ANEKE v. AMERICAN EXPRESS TRAVEL RELATED SERVICES, INC. et al

Filing 64

MEMORANDUM OPINION to the Order denying Plaintiffs' Motion for an Order and granting Defendants' Motion to Compel Arbitration and Stay the Action. Signed by Judge Gladys Kessler on 1/31/12. (CL, )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
___________________________________
CHARLES ANEKE, ET AL.
)
)
Plaintiffs,
)
)
v.
)
)
AMERICAN EXPRESS TRAVEL
) Civil Action No. 11-1008(GK)
RELATED SERVICES, INC., ET AL.
)
)
Defendants.
)
)
___________________________________)

MEMORANDUM OPINION
Plaintiffs,
Addison,

and

Charles
Tolu

Aneke,

Tolu,

Rebecca
a

bring

Fasten,
action

class

Christopher
suit

against

Defendants American Express Travel Related Services Company, Inc.
(“American Express Travel”), American Express Company, American
Express Centurion Bank (“Centurion Bank”), and American Express
Bank, FSB, (“Defendants” or “American Express”) for violations of
the Right to Financial Privacy Act (“RFPA”), 12 U.S.C. § 3401 et
seq.
This case is presently before the Court on Plaintiffs’ Motion
for

an

Order

Subsection

Invalidating

the

of

American

the

Agreement(“Plaintiffs’

Motion

“Restrictions

to

on

Express

Invalidate

the

Arbitration”
Cardmember
Arbitration

Restrictions” or “Pls. Mot.”) [Dkt. No. 29] and Defendants’ Motion
to Compel Arbitration and Stay the Action (“Defendants’ Motion to
Compel

Arbitration”

or

“Defs.

Mot.”)

[Dkt.

No.

32].

Upon

consideration of the Motions, Oppositions, Replies, and the entire
record herein, and for the reasons set forth below, Plaintiffs’
Motion is denied and Defendants’ Motion is granted.
I. BACKGROUND
Plaintiffs are U.S. residents who hold credit card accounts,
as

either

primary

or

additional

users,1

with

Defendants.2

Plaintiffs’ First Amended Complaint ¶¶ 1-5 (“FAC”) [Dkt. No. 8]. As
part of their customer service, Defendants have established a
network of call/data centers, which give card holders direct access
to American Express personnel. Id. ¶ 28. In connection with this
system, Defendants have created an information network that allows
American Express personnel to access callers’ financial records,
which Defendants have collected and stored. Id. ¶¶ 24-26, 29. In

1

Plaintiff Charles Aneke is a primary account holder, who
originally opened a credit card account with American Express in
January 2008. Declaration of Paul V. Carey in Support of
Defendants’ Motion to Compel Arbitration and Stay Action ¶ 5
(“Carey Decl.”) [Dkt. No. 33]. Plaintiff Christopher Addison is
also a primary account holder, who opened an account with American
Express in 1992. Id. ¶ 7. Plaintiffs Rebecca Fasten and Tolu Tolu
are additional cardmembers on credit card accounts opened by other
customers who are primary cardmembers, but who are not named
plaintiffs in this action. Id. ¶¶ 8, 10.

2

Defendant American Express Travel is a New York-based bank holding
company and is a wholly owned subsidiary of Defendant American
Express Company, also a New York-based bank holding company. Id. ¶¶
10-11. Defendant Centurion Bank is a Utah corporation and a wholly
owned subsidiary of American Express Travel, and issues charge
cards and credit cards to persons and/or business entities. Id. ¶
12. American Express Bank, FSB is a federal savings bank and card
issuer with offices in New York and Utah, and is a wholly owned
subsidiary of Centurion Bank. Id. ¶ 13.
-2-

the

past,

American

Express

call

centers

have

been

located

primarily in the United States. Id. ¶ 30. However, over time,
Defendants have expanded their network to include call centers
located overseas and staffed predominantly by foreign nationals.
Id.
Plaintiffs allege that, in violation of the RFPA, Defendants
transmitted

