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All Aboard the Arbitration Train: Court Denies Discovery and Enforces Arbitration Provision

The Southern District of Ohio recently came out with another opinion in favor of arbitration provisions. In Fox v. Transunion, 2018 U.S. Dist. LEXIS 183937 (S.D. Ohio Oct. 26, 2018), the plaintiff filed suit alleging that a bank violated FCRA and defamed her by reporting disputed charges to the credit reporting agencies. The bank’s account agreement contained an arbitration provision covering “any claim, dispute or controversy between you and us (called ‘Claims’). All Claims (whether based on contract, tort, statute, or any other basis) arising out of or related to your account, a previous related account or our relationship may be arbitrated.” Fox, 2018 U.S. Dist. LEXIS 183937, at *3.

The Court easily found there was a binding contract between the plaintiff and the bank with respect to arbitration. However, the plaintiff tried to avoid, or at least delay, the consequences of this agreement by arguing that the Court should allow limited discovery on the issue of the validity of the arbitration agreement. Specifically, the plaintiff claimed she was entitled to discovery regarding whether the account agreement the bank provided as an exhibit was in effect at the time plaintiff took out her initial credit card. The Court did not buy this argument. The Court explained that the plaintiff “has the burden of showing, with evidentiary support, that an arbitration agreement is invalid. Attempting to cast doubt on the validity of the Account Agreement attached to the sworn declaration . . . does not meet that burden.” Id. at *9.

Plaintiff further argued that the arbitration agreement did not apply because the disputed charges were allegedly made fraudulently by a third-party and did not arise out of plaintiff’s actions. Again, the Court dismissed this argument, explaining that plaintiff’s claims against the bank “clearly” arise out of or relate to plaintiff’s account and thus fall within the arbitration provision. Id. at *11. The Court further noted that “Courts within the Sixth Circuit have routinely held that FCRA claims can be appropriately resolved through arbitration.” Id. The plaintiff’s efforts to argue inapplicability were simply to no avail, given the broad language in arbitration provision.

Lastly, the Court explained that Section 3 of the Federal Arbitration Act requires that a court stay an action pending arbitration. Accordingly, the Court granted the bank’s motion to compel arbitration and stayed the civil action pending the conclusion of the arbitration. Neither plaintiff’s request for discovery nor her argument about applicability could keep plaintiff from having to arbitrate her dispute.

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