Youssofi v. Wells Fargo Bank, National Association et al

Filing 21

ORDER Denying Plaintiff's 17 Motion for Reconsideration. It is ordered that after having reviewed its previous ruling, the Court is satisfied that it committed no error in compelling the parties to arbitrate Plaintiff's claims. Accordingly, the Court denies plaintiff's motion for reconsideration. Signed by Judge Michael M. Anello on 12/21/2016. (dxj)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 Case No.: 16cv1330-MMA (JMA) MELAD YOUSSOFI, Plaintiff, 12 13 v. 14 ORDER DENYING PLAINTIFF’S MOTION FOR RECONSIDERATION WELLS FARGO BANK, NATIONAL ASSOCIATION, 15 16 [Doc. No. 17] Defendant. 17 18 On October 24, 2016, the Court compelled arbitration of Plaintiff Melad 19 Youssofi’s consumer protection claims against Defendant Wells Fargo Bank, and 20 dismissed this action without prejudice. See Doc. No. 15. Plaintiff now moves the Court 21 to reconsider its order and judgment of dismissal. See Doc. No. 17. Plaintiff argues that 22 the Court committed clear error by failing to determine whether Plaintiff knowingly and 23 voluntarily waived his rights under the First Amendment’s Petition Clause when entering 24 into a credit card agreement with Wells Fargo. See Doc. No. 17. Wells Fargo filed an 25 opposition to the motion, to which Plaintiff replied. See Doc. Nos. 18, 19. The Court 26 took the motion under submission on the papers and without oral argument pursuant to 27 Civil Local Rule 7.1.d.1. See Doc. No. 20. For the reasons set forth below, the Court 28 DENIES Plaintiff’s motion for reconsideration. 1 16cv1330-MMA (JMA) 1 DISCUSSION 2 1. Legal Standard 3 Pursuant to Federal Rule of Civil Procedure 59(e), district courts have the power to 4 reconsider a judgment by motion. Fed. R. Civ. P. 59(e). A Rule 59(e) motion seeks “a 5 substantive change of mind by the court.” Tripati v. Henman, 845 F.2d 205, 205 (9th Cir. 6 1988). Rule 59(e) provides an extraordinary remedy and, in the interest of finality and 7 conservation of judicial resources, such a motion should not be granted absent highly 8 unusual circumstances. Carroll v. Nakatani, 342 F.3d 934, 945 (9th Cir. 2003); 9 McDowell v. Calderon, 197 F.3d 1253, 1255 (9th Cir. 1999). Rule 59 may not be used to 10 re-litigate old matters, raise new arguments, or present evidence that could have been 11 raised prior to entry of the judgment. Exxon Shipping Co. v. Baker, 544 U.S. 471, 486-87 12 (2008). 13 Under Rule 59(e), it is appropriate to alter or amend a judgment if “(1) the district 14 court is presented with newly discovered evidence, (2) the district court committed clear 15 error or made an initial decision that was manifestly unjust, or (3) there is an intervening 16 change in controlling law.” United Nat. Ins. Co. v. Spectrum Worldwide, Inc., 555 F.3d 17 772, 780 (9th Cir. 2009). To carry the burden of proof, a moving party seeking 18 reconsideration must show more than a disagreement with the Court’s decision or a 19 recapitulation of the cases and arguments previously considered by the court. See United 20 States v. Westlands Water Dist., 134 F. Supp. 2d 1111, 1131 (E.D. Cal. 2001). 21 2. Analysis 22 Plaintiff argues that it was clear error to compel arbitration of his claims because 23 he did not knowingly and voluntarily waive his First Amendment right to litigate those 24 claims when he entered into a credit card agreement with Wells Fargo. 25 The First Amendment guarantees “the right of the people . . . to petition the 26 Government for a redress of grievances.” U.S. Const. amend. I. “The right to petition is 27 cut from the same cloth as the other guarantees of that Amendment, and is an assurance 28 of a particular freedom of expression.” McDonald v. Smith, 472 U.S. 479, 482 (1985). 2 16cv1330-MMA (JMA) 1 “[T]he Petition Clause protects the right of individuals to appeal to courts and other 2 forums established by the government for resolution of legal disputes.” Borough of 3 Duryea v. Guarnieri, 131 S. Ct. 2488, 2494 (2011). 