Jenkins v. Fifth Third Bank
ORDER granting #10 Defendant's Motion to Dismiss and to Compel Arbitration. Signed by Judge Timothy S. Black on 8/22/17. (gs)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
RANDY JENKINS, individually and on
behalf of all others similarly situated,
Case No. 1:16-cv-976
Judge Timothy S. Black
FIFTH THIRD BANK,
ORDER GRANTING DEFENDANT’S
MOTION TO DISMISS
AND TO COMPEL ARBITRATION (Doc. 10)
In this proposed class action, Plaintiff Randy Jenkins (“Plaintiff”) alleges that
Defendant Fifth Third Bank (“Defendant”) willfully and negligently violated 15 U.S.C.
§ 1681-1692x, The Fair Credit Reporting Act (“the FCRA”) by submitting credit report
inquiries after Plaintiff’s debt to Defendant had been discharged through Chapter 7
bankruptcy proceedings. This case is now before the Court on Defendant’s motion to
dismiss and to compel arbitration, or, in the alternative, to stay this action pending
arbitration (Doc. 10) and the parties’ responsive memoranda (Docs. 13, 14). For the
reasons set forth below, the Court will enforce the parties’ written agreement to arbitrate
and therefore dismiss this case.
FACTUAL BACKGROUND AND PROCEDURAL POSTURE
Defendant is a bank that offers consumer lending, among other banking services.
(Doc. 1 at ¶ 11). In December, 2008, Plaintiff opened a credit card account with
Defendant (the “Account”) and subsequently incurred debt owed to Defendant. (Doc. 10
at 2-3). Pursuant to Defendant’s automated credit processing system, upon opening the
Account, Plaintiff was mailed his credit card (“Credit Card”) with a copy of the terms
governing the Account (“the Cardmember Agreement”). (Doc. 10-2 at ¶ 6). The
Cardmember Agreement provided that Defendant:
may reevaluate [Plaintiff’s] financial condition and investigate any
information you provided on your Account application at any time, and in
the course of doing so, we may obtain a current credit report and ask you
for any additional information about your financial condition by completing
a Personal Financial Statement or such other form that we request from
time to time. You authorize us and give us permission to obtain any
information about you that we believe would be beneficial to facilitate our
determination of your eligibility for the Account and the Card, including
credit reports from consumer reporting agencies.
(Doc. 10-4 at ¶ 23).
The Cardmember Agreement also contains an arbitration agreement (“Arbitration
You and we each agree that any Claim (as defined below) will be arbitrated
instead of litigated in court under the circumstances and procedures set
forth below. The term Claim (a) means any claim, dispute or controversy
between you and us arising from or relating to this Agreement, any prior
agreement that you may have had with us or the relationships resulting
from the Agreement or any prior agreement, including the validity,
enforceability or scope of this provision, the Agreement or any prior
agreement and (b) includes claims of every kind and nature, including but
not limited to initial claims, counterclaims, cross-claims and third-party
claims and claims based upon contract, tort, fraud and other intentional
torts, statute, common law and equity. The term Claim is to be given the
broadest possible meaning and includes, by way of example and without
limitation, any claim, dispute or controversy that arises from or relates to (i)
the Account created by the Agreement or any prior agreement or any
balances on the Account, (ii) advertisements, promotions or oral or written
statements related to the Account or the terms of financing and (iii) your
use of the Account. Any Claim will be resolved upon the election of you or
us by arbitration pursuant to this provision and the Code of Procedure
(Code) of the National Arbitration Forum (NAF) in effect at the time the
Claim is filed. (If for any reason the NAF is unable or unwilling or ceases
to serve as arbitration administrator, another nationally recognized
arbitration organization utilizing similar rules and procedures will be
substituted by us.) With respect to Claims covered by this provision, a party
who has asserted a Claim in a lawsuit in court may elect arbitration with
respect to any Claim subsequently asserted in that lawsuit by any other
party or parties. 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, OR TO ENGAGE IN PREARBITRATlON
DISCOVERY EXCEPT AS PROVIDED FOR IN THE NAF CODE.
FURTHER, YOU WILL NOT HAVE THE RIGHT TO PARTICIPATE
AS A REPRESENTATIVE OR 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 WOULD HAVE IF YOU WENT
TO COURT MAY ALSO NOT BE AVAILABLE IN ARBITRATION.
(Doc. 10-4 at ¶ 25). While the Cardmember Agreement was revised several times over
the next few years, the Arbitration Agreement remained substantively the same from
October 13, 2008 to May 1, 2012. (Doc. 10-1 at 6; Doc. 10-2 at ¶¶ 6-8).
