SBD

My Motion to Compel Arbitration in Arizona

Recommended Posts

MOTION TO COMPEL ARBITRATION IN ARIZONA

Defendants hereby move to dismiss Plaintiff Chase Bank USA, NA’s (“Chase”) Complaint pursuant to Federal Rule of Civil Procedure 12(B)(1) or in the alternative to compel arbitration and stay these proceedings pursuant to the Federal Arbitration Act, 9 U.S.C. § 1 et seq. (the “FAA”). In support of its motion, Defendants incorporate the Memorandum of Points and Authorities submitted herewith, and state as follows:

1. The Defendants and Chase entered into a written agreement wherein they agreed to arbitrate all disputes arising between them, other than those that could be brought in small claims court. The parties therefore agreed that other than a small claims court, no courts, including this Court, would have jurisdiction to hear their disputes. Accordingly, the Court should dismiss Plaintiff’s Complaint pursuant to Rule 12(B)(1).

2. In the alternative, the Court should compel arbitration and stay these proceedings pursuant to the FAA. The parties’ agreement states that the FAA governs their disputes. Where a party refuses to arbitrate pursuant to the terms of an arbitration agreement, the FAA provides that the Court should compel arbitration and stay the proceedings.

WHEREFORE, The Defendants respectfully request that this Court dismiss Chase’s Complaint pursuant to Rule 12(B)(1) or in the alternative compel arbitration and stay these proceedings pursuant to the FAA.

Share this post


Link to post
Share on other sites

MEMORANDUM OF POINTS AND AUTHORITIES

INTRODUCTION

The parties to this lawsuit entered into an agreement with binding arbitration provisions. Plaintiff Chase Bank USA, NA (“Chase”) entered into a written agreement waiving their right to have a trial by jury to resolve any dispute; to have a court, other than a small claims tribunal, resolve any dispute; and to serve as a representative and/or participate as a member of a class of claimants. Ignoring these binding contract provisions, Chase brings suit alleging a claim on an account stated which is subject to binding arbitration.

Defendants therefore ask this Court to dismiss Chase’s Complaint pursuant to Federal Rule of Civil Procedure 12(B)(1), or, in the alternative, to compel arbitration of Chase’s claims and to stay these proceedings pending arbitration pursuant to the Federal Arbitration Act, 9 U.S.C. § 1 et seq. (the “FAA”).

BACKGROUND

Defendants are married individuals over the age of 18 and residents of

XXX County, Arizona. Chase is a national banking association, headquartered in New York, New York. Chase is a wholly-owned subsidiary of JP Morgan Chase & Co. ("JPM"), a leading global financial services firm with assets of approximately $2.3 trillion. Chase is the legal entity for JPM's credit card business. Chase is one of the largest credit card companies in the United States, with at least hundreds of thousands of credit card customers throughout the United States and at least tens of thousands of credit card customers throughout the state of Arizona. The Card Member Agreement recently sent to Defendants by Chase contains the following arbitration provision:

ARBITRATION AGREEMENT, PLEASE READ THIS AGREEMENT CAREFULLY IT PROVIDES THAT ANY DISPUTE MAY BE RESOLVED BY BINDING ARBITRATION. ARBITRATION REPLACES THE RlGHT TO GO TO COURT, YOU WILL NOT BE ABLE TO BRING A CLASS ACTION OR OTHER REPRESENTATIVE ACTION IN COURT SUCH AS THAT IN THE FORM OF A PRIVATE ATTORNEYGENERAL ACTION, NOR WILL YOU BE ABLE TO BRING ANY CLAIM IN ARBITRATION AS A CLASS ACTION OR OTHER REPRESENTATIVE ACTION, YOU WILL NOT BE ABLE TO BE PART OF ANY CLASS ACTION OR OTHER REPRESENTATIVE ACTION BROUGHT BY ANYONE ELSE, OR BE REPRESENTED IN A CLASS ACTION OR OTHER REPRESENTATIVE ACTION. IN THE ABSENCE OF THIS ARBITRATION AGREEMENT, YOU AND WE MAY OTHERWISE HAVE HAD A RIGHT OR OPPORTUNITY TO BRING CLAIMS IN A COURT, BEFORE A JUDGE OR JURY, AND/OR TO PARTICIPATE OR BE REPRESENTED IN A CASE FILED IN COURT BY OTHERS INCLUDING CLASS ACTIONS AND OTHER REPRESENTATIVE ACTIONS). OTHER RIGHTS THAT YOU WOULD HAVE IF YOU WENT TO A COURT, SUCII AS DISCOVERY OR THE RIGHT TO APPEAL THE DECISION MAY BE MORE LIMITED, EXCEPT AS OTHERWISE PROVIDED BELOW, THOSE RIGHTS ARE WAIVED.

