ILIANA PEREZ, ET AL V. DISCOVER BANK, No. 22-15322 (9th Cir. 2023)
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Discover Bank seeks to compel Plaintiff to arbitrate her claims that Discover Bank unlawfully discriminated against her based on citizenship and immigration status when it denied her application for a consolidation loan for her student loan. Discover Bank argues that two arbitration agreements—one Plaintiff made in connection with the student loan and one she made in connection with the application for the consolidation loan—require arbitration here. The district court declined to compel arbitration, finding that neither agreement required arbitration.
The Ninth Circuit affirmed the district court’s order declining to compel Plaintiff to arbitrate. The panel held that Discover Bank was judicially estopped from arguing that Perez did not opt out of the Discover Bank agreement. The panel determined that Discover Bank’s past position clearly contradicted its current position that the opt-out would only apply to Plaintiff’s future discrimination claims, Discover Bank persuaded the court to accept its previous position, and Discover Bank would derive an unfair advantage absent estoppel. Citing Revitch v. DIRECTV, LLC, 977 F.3d 713 (9th Cir. 2020), the panel further held that Perez and Discover Bank never formed an agreement to arbitrate her discrimination claims involving her application for a consolidation loan via the Citibank agreement.
Court Description: Arbitration The panel affirmed the district court’s order declining to compel plaintiff Iliana Perez to arbitrate her claims that Discover Bank unlawfully discriminated against her based on her citizenship and immigration status when it denied her application for a consolidation loan for her student loan.
Discover Bank asserted that two arbitration agreements—one Perez made in 2010 in connection with her student loan from Citibank and one she made in 2018 in connection with the application for the consolidation loan with Discover Bank—required arbitration. Discover Bank acquired ownership of the Citibank loan around October 1, 2011, and currently holds the note.
Before the district court, Discover Bank initially argued that its agreement with Perez was not unconscionable because if Perez sent an opt out, she would not be bound by the agreement’s arbitration provision. Shortly thereafter * The Honorable Jed S. Rakoff, United States District Judge for the Southern District of New York, sitting by designation.
Perez notified Discover Bank that she wished to reject the arbitration agreement. The district court found that Perez’s opt out of the Discover Bank agreement applied to her discrimination claims and that the discrimination claims were outside the scope of the Citibank agreement.
The panel held that Discover Bank was judicially estopped from arguing that Perez did not opt out of the Discover Bank agreement. The panel determined that Discover Bank’s past position clearly contradicted its current position that the opt out would only apply to Perez’s future discrimination claims, Discover Bank persuaded the court to accept its previous position, and Discover Bank would derive an unfair advantage absent estoppel.
Citing Revitch v. DIRECTV, LLC, 977 F.3d 713 (9th Cir.
2020), the panel further held that Perez and Discover Bank never formed an agreement to arbitrate her discrimination claims involving her application for a consolidation loan via the Citibank agreement.
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