For more than two years, Plaintiff used the Credit Card to make charges to the
Account and received monthly statements reflecting his activity. (Doc. 10-1 at 5; Doc.
10-3). On or about August 12, 2011, Plaintiff made his last purchase on the Account.
(Doc. 10-1 at 6). On September 16, 2011, Plaintiff became delinquent on the Account.
(Doc. 10-1 at 7). On March 30, 2012, Defendant “charged off” Plaintiff’s delinquent
balance after Plaintiff continually failed to make payments. (Doc. 10-1 at 7).
On November 29, 2012, Plaintiff filed for Chapter 7 bankruptcy in the United
States Bankruptcy Court for the District of Nevada (“Bankruptcy Court”). (Doc. 1 at
¶ 16). On March 6, 2013, the Bankruptcy Court granted Plaintiff a discharge, which
included the debt owed to Defendant. (Doc. 1 at ¶¶ 16-21; Doc. 13-3; Doc. 13-5).
Plaintiff did not make any charges to the Account after the discharge. (Doc. 1 at ¶ 23).
On or about September 30, 2013, and March 3, 2014, Defendant submitted credit
report inquiries to TransUnion, a credit reporting agency. (Id. at ¶ 24). Plaintiff alleges
these inquiries were unlawful because the bankruptcy discharge “extinguished any
relationship between Plaintiff and Defendant.” (Id. at ¶¶ 22-28). Plaintiff further claims
Defendant’s credit inquiries fall outside the scope of permissible uses provided for under
15 U.S.C. §1681b. (Id. at ¶ 26). On October 21, 2016, Plaintiff filed, on behalf of
himself and all others similarly situated, a single-count complaint asserting Defendant’s
post-discharge credit report inquiries violated the Fair Credit Reporting Act.
Defendant has moved to dismiss (or in the alternative, stay) this action on the
grounds that the Arbitration Agreement requires Plaintiff to arbitrate his claim. (Doc.
10). Plaintiff opposes Defendant’s motion. (Doc. 13).
STANDARD OF REVIEW
When asked by a party to compel arbitration under a contract, a federal court must
determine whether the parties agreed to arbitrate the dispute at issue. Stout v. J.D.
Byrider, 228 F.3d 709, 714 (6th Cir. 2000). Any ambiguities in the contract or doubts as
to the parties’ intentions should be resolved in favor of arbitration. Id. Courts are to
examine the language of the contract in light of the strong federal policy in favor of
arbitration. Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24
(1983) (the FAA “is a congressional declaration of a liberal federal policy favoring
arbitration agreements, notwithstanding any state substantive or procedural polices to the
contrary”). The “primary purpose” of the FAA is to ensure “that private agreements to
arbitrate are enforced according to their terms.” Volt Info. Sci., Inc. v. Bd. of Tr. of
Leland Stanford, Jr. Univ., 489 U.S. 468, 479 (1989).
Section 3 of the FAA provides:
If any suit or proceeding be brought in any of the courts of the United
States upon any issue referable to arbitration under an agreement in writing
for such arbitration, the court in which such suit is pending, upon being
satisfied that the issue involved in such suit or proceeding is referable to
arbitration under such an agreement, shall on application of one of the
parties stay the trial of the action until such arbitration has been had in
accordance with the terms of the agreement, providing the applicant for the
stay is not in default in proceeding with such arbitration.
9 U.S.C. § 3. Section 3 thus requires a court in which suit has been brought “‘upon any
issue referable to arbitration under an agreement in writing for such arbitration’ to stay
the court action pending arbitration once it is satisfied that the issue is arbitrable under
the agreement.” Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 400
In considering a motion to compel arbitration under the FAA, a court has four
tasks: (1) it must determine whether the parties agreed to arbitration; (2) it must
determine the scope of the arbitration agreement; (3) if federal statutory claims are
asserted, it must consider whether Congress intended those claims to be nonarbitrable;
and (4) if the court concludes that some, but not all, of the claims in the action are subject
to arbitration, it must determine whether to stay the remainder of the proceedings pending
See also Santos v. Am. Broad. Co., 866 F.2d 892, 894 (6th Cir. 1989) (“[w]here the parties to a
contract that provides for arbitration have an arbitrable dispute, it is crystal clear that Congress
has mandated that federal courts defer to contractual arbitration”).
arbitration. Stout, 228 F.3d at 714.
In determining the scope of an arbitration agreement, it is proper “to ask if an
action could be maintained without reference to the contract or relationship at issue.”
Fazio v. Lehman Bros., Inc., 340 F.3d 386, 395 (6th Cir. 2003). The Sixth Circuit applies
“the cardinal rule that, in the absence of fraud or willful deceit, one who signs a contract
which he has had an opportunity to read and understand, is bound by its provisions.”