Plaintiffs’

personal

financial

information

to

Defendants’ overseas call/data centers without either obtaining
Plaintiffs’ permission, or notifying Plaintiffs of the impact these
transfers might have on their legal rights. Id. ¶¶ 53-57. Customers
typically access the customer service call centers, whether located
overseas or in the United States, through U.S. telephone numbers
provided by American Express. FAC ¶¶ 32-33. American Express does
not, however, notify its customers that calls placed to these U.S.
numbers may be handled by personnel located overseas. Id.
Plaintiffs allege that because financial information received
and sent by the overseas call centers is not subject to U.S. laws,
the United States Government is free to intercept, search, and
seize this data. Id. ¶ 40. Plaintiffs also allege that, upon
information and belief, the U.S. Government has either seized their
financial information or that such information is at risk of
Government seizure. Id. ¶¶ 42-47,60. Plaintiffs also allege that
their financial information may have been seized by certain foreign

-3-

governments, which regularly share such data with the United
States. Id. ¶¶ 48-51, 61-62.
Plaintiffs bring their claims as a class action suit on behalf
of “[all] U.S.-based American Express customers whose financial
records have been electronically transferred from the United States
to foreign nationals residing overseas.” FAC ¶ 7. Defendants seek
to stay the litigation and have Plaintiffs’ claims arbitrated
pursuant

to

the

Arbitration

Provision

in

their

Cardmember

Agreements with Defendants (“Cardmember Agreement”).3
Under the Arbitration Provision in those Agreements, “[a]ny
claim shall be resolved upon the election by [the cardmember] or
[American Express], by arbitration pursuant to this Arbitration
provision . . . .” Cardmember Agreement of Plaintiff Charles Aneke,
Ex. A to Carey Decl., 10 (“Aneke Cardmember Agreement”) [Dkt. No.
33-1].4 Plaintiffs concede that this Provision applies to their

3

Plaintiffs are each subject to separate Cardmember Agreements
with Defendants. However, for purposes of the instant dispute, the
terms of these Agreements do not differ in any material respect.
For the sake of convenience, reference shall be made only to
Plaintiff Charles Aneke’s Cardmember Agreement.
4

The term “claim” is defined as
[A]ny claim, dispute or controversy between you and us
arising from or relating to your Account, this Agreement,
the Electronic Funds Transfer Services Agreement, and any
other related or prior agreement that you may have had
with us, or the relationships resulting from any of the
above
agreements,
except
for
the
validity,
enforceabiltiy, or scope of this Arbitration provision.”
(continued...)
-4-

claims against Defendants. Pls. Opp’n 1-3. As detailed in the
Cardmember Agreement, the Arbitration Provision, when invoked,
prohibits cardmembers from participating in any court action,
including a class action law suit, or in any arbitration in a
representative capacity or as a member of any class of claimants:
Significance of Arbitration5
IF ARBITRATION IS CHOSEN BY ANY PARTY WITH RESPECT TO A
CLAIM, NEITHER YOU NOR WE WILL HAVE THE RIGHT TO LITIGATE
THAT CLAIM IN COURT OR HAVE A JURY TRIAL ON THAT CLAIM.
FURTHER, YOU AND WE WILL NOT HAVE THE RIGHT TO
PARTICIPATE IN A REPRESENTATIVE CAPACITY OR AS A MEMBER
OF ANY CLASS OF CLAIMANTS PERTAINING TO ANY CLAIM SUBJECT
TO ARBITRATION. EXCEPT AS SET FORTH BELOW, THE
ARBITRATOR’S DECISION WILL BE FINAL AND BINDING. NOTE
THAT OTHER RIGHTS THAT YOU OR WE WOULD HAVE IF YOU WENT
TO COURT ALSO MAY NOT BE AVAILABLE IN ARBITRATION.
Restrictions on Arbitration
IF EITHER PARTY ELECTS TO RESOLVE A CLAIM BY ARBITRATION,
THAT CLAIM SHALL BE ARBITRATED ON AN INDIVIDUAL BASIS.
THERE SHALL BE NO RIGHT OR AUTHORITY FOR ANY CLAIMS TO BE
ARBITRATED ON A CLASS ACTION BASIS OR ON BASES INVOLVING
CLAIMS BROUGHT IN A PURPORTED REPRESENTATIVE CAPACITY ON
BEHALF OF THE GENERAL PUBLIC, OTHER CARDMEMBERS OR OTHER
PERSONS SIMILARLY SITUATED. The arbitrator’s authority to
resolve claims is limited to claims between you and us
alone, and the arbitrator’s authority to make awards is
limited to awards to you and us alone. Furthermore,
claims brought by you against us, or by us against you,
may not be joined or consolidated in arbitration with
claims brought by or against someone other than you,
unless agreed to in writing by all parties. No
arbitration award or decision will have any preclusive
effect as to issues or claims in any dispute with anyone

