Anderson v. Credit One Bank, National Association et al, No. 3:2016cv03125 - Document 68 (S.D. Cal. 2018)
Court Description: ORDER Granting 48 Defendant's Motion to Strike the Errata to Plaintiff's Deposition; Granting 47 Defendant's Motion for Reconsideration; and Granting 10 Defendant's Motion to Compel Arbitration. The Court grants Defendant� 39;s motion to strike the errata to Plaintiff's deposition and grants Defendant's motion for reconsideration. Additionally, the Court grants Defendant's motion to compel arbitration and stays this action. The Clerk of Court is instructed to terminate all pending motions, deadlines, and hearings, and administratively close the case. The parties must notify the Court within 7 days of the conclusion of arbitration proceedings. Signed by Judge Michael M. Anello on 5/17/2018. (rmc)
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Anderson v. Credit One Bank, National Association et al Doc. 68 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 10 11 12 13 14 15 16 SOUTHERN DISTRICT OF CALIFORNIA Case No.: 16cv3125-MMA (AGS) RODGER DEAN ANDERSON, v. ORDER GRANTING DEFENDANT’S MOTION TO STRIKE THE ERRATA TO PLAINTIFF’S DEPOSITION; Plaintiff, CREDIT ONE BANK, NATIONAL ASSOCIATION, [Doc. No. 48] GRANTING DEFENDANT’S MOTION FOR RECONSIDERATION; AND Defendant. 17 [Doc. No. 47] 18 19 GRANTING DEFENDANT’S MOTION TO COMPEL ARBITRATION 20 [Doc. No. 10] 21 22 Plaintiff Rodger Dean Anderson (“Plaintiff”) brings this action against Defendant 23 Credit One Bank, National Association (“Defendant” or “Credit One Bank”) alleging 24 three causes of action for: (1) violations of California’s Rosenthal Fair Debt Collection 25 Practices Act, California Civil Code § 1788 et seq.; (2) violations of the Telephone 26 Consumer Protection Act, 47 U.S.C. § 227 et seq.; and (3) intrusion. See Complaint. On 27 May 23, 2017, the Court denied Defendant’s motion to compel arbitration of Plaintiff’s 28 claims because “factual disputes exist as to the existence of an arbitration agreement -1- 16cv3125-MMA (AGS) Dockets.Justia.com 1 between the parties.” Doc. No. 16 at 7. Defendant now moves for reconsideration, 2 arguing that it has recently discovered information from Plaintiff’s February 1, 2018 3 deposition. See Doc. No. 47. Plaintiff filed an opposition to the motion, to which 4 Defendant replied. See Doc. Nos. 53, 56. Defendant also filed a motion to strike the 5 errata to Plaintiff’s deposition. See Doc. No. 48. Plaintiff filed an opposition, to which 6 Defendant replied. See Doc. Nos. 52, 55. The Court found the matters suitable for 7 determination on the papers and without oral argument pursuant to Civil Local Rule 8 7.1.d.1. See Doc. No. 58. For the reasons set forth below, the Court GRANTS 9 Defendant’s motion to strike, GRANTS Defendant’s motion for reconsideration, and 10 GRANTS Defendant’s motion to compel arbitration. 11 12 BACKGROUND Plaintiff, a resident of California, applied for a credit card with Credit One Bank. 13 Upon approval, Defendant mailed Plaintiff a credit card. Plaintiff activated his credit 14 card in February 2015. See Doc. No. 10 at 6. Plaintiff began using his credit card for 15 personal and household purposes. Plaintiff closed his credit card account in June 2015, 16 “after paying off the remaining balance.” Complaint ¶ 15. Approximately four (4) 17 months later, Defendant began telephoning Plaintiff and demanding payment. However, 18 Plaintiff notified Defendant that there was a $0.00 balance on his account. Defendant 19 informed Plaintiff that Plaintiff had not paid the annual card fee. Plaintiff then paid the 20 annual fee, but continued to receive phone calls from Defendant demanding payment for 21 the annual credit card fee. Plaintiff contends that Defendant “continued making calls, 22 frequently multiple times per day, in an attempt to collect this debt from Plaintiff.” Doc. 23 No. 11 at 6; see also Complaint ¶ 20. 24 Based on these allegations, Plaintiff filed the instant action alleging that Defendant 25 made the phone calls in violation of California’s Rosenthal Debt Collection Practices Act 26 and the Telephone Consumer Protection Act, and that the collection calls amount to an 27 intrusion. 28 Defendant moves for reconsideration of the Court’s previous order denying its -2- 16cv3125-MMA (AGS) 1 motion to compel arbitration in light of Plaintiff’s testimony at his February 1, 2018 2 deposition. Specifically, Defendant contends that Plaintiff admitted to receiving its 3 Cardholder Agreement, Disclosure Statement and Arbitration Agreement (collectively 4 referred to as the “Cardholder Agreement”) in the same envelope as Plaintiff’s credit 5 card. Defendant also moves to strike the errata to Plaintiff’s deposition. The Court 6 begins by analyzing Defendant’s motion to strike, followed by the motion for 7 reconsideration. 8 MOTION TO STRIKE 9 Defendant moves to strike the errata to Plaintiff’s deposition pursuant to Federal 10 Rule of Civil Procedure 30. See Doc. No. 48. Defendant argues that Plaintiff used the 11 errata to make contradictory changes to his February 1, 2018 deposition testimony to 12 “avoid summary judgment or arbitration.” Id. at 6.1 13 Federal Rule of Civil Procedure 30(e) provides: 14 On request by the deponent or a party before the deposition is completed, the deponent must be allowed 30 days after being notified by the officer that the transcript or recording is available in which: (A) to review the transcript or recording; and (B) if there are changes in form or substance, to sign a statement listing the changes and the reasons for making them. The officer must note in the certificate prescribed by Rule 30(f)(1) whether a review was requested and, if so, must attach any changes the deponent makes during the 30-day period. 