United States District Court, D. Nevada
WILLIAM BRIDGE, individually and on behalf of all others similarly situated, Plaintiff,
CREDIT ONE FINANCIAL, a Nevada Corporation, d/b/a CREDIT ONE BANK, N.A., Defendant.
D. GEORGE, UNITED STATES DISTRICT JUDGE.
Amended Complaint, William Bridge alleges that Credit One
violated the Telephone Consumer Protection Act when, without
his prior express consent, it used an auto-dialer to place
calls to his cellular telephone number from around January to
January 18, 2014, Bridge used his cell phone to contact
Credit One regarding his mother's account. He alleges he
did so without her knowledge or consent, that he talked with
a Credit One representative, and that he advised that he was
making the call in relation to his mother's account.
Credit One counters that its records establish that Bridge
called its Automated Account Information number, but used his
mother's account information to access its systems. In
either event, Bridge alleges and Credit One does not dispute
that it captured his cell phone number and associated that
number with his mother's account. When his mother's
account became delinquent, Credit One began calling
Bridge's cell phone.
One moves to stay (ECF No. 109) and compel arbitration (ECF
No. 110) arguing that, because Bridge used his mother's
account information to contact Credit One, he should be bound
by the arbitration clause in the Cardholder Agreement his
mother signed. Alternatively, Credit One moves to strike the
class claims (ECF No. 111) and disqualify Bridge as a class
representative (ECF No. 112), arguing that Bridge's
conduct not only establishes that his claim is highly unique
but that he is an improper class representative. Credit One
also asks that Bridge's Nevada Deceptive Trade Practices
Act claim be dismissed (ECF No. 113). Bridge opposes each
has moved to certify a class, appoint a class representative,
and appoint class counsel (ECF No. 150). Credit One opposes
mother was a Credit One account holder. Credit One's
standard Visa/MasterCard Cardholder Agreement, Disclosure
Statement and Arbitration Agreement ("cardholder
agreement") provides the following:
COMMUNICATIONS: You are providing express written permission
authorizing Credit One Bank or its agents to contact you at
any phone number (including mobile, cellular/wireless, or
similar devices) or email address you provide at anytime, for
any lawful purpose. . . . Phone numbers and email addresses
you provide include those you give to us, those from which
you contact us or which we obtain through other means.
Cardholder Agreement also contains the following arbitration
Claims subject to arbitration include not only Claims made
directly by you, but also Claims made by anyone connected
with you or claiming through you, such as a co-applicant or
authorized user of your account, your agent, representative
or heirs, or a trustee in bankruptcy.
cardholder agreement's arbitration provision further
Claims subject to arbitration include, but are not limited
to, disputes relating to the establishment, terms, treatment,
operation, handling, limitations on or termination of your
account; any disclosures or other documents or communications
relating to your account; any transactions or attempted
transactions involving your account, whether authorized or
not: billing, billing errors, credit reporting, the posting
of transactions, payment or credits, or collections matters
relating to your account.
January 2014, Bridge's mother underwent surgery and
Bridge learned that her prognosis was not favorable. In
addition to the emotional impact of his mother's
condition on Bridge, he was also concerned that he had no
understanding of his mother's finances in the event that
she passed away. Bridge stayed in his mother's house
while she was in the hospital. During that time, he
discovered a folder in which his mother kept her bills. On
January 18, 2014, Bridge called his mother's creditors
using the toll-free numbers he found on her bills. He made
the calls from her home, using his mobile phone, while she
was in the hospital. He did not discuss making these calls
with his mother, received neither her consent nor her
instruction to do so, and did so without her knowledge.
One's toll-free number connects its customers to its
"Automated Account Information" system. According
to Credit One's records, Bridge reached its IVR
technology which allows customers to interact with its
systems using a telephone keypad. The records further
establish that Bridge performed a "Full" IVR
authentication of his mother's account. That is, in
response to an automated message requesting the customer to
"enter your sixteen digit card number, " Bridge
entered his mother's account number that he found on her
billing statement. Next, in response to an automated message
that the customer "enter the last four digits of your
social security number, " Bridge entered the last four
digits of his mother's social security number. Bridge
then received an automated instruction to "[p]lease stay
on the line while we access your account." As Bridge had
entered the validation information for his mother's
account, he was able to access information related to his
mother's account, including the account balance,
delinquency status, and payment due dates.
successful authentication of the account and partial social
security information, Credit One associated the phone number
Bridge had used to contact it with his mother's account.
