UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

___________________________________

CHARLES ANEKE, ET AL. )

)

Plaintiffs, )

)

v. )

)

AMERICAN EXPRESS TRAVEL ) Civil Action No. 11-1008(GK)

RELATED SERVICES, INC., ET AL. ) 

)

Defendants. )

)

___________________________________)

MEMORANDUM OPINION

Plaintiffs, Charles Aneke, Rebecca Fasten, Christopher

Addison, and Tolu Tolu, bring a class action suit against

Defendants American Express Travel Related Services Company, Inc.

(“American Express Travel”), American Express Company, American

Express Centurion Bank (“Centurion Bank”), and American Express

Bank, FSB, (“Defendants” or “American Express”) for violations of

the Right to Financial Privacy Act (“RFPA”), 12 U.S.C. § 3401 et

seq.

This case is presently before the Court on Plaintiffs’ Motion

for an Order Invalidating the “Restrictions on Arbitration”

Subsection of the American Express Cardmember

Agreement(“Plaintiffs’ Motion to Invalidate the Arbitration

Restrictions” or “Pls. Mot.”) [Dkt. No. 29] and Defendants’ Motion

to Compel Arbitration and Stay the Action (“Defendants’ Motion to

Compel Arbitration” or “Defs. Mot.”) [Dkt. No. 32]. Upon
consideration of the Motions, Oppositions, Replies, and the entire

record herein, and for the reasons set forth below, Plaintiffs’

Motion is denied and Defendants’ Motion is granted.

I. BACKGROUND

Plaintiffs are U.S. residents who hold credit card accounts,

as either primary or additional users, with Defendants. 1 2

Plaintiffs’ First Amended Complaint ¶¶ 1-5 (“FAC”) [Dkt. No. 8]. As

part of their customer service, Defendants have established a

network of call/data centers, which give card holders direct access

to American Express personnel. Id. ¶ 28. In connection with this

system, Defendants have created an information network that allows

American Express personnel to access callers’ financial records,

which Defendants have collected and stored. Id. ¶¶ 24-26, 29. In

Plaintiff Charles Aneke is a primary account holder, who 1

originally opened a credit card account with American Express in

January 2008. Declaration of Paul V. Carey in Support of

Defendants’ Motion to Compel Arbitration and Stay Action ¶ 5

(“Carey Decl.”) [Dkt. No. 33]. Plaintiff Christopher Addison is

also a primary account holder, who opened an account with American

Express in 1992. Id. ¶ 7. Plaintiffs Rebecca Fasten and Tolu Tolu

are additional cardmembers on credit card accounts opened by other

customers who are primary cardmembers, but who are not named

plaintiffs in this action. Id. ¶¶ 8, 10.

Defendant American Express Travel is a New York-based bank holding 2

company and is a wholly owned subsidiary of Defendant American

Express Company, also a New York-based bank holding company. Id. ¶¶

10-11. Defendant Centurion Bank is a Utah corporation and a wholly

owned subsidiary of American Express Travel, and issues charge

cards and credit cards to persons and/or business entities. Id. ¶

12. American Express Bank, FSB is a federal savings bank and card

issuer with offices in New York and Utah, and is a wholly owned

subsidiary of Centurion Bank. Id. ¶ 13.

-2-
the past, American Express call centers have been located 

primarily in the United States. Id. ¶ 30. However, over time,

Defendants have expanded their network to include call centers

located overseas and staffed predominantly by foreign nationals.

Id. 

Plaintiffs allege that, in violation of the RFPA, Defendants

transmitted Plaintiffs’ personal financial information to

Defendants’ overseas call/data centers without either obtaining

Plaintiffs’ permission, or notifying Plaintiffs of the impact these

transfers might have on their legal rights. Id. ¶¶ 53-57. Customers

typically access the customer service call centers, whether located

overseas or in the United States, through U.S. telephone numbers

provided by American Express. FAC ¶¶ 32-33. American Express does

not, however, notify its customers that calls placed to these U.S.

numbers may be handled by personnel located overseas. Id. 