15 16 17 18 19 20 21 Fed. R. Civ. P. 30(e). The Ninth Circuit has indicated that “[w]hile the language of FRCP 30(e) permits 22 correction ‘in form or substance,’ this permission does not properly include changes 23 offered solely to create a material factual dispute in a tactical attempt to evade an 24 25 26 27 28 1 The Court notes that when initially asked whether Plaintiff wished to make any changes to his deposition testimony, Plaintiff’s counsel indicated that there were “no changes.” Doc. No. 48-5 at 1. It was only after defense counsel inquired whether Plaintiff would stipulate to a joint motion to compel arbitration in light of Plaintiff’s deposition testimony that Plaintiff’s counsel indicated that Plaintiff had changed his testimony. See Doc. No. 48-7. -3- 16cv3125-MMA (AGS) 1 unfavorable summary judgment.” Hambleton Bros. Lumber Co. v. Balkin Enters., Inc., 2 397 F.3d 1217, 1225 (9th Cir. 2005). “Rule 30(e) is to be used for corrective, and not 3 contradictory, changes.” Id. at 1226. “The Rule cannot be interpreted to allow one to 4 alter what was said under oath. If that were the case, one could merely answer the 5 questions with no thought at all then return home and plan artful responses.” Azco 6 Biotech Inc. v. Qiagen, N.V., No. 12-CV-2599-BEN (DHB), 2015 WL 350567, at *5 7 (S.D. Cal. Jan. 23, 2015). Where an individual uses Rule 30 to make contradictory 8 changes to testimony made under oath, several courts have found striking the errata to be 9 the appropriate remedy. See Hambleton Bros. Lumber Co., 397 F.3d at 1226 (finding 10 district court did not abuse discretion in striking the deposition errata for failure to 11 comply with Rule 30(e)); Greer v. Pac. Gas & Elec. Co., No. 15-CV-1066-EPG, 2017 12 WL 2389567, at *7 (E.D. Cal. June 1, 2017) (granting motion to strike errata sheets to 13 deposition transcript because “Defendants’ errata sheet display an attempt to materially 14 alter the witnesses’ testimony on critical facts in order to change the record for summary 15 judgment and class certification.”); Azco Biotech Inc., 2015 WL 350567, at *3 (granting 16 the motion to strike the errata where the proposed changes “expand, and in some cases, 17 contradict, [the plaintiff’s] deposition testimony.”); Tourgeman v. Collins Fin. Servs., 18 Inc., No. 8-CV-1392 JLS (NLS), 2010 WL 4817990, at *3-4 (S.D. Cal. Nov. 22, 2010) 19 (granting motion to strike contradictory portions of errata sheet). 20 Here, upon due consideration, the Court finds that Plaintiff’s errata sheet “runs 21 afoul of Rule 30(e)’s . . . requirements.” Tourgeman, 2010 WL 4817990, at *2. 22 Plaintiff’s sole proposed change expands and contradicts his sworn deposition testimony. 23 Specifically, when asked at his deposition “[w]hen you received your Credit One credit 24 card, was the credit card accompanied by an agreement such as the one you see here in 25 Exhibit C?” Doc. No. 48-2 at 4.2 Plaintiff responded, “I’m sure it was something similar 26 27 28 2 Citations to document 48-2 refer to the pagination assigned by the CM/ECF system. -4- 16cv3125-MMA (AGS) 1 to this. They all are, all very similar.” Id. Plaintiff seeks to change his response to 2 counsel’s question to: “No. The credit card was accompanied only by one sheet of paper 3 that the credit card was stuck to using some type of gluey material. Prior to filing this 4 lawsuit, I have never received exhibit C.” Doc. No. 48-7 at 5.3 Plaintiff does not directly 5 respond to Defendant’s arguments in his opposition to the instant motion, aside from 6 summarily stating that he “signed the Errata in an effort for the truth to come forward 7 with no confusion[.]” Doc. No. 52 at 2. However, “[c]hanging ‘yes’ to ‘no’ and ‘correct’ 8 to ‘no not correct’ are paradigmatic examples of contradiction, rather than correction.” 9 Tourgeman, 2010 WL 4817990, at *2 (citing Hambleton Bros. Lumber Co., 397 F.3d at 10 1226). As such, the Court finds that the errata to Plaintiff’s February 1, 2018 deposition 11 does not comply with the requirements of Rule 30(e), or with binding Ninth Circuit 12 authority. 13 Accordingly, the Court GRANTS Defendant’s motion to strike the errata to 14 Plaintiff’s February 1, 2018 deposition. See Greer, 2017 WL 2389567, at *7 (“To allow 15 such changes would eliminate the purpose of deposition testimony, which is to elicit a 16 witness’s testimony under oath, in a recorded setting, subject to questioning without 17 coaching from any other person.”). 18 19 MOTION FOR RECONSIDERATION As set forth in the Court’s previous order, the Court concluded that Defendant had 20 not met its burden of showing the existence of an agreement to arbitrate. See Doc. No. 16 21 at 7. Specifically, the Court relied on Plaintiff’s declaration filed in support of his 22 opposition to the motion to compel arbitration, wherein Plaintiff claimed that his credit 23 card was not accompanied by any other document, he never received the Cardholder 24 Agreement, and that Defendant did not notify Plaintiff that he was required to arbitrate 25 disputes in connection with his credit card. See id. at 6-7. Defendant argues that at his 26 February 1, 2018 deposition, Plaintiff “admitted that he received a document similar to 27 28 3 Citations to document 48-7 refer to the pagination assigned by the CM/ECF system. -5- 16cv3125-MMA (AGS) 1 the Bank’s Cardholder Agreement.” Doc. No. 47 at 2. As such, Defendant requests the 2 Court reconsider its previous motion and compel arbitration pursuant to Federal Rules of 3 Civil Procedure 54(b)4 and 60(b). See id. at 5. In opposition, Plaintiff maintains that “no 4 new facts have come to light” and that he “did not receive the Cardholder Agreement 5 prior to litigation[.]” Doc. No. 53 at 8. 6 1. 