Allied Steel & Conveyors, Inc. v. Ford Motor Co., 277 F.2d 907, 913 (6th Cir. 1960). It
is settled authority that doubts regarding the applicability of an arbitration clause should
be resolved in favor of arbitration. Id. Indeed, “any doubts are to be resolved in favor of
arbitration ‘unless it may be said with positive assurance that the arbitration clause is not
susceptible of an interpretation that covers the asserted dispute.’” Nestle Waters N. Am.,
Inc. v. Bollman, 505 F.3d 498, 504 (6th Cir. 2007) (quoting Masco Corp. v. Zurich Am.
Ins. Co., 382 F.3d 624, 627 (6th Cir. 2004)). If parties contract to resolve their disputes
in arbitration rather than in the courts, a party may not renege on that contract absent
extreme circumstances. Allied Steel & Conveyors, 277 F.2d at 913. Furthermore, a
district court’s duty to enforce an arbitration agreement under the FAA is not diminished
when a party bound by the agreement raises claims arising from statutory rights. Stout,
228 F.3d at 715.
A. The parties agreed to arbitration.
Defendant argues that Plaintiff’s application for and use of the Credit Card
constituted acceptance of the terms of the Cardmember Agreement, including the
Arbitration Agreement. (Doc. 10 at 8-9). The Court agrees.
In determining whether parties have agreed to arbitrate specific disputes, courts
generally consider the applicable state law concerning contract formation. First Options
of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995). Ohio law applies here. (Doc. 10-4
at ¶ 32). Agreements on credit accounts between banks and customers “are contracts
whereby the issuance and use of a credit card creates a legally binding agreement.” Bank
One, Columbus, NA v. Palmer, 579 N.E.2d 284, 285 (Ohio 1989). Accordingly, a credit
cardholder’s use of the card shows that “he agree[s] to be bound by the Agreement and
all its terms.” Heiges v. JP Morgan Chas Bank, N.A., 521 F. Supp. 2d 641, 647 (N.D.
Here, Defendant submitted affirmative evidence that Plaintiff used the Credit Card
after he was sent the Cardmember Agreement and that Plaintiff received multiple
revisions of the Cardmember Agreement—all of which contained the Arbitration
Agreement—throughout the period in which he was using the Credit Card to make
charges to the Account. (Doc. 10-2 at ¶¶ 5-9). Plaintiff does not dispute that he used the
Credit Card to make purchases on the Account and admits he listed Defendant as a
creditor for the Account in his bankruptcy case. (Doc. 1 at ¶ 21; Doc. 13 at 9, Ex. 2). In
these circumstances, the Court finds that the Plaintiff’s use of the Credit Card amounted
to consent of the Arbitration Agreement. See Heiges, 521 F. Supp. 2d at 647.
B. The Court will enforce the Arbitration Agreement.
1. Plaintiff’s bankruptcy discharge did not render the Arbitration
Plaintiff argues the Arbitration Agreement no longer applies because Plaintiff’s
bankruptcy discharge renders the Cardmember Agreement unenforceable. (Doc. 13 at 49).
The Court does not agree. Whether a contract’s arbitration clause remains
enforceable after the debt owed under the contract has been discharged depends on the
nature of the claim. A court may decline to enforce an arbitration agreement only if
arbitration would conflict with the underlying purposes of the Bankruptcy Code. See
Mann v. Equifax Information Services, LLC, No.12-cv-14097, 2013 U.S. Dist. LEXIS
103210, at *12-13 (E.D. Mich. July 22, 2013), report and recommendation adopted at
2013 U.S. Dist. LEXIS 101803 (E.D. Mich. July 22, 2013); Green Tree Servicing, LLC v.
Brough, 930 N.E.2d 1238, 1243 (Ind. Ct. App. 2010).
Accordingly, courts have found arbitration agreements unenforceable in cases
where the debtor alleges the defendant attempted to collect discharged debt, thereby
frustrating the “fresh start” provided in bankruptcy. See Harrier v. Verizon Wireless
Personal Communications LP, 903 F. Supp. 2d 1281, 1283 (M.D. Fla. 2012) (refusing to
compel arbitration when plaintiff-debtors had “received numerous calls from the
defendant seeking payment of a discharged debt”); Jernstad v. Green Tree Servicing,
LLC, No. 11 C 7974, 2012 WL 8169889 at *2 (N.D. Ill. Aug. 2, 2012) (finding that one
of the Bankruptcy Code’s primary purposes is “to give debtors a fresh start,” which the
creditor frustrated by making several attempts to collect the discharged debt).