Plaintiffs allege that because financial information received

and sent by the overseas call centers is not subject to U.S. laws,

the United States Government is free to intercept, search, and

seize this data. Id. ¶ 40. Plaintiffs also allege that, upon

information and belief, the U.S. Government has either seized their

financial information or that such information is at risk of

Government seizure. Id. ¶¶ 42-47,60. Plaintiffs also allege that

their financial information may have been seized by certain foreign

-3-
governments, which regularly share such data with the United

States. Id. ¶¶ 48-51, 61-62. 

Plaintiffs bring their claims as a class action suit on behalf

of “[all] U.S.-based American Express customers whose financial

records have been electronically transferred from the United States

to foreign nationals residing overseas.” FAC ¶ 7. Defendants seek

to stay the litigation and have Plaintiffs’ claims arbitrated

pursuant to the Arbitration Provision in their Cardmember

Agreements with Defendants (“Cardmember Agreement”).3

Under the Arbitration Provision in those Agreements, “[a]ny

claim shall be resolved upon the election by [the cardmember] or

[American Express], by arbitration pursuant to this Arbitration

provision . . . .” Cardmember Agreement of Plaintiff Charles Aneke,

Ex. A to Carey Decl., 10 (“Aneke Cardmember Agreement”) [Dkt. No.

33-1]. Plaintiffs concede that this Provision applies to their 4

Plaintiffs are each subject to separate Cardmember Agreements 3

with Defendants. However, for purposes of the instant dispute, the

terms of these Agreements do not differ in any material respect.

For the sake of convenience, reference shall be made only to

Plaintiff Charles Aneke’s Cardmember Agreement. 

 The term “claim” is defined as 4

[A]ny claim, dispute or controversy between you and us

arising from or relating to your Account, this Agreement,

the Electronic Funds Transfer Services Agreement, and any

other related or prior agreement that you may have had

with us, or the relationships resulting from any of the

above agreements, except for the validity,

enforceabiltiy, or scope of this Arbitration provision.”

(continued...)

-4-
claims against Defendants. Pls. Opp’n 1-3. As detailed in the

Cardmember Agreement, the Arbitration Provision, when invoked,

prohibits cardmembers from participating in any court action,

including a class action law suit, or in any arbitration in a

representative capacity or as a member of any class of claimants:

Significance of Arbitration5

IF ARBITRATION IS CHOSEN BY ANY PARTY WITH RESPECT TO A

CLAIM, NEITHER YOU NOR WE WILL HAVE THE RIGHT TO LITIGATE

THAT CLAIM IN COURT OR HAVE A JURY TRIAL ON THAT CLAIM.

FURTHER, YOU AND WE WILL NOT HAVE THE RIGHT TO

PARTICIPATE IN A REPRESENTATIVE CAPACITY OR AS A MEMBER

OF ANY CLASS OF CLAIMANTS PERTAINING TO ANY CLAIM SUBJECT

TO ARBITRATION. EXCEPT AS SET FORTH BELOW, THE

ARBITRATOR’S DECISION WILL BE FINAL AND BINDING. NOTE

THAT OTHER RIGHTS THAT YOU OR WE WOULD HAVE IF YOU WENT

TO COURT ALSO MAY NOT BE AVAILABLE IN ARBITRATION.

Restrictions on Arbitration

IF EITHER PARTY ELECTS TO RESOLVE A CLAIM BY ARBITRATION,

THAT CLAIM SHALL BE ARBITRATED ON AN INDIVIDUAL BASIS.

THERE SHALL BE NO RIGHT OR AUTHORITY FOR ANY CLAIMS TO BE

ARBITRATED ON A CLASS ACTION BASIS OR ON BASES INVOLVING

CLAIMS BROUGHT IN A PURPORTED REPRESENTATIVE CAPACITY ON

BEHALF OF THE GENERAL PUBLIC, OTHER CARDMEMBERS OR OTHER

PERSONS SIMILARLY SITUATED. The arbitrator’s authority to

resolve claims is limited to claims between you and us

alone, and the arbitrator’s authority to make awards is

limited to awards to you and us alone. Furthermore,

claims brought by you against us, or by us against you,

may not be joined or consolidated in arbitration with

claims brought by or against someone other than you,

unless agreed to in writing by all parties. No

arbitration award or decision will have any preclusive

effect as to issues or claims in any dispute with anyone

(...continued) 4

Ex. A to Carey Decl., 10 [emphasis in original].