7 Legal Standard The Federal Rules of Civil Procedure do not expressly provide for motions for 8 reconsideration. However, a motion for reconsideration may be construed as a motion to 9 alter or amend a final judgment, order, or proceeding under Rule 60(b). See Osterneck v. 10 Ernst & Whinney, 489 U.S. 169, 174 (1989); In re Arrowhead Estates Dev. Co., 42 F.3d 11 1306, 1311 (9th Cir. 1994). Additionally, a motion for reconsideration is proper under 12 Civil Local Rule 7.1.i.1. See CivLR 7.1.i. 13 Reconsideration under Rule 60 may be granted in the case of: (1) mistake, 14 inadvertence, surprise or excusable neglect; (2) newly discovered evidence; or (3) fraud; 15 or if (4) the judgment is void; (5) the judgment has been satisfied; or (6) for any other 16 reason justifying relief. Fed. R. Civ. P. 60(b). Under Rule 60, a motion for “relief from a 17 final judgment, order or proceeding” may be filed within a “reasonable time,” but must 18 be filed “no more than a year after the entry of the judgment or order or the date of the 19 proceeding” for reasons (1), (2), and (3).5 Fed. R. Civ. P. 60(c)(1). 20 Reconsideration is an “extraordinary remedy, to be used sparingly in the interests 21 of finality and conservation of judicial resources.” Kona Enters., Inc. v. Estate of Bishop, 22 229 F.3d 877, 890 (9th Cir. 2000). “Ultimately, however, the decision on a motion for 23 24 25 26 27 28 4 Because the Court finds that reconsideration is appropriate pursuant to Rule 60(b) for the reasons discussed below, the Court need not analyze whether Defendant’s motion for reconsideration is also proper pursuant to Federal Rule of Civil Procedure 54(b). 5 Defendant’s motion is timely pursuant to Rule 60(c). See CivLR 7.1.i.2 (“Except as may be allowed under Rules 59 and 60 of the Federal Rules of Civil Procedure, any motion . . . for reconsideration must be filed within twenty-eight (28) days after the entry of the ruling, order or judgment sought to be reconsidered.”) (emphasis added). -6- 16cv3125-MMA (AGS) 1 reconsideration lies in the Court’s sound discretion.” Labastida v. McNeil Techs., Inc., 2 No. 10-CV-1690-MMA (CAB), 2011 WL 767169, at *2 (S.D. Cal. Feb. 25, 2011) (citing 3 Navajo Nation v. Norris, 331 F.3d 1041, 1046 (9th Cir. 2003)). Defendant bases its 4 motion for reconsideration on newly discovered evidence (Rule 60(b)(2)) and alleged 5 misrepresentations or misconduct by an opposing party (Rule 60(b)(3)). See Doc. No. 47 6 at 6. 7 2. 8 9 Analysis Defendant argues that the Court should reconsider its order denying Defendant’s motion to compel arbitration in light of “recently discovered information from Plaintiff’s 10 February 1, 2018, deposition testimony.” Doc. No. 47 at 1. Additionally, Defendant 11 claims that Plaintiff “made prior misrepresentations under oath, which this court relied on 12 in denying” its motion to compel. Id. Plaintiff does not respond to Defendant’s 13 argument that Plaintiff’s deposition testimony constitutes newly discovered evidence, but 14 maintains that during his deposition, Plaintiff confused “the Cardholder Agreement with 15 the solicitation he received from Credit One[.]” Doc. No. 53 at 5. “There is no 16 confusion, the Plaintiff has never seen or received the Cardholder Agreement prior to 17 litigation yet the Defendants continue to grasp at air to try and avoid trial.” Id. The 18 Court begins by addressing Defendant’s “newly discovered evidence” argument. 19 “Evidence is not ‘newly discovered’ under [Rule 60(b)(2)] if it was in the moving 20 party’s possession at the time of trial or could have been discovered with reasonable 21 diligence.” Coastal Transfer Co. v. Toyota Motor Sales, U.S.A., 833 F.2d 208, 212 (9th 22 Cir. 1987) (quoting Engelhard Indus., Inc. v. Research Instrumental Corp., 324 F.2d 347, 23 352 (9th Cir. 1963)). 24 Here, although Plaintiff’s deposition testimony is difficult to follow at times, four 25 passages are particularly important. First, defense counsel asked Plaintiff whether “the 26 [credit] card was accompanied by an agreement.” Doc. No. 48-2 at 3. Plaintiff replied, 27 “I don’t remember an agreement being with the card.” Id. at 3-4. Second, defense 28 counsel then directed Plaintiff’s attention to Exhibit C, which is a copy of Defendant’s -7- 16cv3125-MMA (AGS) 1 Cardholder Agreement, Disclosure Statement and Arbitration Agreement. See id. at 4. 2 Defense counsel asked Plaintiff, “[w]hen you received your Credit One credit card, was 3 the credit card accompanied by an agreement such as the one you see here in Exhibit C?” 4 Id. Plaintiff responded, “I’m sure it was something similar to this. They all are, all very 5 similar.” Id. Third, when asked whether Plaintiff kept the agreement that he received 6 that was similar to Exhibit C, Plaintiff responded, “I might have it at my house 7 somewhere.” Doc. No. 48-4 at 3.6 Fourth, at the end of defense counsel’s questioning on 8 the subject, defense counsel asked Plaintiff, “what address did you receive your Credit 9 One credit card and the agreement similar to the agreement you see in Exhibit C?” Id. 10 Plaintiff replied, “8818 Gardena Road.” Id. Notably, Plaintiff answered the question 11 without correcting defense counsel that he never received a Cardholder Agreement with 12 his credit card. Id. Plaintiff’s argument that he confused the Cardholder Agreement with 13 the solicitation he received from Credit One is unavailing, as the relevant portions of 14 Plaintiff’s deposition testimony do not even reference any such solicitation. Rather, 15 Plaintiff’s deposition testimony plainly contradicts his March 17, 2017 declaration 16 wherein Plaintiff asserts that “the credit card came in the mail” and that “[t]he credit card 17 was not accompanied by any other document.” Doc. No. 11-1 at 2. 18 Moreover, Defendant asserts that it “could not possibly have known that Plaintiff 19 would change his prior testimony . . . at his February 1, 2018 deposition.” Id. at 6. Thus, 20 Defendant maintains that it could not have discovered this evidence with reasonable 21 diligence. Plaintiff does not address this contention. As such, the Court finds that 22 Defendant has met its burden of presenting newly discovered evidence pursuant to Rule 23 60(b)(2).7 See Hamid v. Nike Retail Servs., Inc., No. 17-CV-600-DOC (JDEx), 2018 WL 24 1684316, at *5 (C.D. Cal. Apr. 6, 2018) (“Because Plaintiff has pointed to newly 25 26 27 28 6 Citations to document 48-4 refer to the pagination assigned by the CM/ECF system. 