4

(...continued)
Ex. A to Carey Decl., 10 [emphasis in original].
5

All capitalization in the following sections has been taken
directly from the Cardmember Agreement.
-5-

who is not a named party to the arbitration.
Notwithstanding any other provision in this Agreement
(including but not limited to the Continuation subsection
below) and without waiving either party’s right to appeal
such decision, should any portion of this Restrictions on
Arbitration
subsection
be
deemed
invalid
or
unenforceable, then the entire Arbitration provision
(other than this sentence) shall not apply.
Id.
On May 31, 2011, Plaintiffs filed their Complaint, which they
subsequently amended on August 1, 2011. On October 10, 2011,6
Plaintiffs

filed

a

Motion
of

to

Invalidate

the

American

the

Restrictions

Express

on

Arbitration

Subsection

Cardmember

Agreement.7

On October 14, 2011, Defendants filed a Motion to

Compel Arbitration and Stay the Action. On October 27, 2011,
Defendants filed an Opposition to Plaintiffs’ Motion for an Order
Invalidating the “Restrictions on Arbitration” Subsection of the
American Express Cardmember Agreement [Dkt. No. 37]. On November 7,
2011, Plaintiffs filed an Opposition to Defendants’ Motion to
Compel Arbitration and Stay the Action [Dkt. No. 45], and a Reply
to Defendants’ Opposition to Plaintiffs’ Motion for an Order
Invalidating the “Restrictions on Arbitration” Subsection of the
American Express Cardmember Agreement [Dkt. No. 46]. On November

6

On October 11, 2011, Plaintiffs filed an Errata notice,
substituting their original Motion with a revised version. All
references to Plaintiffs’ Motion are to the revised version.

7

Plaintiffs’ Motion also included a request to certify the lawsuit
as a class action. Pursuant to the Court’s October 18, 2011 Order,
Plaintiffs’ motion to certify a class has been stayed pending
resolution of the arbitration issue.
-6-

17, 2011, Defendants filed a Reply in Further Support of the Motion
to Compel Arbitration and Stay the Action [Dkt. No. 50].
II. Statutory Framework
The Federal Arbitration Act (“FAA”), 9 U.S.C. § 1 et seq.,
governs the enforcement of contractual arbitration provisions, such
as the one in issue in this case,8 which pertain to matters of
interstate commerce. Compucredit Corp v. Greenwood, No. 10-948,
2012 WL 43514, at * 3 (U.S. Jan. 10, 2012). “The overarching
purpose

of

the

FAA

.

.