All capitalization in the following sections has been taken 5

directly from the Cardmember Agreement.

-5-
who is not a named party to the arbitration.

Notwithstanding any other provision in this Agreement

(including but not limited to the Continuation subsection

below) and without waiving either party’s right to appeal

such decision, should any portion of this Restrictions on

Arbitration subsection be deemed invalid or

unenforceable, then the entire Arbitration provision

(other than this sentence) shall not apply.

Id.

On May 31, 2011, Plaintiffs filed their Complaint, which they

subsequently amended on August 1, 2011. On October 10, 2011,6

Plaintiffs filed a Motion to Invalidate the Restrictions on

Arbitration Subsection of the American Express Cardmember

Agreement. On October 14, 2011, Defendants filed a Motion to 7

Compel Arbitration and Stay the Action. On October 27, 2011,

Defendants filed an Opposition to Plaintiffs’ Motion for an Order

Invalidating the “Restrictions on Arbitration” Subsection of the

American Express Cardmember Agreement [Dkt. No. 37]. On November 7,

2011, Plaintiffs filed an Opposition to Defendants’ Motion to

Compel Arbitration and Stay the Action [Dkt. No. 45], and a Reply

to Defendants’ Opposition to Plaintiffs’ Motion for an Order

Invalidating the “Restrictions on Arbitration” Subsection of the

American Express Cardmember Agreement [Dkt. No. 46]. On November

On October 11, 2011, Plaintiffs filed an Errata notice, 6

substituting their original Motion with a revised version. All

references to Plaintiffs’ Motion are to the revised version.

Plaintiffs’ Motion also included a request to certify the lawsuit 7

as a class action. Pursuant to the Court’s October 18, 2011 Order,

Plaintiffs’ motion to certify a class has been stayed pending

resolution of the arbitration issue.

-6-
17, 2011, Defendants filed a Reply in Further Support of the Motion

to Compel Arbitration and Stay the Action [Dkt. No. 50].

II. Statutory Framework

The Federal Arbitration Act (“FAA”), 9 U.S.C. § 1 et seq.,

governs the enforcement of contractual arbitration provisions, such

as the one in issue in this case, which pertain to matters of 8

interstate commerce. Compucredit Corp v. Greenwood, No. 10-948,

2012 WL 43514, at * 3 (U.S. Jan. 10, 2012). “The overarching

purpose of the FAA . . . is to ensure the enforcement of

arbitration agreements according to their terms so as to facilitate

streamlined proceedings.” At&T Mobility, LLC, v. Concepcion, __

U.S. __, 131 S. Ct. 1740, 1748 (2011)

Pursuant to Section 2 of the FAA, 

A written provision in any . . . contract evidencing a

transaction involving commerce to settle by arbitration

a controversy thereafter arising out of such contract or

transaction, or the refusal to perform the whole or any

part thereof, or an agreement in writing to submit to

arbitration an existing controversy arising out of such

a contract, transaction, or refusal, shall be valid,

irrevocable, and enforceable save upon such grounds as

exist at law or equity for the revocation of any

contract.

9 U.S.C. § 2. As the Supreme Court has repeatedly held, this

provision “establishes ‘a liberal federal policy favoring

The Arbitration Provision states that it is “made pursuant to 8

transactions involving interstate commerce and shall be governed by

the FAA.” Ex. A to Casey Decl., 10. There is no dispute that the

transactions involved in this case involve matters of interstate

commerce.

