WonderingInWI

Citi's "Arbitration Limits" clause

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Hi there,

 

This forum has been so helpful to me previously (I used arbitration to make Kohn Law Firm give up on a 5K Care Credit debt), I am hoping you guys have insight into my current dilemma.

 

I am being sued in my county's Small Claims Court for an alleged 2k Citi card debt. I thought I was good to go with my MTC but have read a few posts here indicating some courts have taken:

 

 

 

"Individual claims filed in a small claims court are not subject to arbitration, as long as the matter stays in small claims court,"

to refuse MTCs.

 

Sure seems like the OC is wanting to have his cake and eat it, too.

My question is: How often are JDB's aware of this little nugget and how often are courts refusing MTCs based on it?

 

I've really no option but to give it a go with my MTC, just wondered if others have experience with this.

 

 

 

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6 hours ago, WonderingInWI said:

I am being sued in my county's Small Claims Court for an alleged 2k Citi card debt.

Who is the plaintiff?  Citi or a buyer?

 

6 hours ago, WonderingInWI said:

"Individual claims filed in a small claims court are not subject to arbitration, as long as the matter stays in small claims court,"

What's the date of the agreement?

Citi had delegation language from 2001 until late 2016 or early 2017 (depending on the style of account).

The delegation language looks like this;

Quote

Claims Covered
What Claims are subject to arbitration? All Claims relating to your account, a prior related account, or our relationship are subject to arbitration, including Claims regarding the application, enforceability, or interpretation of this Agreement and this arbitration provision

Citi removed this language a couple of years ago.  But if the agreement that governs the account in question does contain this language, then the court can't consider the small claims cut-out.

The Supreme Court re-enforced this interpretation earlier this year in Henry Schein, Inc. v. Archer & White Sales, Inc., 586 U.S. ___, 139 S. Ct. 524.

See also;

U.S. Supreme Court Holds That Arbitrators, Not Courts, Decide Arbitrability Under Contractual Delegations—Even When the Answer Is Obviously “No”

SCOTUS Rejects Exception to Compelling Arbitration—Delegation clause means arbitrator decides scope—no plausible argument required

Supreme Court Gives Teeth to Delegation Clauses in Arbitration Provisions

U.S. Supreme Court Rejects ‘Wholly Groundless’ Exception to Delegation Clauses in Arbitration Agreements

If the agreement that governs the account in question does not contain the delegation language, then you might not have this leverage unless delegation is somehow incorporated by reference to the rules of the arbitration forum — as was the case in Schein.

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On 8/14/2019 at 7:14 PM, Pericles said:

Who is the plaintiff?  Citi or a buyer?

The OC is Citi. Calvary is the JDB.

 

On 8/14/2019 at 7:14 PM, Pericles said:

What's the date of the agreement?

Citi had delegation language from 2001 until late 2016 or early 2017 (depending on the style of account).

The delegation language looks like this;

My agreement is 2016. There is no delegation language. Therefore, it seems, the small claims cut-out is potentially problematic. My previous experience with Midland was that the law firm they employed was rather clueless about the arbitration clause. I am not sure if Calvary is more savvy. 

Thank you for bringing the Schein case to my attention. I am doing a tedious search on PACER but can't seem to find a single ruling on the small claims cut-out. Are you aware of anything related to this?

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On 8/17/2019 at 8:51 AM, WonderingInWI said:
My agreement is 2016. There is no delegation language. Therefore, it seems, the small claims cut-out is potentially problematic.

What's the incorporation (adopted by reference) language like?
For agreements that reference both the AAA and JAMS, it usually looks something like this;

Quote

The arbitration will follow procedures and rules of the arbitration firm in effect on the date the arbitration is filed unless those procedures and rules are inconsistent with this Agreement, in which case this Agreement will prevail.


For agreements that reference just the AAA;

Quote

Arbitration shall be conducted by the American Arbitration Association (“AAA”) according to this arbitration provision and the applicable AAA arbitration rules in effect when the claim is filed (“AAA Rules”), except where those rules conflict with this arbitration provision. 


The following is quoted from Rent-A-Center delegation of arbitrability to the arbitrator is alive and well ...;

In Hughes v. Ancestry.com, 2019 WL 2260666 (May 28, 2019), Ancestry.com and the customer agreed to arbitrate disputes, except for certain claims not involved in the case. The parties’ arbitration agreement adopted by reference AAA’s Consumer Arbitration Rules, including Rule R-14(a), which provides that “[t]he arbitrator shall have the power to rule on his or her own jurisdiction, including any objections with respect to the existence, scope, or validity of the arbitration agreement or to the arbitrability of any claim or counterclaim.”

In order for some citi agreement to be inconsistent with the adopted-by-reference language, it would have to state the contrary of that language, something like;
only a court decides "claims related to the validity, enforceability, coverage or scope of the arbitration clause".

 

On 8/17/2019 at 8:51 AM, WonderingInWI said:
I am doing a tedious search on PACER but can't seem to find a single ruling on the small claims cut-out. Are you aware of anything related to this?

Probably most of the relevant cases are decided in "small claims" court and not challenged beyond that.

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Thanks, Pericles,

My agreement is the one naming only AAA as arbiter.

My tiny ray of hope is that, in WI, we start in Small Claims Court, overseen by a Court Commissioner. If the Commissioner rules against you, the appeal goes to Circuit Court where a judge presides. 

My previous experience was that the Commissioner denied my MTC and entered a judgement against me. The Circuit Court judge accepted the MTC.

 

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If the appeal goes to circuit court, you can raise both the adopted-by-reference delegation, and the "so long as the matter remains in such court" arguments.

Assuming that the buyer raises the cut-out at all.  Depending on the rules in your jurisdiction, if the appeal is not de novo, any objection based on the cut-out might be waived if not raised in the lower court.

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8 hours ago, WonderingInWI said:

The appeal from Small Claims to Circuit Court in my county is De Novo.

I think that is the way throughout the state. At least in my county, which has the added benefit of having the most pro-consumer judges in the state.  

I once had a case heard by THE most consumer friendly Circuit Court judge in the state.  I was happy with that case. 

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