.

is

to

ensure

the

enforcement

of

arbitration agreements according to their terms so as to facilitate
streamlined proceedings.” At&T Mobility, LLC, v. Concepcion, __
U.S. __, 131 S. Ct. 1740, 1748 (2011)
Pursuant to Section 2 of the FAA,
A written provision in any . . . 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 equity for the revocation of any
contract.
9 U.S.C. § 2. As the Supreme Court has repeatedly held, this
provision

“establishes

‘a

liberal

8

federal

policy

favoring

The Arbitration Provision states that it is “made pursuant to
transactions involving interstate commerce and shall be governed by
the FAA.” Ex. A to Casey Decl., 10. There is no dispute that the
transactions involved in this case involve matters of interstate
commerce.
-7-

arbitration agreements.’” Compucredit Corp., 2012 WL 43514, at *3
(quoting Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460
U.S. 1, 24, 103 S. Ct. 927 (1983)), and reflects the “‘fundamental
principle that arbitration is a matter of contract.’” Concepcion,
131 S. Ct. at 1745 (quoting Rent-A-Center, West, Inc. v. Jackson,
__ U.S. __, 130 S. Ct. 2772, 2776 (2010)).
Thus, “courts must place arbitration agreements on an equal
footing with other contracts,” id. at 1745-46 (citations omitted),
and “[a]ny doubts concerning the scope of arbitrable issues should
be resolved in favor of arbitration.” Moses H. Cone Mem’l Hosp.,
460 U.S. at 24-25. This is the case “even when the claims at issue
are federal statutory claims, unless the FAA’s mandate has been
‘overriden

by

a

contrary

congressional

command.’”

Compucredit

Corp., 2012 WL 43514, at *3 (quoting Shearson/Am. Express Inc. v.
McMahon, 482 U.S. 220, 226, 107 S. Ct. 2332 (1987)).
III. Analysis
A. Procedural Arguments
Defendants

raise

several

procedural

arguments

to

rebut

Plaintiffs’ claims.
First,

Defendants

challenge

Plaintiffs’

claim

that

the

Arbitration Provision cannot be enforced under the FAA because it
violates the D.C. Consumer Protection Procedures Act (“DCCPPA”),

-8-

D.C. Code § 28-3904 et seq.9 Defendants argue that Plaintiffs lack
standing to raise this claim. Defs. Opp’n 8; Defs. Reply 7.
Under Article III of the U.S. Constitution, federal courts
have jurisdiction to hear only those cases or controversies that
are justiciable. As the Supreme Court has held, standing is central
to determining if a case or controversy meets this requirement.
In Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 112 S.
Ct. 2130 (1992), the Supreme Court set out the three elements a
plaintiff

must

establish

in

order

to

have

standing.

First,

plaintiff must have suffered “an ‘injury in fact’ - an invasion of
a

legally

protected

interest

which

is

(a)

concrete

and

particularized and (b) ‘actual or imminent, not conjectural’ or
hypothetical.” Id. (citations omitted). Second, there must be a
“casual connection between the injury and the conduct complained of
- the injury has to be fairly . . . trace[able] to the challenged
action of the defendant, and not . . . th[e] result [of] the
independent action of some third party not before the court.” Id.
(citation and internal quotations omitted). Third, it must be
“‘likely,’ as opposed to merely ‘speculative,’ that the injury will
be

redressed

by

a

favorable decision.” Id. at

561 (citation

omitted).

9

Plaintiffs argue that the Arbitration Provision violates the
DCCPPA because it “ban[s] a District of Columbia resident from
assuming the quasi-governmental, quasi-police powers of a private
attorney general.” Pls. Mot. 13.
-9-