Either you or we may, without the other’s consent, elect mandatory, binding, arbitration of any claim, dispute or controversy by either you or us against the other, or against the employees, parents, subsidiaries, affiliates, beneficiaries, agents or assigns of the other, arising from or relating in any way to the [CMA], any prior [CMA], your credit card Account or the advertising, application, or approval of your Account (“Claim”). This Arbitration Agreement governs all Claims, whether such Claims are based on law, statute, contract, regulation, ordinance, tort, common law, constitutional provision, or any legal theory of law such as respondent superior, or any other legal or equitable ground and whether such Claims seek as remedies money damages, penalties, injunctions, or declaratory or equitable relief. Claims subject to this Arbitration Agreement include Claims regarding the applicability of this Arbitration Agreement or the validity of the entire [CMA] or any prior [CMA]. This Arbitration Agreement includes Claims that arose in the past, or arise in the present or the future. As used in this Arbitration Agreement, the term Claim is to be given the broadest possible meaning.

The agreement also contains an exception to the arbitration provision for claims brought in small claims court. It then outlines the procedure for initiating arbitration as follows.

Initiation of Arbitration. The party filing a Claim in arbitration must choose one of the following two arbitration administrators; American Arbitration Association; or National Arbitration Forum. These administrators are independent from us. The administrator does not conduct the arbitration. Arbitration is conducted under the rules of the selected arbitration administrator by an impartial third party chosen in accordance with the rules of the selected arbitration administrator and as may be provided in this Arbitration Agreement.

Costs. We will reimburse you for the Initial Arbitration filing fee paid by you up to the amount of $500 upon receipt of proof of payment. Additionally, if there is a hearing, we will pay any fees of the arbitrator and arbitration administrator for the first two days of the hearing.

ARGUMENT

I. THE COURT SHOULD DISMISS PLAINTIFF’S COMPLAINT BECAUSEARBITRATION IS THE EXCLUSIVE REMEDY FOR THESE CLAIMS.

Pursuant to the parties’ contract, this Court cannot be a forum for any disputes between the parties. Under both Federal and Arizona law, an action should be dismissed where a party contractually agrees exclusively to arbitration. See, e.g., Simula, Inc. v. Autoliv, Inc., 175 F.3d 716, 726 (9th Cir. 1999) (affirming district court’s order compelling arbitration and dismissing complaint); Sparling v. Hoffman Constr. Co., Inc., 864 F.2d 635, 638 (9th Cir. 1988) (affirming dismissal of claims where all claims were subject to arbitration); see also Martin Marietta Aluminum, Inc. v. General Electric Co., 586 F.2d 143 (9th Cir. 1978) (affirming grant of summary judgment where all claims to court were barred by arbitration clause); Payne v. Pennzoil Corp., 138 Ariz. 52, 53-54, 56, 672 P.2d 1322, 1323-24, 1326 (Ariz. Ct. App. 1983) (affirming trial court’s grant of motion to dismiss “based on lack of subject matter jurisdiction and failure to state a claim” under Ariz. R. Civ. P. 12(B)) where arbitration provided for exclusive remedy).

Because Chase’s agreement with the Defendants clearly state that all disputes, other than those in Small Claims, must be resolved through arbitration and cannot be brought in a court, this Court should dismiss Chase’s Complaint and allow the parties to arbitrate their disputes in accordance with their agreement.

Share this post


Link to post
Share on other sites

cont...

II. ARBITRATION PROVISION IS BINDING AND REQUIRES ARBITRATION

Congress enacted the FAA to reverse the long standing judicial hostility toward arbitration agreements “and to place arbitration agreements upon the same footing as other contracts.” Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 24 (1991). The FAA establishes a liberal policy favoring arbitration agreements and requires courts to enforce rigorously private arbitration agreements according to their terms. Volt Info Scis., Inc. v. Board of Trustees, 489 U.S. 468, 479 (1989). A court should not strike down an arbitration agreement except in those very limited circumstances where the arbitration agreement at issue is unenforceable on a ground that exists at law or equity for any contract, such as fraud, duress, or unconscionability. Doctor’s Assocs., Inc. v. Casarotto, 517 U.S. 681, 687 (1996); see also Ticknor v. Choice Hotels Int’l, Inc., 265 F.3d 931, 936-37 (9th Cir. 2001), cert. denied, 534 U.S. 1133 (2002). Courts should give deference to these Congressional findings and directives when determining the enforceability of the parties’ arbitration agreements. See Simula, 175 F.3d at 719 (holding that the FAA

“reflects Congress’ intent to provide for the enforcement of arbitration agreements within the full reach of the Commerce Clause”).