However, courts have enforced arbitration agreements, post-discharge, when the
debtor’s claims are unrelated to the creditor’s attempt to collect the discharged debt. In
Mann, the plaintiff filed an FCRA claim against a creditor after discovering discharged
debts on her credit report. Mann, 2013 U.S. Dist. LEXIS 103210, at *2-3. Importantly,
the creditor had not attempted to collect the discharged debt. Id. at *8. The court
enforced the arbitration clause, reasoning that the debtor’s claim was not a “core” part of
her bankruptcy proceedings and referring the claim to arbitration would not impose any
financial liability or otherwise interfere with the “fresh start” guaranteed by the
Bankruptcy Code. Id. at *10-13. The court noted “the mere fact that Mann was granted a
discharge of the debt owed to NMAC does not mean that the Arbitration Agreement
executed in connection with the Contract cannot be enforced with respect to their future
disputes which are otherwise covered by that Agreement.” Id. at *13.
Similarly, in Brough, a debtor claimed a creditor violated the FCRA by reporting
discharged debt to credit agencies. Brough, 930 N.E.2d at 1241. Noting that the debtor’s
bankruptcy proceeding had concluded, the court found arbitration of the FCRA claim
would not jeopardize the bankruptcy case nor interfere with the discharge. Id. at 1243.
The court held that the discharge did not invalidate the debtor’s obligation to arbitrate his
FCRA claim. Id.
Here, Plaintiff does not allege Defendant attempted to collect discharged debt; his
sole claim is premised on his allegation that Defendant violated the FCRA by submitting
unauthorized credit inquiries. (Doc. 1 at ¶¶ 50-53). This is not a “core” bankruptcy
proceeding, and referring this claim to arbitration will not impose any financial liability
on the Plaintiff, interfere with his “fresh start” guaranteed by the discharge, nor otherwise
conflict with the purposes of the Bankruptcy Code. In these circumstances, the Court
will enforce the Arbitration Agreement. See Mann, 2013 U.S. Dist. LEXIS 103210, at
*12-13; Brough, 930 N.E.2d at 1243.
2. The Arbitration Agreement is not a Contract of Adhesion.
Next, Plaintiff argues that the Arbitration Agreement is an adhesion contract and
ambiguous terms should be construed against Defendant as the drafter. (Doc. 13 at 10).
Specifically, Plaintiff contends that by defining an arbitrable “claim” as including
disputes arising from, inter alia, “prior agreement[s],” Defendant subjected itself to the
presumption that claims materializing subsequent to the Cardmember Agreement “were
intentionally excluded from the language of the [Arbitration Agreement].” Id.
Plaintiff’s argument is not well-taken. First, any ambiguities in the Arbitration
Agreement “should be resolved in favor of arbitration.” Stout, 228 F.3d at 714. Second,
even if the Court were to construe the Cardmember Agreement against Defendant, there
are no ambiguities to interpret. The Arbitration Agreement explicitly applies to “claims
of every kind and nature” and states it is to “be given the broadest possible meaning.”
(Doc. 10-4, ¶ 25). The reference to “prior agreement[s]” is made “by way of example
and without limitation.” (Id.) Third, unequal bargaining power, in and of itself, is not
legally or equitably sufficient to hold an arbitration agreement unenforceable. Stachurski
v. DirecTV, Inc., 642 F.Supp.2d 758, 768 (N.D. Ohio 2009). 2
Accordingly, Plaintiff’s argument that the Arbitration Agreement is an adhesion
3. Plaintiff will be able to vindicate his FCRA rights through
Next, Plaintiff argues that he will not be able to vindicate his rights under the
FCRA through arbitration. (Doc. 13 at 12). A party who has agreed to arbitration
“should be held to it unless Congress itself has evinced an intention to preclude a waiver
of judicial remedies for the statutory rights at issue.” Gilmer v. Interstate/Johnson Lane
Corp., 500 U.S. 20, 26 (1991). The Supreme Court has repeatedly recognized that
federal statutory claims can be appropriately resolved through arbitration and has
enforced agreements to arbitrate such claims. See Green Tree Fin. Corp.—Alabama v.
Randolph, 531 U.S. 79, 89 (2000) (citations 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 statute serves its functions.” Id. at 90. With respect to proposed
class actions, Rule 23 does not entitle litigants “to class proceedings for the vindication of
statutory rights.” American Exp. Co. v. Italian Colors Restaurant, 133 S. Ct. 2304, 23092
Instead, “there must be some evidence that, in consequence of the imbalance, the party in the
weaker position was defrauded or coerced into agreement to the arbitration clause.” Id. For
instance, “[t]he stronger party’s refusal to negotiate a key term is a common feature of adhesion
contracts.” Taylor Bldg. Corp. of Am. v. Benfield, 884 N.E.2d 12, 24 (Ohio 2008). Plaintiff did
not submit any evidence indicating that Defendant coerced or defrauded him into agreeing to the
Cardmember Agreement nor that Defendant refused to negotiate the Arbitration Agreement.