4 Plaintiff contends that he did not knowingly and voluntarily waive his First 5 Amendment right to sue in federal court. However, Plaintiff signed the credit card 6 application and agreement in the presence of a Wells Fargo banker. The terms of the 7 application and agreement were set forth in the space immediately above the signature 8 line. See Doc. No. 7-2. Those terms clearly state that by signing the document, Plaintiff 9 agreed to arbitration: 10 11 12 13 You agree to be bound by the terms and conditions of the Customer Agreement and Disclosure Statement, which will be sent to you and understand that the terms of your account may be changed at any time, subject to applicable law. You hereby stipulate to the terms of the arbitration program described in the Customer Agreement and Disclosure Statement. 14 Id. at 1 (emphasis added). Plaintiff could only have been ignorant of the arbitration 15 stipulation if he did not read these terms prior to signing the application and agreement. 16 However, in California, “[a]s a general rule, a party cannot avoid the terms of a contract 17 by failing to read them before signing.” Knutson v. Sirius XM Radio Inc., 771 F.3d 559, 18 567 (9th Cir. 2014) (citing Marin Storage & Trucking v. Benco Contracting & Eng’g, 19 Inc., 89 Cal. App. 4th 1042, 1049 (2001)); Pinnacle Museum Tower Ass’n. v. Pinnacle 20 Mkt. Dev. (US), LLC, 55 Cal. 4th 223, 236 (2012) (“A party’s acceptance of an 21 agreement to arbitrate may be express, as where a party signs the agreement,” and “[a]n 22 arbitration clause within a contract may be binding on a party even if the party never 23 actually read the clause.”). 24 In opposition to Wells Fargo’s motion to compel, Plaintiff asserted that the Wells 25 Fargo banker never specifically advised him that his claims would be subject to 26 arbitration, and that “he had no idea what arbitration was until his attorney explained it” 27 to him. See Doc. No. 9-1 ¶¶ 5, 9. However, Wells Fargo was “under no obligation to 28 highlight the arbitration clause of its contract, nor [was] it required to specifically call 3 16cv1330-MMA (JMA) 1 that clause to [plaintiff’s] attention.” Sanchez v. Valencia Holding Co., LLC, 61 Cal. 4th 2 899, 914 (2015). Furthermore, Plaintiff’s unfamiliarity with the concept of arbitration 3 does not vitiate his consent in the absence of fraud or coercion. “[T]he general rule of 4 law in California is that when a person with the capacity of reading and understanding an 5 instrument signs it, he is, in the absence of fraud and imposition, bound by its contents, 6 and is estopped from saying that its provision is contrary to his intentions or 7 understanding.” Dobler v. Story, 268 F.2d 274, 277 (9th Cir. 1959). 8 Finally, Plaintiff previously complained that the credit card application and 9 agreement did not expressly provide for a waiver of his First Amendment right to petition 10 the courts. Such a waiver is implicit in the arbitration provision. Regardless, in this case 11 it was a limited waiver at most. Plaintiff retained the right to pursue his claims in small 12 claims court. “The right to access to the courts . . . includes the right of access to small 13 claims courts.” City and County of San Francisco v. Small Claims Court, 141 Cal. App. 14 3d 470, 477 (1983). 15 In sum, Plaintiff entered into a valid contract with Wells Fargo when he signed the 16 credit card application and agreement. Plaintiff consented to the terms of that contract, 17 including the arbitration program, as set forth in plain language less than two inches 18 above the signature line. Plaintiff’s failure to read or understand those terms does not 19 render the waiver of his First Amendment rights, if any, unknowing or involuntary. As 20 such, Plaintiff must arbitrate his claims against Wells Fargo. 21 CONCLUSION 22 Having reviewed its previous ruling, the Court is satisfied that it committed no 23 error in compelling the parties to arbitrate Plaintiff’s claims. Accordingly, the Court 24 DENIES Plaintiff’s motion for reconsideration. 25 26 27 IT IS SO ORDERED. DATE: December 21, 2016 ________________________________________ HON. MICHAEL M. ANELLO United States District Judge 28 4 16cv1330-MMA (JMA)

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