In their Motion to Invalidate the Arbitration Restrictions
and

Opposition

Plaintiffs

to

Defendants’

challenge

the

Motion

to

enforceability

Compel
of

the

Arbitration,
Arbitration

Provision under the FAA. Because of this Arbitration Provision,
Plaintiffs claim to have suffered an injury in fact, namely the
inability to bring a class action claim.10 This alleged injury is
directly connected to the Arbitration Provision, which bars class
action arbitrations and prohibits cardmembers from participating in
class litigation subsequent to arbitration. Plaintiffs seek both
declaratory and injunctive relief as a remedy. FAC ¶¶ 22.7-22.17,
70-73.4. If the Court were to hold the Arbitration Provision to be
unenforceable and grant the requested relief, Plaintiffs’ injury
would be redressed. Thus, Plaintiffs satisfy the Lujan requirements
and

have

standing

to

challenge

the

enforceability

of

the

Arbitration Provision under the FAA.11

10

Although Defendants had not yet sought arbitration when
Plaintiffs filed their Motion, they did so only four days later in
their Motion to Compel Arbitration.

11

Defendants’ argument that Plaintiffs lack standing to challenge
the Arbitration Provision under the DCCPPA mischaracterizes the
standing inquiry. The standing doctrine concerns the justiciability
of cases, not the arguments raised to support a plaintiff’s cause
of action. Here, the underlying case or controversy is whether the
Arbitration Provision should be enforced under the FAA. The DCCPPA
is simply one argument Plaintiffs use to challenge such
enforcement.
Because Plaintiffs have presented a valid case or controversy
under Article III, Defendants are also incorrect that Plaintiffs’
DCCPPA argument constitutes a request for an advisory opinion.
Defs. Opp’n 9. See U.S. Nat’l Bank of Oregon v. Independent Ins.
(continued...)
-10-

Second,

Defendants

argue

that

Plaintiffs’

Motion

was

procedurally improper because their FAC did not seek a declaratory
judgment regarding the enforceability of the Arbitration Provision.
Defs. Opp’n 7. While it is true that Plaintiffs’ FAC does not
contain a specific request for a declaratory judgement, it does
allege that the Arbitration Provision is invalid and unenforceable.
FAC ¶¶ 22.7-22.17. Under the notice pleading requirements of FED .
R. CIV. P. 8, such pleadings are sufficient to support a declaratory
judgment request. See Bell Atl. Corp. v. Twombly, 550 U.S. 544,
555, 127 S. Ct. 1955 (2007) (“Federal Rule of Civil Procedure
8(a)(2) requires only a short and plain statement of the claim
showing that the pleader is entitled to relief, in order to give
the defendant fair notice of what the . . . claim is and the
grounds upon which it rests.”).
Third, Defendants argue that Plaintiffs’ Motion is barred by
the FAA. However, contrary to Defendants’ claim, the FAA only
addresses motions to compel arbitration, 9 U.S.C. § 4., and does
not contain any prohibition on motions to invalidate a contractual
arbitration clause.

11

(...continued)
Agents of Am., Inc., 508 U.S. 439, 446, 133 S. Ct. 2173 (holding
that a court renders an advisory opinion when there is no
justiciable case or controversy under Article III).
-11-

B. Substantive Arguments
In determining whether an arbitration provision is valid under
the FAA, courts must engage in a two-part inquiry. Stromberg Sheet
Metal Works, Inc., v. Wash. Gas Energy Sys., 448 F. Supp. 2d 64, 68
(D.D.C. 2006) (citing Nelson v. Insignia/ESG, Inc., 215 F. Supp. 2d
143, 146 (D.D.C. 2002)). First, the court “must decide whether the
parties

entered

into

a

valid

and

enforceable

arbitration

agreement.” Id. (citing Nur v. K.F.C. USA, Inc., 142 F. Supp. 2d
48, 50-51 (D.D.C. 2001)). Second, the court must “determine whether
the arbitration agreement encompasses the claims raised in the
complaint.” Id. The party opposing arbitration bears the burden of
demonstrating

that

the

arbitration

provision

is

invalid

and

unenforceable. Green Tree Fin. Corp. - Ala. v. Randolph, 531 U.S.
79, 91-92, 121 S. Ct. 513 (2000).
The parties’ dispute centers on the first prong of this
analysis, namely whether the Arbitration Provision is valid and
enforceable.
1.
Plaintiffs

