14 This is because the right to compel arbitration is a contractual right and only contractual parties can assert contractual rights.15 But there are exceptions to this rule. If the governing state law would allow a non-party to enforce an arbitration provision, then thatnonsignatory can compel arbitration.16 I must thus determine whether Utah's law—the state law that both parties agree applies here—allows ACCT to enforce the arbitration agreement, despite that it is not a party to that agreement.17 ACCT argues that under Utah law it should be permitted to stand in Synchrony's shoes and compel arbitration because it is Synchrony's agent.18
Utah caselaw suggests that an agent can enforce its principal's contractual right to compel arbitration when the agent is sued for breaching that contract. But St. Pierre is suing ACCT for violating the FDCPA when it attempted to collect under the contract, she is not suing for breach of the contract itself. And no Utah cases cited by the parties, nor any that I can find, shed light on whether an agent can compel arbitration when the claim against it is merely related to the contract.
The only time the Utah Supreme Court weighed in on this agency theory at all was in Ellsworth v. American Arbitration Association.19 But Ellsworth merely suggests that the agency theory for compelling arbitration can be used when an agent is sued for breaching a contract.20 And the cases that the Ellsworth court cites are similarly unhelpful.21 In short, nothing in Ellsworth or any other Utah case cited by the parties (or that I can find) reaches the issue of whether an agent canavail itself of its principal's right to arbitration when the claim against it does not directly arise from the contract. I must thus turn to other jurisdictions.
The weight of authority across the nation indicates that an agent can avail itself of its principal's arbitration powers under a contract so long as the claim against the agent relates to that contract. The Ninth Circuit in Letizia v. Prudential, for example, held that agents of a securities company could avail themselves of their principal's arbitration agreement when they were sued for mishandling customers' securities accounts.22 Despite that the agents were being sued for statutory violations, not breaches of the securities agreements—the Ninth Circuit held that it was enough that all "of the individual defendants' allegedly wrongful acts related to their handling of [the plaintiff's] securities account."23
Contrast this situation with the one in Britton v. Co-op Banking Group. The Ninth Circuit started from the same broad standard: whether the agent's alleged wrongdoing "relate[s] to or arise[s] out of the contract containing the arbitration clause."24 But the court did not allow the agent to use his principal's arbitration powers because the claim was that the agent conducted fraud completely independent of the agreement containing the arbitration clause.25
Other courts have generally taken this same approach, finding that it is enough that an agent is sued for conduct relating to the agreement containing the arbitration clause, even if the claim does not directly arise from that agreement.26 Indeed, one other U.S. District Court has specifically heldthat Utah law would allow an agent sued for violating the FDCPA to enforce its principal's arbitration powers.27
These cases suggest a common-sense principle: where two parties to an agreement contemplate that a principal's alleged wrongdoing would be subject to arbitration, it makes little sense to treat that principal's agent any differently—regardless of whether the claim directly arises from the contract's terms. After all, entities can only act through employees or agents, "and an arbitration agreement would be of little value if it did not extend to [agents]."28 And if a party can avoid arbitration by simply naming a nonsignatory agent as a defendant, the right to arbitrate wouldbe largely "nullified."29
I am persuaded that the majority of courts have it right and that Utah courts would agree: agents can use their principal's arbitration rights if the claim against the agent relates to the principal's agreement and would be subject to arbitration had it been brought against the principal in the first place. Practically, companies act through employees and agents, and it makes little sense to allow a plaintiff to avoid what would otherwise be an arbitratable claim if brought against the principal, simply because an agent carried out that same act at the principal's behest. St. Pierre provides no compelling reason to adopt a narrow rule that an agent is only shielded from claims directly arising out of the terms of a contract (when that agent's principal would not be so limited).
ACCT provides evidence that it was acting as Synchrony's agent and that the allegations against ACCT relate to St. Pierre's agreement—ACCT can thus avail itself of Synchrony's arbitration rights.
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