7 Therefore, the Court need not determine whether reconsideration is also appropriate under Rule 60(b)(3). -8- 16cv3125-MMA (AGS) 1 discovered evidence . . . , Plaintiff has satisfied his burden under Federal Rule of Civil 2 Procedure 60(b)”). 3 Accordingly, in light of the newly discovered evidence, the Court GRANTS 4 Defendant’s motion for reconsideration and finds it appropriate to reconsider its previous 5 order denying Defendant’s motion to compel arbitration. See Sch. Dist. No. 1J, 6 Multnomah Cnty., Or. V. ACandS, Inc., 5 F.3d 1255, 1263 (9th Cir. 1993) 7 (“Reconsideration is appropriate if the district court (1) is presented with newly 8 discovered evidence[.]”); Brady v. Grendene USA, Inc., No. 12-CV-604-GPC-KSC, 2015 9 WL 3539702, at *3 (S.D. Cal. June 3, 2015) (“[T]he Court finds it appropriate to consider 10 [Defendant’s] motion [for reconsideration] based on the fact that the factual record has 11 expanded.”). 12 MOTION TO COMPEL ARBITRATION 13 Having granted Defendant’s motion for reconsideration, the Court turns to 14 Defendant’s motion to compel arbitration. See Doc. No. 10. In its previous order, the 15 Court found that “factual disputes exist as to the existence of an arbitration agreement 16 between the parties.” Doc. No. 16 at 7 (citing Three Valleys Mun. Water Dist. v. E.F. 17 Hutton & Co., 925 F.2d 1136, 1141 (9th Cir. 1991) (“The district court, when considering 18 a motion to compel arbitration which is opposed on the ground that no agreement to 19 arbitrate had been made between the parties, should give to the opposing party the benefit 20 of all reasonable doubts and inferences that may arise.”)). 21 Defendant contends that in light of Plaintiff’s February 1, 2018 deposition 22 testimony, which contradicts Plaintiff’s declaration submitted in opposition to the motion 23 to compel arbitration, the Court should reconsider its order denying Defendant’s motion 24 to compel arbitration. See Doc. No. 47. 25 1. 26 Legal Standard The Federal Arbitration Act (“FAA”) permits “[a] party aggrieved by the alleged 27 failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration 28 [to] petition any United States District Court . . . for an order directing that . . . arbitration -9- 16cv3125-MMA (AGS) 1 proceed in the manner provided for in [the arbitration] agreement.” 9 U.S.C. § 4. Upon a 2 showing that a party has failed to comply with a valid arbitration agreement, the district 3 court must issue an order compelling arbitration. Id. 4 The Supreme Court has stated that the FAA espouses a general policy favoring 5 arbitration agreements. AT & T Mobility v. Concepcion, 563 U.S. 333, 339 (2011). 6 Federal courts are required to rigorously enforce an agreement to arbitrate. See id. 7 Courts are also directed to resolve any “ambiguities as to the scope of the arbitration 8 clause itself . . . in favor of arbitration.” Volt Info. Scis., Inc. v. Bd. of Trs. of Leland 9 Stanford Jr. Univ., 489 U.S. 468, 476-77 (1989). 10 A party moving to compel arbitration must show “(1) the existence of a valid, 11 written agreement to arbitrate; and, if it exists, (2) that the agreement to arbitrate 12 encompasses the dispute at issue.” Ashbey v. Archstone Prop. Mgmt., Inc., 785 F.3d 13 1320, 1323 (9th Cir. 2015) (citation omitted). If the Court finds that the answers to those 14 questions are “yes,” the Court must compel arbitration. See Dean Witter Reynolds, Inc. v. 15 Byrd, 470 U.S. 213, 218 (1985). If there is a genuine dispute of material fact as to any of 16 these queries, a district court should apply a “standard similar to the summary judgment 17 standard of [Federal Rule of Civil Procedure 56].” Concat LP v. Unilever, PLC, 350 F. 18 Supp. 2d 796, 804 (N.D. Cal. 2004). 19 Agreements to arbitrate are valid, irrevocable, and enforceable, save upon such 20 grounds as exist at law or in equity for the revocation of any contract. 9 U.S.C. § 2. 21 Courts must apply ordinary state law principles in determining whether to invalidate an 22 agreement to arbitrate. Ferguson v. Countrywide Credit Indus., 298 F.3d 778, 782 (9th 23 Cir. 2002). As such, arbitration agreements may be invalidated by generally applicable 24 contract defenses, such as fraud, duress, or unconscionability. Concepcion, 563 U.S. at 25 339-41. 26 2. 27 28 Analysis In its motion to compel arbitration, Defendant argues that Plaintiff entered into an agreement to arbitrate with Credit One by activating his credit card, and that the -10- 16cv3125-MMA (AGS) 1 arbitration agreement encompasses Plaintiff’s claims. See Doc. No. 10 at 9-11. In 2 opposition, Plaintiff contends that he did not consent to any arbitration agreement, and 3 even if he did, the arbitration agreement is unconscionable. See Doc. No. 11 at 6, 10. 4 The Court addresses the parties’ arguments in turn. 5 6 7 a. The Court May Consider Plaintiff’s Challenge Regarding the Existence of an Agreement to Arbitrate As an initial matter, Defendant contends that to the extent “Plaintiff asserts any 8 challenge to the existence of the arbitration agreement, that issue has been contractually 9 delegated to the arbitrator to decide.” Doc. No. 10 at 9 n.1. Specifically, the Arbitration 10 Agreement contains a delegation provision which indicates that the claims subject to 11 arbitration “include, but are not limited to, disputes relating to . . . the application, 12 enforceability or interpretation of this Agreement, including this arbitration provision[.]” 13 Doc. No. 10-3 at 7. According to Defendant, this clause means that the arbitrator, as 14 opposed to the Court, should decide whether an agreement to arbitrate exists. The Court 15 disagrees. 