Bridge's mother's account became delinquent, and
Credit One made calls to Bridge's mobile phone to recover
the debt. Bridge alleges that over 100 such calls were made
to his mobile phone number between January 2014 and March
2014. On or about March 18, 2014, Bridge instructed a Credit
One representative to stop calling his cell phone, and no
subsequent calls were made.
- Nevada Deceptive Trade Practices Act Claim
One's motion to dismiss the NDTPA claim, brought pursuant
to Fed. R. Civ. P, 12(b)(6), challenges whether Bridge's
complaint states "a claim upon which relief can be
granted." In ruling upon this motion, the court is
governed by the relaxed requirement of Rule 8(a)(2) that the
complaint need contain only "a short and plain statement
of the claim showing that the pleader is entitled to
relief." As summarized by the Supreme Court, a plaintiff
must allege sufficient factual matter, accepted as true,
"to state a claim to relief that is plausible on its
face." Bell Atlantic Corp, v. Twombly, 550 U.S.
544, 570 (2007), Landers v. Quality Communications,
Inc., 771 F.3d 638, 641 (9th Cir. 2015). Nevertheless,
while a complaint "does not need detailed factual
allegations, a plaintiffs obligation to provide the
'grounds' of his 'entitle[ment] to relief
requires more than labels and conclusions, and a formulaic
recitation of the elements of a cause of action will not
do." Twombly, 550 U.S. at 555,
Landers, 771 F.3d at 642. In deciding whether the
factual allegations state a claim, the court accepts those
allegations as true, as "Rule 12(b)(6) does not
countenance . . . dismissals based on a judge's disbelief
of a complaint's factual allegations." Neitzke
v. Williams, 490 U.S. 319, 327 (1989). Further, the
court "construe[s] the pleadings in the light most
favorable to the nonmoving party." Outdoor Media
Group, inc. v. City of Beaumont, 506 F.3d 895, 900 (9th
bare, conclusory allegations, including legal allegations
couched as factual, are not entitled to be assumed to be
true. Twombly, 550 U.S. at 555, Landers,
771 F.3d at 641. "[T]he tenet that a court must accept
as true all of the allegations contained in a complaint is
inapplicable to legal conclusions." Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009). "While legal
conclusions can provide the framework of a complaint, they
must be supported by factual allegations." Id.
at 679. Thus, this court considers the conclusory statements
in a complaint pursuant to their factual context.
plausible on its face, a claim must be more than merely
possible or conceivable. "[W]here the well-pleaded facts
do not permit the court to infer more than the mere
possibility of misconduct, the complaint has alleged-but it
has not 'show[n]'-'that the pleader is entitled
to relief." Id. (citing Fed.R.Civ.P. 8(a)(2)).
Rather, the factual allegations must push the claim
"across the line from conceivable to plausible."
Twombly, 550 U.S. at 570. Thus, allegations that are
consistent with a claim, but that are more likely explained
by lawful behavior, do not plausibly establish a claim.
Id. at 567.
relevant to Bridge's NDTPA claim, "[a] person
engages in a "deceptive trade practice" when in the
course of his or her business or occupation he or she
knowingly: . . . 3. Violates a state or federal statute or
regulation relating to the sale or lease of goods or
services." Nev. Rev. Stat. 598.0923(3). Bridge argues
that the TCPA is such a "statute, " as 47 U.S.C,
§227(a)(4) defines "telephone solicitation" as
meaning "the initiation of a telephone call or message
for the purpose of encouraging the purchase or rental of, or
investment in, property, goods, or services, which is
transmitted to any person, but such term does not include a
call or message (A) to any person with that person's
prior express invitation or permission, (B) to any person
with whom the caller has an established business
relationship, or (C) by a tax exempt nonprofit
organization." Bridge fails, however, to identify any
allegation of his Amended Complaint suggesting that Credit
One violated a statute within the TCPA relevant to the
Act's regulation of telephone solicitations. Rather, he
alleges that Credit One violated 47 U.S, C.
§227(b)(1)(A)(iii) of the TCPA, which prohibits a person
from making "any call (other than a call made for
emergency purposes or made with the prior express consent of
the called party) using any automatic telephone dialing
system or an artificial or prerecorded voice- .. . (iii) to
any telephone number assigned to a . . . cellular telephone
service." Further, Bridge has alleged that Credit
One's calls concerned attempts to collect a debt which,
for purposes of the NDTPA, does not constitute doing
business, See Nev. Rev. Stat. 80, 015(1)(h),
Dismissal of Bridge's NDTPA claim is appropriate.