A. The FAA Governs the Arbitration Agreement in this Case.

The FAA governs whether the parties’ Arbitration Provision is enforceable. The parties’ Agreement provides: “This Arbitration Provision is made pursuant to a transaction involving interstate commerce and shall be governed by the FAA.” The FAA governs arbitration agreements in contracts involving transactions in interstate commerce. 9 U.S.C. § 1; Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 25 n. 32 (1983). Not only does the contract containing the Arbitration Provision at issue specifically provide that the arbitration provision is made pursuant to a transaction involving interstate commerce, but also

Congress intended courts to construe “commerce” as broadly as possible. Simula, 175 F.3d at 719.

Only state law contract defenses—defenses relevant to any contact—can be used to challenge the enforceability of an arbitration agreement. The Supreme Court has unequivocally stated that the FAA precludes specialized scrutiny of arbitration agreements:

A court may not . . . in assessing the rights of litigants to enforce an arbitration agreement, construe that agreement in a manner different from that in which it otherwise construes nonarbitration agreements under state law. Nor may a court rely on the uniqueness of an agreement to arbitrate as a basis for a state-law holding that enforcement would be unconscionable, for this would enable the court to effect what we hold today the state legislature cannot.

Perry v. Thomas, 482 U.S. 483, 493 n.9 (1987). See also Doctor’s Assocs., 517 U.S. at 687 (“courts may not . . . invalidate arbitration agreements under state laws applicable only to arbitration provisions”); Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 24 (1991) (purpose of FAA is to “reverse the longstanding judicial hostility to arbitration agreements . . . and to place arbitration agreements upon the same footing as other contracts”); Banc One Acceptance Corp. v. Hill, 367 F.3d 426, 432 (5th Cir. 2004)(explaining that “state courts may properly strike down arbitration clauses, but they may not treat arbitration clauses differently than other contract terms”) (emphasis in original).

Claiming that the enforcement of a contractual provision will have adverse effects on

society, i.e., allow businesses and industry to grant themselves “virtual immunity,” is

precisely the type of specialized, and non-contract based, argument prohibited under the FAA. The only public policy at issue in this case is the FAA and Arizona’s presumption in favor of arbitration.

B. The Arbitration Provision Does Not Violate Public Policy.

The Arbitration Provision does not violate public policy. As previously discussed, both federal and Arizona courts have expressed a public policy favoring arbitration. Volt, 489 U.S. at 475-76; City of Cottonwood, 179 Ariz. at 189. The Randolph court agreed that the Arbitration Provision does not violate public policy: [A]rbitration clauses are construed liberally and any doubts about whether a matter is subject to arbitration are resolved in favor of arbitration.” City of Cottonwood v. James L. Fann Contracting, Inc., 179 Ariz. 185, 189, 877 P. 2d 284, 288 (App. 1994).

Defendants respectfully requests that this Court enforce the contract entered into between the parties, compel arbitration, and stay these proceedings pending arbitration.

Share this post


Link to post
Share on other sites

I don't think judge will deny.

Where this motion has its big value is against the opposing counsel. If you draft such a good legal pleading for this motion...they immediately think, do you have legal training? did you go to law school? and then they think about how much "problem" and expense this arbitration will be...

Remember many of these law firms need VOLUME. If they fought every case, they woukld lose money.

They need their time to crank default judgments.

Share this post


Link to post
Share on other sites

Excellent motion!

1 critique - draft a proposed order for the judge and include it in the filing.

2 quick questions-- Have you actually used it in Court? If so, what was the outcome?

Share this post


Link to post
Share on other sites
Excellent motion!

1 critique - draft a proposed order for the judge and include it in the filing.

2 quick questions-- Have you actually used it in Court? If so, what was the outcome?

mine was not this good and i got a motion to stay in AZ superior court:)

Send me a PM and we can compare notes! Az courts are not pro se freindly and chase uses very unethical lawyers//that lie ! :evil: in a way acceptable to the courts :rolleyes: i think its called partial truth :D

ditto on the order , i forgot to do that :|

Share this post


Link to post
Share on other sites

I noticed that at the beginning of the motion, you reference Federal Rules of Civil Procedure and then go on to say that the case should be dismissed due to FRCP 12.1.b. Your motion mixes federal and state laws and federal and state case precedents. This can make a difference depending upon who is trying your case and where.

Some judges don't like to see FRCP mentioned in pleadings if the case is being held in state superior court.

If your case is being held at the federal level, forgive my comments. Your pleading looks good otherwise. But if your case is being held at the state superior court level, please change the basis of your dismissal suggestion to the relevant AZRCP rule.

As to the cases you mention under points and authorities, you mention that federal law governs how arbitration should be conducted and do a good job of that. I have no other suggestions because I am no expert in this topic. I just noticed the first paragraph.

Share this post


Link to post
Share on other sites
Guest
This topic is now closed to further replies.