16 The Supreme Court has repeatedly admonished that “[a]rbitration is strictly a 17 matter of consent.” Granite Rock Co. v. Int’l Bhd. Of Teamsters, 561 U.S. 287, 299 18 (2010) (internal quotation marks omitted). Arbitration “is a way to resolve those 19 disputes—but only those disputes—that the parties have agreed to submit to 20 arbitration[.]” Id. (emphasis in original) (quoting First Options of Chicago, Inc. v. 21 Kaplan, 541 U.S. 938, 943 (1995)). “[O]ur precedents hold that courts should order 22 arbitration of a dispute only where the court is satisfied that neither the formation of the 23 parties’ arbitration agreement nor (absent a valid provision specifically committing such 24 disputes to an arbitrator) its enforceability or applicability to the dispute is in issue.” 25 Granite Rock Co., 561 U.S. at 299 (emphasis in original). “Where a party contests either 26 or both matters, ‘the court’ must resolve the disagreement.” Id. at 299-300 (quoting First 27 Options of Chicago, Inc., 541 U.S. at 943); see also Buckeye Check Cashing, Inc. v. 28 Cardegna, 546 U.S. 440, 444 n.1 (2006) (distinguishing the generally nonarbitral -11- 16cv3125-MMA (AGS) 1 question of whether an arbitration agreement was “ever concluded” from the question of 2 whether a contract containing an arbitration clause was illegal when formed, the latter of 3 which the Supreme Court held to be arbitrable in certain circumstances); AT&T Techs., 4 Inc. v. Commc’ns Workers, 475 U.S. 643, 648-49 (1986) (explaining that “arbitrators 5 derive their authority to resolve disputes only because the parties have agreed in advance 6 to submit such grievances to arbitration”). 7 In Rent-A-Center, West, Inc. v. Jackson, the Supreme Court indicated that “parties 8 can agree to arbitrate ‘gateway’ questions of ‘arbitrability,’ such as whether the parties 9 have agreed to arbitrate or whether their agreement covers a particular controversy.” 561 10 U.S. 63, 68-69 (2010). “An agreement to arbitrate a gateway issue is simply an 11 additional, antecedent agreement the party seeking arbitration asks the federal court to 12 enforce[.]” Id. at 70. The Ninth Circuit has indicated that, “[a]lthough challenges to the 13 validity of a contract with an arbitration clause are to be decided by the arbitrator, 14 challenges to the very existence of the contract are, in general, properly directed to the 15 court.” Kum Tat Ltd. v. Linden Ox Pasture, LLC, 845 F.3d 979, 983 (9th Cir. 2017) 16 (internal citations omitted). An “argument that there was ‘no contract’ [is] a challenge to 17 the existence of a contract.” Id. Thus, “[t]he FAA cannot compel a party ‘to arbitrate the 18 threshold issue of the existence of an agreement to arbitrate’ unless there is an 19 overarching agreement to do so within the FAA’s scope.” Galilea, LLC v. AGCS Marine 20 Ins. Co., 879 F.3d 1052, 1056 (9th Cir. 2018) (quoting Three Valleys Mun. Water Dist., 21 925 F.2d at 1140-41); see also Rent-A-Ctr., 561 U.S. at 70 n.2 (cautioning that “[t]he 22 issue of the agreement’s ‘validity’ is different from the issue whether any agreement 23 between the parties ‘was ever concluded[,]’” and noting that the it was “address[ing] only 24 the former.”) (emphasis added) (quoting Buckeye Check Cashing, Inc., 546 U.S. at 444 25 n.1). 26 In Olivas v. Hertz Corporation, the district court considered a similar argument to 27 the one Defendant makes in this case. No. 17-CV-1083-BAS-NLS, 2018 WL 1306422 28 (S.D. Cal. Mar. 12, 2018). Specifically, the defendant argued that because the arbitration -12- 16cv3125-MMA (AGS) 1 provision contained a delegation clause, the arbitrator, as opposed to the court, “should 2 even decide whether an agreement to arbitrate exists.” Id. at *4. The district court 3 indicated that “[t]he problem with [the defendant’s] position is it presupposes that an 4 ‘agreement to arbitrate arbitrability’ exists.” Id. at *5 (citing Momot v. Mastro, 652 F.3d 5 982, 988 (9th Cir. 2011)). However, because the plaintiff challenged whether he agreed 6 to the arbitration provision, the court found that it “cannot enforce the delegation 7 clause—let alone the remainder of the Arbitration Provision—without first concluding 8 [the plaintiff] entered into an agreement.” Id. 9 Here, the Court finds the reasoning of the Olivas court persuasive and concludes 10 that it must first determine whether the parties entered into an agreement to arbitrate. See 11 Casa del Caffe Vergnano S.P.A. v. ItalFlavors, LLC, 816 F.3d 1208, 1211 (9th Cir. 2016) 12 (explaining that where a document “contain[s] a clause committing the parties to 13 arbitrate, the threshold issue is whether that document constituted a binding agreement at 14 all. If it did not constitute such an agreement, it follows that the arbitration provision is 15 not enforceable.”) (emphasis added). Unless the parties “clearly and unmistakably 16 provide otherwise,” the issue of arbitrability “is left to the court.” Momot, 652 F.3d at 17 988; see also United Steelworkers of Am. v. Warrior Gulf Nav. Co., 363 U.S. 574, 582 18 (1960) (noting that a party “cannot be required to submit to arbitration any dispute which 19 he has not agreed so to submit.”); Norcia v. Samsung Telecomms. Am., LLC, 845 F.3d 20 1279, 1291 (9th Cir. 2017) (remarking that although the FAA “embodies the national 21 policy favoring arbitration[,] . . . the liberal federal policy regarding the scope of 22 arbitrable issues is inapposite when the question is whether a particular party is bound by 23 the arbitration agreement.”); Cordas v. Uber Techs., Inc., 228 F. Supp. 3d 985, 991 (N.D. 24 Cal. 2017) (indicating that after determining the parties have clearly agreed to arbitrate, 25 “the question becomes whether that agreement ‘clearly and unmistakably delegates 26 arbitrability questions to the arbitrator.”) (quoting Brennan v. Opus Bank, 796 F.3d 1125, 27 1132 (9th Cir. 2015)); 9 U.S.C. § 4 (authorizing the Court to compel arbitration once it is 28 “satisfied that the making of the agreement . . . is not at issue”). -13- 16cv3125-MMA (AGS) 1 Accordingly, “the Court—not the arbitrator—will determine whether Plaintiff 2 agreed to the Arbitration [Agreement] and its delegation clause.” Olivas, 2018 WL 3 1306422, at *5. 