-7-
arbitration agreements.’” Compucredit Corp., 2012 WL 43514, at *3

(quoting Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460

U.S. 1, 24, 103 S. Ct. 927 (1983)), and reflects the “‘fundamental

principle that arbitration is a matter of contract.’” Concepcion,

131 S. Ct. at 1745 (quoting Rent-A-Center, West, Inc. v. Jackson,

__ U.S. __, 130 S. Ct. 2772, 2776 (2010)).

Thus, “courts must place arbitration agreements on an equal

footing with other contracts,” id. at 1745-46 (citations omitted),

and “[a]ny doubts concerning the scope of arbitrable issues should

be resolved in favor of arbitration.” Moses H. Cone Mem’l Hosp.,

460 U.S. at 24-25. This is the case “even when the claims at issue

are federal statutory claims, unless the FAA’s mandate has been

‘overriden by a contrary congressional command.’” Compucredit

Corp., 2012 WL 43514, at *3 (quoting Shearson/Am. Express Inc. v.

McMahon, 482 U.S. 220, 226, 107 S. Ct. 2332 (1987)).

III. Analysis

A. Procedural Arguments

Defendants raise several procedural arguments to rebut

Plaintiffs’ claims.

First, Defendants challenge Plaintiffs’ claim that the

Arbitration Provision cannot be enforced under the FAA because it

violates the D.C. Consumer Protection Procedures Act (“DCCPPA”),

-8-
D.C. Code § 28-3904 et seq. Defendants argue that Plaintiffs lack 9

standing to raise this claim. Defs. Opp’n 8; Defs. Reply 7. 

Under Article III of the U.S. Constitution, federal courts

have jurisdiction to hear only those cases or controversies that

are justiciable. As the Supreme Court has held, standing is central

to determining if a case or controversy meets this requirement. 

In Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 112 S.

Ct. 2130 (1992), the Supreme Court set out the three elements a

plaintiff must establish in order to have standing. First,

plaintiff must have suffered “an ‘injury in fact’ - an invasion of

a legally protected interest which is (a) concrete and

particularized and (b) ‘actual or imminent, not conjectural’ or

hypothetical.” Id. (citations omitted). Second, there must be a

“casual connection between the injury and the conduct complained of

- the injury has to be fairly . . . trace[able] to the challenged

action of the defendant, and not . . . th[e] result [of] the

independent action of some third party not before the court.” Id.

(citation and internal quotations omitted). Third, it must be

“‘likely,’ as opposed to merely ‘speculative,’ that the injury will

be redressed by a favorable decision.” Id. at 561 (citation

omitted).

Plaintiffs argue that the Arbitration Provision violates the 9

DCCPPA because it “ban[s] a District of Columbia resident from

assuming the quasi-governmental, quasi-police powers of a private

attorney general.” Pls. Mot. 13.

-9-
In their Motion to Invalidate the Arbitration Restrictions 

and Opposition to Defendants’ Motion to Compel Arbitration,

Plaintiffs challenge the enforceability of the Arbitration

Provision under the FAA. Because of this Arbitration Provision,

Plaintiffs claim to have suffered an injury in fact, namely the

inability to bring a class action claim. This alleged injury is 10

directly connected to the Arbitration Provision, which bars class

action arbitrations and prohibits cardmembers from participating in

class litigation subsequent to arbitration. Plaintiffs seek both

declaratory and injunctive relief as a remedy. FAC ¶¶ 22.7-22.17,

70-73.4. If the Court were to hold the Arbitration Provision to be

unenforceable and grant the requested relief, Plaintiffs’ injury

would be redressed. Thus, Plaintiffs satisfy the Lujan requirements

and have standing to challenge the enforceability of the

Arbitration Provision under the FAA.11

Although Defendants had not yet sought arbitration when 10

Plaintiffs filed their Motion, they did so only four days later in

their Motion to Compel Arbitration. 

Defendants’ argument that Plaintiffs lack standing to challenge 11

the Arbitration Provision under the DCCPPA mischaracterizes the

standing inquiry. The standing doctrine concerns the justiciability

of cases, not the arguments raised to support a plaintiff’s cause

of action. Here, the underlying case or controversy is whether the

Arbitration Provision should be enforced under the FAA. The DCCPPA

is simply one argument Plaintiffs use to challenge such

enforcement.

Because Plaintiffs have presented a valid case or controversy

under Article III, Defendants are also incorrect that Plaintiffs’

DCCPPA argument constitutes a request for an advisory opinion.

Defs. Opp’n 9. See U.S. Nat’l Bank of Oregon v. Independent Ins.