- Motion to Compel Arbitration
motion to compel arbitration, Credit One asserts that Bridge
should be bound by the cardholder agreement including the
arbitration provision even though he is a non-signatory to
the agreement. Credit One argues that non-signatories may be
bound by arbitration agreements under ordinary contract and
agency principles. Alternatively, It argues that estoppel
precludes Bridge from avoiding the arbitration clause. Bridge
argues that the cardholder agreement does not apply to him
under any legal theory.
determining whether parties have agreed to arbitrate a
dispute, the court applies general state-law principles of
contract interpretation, while giving due regard to the
federal policy in favor of arbitration by resolving
ambiguities as to the scope of arbitration in favor of
arbitration. Mundi v. Union Security Life Ins. Co.,
555 F.3d 1042, 1044 (9th Cir. 2009) (citations omitted). The
presumption in favor of arbitration, however, does not apply
if contractual language is plain that arbitration of a
particular controversy is not within the scope of the
arbitration provision. Id., (citations omitted).
circumstances, a non-signatory to an arbitration agreement
may be bound by the agreement. Comer v. Micor, Inc.,
436 F, 3d 1098, 1101 (9th Cir. 2006). Federal courts have
identified five theories pursuant to which an arbitration
clause can be enforced by or against a non-signatory: (1)
incorporation by reference, (2) assumption, (3) agency, (4)
veil piercing alter ego, and (5) estoppel. Id.
However, "[t]he strong public policy in favor of
arbitration does not extend to those who are not parties to
an arbitration agreement." Comedy Club, Inc. v.
Improv W. Assocs., 553 F.3d 1277, 1287 (9th Cir. 2009)
(quoting Buckner v. Tamarin, 119 Cal.Rptr.2d 489
One's argument that agency principles bind Bridge to the
arbitration provision is without merit. "Where Nevada
law is lacking, its courts have looked to the law of other
jurisdictions, particularly California, for guidance."
Eichacker v. Paul Revere Life Ins. Co., 354 F.3d
1142, 1145 (9th Cir.2004) (quotation omitted). "Under
California law, when a non-signatory and one of the parties
to an arbitration agreement have an agency relationship, the
arbitration agreement may be enforced against the
non-signatory." Tamsco Properties, LLC v.
Langemeier, 597 Fed.Appx. 428, 429 (9th Cir. 2015). The
court in Tamsco relied, in part, on Nguyen v.
Tran, 157 Cal.App.4th 1032, 68 Cal.Rptr.3d 906 (2007).
In Nguyen, the court noted that an arbitration
agreement may be enforced by or against a non-signatory
"when a non-signatory and one of the parties to the
agreement have a preexisting agency relationship that makes
it equitable to impose the duty to arbitrate on either of
them." 157 Cal.App. 4th at 1036-37. In that
case, the court found that the non-signatory who was
identified in the underlying agreement as an agent of the
signatory could, as the agent of the signatory, enforce the
arbitration agreement against another signatory.
Court in Tamsco also cited Berman v. Dean Witter
& Co., 44 Cal.App.3d 999, 1003, 119 Cal.Rptr. 130,
133 (Ct. App. 1975). In Berman, the plaintiff
purchased futures contracts on his wife's account with a
securities broker, then brought a suit arising from that
purchase. The broker and its agent sought to enforce the
arbitration provision in the agreement establishing the
wife's account. Neither the plaintiff nor the
broker's agent were signatories to the agreement.
Nevertheless, the court noted that the dispute arose out of
and was related to the agreement. As such, the broker's
agent (a non-signatory) was entitled to the benefit of the
arbitration provision to the same extent as his principal (a
signatory). Conversely, the plaintiff (a non-signatory) was
"not entitled to any greater right than his principal (a
signatory). Under the agreement, the broker could enforce the
arbitration provision against the wife, and the agent of the
broker could likewise enforce the agreement against the
plaintiff-the agent of the wife.
present matter, Credit One has not shown that Bridge was
acting as an agent for his mother at the time she entered the
Cardholder Agreement. Further, Bridge was not identified as
an agent for his mother in the Cardholder Agreement.