4 b. An Agreement to Arbitrate Exists 5 The Court first considers whether there is an agreement to arbitrate between the 6 parties. See Ashbey, 785 F.3d at 1323. When determining the existence of valid 7 arbitration agreements, “federal courts ‘should apply ordinary state-law-principles that 8 govern the formation of contracts.’” Ingle v. Circuit City Stores, Inc., 328 F.3d 1165, 9 1170 (9th Cir. 2003) (quoting First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 944 10 (1995)). “It is undisputed that under California law, mutual assent is a required element 11 of contract formation.”8 Doherty, 2017 WL 588446, at *3 (citing Knutson v. Sirius XM 12 Radio Inc., 771 F.3d 559, 565 (9th Cir. 2014)); see also Restatement (Second) of 13 Contracts § 3 (“An agreement is a manifestation of mutual assent on the part of two or 14 more persons.”). “Only when there is no genuine issue of fact concerning the formation 15 of the agreement should the court decide as a matter of law that the parties did or did not 16 enter into such an agreement.” Three Valleys Mun. Water Dist., 925 F.2d at 1141. In 17 determining whether there is a genuine issue of fact concerning formation of an 18 agreement, the party opposing arbitration shall receive “the benefit of all reasonable 19 doubt and inferences.” Id. 20 Here, the Court finds that there is no genuine issue of fact concerning the 21 formation of an agreement to arbitrate. “While the Court may not review the merits of 22 the underlying case ‘[i]n deciding a motion to compel arbitration, [it] may consider the 23 pleadings, documents of uncontested validity, and affidavits submitted by either party.’” 24 Macias v. Excel Bldg. Servs. LLC, 767 F. Supp. 2d 1002, 1007 (N.D. Cal. 2011) (quoting 25 26 27 28 8 Because “both sides have addressed contract formation as an issue of California law,” the Court “applies California law to the question of whether a valid agreement to arbitrate was formed between [the parties].” Norcia v. Samsung Telecomms. Am., LLC, No. 14-CV-582-JD, 2014 WL 4652332, at *4 (N.D. Cal. Sept. 18, 2014), aff’d, 845 F.3d 1279 (9th Cir. 2017). -14- 16cv3125-MMA (AGS) 1 Ostroff v. Alterra Healthcare Corp., 433 F. Supp. 2d 538, 540 (E.D. Pa. 2006)). The 2 Court previously found that “factual disputes exist as to Plaintiff’s assent to the terms of 3 the Credit One Bank’s Cardholder Agreement, Disclosure Statement and Arbitration 4 Agreement.” Doc. No. 16 at 6. The Court relied on Plaintiff’s declaration, wherein he 5 claimed that his “credit card was not accompanied by any other document.” Doc. No. 11- 6 1 at 2. Defendant now presents Plaintiff’s deposition testimony to support its argument 7 that the parties entered into an agreement to arbitrate. 8 Plaintiff initially testified at his deposition that he could not remember whether an 9 agreement accompanied his credit card in the mail. See Doc. No. 48-2 at 3-4. However, 10 after defense counsel presented Plaintiff with a copy of its Cardholder Agreement, 11 defense counsel asked, “[w]hen you received your Credit One credit card, was the credit 12 card accompanied by an agreement such as the one you see here in Exhibit C?” Id. at 4 13 (emphasis added). Plaintiff then responded, “I’m sure it was something similar to this. 14 They all are, all very similar.” Id. Additionally, when asked if Plaintiff ever read the 15 agreement, Plaintiff responded “[y]es.” Id. Plaintiff further indicated that he “might 16 have [the Cardholder Agreement] at his house somewhere” after defense counsel inquired 17 whether Plaintiff kept the agreement or not. Doc. No. 48-4 at 3. Finally, when asked at 18 what address Plaintiff “receive[d] [his] Credit One credit card and the agreement similar 19 to the agreement” in Exhibit C, Plaintiff provided his address. Id. (emphasis added). 20 Defendant further submits the declarations of Gary Harwood, Vice President of 21 Portfolio Services at Credit One Bank, in addition to the declaration of Jeffrey Meek, 22 Vice President of Collections at Credit One Bank. As noted in the Court’s previous 23 Order, Mr. Harwood avers that Credit One Bank mailed Plaintiff a copy of Credit One 24 Bank’s Cardholder Agreement in the same envelope as Plaintiff’s new credit card for 25 activation. Doc. No. 10-1 (hereinafter “Harwood Decl.”) ¶ 6. Moreover, Mr. Meek 26 asserts that upon approval of Plaintiff’s application for a credit card, Credit One Bank 27 mailed Plaintiff a credit card for activation. See Doc. No. 56-1 (hereinafter “Meek 28 Decl.”) ¶ 7. “In the same envelope as the credit card was a copy of Credit One Bank’s -15- 16cv3125-MMA (AGS) 1 Visa/MasterCard Cardholder Agreement, Disclosure Statement and Arbitration 2 Agreement (the ‘Cardholder Agreement’).” Id. (emphasis in original). Moreover, it is 3 “Credit One’s policy to enclose as copy of the Cardholder Agreement when it mails the 4 customer the credit card for activation.” Id. ¶ 8. This policy “is a mandatory and non- 5 discretionary requirement implemented automatically at Credit One to ensure that the 6 Cardholder Agreement is mailed to its customers.” Id. (emphasis added). 7 The Cardholder Agreement provides, “[b]y requesting and receiving, signing or 8 using your card, you agree” to the terms of the Cardholder Agreement. Doc. No. 10-3 at 9 3.9 Plaintiff activated his credit card on February 7, 2015. Harwood Decl. ¶ 7; see also 10 Complaint ¶ 14. By doing so, Plaintiff assented to the terms of the Cardholder 11 Agreement. See Cal. Civ. Code § 1589 (“A voluntary acceptance of the benefit of a 12 transaction is equivalent to a consent to all the obligations arising from it, so far as the 13 facts are known, or ought to be known, to the person accepting.”); see also Esparza v. KS 14 Indus., L.P., 221 Cal. Rptr. 594, 601 (Ct. App. 2017) (“Under California law, consent to a 15 written contract may be implied by conduct.”). Thus, because Plaintiff admits that he 16 received the Cardholder Agreement in the mail with his Credit One credit card, and 17 because Plaintiff assented to the terms of the Cardholder Agreement by activating his 18 credit card, the Court finds that Defendant has met its “burden of proving the existence of 19 an agreement to arbitrate.” Olivas, 2018 WL 1306422, at *10. 