D.C. v. Utah Law
argue

that

the

Arbitration

Provision

is

unenforceable because it is illegal under D.C. law. Pls. Mot. 3-21.
Defendants

respond

that

Utah,

and

not

D.C.

law,

governs

the

enforceability of the Arbitration Provision, and that the Provision
is valid and enforceable under Utah’s statutes and caselaw. Defs.
Mot. 13-16; Defs. Opp’n 8 n. 5.
-12-

In deciding whether an arbitration agreement is valid, courts
apply “ordinary state-law principles that govern the formation of
contracts.” First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938,
944, 115 S. Ct. 1920 (1995). To determine the applicable state law
in a FAA case, federal courts use the conflict of law principles
applied by the state in which they sit. See Gay v. Creditform, 511
F.3d 369, 389 (3d Cir. 2007) (FAA case in which appellate court
applied Pennsylvania conflict of law rule because district court
was located in Pennsylvania).
The District of Columbia Court of Appeals “has adopted the
general rule that parties to a contract may specify the law they
wish to govern, as part of their freedom to contract, as long as
there is some reasonable relationship with the state specified.”11
Ekstrom v. Value Health, Inc., 68 F.3d 1391, 1394 (D.C. Cir. 1995)
(citation and internal quotations omitted). Such a reasonable
relationship exists where one of the parties to the contract is
based in the specified state. See Whiting v. AARP, 637 F.3d 355,

11

To support their claim that D.C. law applies to the Cardmember
Agreement, Plaintiffs cite to another D.C. conflict of law
principle in which courts “evaluate the governmental policies
underlying the applicable laws and determine which jurisdiction’s
policy would be most advanced by having its law applied to the
facts of the case under review.” Pls. Opp’n (citing to Hercules &
Co. v. Shama Rest. Corp., 566 A.2d 31 (D.C. 1989)). Plaintiffs have
failed to point to any authority applying this D.C. conflict of law
principle to contracts containing an express choice of law
provision. This is unsurprising, as D.C. courts clearly honor
express
contractual
choice
of
law
provisions
under
the
circumstances noted above.
-13-

361 (D.C. Cir. 2011) (enforcing contract’s D.C. choice of law
provision where party to contract was based in the District of
Columbia).
The Cardmember Agreement contains an express choice of law
provision selecting Utah law to govern the contract. See Aneke
Cardmember

Agreement

(“Utah

law

Agreement and your Account.”).

and

federal

law

govern

this

As a number of Defendants are

headquartered in Utah, this choice of law provision is valid and
Utah

law,

therefore,

determines

the

Arbitration

Provisions’

enforceability.
Under Utah law, a credit agreement is binding and enforceable
if:
(i) the debtor is provided with a written copy of the
terms of the agreement; (ii) the agreement provides that
any use of the credit offered shall constitute acceptance
of those terms; and (iii) after the debtor receives the
agreement, the debtor, or a person authorized by the
debtor, requests funds pursuant to the credit agreement
or otherwise uses the credit offered.
UTAH CODE ANN. § 25-5-4(2)(e). Utah law also permits the inclusion of
class-action waivers in consumer credit agreements. See UTAH CODE
ANN. § 70(C)-4-105 (“[A] creditor may contract with the debtor of
an open-end consumer credit contract for a waiver by the debtor of
the right to initiate or participate in a class action related to
the open-end consumer credit contract.”).
As Defendants accurately point out, a number of courts have
found the Arbitration Provision to be valid and enforceable under

-14-

Utah law. See, e.g., Miller v. Corinthian Colleges, Inc., 769 F.
Supp. 2d 1336, 1333-49 (D. Utah 2011) (holding that both American
Express arbitration agreement itself and its class action waiver
were enforceable under Utah law); Wynne v. American Express Co.,
No. 2:09-CV-00260, slip op., 2010 WL 3860362, at *7-9 (E.D. Tex.
Sept. 30, 2010) (holding class action waiver in American Express
arbitration provision to be enforceable under Utah law). Plaintiffs
have neither distinguished this legal precedent nor otherwise
argued

that

Utah

law

requires

invalidating

the

Arbitration

Provision involved in this case.
For these reasons, the Court concludes that the Arbitration
Provision is valid and enforceable under Utah law, which is the
relevant state law in this case.12
2.