Accordingly, the arbitration provision cannot be enforced
against Bridge on the basis that he had a preexisting agency
relationship with his mother at the time Credit One and
Bridge's mother agreed to arbitrate disputes, and whose
claims arise from or concern the Cardholder Agreement.
assuming Bridge acted as his mother's agent at the time
he called Credit One using his mother's account
information, such act of agency is insufficient to compel
arbitration against Bridge. Credit One is "not entitled
to any greater right" against Bridge than those rights
to which it is entitled as against his mother, who is the
principal and signatory. Pursuant to the Cardholder
Agreement, a Credit One customer agrees to arbitrate claims
arising from communications relating to her account. The
customer also agrees that she is "providing express
written permission authorizing Credit One Bank ... to contact
[her] at any phone number (including mobile,
cellular/wireless, or similar devices), ., [she] provide[d]
at anytime . . . includ[ing] those from which [she]
contact[ed Credit One.]"
to the TCPA, however, a customer cannot give Credit One
express written permission to use a regulated device to
contact her at a cell phone number for which the customer is
neither the subscriber nor the customary user. More
particularly, she could not give Credit One such permission
by the mere act of contacting Credit One using a phone for
which she was neither subscriber nor customary user. If
Credit One used a regulated device to call a mobile phone
number used by a customer to contact Credit One, and the
customer was neither the subscriber nor customary user of
that number (and did not otherwise have any authority to
grant permission regarding that number), Credit One's
calls to that number would be outside the terms of, and not
governed by, the Cardholder Agreement and not subject to its
arbitration provision. Credit One cannot merely rely on a
customer's use of a mobile phone to contact Credit One,
and the terms of the Cardholder Agreement, to establish that
the customer could and did grant consent to Credit One to
make calls to that particular phone. Conversely, the terms of
the Cardholder Agreement and a customer's use of a cell
phone to contact Credit One do not establish that Credit
One's subsequent calls to that cell phone number are
governed by the Cardholder Agreement. Rather, in the context
of the TCPA, Credit One must show (in addition to the terms
of the Cardholder Agreement, and the customer's use of a
phone) that the customer could, for the mobile phone number
used to contact Credit One, grant consent to Credit One to
call that mobile phone number. As Credit One has neither
argued nor shown that Bridge's mother could grant it
permission to use a regulated device to contact Bridge's
phone, the Court cannot conclude that Bridge, as her agent,
could grant that permission. Accordingly, Credit One cannot
compel Bridge, in his capacity as an agent of his mother, to
arbitrate his TCPA claim.
Bridge should be equitably estopped from avoiding the
arbitration provision, however, presents a closer and more
difficult question. "Equitable estoppel 'precludes a
party from claiming the benefits of a contract while
simultaneously attempting to avoid the burdens that contract
imposes.'" Comer v. Micor, Inc., 436 F.3d
1098, 1101 (9th Cir. 2006) (quoting Wash. Mut. Fin.
Group, LLC v. Bailey, 364 F.3d 260, 267 (5th Cir.2004)),
"[N]onsignatories have been held to arbitration clauses
where the nonsignatory 'knowingly exploits the agreement
containing the arbitration clause despite having never signed
the agreement.'" Id., (quoting E.I,
DuPont de Nemours & Co. v. Rhone Poulenc Fiber &
Resin Intermediates, 269 F.3d 187, 199 (3d Cir.2001)).
In Comer, the Ninth Circuit affirmed the district
court's denial of the defendant's motion to compel
arbitration. The court noted that the plaintiff was
"simply a participant" in an ERISA plan, did not
seek to enforce the terms of the underlying agreement, and
did not otherwise take advantage of the agreements.
Nevada, the elements of equitable estoppel are: "(1) the
party to be estopped must be apprised of the true facts, (2)
that party must intend that his conduct shall be acted upon
or must so act that the party asserting estoppel has the
right to believe it was so intended, (3) the party asserting
estoppel must be ignorant of the true state of the facts, and
(4) the party asserting estoppel must have detrimentally
relied on the other party's conduct." Las Vegas
Convention and Visitors Authority v. Miller, 124 Nev.
669, 698, 191 P.3d 1138, 1157 (2008); see also Holland
Livestock Ranch v. U.S., 655 F.2d 1002 (9th Cir. 1981).
non-signatory to an arbitration agreement may be compelled to
arbitrate where the non-signatory 'knowingly
exploits' the benefits of the agreement and receives
benefits flowing directly from the agreement. Nguyen v.
Barnes & Noble Inc., 763 F.3d 1171, 1179 (9th Cir.
2014) (citing MAG Portfolio Consultant, GMBH v. Merlin
Biomed Grp. LLC, 268 F.3d 58, 61 (2d Cir.2001)). In
Nguyen, the Ninth Circuit indicated the plaintiff
was "not the type of non-signatory contemplated by the
rule." Id. It went on to note that
"[e]quitable estoppel typically applies to third parties
who benefit from an agreement made between two primary
parties." Id. The plaintiff brought suit
against an online retailer. The plaintiff relied on the Terms
of Use's "choice of law provision in his complaint
and asserting class claims under New York law."