20 The Court notes that in opposition to Defendant’s motion for reconsideration, 21 Plaintiff submits a declaration, dated March 8, 2018, which contradicts his February 1, 22 2018 deposition testimony.10 See Doc. No. 53-3 (hereinafter “Anderson Decl.”). In his 23 most recent declaration, Plaintiff claims that “[t]he credit card was not accompanied by 24 any other document.” Anderson Decl. ¶ 6. Additionally, Plaintiff explains that “[w]hen 25 26 27 9 28 10 Citations to document 10-3 refer to the pagination assigned by the CM/ECF system. Notably, Plaintiff does not cite to, or rely on, his declaration in his opposition brief. -16- 16cv3125-MMA (AGS) 1 asked what address I received the Card and the agreement, I responded with my current 2 address. I was tricked by that question.” Id. ¶ 10. Moreover, “[w]hen I stated that the 3 Cardholder Agreement looked similar it is because I saw this agreement prior to the 4 deposition when it was provided to me by my attorney in preparing my opposition to 5 Defendants [sic] Motion to Compel.” Id. ¶ 11. The Court, however, declines to consider 6 Plaintiff’s March 8, 2018 declaration pursuant to the “sham affidavit rule.” Van Asdale v. 7 Int’l Game Tech., 577 F.3d 989, 998 (9th Cir. 2009). 8 “The general rule in the Ninth Circuit is that a party cannot create an issue of fact 9 by an affidavit contradicting his prior deposition testimony.” Kennedy v. Allied Mut. Ins. 10 Co., 952 F.2d 262, 266 (9th Cir. 1991). “[I]f a party who has been examined at length on 11 deposition could raise an issue of fact by simply submitting an affidavit contradicting his 12 own prior testimony, this would greatly diminish the utility of summary judgment as a 13 procedure for screening out sham issues of fact.” Id. The Ninth Circuit has fashioned 14 “two important limitations on a district court’s discretion to invoke the sham affidavit 15 rule.” Van Asdale, 577 F.3d at 998. First, the rule does not apply automatically to every 16 case where a contradictory affidavit is introduced; rather, “the district court must make a 17 factual determination that the contradiction was actually a ‘sham.’” Id. (quoting 18 Kennedy, 952 at 267). Second, “the inconsistency between a party’s deposition 19 testimony and subsequent affidavit must be clear and unambiguous to justify striking the 20 affidavit.” Id. at 998-99. For example, the non-moving party is not prohibited from 21 elaborating on, explaining, or clarifying prior testimony and “minor inconsistencies that 22 result from an honest discrepancy, mistake, or newly discovered evidence[.]” Id. at 999. 23 The Court finds that both limitations are satisfied based on the sequence of events 24 that transpired from the date of Plaintiff’s February 1, 2018 deposition. Specifically, and 25 as noted above, Plaintiff responded numerous times to defense counsel’s methodical 26 questions at his deposition indicating that he received the Cardholder Agreement. 27 Plaintiff did so without his counsel lodging any objections to defense counsel’s 28 questioning. Moreover, Defendant has presented evidence that on February 9, 2018, -17- 16cv3125-MMA (AGS) 1 Plaintiff’s counsel initially informed defense counsel that Plaintiff had “no changes” to 2 his deposition, and that Plaintiff’s counsel would email the signed copy of Plaintiff’s 3 deposition to defense counsel later that night. Doc. No. 48-5 at 1. Later that day, defense 4 counsel asked whether Plaintiff’s counsel would be willing to stipulate to arbitration in 5 light of Plaintiff’s deposition testimony confirming that he received the Cardholder 6 Agreement with his credit card. See Doc. No. 48-1 (hereinafter “Wade Decl.”) ¶ 7. The 7 following day, Plaintiff’s counsel responded and noted that Plaintiff had made a change 8 to his deposition testimony “to correct some confusion.” Doc. No. 48-7 at 2. As noted 9 above, Plaintiff attempted to substantively change the answer to one of the questions he 10 11 answered at his deposition. See Doc. No. 48-7. Further, after Defendant filed the instant motions to strike and for reconsideration, 12 Plaintiff submitted the instant declaration which contradicts his deposition testimony, and 13 which is not entirely consistent with his previous declaration. Compare Anderson Decl. ¶ 14 6 (indicating that “the card came in the mail glued to a piece of paper.”), with Doc. No. 15 11-1 at 2 (“The credit card was not accompanied by any other documents.”). Lastly, 16 Plaintiff’s new declaration fails to explain why Plaintiff never informed defense counsel 17 at his deposition that he did not receive the Cardholder Agreement with his credit card. 18 As such, the Court finds that the contradictions in Plaintiff’s new declaration are a 19 “sham,” and that the inconsistencies between the deposition testimony and subsequent 20 declaration are “clear and unambiguous to justify striking the affidavit.” Van Asdale, 577 21 F.3d at 998-99. 