The FAA v. RFPA

Plaintiffs argue that, by preventing them from obtaining
class-wide

injunctive

relief,

the

Arbitration

Provision

is

unenforceable because it conflicts with the purpose of RFPA.13 Pls.
12

Because Utah law applies to this case, there is no cause to
consider Plaintiffs’ argument that the Arbitration Provision is
unenforceable under the DCCPPA.

13

Plaintiffs also claim that they “cannot yet make a good faith
argument with respect to the expense of arbitration because
Plaintiffs do not know whether expert testimony will be required.”
Pls. Opp’n 25. Under Supreme Court precedent, the existence of
“large arbitration costs” may be grounds for holding that an
arbitration provision containing a class-action waiver conflicts
with a claimant’s federal statutory rights. Randolph, 531 U.S. at
90. However, where “a party seeks to invalidate an arbitration
(continued...)
-15-

Mot. 21-25. Defendants respond that class wide injunctive relief is
neither mandated by the RFPA nor necessary to fulfill the statute’s
purpose. Defs. Opp’n 18-24.
As

the

Supreme

Court

has

held,

claims

based

on

federal

statutes are no exception to the general rule that arbitration
agreements

should

be

enforced

according

to

their

terms.

See

Mitsubishi Motors Corp., v. Soler Chrysler-Plymouth, Inc., 473 U.S.
614, 626, 105 S. Ct. 3346 (1985) (holding that claims based on
federal statutes may be subject to arbitration). Although all
statutory claims “may not be appropriate for arbitration, having
made the bargain to arbitrate, the party should be held to it
unless Congress itself has evinced an intention to preclude waiver
of judicial remedies for the statutory rights at issue.” Gilmer v.
Interstate/Johnson Lane Corp., 500 U.S. 20, 26, 111 S. Ct. 1647
(1991).

If

such

Congressional

intent

exists,

“it

will

be

discoverable in the text of the [statute], its legislative history,
or an ‘inherent conflict’ between arbitration and the statute’s
underlying purpose.” Id.

13

(...continued)
agreement on the ground that arbitration would be prohibitively
expensive, that party bears the burden of showing the likelihood of
incurring such costs.” Id. at 92. “The ‘risk’ that [the party] will
be saddled with prohibitive costs is too speculative to justify the
invalidation of an arbitration agreement.” Id. at 91. To the extent
Plaintiffs have alleged that the costs of individual arbitration
may be exorbitant, they have presented no evidence whatsoever and,
therefore, have failed to sustain their burden to prove this claim.
-16-

RFPA

prohibits financial

Government

with

information

institutions

concerning

a

from

providing the

customer’s

financial

records, unless the customer authorized the disclosure of the
information or the Government obtained a valid warrant or subpoena.
12 U.S.C. § 3402. At the time of its passage, RFPA “fill[ed] the
void in . . . Federal law regarding statutory protection against
unrestricted access to third-party records” and “represented a
compromise between a bank customer’s right to financial privacy and
the need of law enforcement agencies to obtain financial records
pursuant to legitimate investigations.” United States v. Frazin,
780 F.2d 1461, 1465 (9th Cir. 1986).
Under RFPA, any agency or department of the United Sates or
financial institution that violates its provisions is liable for
civil penalties. 12 U.S.C. § 3417. In addition, as Plaintiffs
correctly point out, RFPA also permits parties to seek injunctive
relief for statutory violations. 12 U.S.C. § 3418.
Plaintiffs

do

not

dispute

that,

under

the

Arbitration

Provision, they may individually pursue RFPA’s civil and injunctive
remedies in arbitration proceedings. Most significantly, they have
failed to point to any language in RFPA, its legislative history,
or

case

law

suggesting

that

class-wide

injunctive

relief

is

mandated by or necessary to carry out RFPA’s purpose. In short,
Plaintiffs have presented no legal authority suggesting that RFPA
precludes enforcement of the Arbitration Provision.