The Arbitration Agreement expressly provides “YOU WILL NOT HAVE THE
RIGHT TO PARTICIPATE AS A REPRESENTATIVE OR MEMBER OF ANY
CLASS OR CLAIMANTS PERTAINING TO ANY CLAIM SUBJECT TO
ARBITRATION.” (Doc. 13 at 13). Plaintiff argues that by contractually foreclosing the
possibility of class litigation, the Cardmember Agreement makes his rights under the
FCRA too expensive to vindicate. (Doc. 13 at 14). He states that he “cannot be expected
to pay many thousands of dollars in attorney’s fees to arbitrate his individual claim.”
(Doc. 13 at 15). He claims, without support, that the prohibitive expense of bilateral
arbitration “effectively prevents” the vindication of Plaintiff’s statutory and class member
The Supreme Court has rejected a similarly unsupported assertion. In Randolph,
the plaintiff argued the court should not enforce an arbitration clause because of the
“risk” arbitration would impose prohibitive fees that would render the plaintiff unable to
vindicate her statutory rights. 531 U.S. at 90. The arbitration agreement at issue was
silent as to the costs and fees of arbitration, and the plaintiff “failed to support” her
assertion that costs were prohibitive. Id., n. 6. For example, the plaintiff submitted
evidence that certain arbitrators on average charge $700 per day, but did not demonstrate
this rate applied to her arbitration. Id. The Supreme Court rejected the plaintiff’s
argument, holding “[t]he ‘risk’ that [plaintiff] will be saddled with prohibitive costs is too
speculative to justify the invalidation of an arbitration agreement.” Id. at 91.
Here, Plaintiff submitted even less information on this issue than the plaintiff in
Randolph. Plaintiff’s unsupported statement that arbitration will cost “many thousands of
dollars in attorney’s fees” is simply too speculative to justify the invalidation of the
Arbitration Agreement. Randolph, 531 U.S. at 90-91.
Accordingly, the Court will enforce the plain terms of the Arbitration Agreement
and refer Plaintiff’s claim to arbitration.
4. The Arbitration Agreement is not overbroad or contrary to public
Lastly, Plaintiff argues that the Arbitration Agreement is overbroad and contrary
to public policy. However, Plaintiff cites to no authority supporting this proposition and
offers “no real analysis . . . .” See McPherson v. Kelsey, 125 F.3d 989, 995-996 (6th Cir.
1997). “[I]ssues adverted to in a perfunctory manner, unaccompanied by some effort at
developed argumentation, are deemed waived.” Id. Plaintiff does not identify a public
policy that a compelled arbitration would violate. Plaintiff states that Defendant gives
itself a “get out of jail free card,” but fails to acknowledge that Defendant remains subject
to an adverse award rendered in arbitration.
Accordingly, Plaintiff has not shown the Arbitration Agreement to be overbroad
nor contrary to public policy.
C. The Court will dismiss the case and compel arbitration.
When an issue is referable to arbitration, the FAA requires a court to stay
proceedings until the arbitration has taken place in accord with an agreement to arbitrate.
9 U.S.C. § 3. However, if all claims are referred to arbitration, the action may be
dismissed. See, e.g., Arnold v. Arnold Corp., 920 F.2d 1269, 1275 (6th
Cir.1990) (finding that it was not “error for the district court to dismiss the complaint”
after ordering arbitration); Ozormoor v. T-Mobile USA, Inc., 354 Fed.Appx. 972, 975 (6th
Cir. 2009) (noting that the Sixth Circuit has “already rejected” the argument that 9 U.S.C.
§ 3 “requires district courts to stay suits pending arbitration rather than dismiss them”);
Hensel v. Cargill, Inc., No. 99-3199, 1999 WL 993775, at *4 (6th Cir. Oct. 19, 1999)
(upholding dismissal of “litigation in which all claims are referred to arbitration may be
dismissed”). Because Plaintiff’s only claim has been referred to arbitration, the Court will
dismiss this case without prejudice.
For these reasons, Defendant’s motion to compel arbitration (Doc. 10) is
GRANTED, and this civil action is DISMISSED WITHOUT PREJUDICE.
IT IS SO ORDERED.
_ _ _
Timothy S. Black
imothy S. Black
United States District Judge
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