22 In sum, taking into consideration Plaintiff’s deposition testimony, the Harwood 23 and Meek declarations, and Plaintiff’s activation of his credit card, the Court finds that 24 Defendant has met its burden in demonstrating that the parties entered into an agreement 25 to arbitrate. See Cordas, 228 F. Supp. 3d at 990 (concluding that because the plaintiff 26 “raises no genuine dispute of any material fact[,]” it is proper to find, as a matter of law, 27 that the plaintiff “was on notice of Uber’s terms and conditions, and assented to them in 28 signing up for Uber.”) (emphasis in original). -18- 16cv3125-MMA (AGS) 1 c. Delegation of Arbitrability Determination 2 Plaintiff argues that even if he entered into an agreement to arbitrate with 3 Defendant, the “disputed arbitration agreement is unconscionable and should not be 4 enforceable against Plaintiff.” Doc. No. 11 at 13. Before reaching Plaintiff’s 5 unconscionability argument, however, the Court must determine whether the parties 6 clearly and unmistakably intended for an arbitrator to determine the validity of the 7 Arbitration Agreement. As noted above, the Arbitration Agreement contains a delegation 8 clause which provides that claims subject to arbitration “include, but are not limited to, 9 disputes relating to . . . the application, enforceability or interpretation of this Agreement, 10 11 including this arbitration provision[.]” Doc. No. 10-3 at 7. Language in an agreement “delegating to the arbitrators the authority to determine 12 the validity or application of any of the provisions of the arbitration clause[] constitutes 13 an agreement to arbitrate threshold issues concerning the arbitration agreement,” and in 14 doing so “clearly and unmistakably indicates [the parties’] intent for the arbitrators to 15 decide the threshold question of arbitrability.” Momot, 652 F.3d at 988 (quoting Rent-A- 16 Ctr., 561 U.S. at 68) (internal quotation marks omitted) (emphasis added). “[A] court 17 must enforce an agreement that, as here, clearly and unmistakably delegates arbitrability 18 questions to the arbitrator[.]” Brennan, 796 F.3d at 1132. 19 Here, the delegation clause contained in the Arbitration Agreement expressly states 20 that disputes relating to the “application, enforceability or interpretation of this 21 Agreement” are subject to arbitration. Doc. No. 10-3 at 7. The Supreme Court and the 22 Ninth Circuit have determined that similar language is sufficient to demonstrate a clear 23 and unmistakable intent to arbitrate arbitrability. See e.g., Rent-A-Ctr., 561 U.S. at 68 24 (concluding that language that an arbitrator “shall have exclusive authority to resolve any 25 dispute relating to the . . . enforceability . . . of this Agreement including, but not limited 26 to any claim that all or any part of this Agreement is void or voidable” demonstrates a 27 clear and unmistakable intent to arbitrate arbitrability) (emphasis added); Mohamed v. 28 Uber Techs., Inc., 848 F.3d 1201, 1209 (9th Cir. 2016) (indicating that language -19- 16cv3125-MMA (AGS) 1 delegating to the arbitrators the authority to decide issues relating to the “enforceability, 2 revocability or validity of the Arbitration Provision . . . clearly and unmistakably 3 indicates [the parties’] intent for the arbitrators to decide the threshold question of 4 arbitrability.”) (internal quotation marks and citation omitted) (emphasis added); Momot, 5 652 F.3d at 988 (finding that language delegating authority to the arbitrator to determine 6 “the validity or application of any of the provisions” of the arbitration clause was clear 7 and unmistakable) (emphasis added). As such, the Court finds that the delegation clause 8 in the Arbitration Agreement “clearly and unmistakably” demonstrates an intent to 9 arbitrate arbitrability. 10 “Despite a clear and unmistakable delegation of arbitrability, an arbitration 11 provision may still be found unenforceable if delegation itself is unconscionable.” Appel 12 v. Concierge Auctions, LLC, No. 17-CV-2263-BAS-MDD, 2018 WL 1773479, at *6 13 (S.D. Cal. Apr. 13, 2018) (citing Rent-A-Ctr., 561 U.S. at 74). Although Plaintiff argues 14 that the Arbitration Agreement is unconscionable, Plaintiff does “not contest the validity 15 of the delegation provision in particular.” Rent-A-Ctr., 561 U.S. at 74. In fact, Plaintiff 16 does not mention the delegation provision at all in his opposition to the instant motion. 17 In Rent-A-Center, the Supreme Court focused on whether the party opposing arbitration 18 “challenged the delegation clause specifically.” Id. at 72. The Supreme Court noted that 19 the plaintiff “challenged only the validity of the contract as a whole,” and that “nowhere 20 in his opposition to Rent-A-Center’s motion to compel arbitration did he even mention 21 the delegation provision.” Id. Here, similarly, Plaintiff only argues that the Arbitration 22 Agreement, as a whole, is “overbroad” and “unfairly one-sided in favor of Defendant.” 23 Doc. No. 11 at 13. Therefore, the Court “must treat [the delegation clause] as valid under 24 § 2 [of the FAA], and must enforce it under §§ 3 and 4, leaving any challenge to the 25 validity of the Agreement as a whole for the arbitrator.” Rent-A-Ctr., 561 U.S. at 72; see 26 also McLellan v. Fitbit, Inc., No. 16-CV-36-JD, 2017 WL 4551484, at *4 (N.D. Cal. Oct. 27 11, 2017) (“If plaintiffs raise a challenge specific to the validity of the delegation clause, 28 the Court must consider it. Other challenges go to the arbitrator.”) -20- 16cv3125-MMA (AGS) 1 Accordingly, the Court GRANTS Defendant’s motion to compel arbitration and 2 requires the parties to “submit to the arbitrator whether their dispute is arbitrable.” 3 Olivas, 2018 WL 1306422, at *10. 4 CONCLUSION 5 Based on the foregoing, the Court GRANTS Defendant’s motion to strike the 6 errata to Plaintiff’s deposition and GRANTS Defendant’s motion for reconsideration. 7 Additionally, the Court GRANTS Defendant’s motion to compel arbitration and STAYS 8 this action. See 9 U.S.C. § 3. The Clerk of Court is instructed to terminate all pending 9 motions, deadlines, and hearings, and administratively close the case. The parties must 10 notify the Court within seven (7) days of the conclusion of arbitration proceedings. 11 12 IT IS SO ORDERED. 13 14 15 16 17 Dated: May 17, 2018 _____________________________ HON. MICHAEL M. ANELLO United States District Judge 18 19 20 21 22 23 24 25 26 27 28 -21- 16cv3125-MMA (AGS)
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