Antitrust Law Daily Wrap Up, PRIVACY—S.D.N.Y.: TCPA claim against Citibank must be arbitrated, (Dec 29, 2015)

By Edward L. Puzzo, J.D.

A claim brought under the Telephone Consumer Protection Act by a credit card holder against Citibank must be heard in arbitration, because the card agreement's arbitration provision was valid, and the dispute fell within its scope, the federal district court in New York has ruled (Carr v. Citibank, NA, December 23, 2015, Scheindlin, S.).

Laverne Carr brought a claim under the Telephone Consumer Protection Act (TCPA), alleging that, without her consent, Citibank used an auto-dialing device to call her cell phone concerning her credit card. Citibank responded by moving to compel arbitration, pursuant to the provision contained in her credit card agreement requiring arbitration of all claims regarding her account, regardless of the legal theory used or the remedy sought.

Agreement issue. The initial issue was whether Carr's card agreement with Citibank contained an arbitration provision. Carr did not challenge the validity of the arbitration provision but instead challenged whether she was bound by the entire card agreement containing the arbitration provision. Specifically, she disputed whether she had received the card agreement and agreed to be bound by its terms.

The question as to whether a valid arbitration agreement exists within an agreement is distinct from the question of whether the parties entered into an agreement at all, the court stated. Under federal arbitration law, unless the plaintiff's challenge is to the arbitration clause itself, the arbitration clause is valid and the issue of the validity of the card agreement is a question for the arbitrator, not the court, the court ruled.

Scope of arbitration. The next issue was whether Carr's TCPA dispute fell within the scope of the arbitration provision. The court noted that the arbitration clause was broad, covering all claims related to Carr's account. In addition, multiple courts in the Circuit have held that TCPA claims were arbitrable under credit card arbitration agreements and a variety of other agreements. Thus, Carr's TCPA claim fell with the arbitration provision, the court ruled.

The determination as to whether a dispute is arbitrable under the Federal Arbitration Act (FAA) has two prongs, the court stated. The first is whether a valid arbitration agreement exists within the contract in question, and the second is whether the dispute in question falls within the scope of the arbitration agreement. Having ruled in the affirmative for both prongs, the court granted Citibank's motion to compel arbitration of Carr's TCPA claim.

The case is Civil Action No. 1:15-cv-06993-SAS.

Attorneys: Craig T. Kimmel (Kimmel & Silverman) for Laverne Carr. Justin A. Angelo (Ballard Spahr LLP) for Citibank, NA.

Companies: Citibank, NA

Cases: Privacy NewYorkNews