Williams et al v. Champs Auto Sales, Inc. et al

Filing 13

ORDER granting 4 Motion to compel arbitration and dismissing claims against defendant Credit Acceptance Corporation without prejudice. Signed by District Judge Matthew F. Leitman. (DPer)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
RENIA WILLIAMS and
CHRISTOPHER IVORY,
Plaintiffs,

Case No. 14-cv-12866
Hon. Matthew F. Leitman

v.
CHAMPS AUTO SALES, INC. et al.,
Defendants.
_________________________________/
ORDER GRANTING DEFENDANT CREDIT ACCEPTANCE
CORPORATION’S MOTION TO COMPEL ARBITRATION (ECF #4) AND
DISMISSING CLAIMS AGAINST DEFENDANT CREDIT ACCEPTANCE
CORPORATION WITHOUT PREJUDICE

Plaintiffs Renia Williams and Christopher Ivory (collectively “Plaintiffs”)
have filed a four-count Complaint against Defendants Champs Auto Sales, Inc.
(“Champs”) and Credit Acceptance Corporation (“CAC”). The Complaint asserts
only a single claim against CAC – Count IV – which alleges a violation of the
Electronic Funds Transfers Act, 15 U.S.C. § 1693 et seq. (the “EFTA”). Now
before the Court is CAC’s motion to compel Plaintiffs to arbitrate their EFTA
claim and to dismiss that claim. (See ECF #4.) For all of the reasons stated below,
the Court GRANTS CAC’s motion.

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CAC seeks to compel arbitration based upon a broad arbitration provision in
the parties’ contract – a provision that requires Plaintiffs to arbitrate any dispute
with CAC.1 Plaintiffs do not dispute that the arbitration provision is enforceable
and do not dispute that it encompasses their EFTA claim. Plaintiffs make only one
argument in their effort to avoid arbitration – that their EFTA claim “is not subject
to mandatory arbitration because Congress ‘intended to preclude a waiver of a
judicial forum’ for EFTA claims.” (Plaintiffs’ Response Brief, ECF # 9 at 2, Pg. ID
88, quoting Gilmer v. Interstate Johnson Lane Corp., 500 U.S. 20, 21 (1991).)
However, “[t]he burden is on the party opposing arbitration … to show that
Congress intended to preclude a waiver of judicial remedies for the statutory rights
at issue,” Shearson/Am. Exp., Inc. v. McMahon, 482 U.S. 220, 227 (1987), and
Plaintiff have failed to satisfy that burden.
Plaintiffs acknowledge that Congressional intent to protect against waiver of
the right to a judicial forum must be “deducible from text or legislative history.”
(Pls.’ Resp. Br. at 3, Pg. ID 89, quoting Mitsubishi Motors Corp. v. Solersoler, 473
U.S. 614, 628 (1985).) Plaintiffs purport to find Congress’ intent to preclude
waiver of a judicial forum for EFTA claims in two provisions of the Act:

1

The contract was originally entered into between Plaintiffs and Champs and was
then immediately assigned to CAC. Plaintiffs do not dispute that CAC may now
enforce the contract.
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1. 15 U.S.C. §1693m(g), which provides: “Without regard to the amount in
controversy, any action under this section may be brought in any United
States district court, or in any other court of competent jurisdiction,
within one year from the date of the occurrence of the violation”2; and
2. 15 U.S.C. § 1693l, which provides: “No writing or other agreement
between a consumer and any other person may contain any provision
which constitutes a waiver of any right conferred or cause of action
created by this subchapter. Nothing in this section prohibits, however,
any writing or other agreement which grants to a consumer a more
extensive right or remedy or greater protection than contained in this
subchapter or a waiver given in settlement of a dispute or action.”
Plaintiffs argue that the first provision confers “a substantive right to access
federal courts to bring [EFTA] claims,” and that the second provision prohibits a
waiver of the substantive right of access. (Pls.’ Resp. Br. at 4-5, Pg. ID 90-91.)
Plaintiffs mis-read the first provision. It does not create a “substantive right”
of access to federal district courts. Instead, it simply provides that a federal district
court is one appropriate forum in which to bring an EFTA claim. Plaintiffs have
not cited any decision from any court that reads the provision as Plaintiffs do, nor

2

This provision was accurately quoted in Plaintiffs’ response brief but was
incorrectly cited as 15 U.S.C. § 1693m(f). (See Pls. Resp. Br. at 4, Pg. ID 90.)
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have Plaintiffs cited a single decision in which any court has held that EFTA
claims are not subject to mandatory arbitration.
In fact, several courts – including this Court – have held that EFTA claims
may be subject to mandatory arbitration. See, e.g., Novak v. JP Morgan Chase
Bank, N.A., 06-cv-14862, 2008 WL 907380 (E.D. Mich. Mar. 31, 2008);
Guadagno v. E*Trade Bank, 592 F.Supp.2d 1263, 1272 (C.D. Cal. 2008); Byrd v.
Suntrust Bank, 2013 WL 3816714 (W.D. Tenn July 22, 2013); Johnson v. W.
Suburban Bank, 225 F.3d 366, 379 (3d Cir. 2000).

Plaintiffs have not

acknowledged these decisions, much less made any effort to distinguish them or to
show why this Court should not follow them.
In sum, Plaintiffs have failed to establish that their EFTA claim is immune
from the mandatory arbitration provision in their contract with CAC. Accordingly,
IT IS HEREBY ORDERED THAT:
A. CAC’s motion to compel arbitration (ECF #4) is GRANTED;
B. If and to the extent that Plaintiffs wish to pursue their EFTA claim
against CAC, they are directed to do so in accordance with the terms of
the parties’ contract; and
C. In lieu of staying the proceedings against CAC, the sole claim against
CAC is DISMISSED WITHOUT PREJUDICE to the parties’ rights to

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move to re-open this case to seek confirmation of an arbitration award or
to seek any other relief to which the parties may be entitled.

s/Matthew F. Leitman
MATTHEW F. LEITMAN
UNITED STATES DISTRICT JUDGE
Dated: December 4, 2014

I hereby certify that a copy of the foregoing document was served upon the parties
and/or counsel of record on December 4, 2014, by electronic means and/or
ordinary mail.
s/Holly A. Monda
Case Manager
[phone]

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