(continued...)

-10-
Second, Defendants argue that Plaintiffs’ Motion was

procedurally improper because their FAC did not seek a declaratory

judgment regarding the enforceability of the Arbitration Provision.

Defs. Opp’n 7. While it is true that Plaintiffs’ FAC does not

contain a specific request for a declaratory judgement, it does

allege that the Arbitration Provision is invalid and unenforceable.

FAC ¶¶ 22.7-22.17. Under the notice pleading requirements of FED.

R. CIV. P. 8, such pleadings are sufficient to support a declaratory

judgment request. See Bell Atl. Corp. v. Twombly, 550 U.S. 544,

555, 127 S. Ct. 1955 (2007) (“Federal Rule of Civil Procedure

8(a)(2) requires only a short and plain statement of the claim

showing that the pleader is entitled to relief, in order to give

the defendant fair notice of what the . . . claim is and the

grounds upon which it rests.”). 

Third, Defendants argue that Plaintiffs’ Motion is barred by

the FAA. However, contrary to Defendants’ claim, the FAA only

addresses motions to compel arbitration, 9 U.S.C. § 4., and does

not contain any prohibition on motions to invalidate a contractual

arbitration clause.

(...continued) 11

Agents of Am., Inc., 508 U.S. 439, 446, 133 S. Ct. 2173 (holding

that a court renders an advisory opinion when there is no

justiciable case or controversy under Article III). 

-11-
B. Substantive Arguments

In determining whether an arbitration provision is valid under

the FAA, courts must engage in a two-part inquiry. Stromberg Sheet

Metal Works, Inc., v. Wash. Gas Energy Sys., 448 F. Supp. 2d 64, 68

(D.D.C. 2006) (citing Nelson v. Insignia/ESG, Inc., 215 F. Supp. 2d

143, 146 (D.D.C. 2002)). First, the court “must decide whether the

parties entered into a valid and enforceable arbitration

agreement.” Id. (citing Nur v. K.F.C. USA, Inc., 142 F. Supp. 2d

48, 50-51 (D.D.C. 2001)). Second, the court must “determine whether

the arbitration agreement encompasses the claims raised in the

complaint.” Id. The party opposing arbitration bears the burden of

demonstrating that the arbitration provision is invalid and

unenforceable. Green Tree Fin. Corp. - Ala. v. Randolph, 531 U.S.

79, 91-92, 121 S. Ct. 513 (2000).

The parties’ dispute centers on the first prong of this

analysis, namely whether the Arbitration Provision is valid and

enforceable.

1. D.C. v. Utah Law

Plaintiffs argue that the Arbitration Provision is

unenforceable because it is illegal under D.C. law. Pls. Mot. 3-21.

Defendants respond that Utah, and not D.C. law, governs the

enforceability of the Arbitration Provision, and that the Provision

is valid and enforceable under Utah’s statutes and caselaw. Defs.

Mot. 13-16; Defs. Opp’n 8 n. 5.

-12-
In deciding whether an arbitration agreement is valid, courts

apply “ordinary state-law principles that govern the formation of

contracts.” First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938,

944, 115 S. Ct. 1920 (1995). To determine the applicable state law

in a FAA case, federal courts use the conflict of law principles

applied by the state in which they sit. See Gay v. Creditform, 511

F.3d 369, 389 (3d Cir. 2007) (FAA case in which appellate court

applied Pennsylvania conflict of law rule because district court

was located in Pennsylvania). 

The District of Columbia Court of Appeals “has adopted the

general rule that parties to a contract may specify the law they

wish to govern, as part of their freedom to contract, as long as

there is some reasonable relationship with the state specified.”11

Ekstrom v. Value Health, Inc., 68 F.3d 1391, 1394 (D.C. Cir. 1995)

(citation and internal quotations omitted). Such a reasonable

relationship exists where one of the parties to the contract is

based in the specified state. See Whiting v. AARP, 637 F.3d 355,

To support their claim that D.C. law applies to the Cardmember 11

Agreement, Plaintiffs cite to another D.C. conflict of law

principle in which courts “evaluate the governmental policies

underlying the applicable laws and determine which jurisdiction’s

policy would be most advanced by having its law applied to the

facts of the case under review.” Pls. Opp’n (citing to Hercules &

Co. v. Shama Rest. Corp., 566 A.2d 31 (D.C. 1989)). Plaintiffs have

failed to point to any authority applying this D.C. conflict of law

principle to contracts containing an express choice of law

provision. This is unsurprising, as D.C. courts clearly honor

express contractual choice of law provisions under the

circumstances noted above.