Id., at 1179. The retailer's website had a link
use the website in an unsuccessful attempt to purchase a
product from the retailer. On this evidence, the court
determined that the plaintiff was "not equitably
estopped from avoiding arbitration because he relied on the
MAG Portfolio Consultant, GMBH v. Merlin Biomed Grp.
LLC, 268 F.3d 58, 61 (2d Cir. 2001), the Second Circuit
explained that "[t]he benefits must be direct-which is
to say, flowing directly from the agreement." The court
went on to explain:
Deloitte [Noraudit A/S v. Deloitte Haskins &
Sells, __ U.S. __, 9 F.3d 1060, 1064 (2d Cir.1993)], for
example, concerned an agreement containing an arbitration
non-signatory who had received a copy of the agreement,
raised no objections to it and made use of that trade name
pursuant to the agreement was estopped from arguing it was
not bound by the arbitration clause in the agreement.
Deloitte, 9 F.3d at 1064.
By contrast, the benefit derived from an agreement is
indirect where the non-signatory exploits the contractual
relation of parties to an agreement, but does not exploit
(and thereby assume) the agreement itself. Thomson-CSF,
[S.A. v. Am. Arbitration Ass'n, 64 F.3d 773, 776 (2d
Cir.1995)]. In Thomson-CSF, for example, two
companies agreed to trade exclusively with each other.
Id. at 775. A third-party competitor acquired one of
the companies, apparently with the intent of squeezing the
remaining company out of the market. Id. The
unacquired signatory was contractually bound to trade only
with a company that was now a subsidiary to its competitor.
Id. Thus, interest in trading waned. Id.
While the agreement was crucial to the benefit the third
party gained by shutting its competitor out of the market,
the agreement was not the direct source of the benefit.
Id. at 778-79. Rather, the benefit flowed from the
non-signatory's exploitation of the contractual relation
created through the agreement by acquiring one of the
signatories to the agreement.
268 F.3d at 61-62.
quotes, in his opposition, the Texas Supreme Court in In
re Kellogg Brown & Root, Inc., 166 S.W.3d
732, 739-40 (Tex. 2005) for the proposition that if "a
non-signatory's claims can stand independently of the
underlying contract, then arbitration generally should not be
compelled under this theory." As suggested by the
court's discussion in that matter, a suit brought to
enforce the terms of a contract is an obvious example of a
non-signatory seeking a direct benefit-a benefit flowing
directly from the contract. Deloitte, however,
provides an example of direct benefit estoppel applying to a
non-signatory who argued that its claim did not arise from
the agreement containing the arbitration provision. The court
concluded, however, that the non-signatory's acceptance
of the benefits of the agreement, as well as its knowledge of
and failure to object to the agreement, estopped it from
denying its obligation to arbitrate under the agreement.
argues that "even if none of the terms of the
Cardholder Agreement existed, [he] would still have a viable
TCPA claim against Credit One." The argument is accurate
only to the extent that the elements of his TCPA claim do not
rely upon any term within the Cardholder Agreement. The
argument ignores, however, the allegations of his own amended
complaint, in which he acknowledges that he first contacted
Credit One in relation to his mother's account. The issue
raised by Credit One's motion is whether Bridge should be
permitted to engage in and benefit from conduct governed by
the Cardholder Agreement, which conduct elicited Credit
One's response that is the subject of his TCPA claim, but
avoid its arbitration provision.
Court disagrees with Bridge's argument that this case is
more like Bridas S.A.P.I.C. v. Govt, of
Turkmenistan, 345 F.3d 347 (5th Cir. 2003) than
Hellenic Investment Fund, Inc. v. Det Norske
Veritas, 464 F.3d 514 (5th Cir. 2006). Both matters are
distinguishable. Bridge is accurate in noting that, in
Bridas, the non-signatory did not sue the signatory
based upon the underlying agreement. He ignores, however,
that Bridas involved a signatory initiating an
arbitration proceeding against the non-signatory to pursue a
claim against the non-signatory under the provisions of the
underlying agreement. The present matter concerns a
non-signatory bringing a claim against the signatory. At
issue is whether that suit against the signatory is
"premised in part upon the agreement."
Bridas, 345 F.3d at 362.
matter underlying Hellenic is similar to the present
matter in that it involved a signatory seeking to enforce an
arbitration provision against a non-signatory who had brought
suit against the signatory. The claim in Hellenic,
however, depended on establishing that the signatory had
acted contrary to other provisions of the same document
containing the arbitration provision. In ...