-17-

Plaintiffs’ remaining arguments rest on the presumption that
“piecemeal, one-off,14 non-binding outcomes

. . . . cannot provide

meaningful relief to Cardmembers - relief that is consistent with
the federal government’s charge to safeguard interstate commerce.”15
Pls. Mot. 21. The Supreme Court has made it clear, however, that

14

Plaintiffs appear to use the term “one-off” to describe
individual, as opposed to class-wide, arbitration, although they
never define the term.
15

In particular, Plaintiffs argue that
Given the global configuration of American Express’
procedures, Plaintiffs cannot envision one-off arbitral
relief that will ensure compliance with the RFPA with
respect
to
the
RFPA-indicated
[sic]
individual
Cardmember. Without a categorical change of its
procedures how can American Express ensure compliance
with the RFPA with respect to a single individual when
that Cardmember makes a phone call to American Express
from a public pay phone? Or makes a phone call to
American Express from a phone number not identified as
hers? Or executes an online transaction using the
computer at a public library? Or executes an online
transaction with American Express using a computer in
another state? Plaintiffs posit that such compliance is
impossible.
Even
if
it
were
possible
for
the
individualized injunction to follow the arbitrationvindicated
Cardmember
throughout
her
travels
in
interstate commerce, the intensive monitoring of such a
RFPA/arbitration-vindicated
Cardmember
would
be
antithetical to a host of other privacy safeguards and
controls on private surveillance.

Pls. Mot. 24.
This speculative, not to say rhetorical, argument is a pure
public policy argument. Plaintiffs overlook the fact that Congress
has already enunciated our federal public policy by enacting the
FAA.
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such “generalized attacks on arbitration that rest on ‘suspicion of
arbitration as a method of weakening the protections afforded in
the substantive law to would-be complainants’” must be rejected.
Randolph,

531

U.S.

at

89-90

(citation

omitted).

Even

claims

“arising under a statute designed to further important social
policies may be arbitrated because ‘so long as the prospective
litigant effectively may vindicate [his or her] statutory cause of
action in the arbitral forum’ the statue serves its function.” Id.
at 90 (citation omitted).
In essence, Plaintiffs have presented a policy argument about
the limits of arbitration and the prejudicial impact it has on
their statutory claims. In passing the FAA, Congress established a
“‘liberal

federal

policy

favoring

arbitration

agreements.’”

Compucredit Corp., 2012 WL 43514, at *3 (quoting Moses H. Cone
Mem’l Hosp., 460 U.S. 1 at 24). To invalidate the Arbitration
Provision based upon Plaintiffs’ policy arguments would undermine
this firmly established Congressional policy choice.
For these reasons, the Court concludes that the Arbitration
Provision is valid and enforceable under RFPA.

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IV. Conclusion
For the foregoing reasons, Plaintiffs’ Motion to Invalidate
the Arbitration Restrictions is denied and Defendants’ Motion to
Compel

Arbitration

is

granted.

An

Order

will

accompany

this

Memorandum Opinion.16

/s/
Gladys Kessler
United States District Judge

January 31, 2012

16

The Court has today received from Plaintiffs a Notice, and a
Motion to Take Notice, of Supplemental Authority and Notice of
Defendants’ Waiver of Arbitration and Abandonment of Motion to
Compel Arbitration [Dkt. No. 61]. It is difficult, on first
reading, to comprehend the nature of their legal argument. In any
event, Defendants will have an opportunity to respond.
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