-13-
361 (D.C. Cir. 2011) (enforcing contract’s D.C. choice of law

provision where party to contract was based in the District of

Columbia).

The Cardmember Agreement contains an express choice of law

provision selecting Utah law to govern the contract. See Aneke

Cardmember Agreement (“Utah law and federal law govern this

Agreement and your Account.”). As a number of Defendants are

headquartered in Utah, this choice of law provision is valid and

Utah law, therefore, determines the Arbitration Provisions’

enforceability. 

Under Utah law, a credit agreement is binding and enforceable

if: 

(i) the debtor is provided with a written copy of the

terms of the agreement; (ii) the agreement provides that

any use of the credit offered shall constitute acceptance

of those terms; and (iii) after the debtor receives the

agreement, the debtor, or a person authorized by the

debtor, requests funds pursuant to the credit agreement

or otherwise uses the credit offered. 

UTAH CODE ANN. § 25-5-4(2)(e). Utah law also permits the inclusion of

class-action waivers in consumer credit agreements. See UTAH CODE

ANN. § 70(C)-4-105 (“[A] creditor may contract with the debtor of

an open-end consumer credit contract for a waiver by the debtor of

the right to initiate or participate in a class action related to

the open-end consumer credit contract.”). 

As Defendants accurately point out, a number of courts have

found the Arbitration Provision to be valid and enforceable under

-14-
Utah law. See, e.g., Miller v. Corinthian Colleges, Inc., 769 F.

Supp. 2d 1336, 1333-49 (D. Utah 2011) (holding that both American

Express arbitration agreement itself and its class action waiver

were enforceable under Utah law); Wynne v. American Express Co.,

No. 2:09-CV-00260, slip op., 2010 WL 3860362, at *7-9 (E.D. Tex.

Sept. 30, 2010) (holding class action waiver in American Express

arbitration provision to be enforceable under Utah law). Plaintiffs

have neither distinguished this legal precedent nor otherwise

argued that Utah law requires invalidating the Arbitration

Provision involved in this case.

For these reasons, the Court concludes that the Arbitration

Provision is valid and enforceable under Utah law, which is the

relevant state law in this case.12

2. The FAA v. RFPA

Plaintiffs argue that, by preventing them from obtaining

class-wide injunctive relief, the Arbitration Provision is

unenforceable because it conflicts with the purpose of RFPA. Pls. 13

Because Utah law applies to this case, there is no cause to 12

consider Plaintiffs’ argument that the Arbitration Provision is

unenforceable under the DCCPPA.

Plaintiffs also claim that they “cannot yet make a good faith 13

argument with respect to the expense of arbitration because

Plaintiffs do not know whether expert testimony will be required.”

Pls. Opp’n 25. Under Supreme Court precedent, the existence of

“large arbitration costs” may be grounds for holding that an

arbitration provision containing a class-action waiver conflicts

with a claimant’s federal statutory rights. Randolph, 531 U.S. at

90. However, where “a party seeks to invalidate an arbitration

(continued...)

-15-
Mot. 21-25. Defendants respond that class wide injunctive relief is

neither mandated by the RFPA nor necessary to fulfill the statute’s

purpose. Defs. Opp’n 18-24. 

As the Supreme Court has held, claims based on federal

statutes are no exception to the general rule that arbitration

agreements should be enforced according to their terms. See

Mitsubishi Motors Corp., v. Soler Chrysler-Plymouth, Inc., 473 U.S.

614, 626, 105 S. Ct. 3346 (1985) (holding that claims based on

federal statutes may be subject to arbitration). Although all

statutory claims “may not be appropriate for arbitration, having

made the bargain to arbitrate, the party should be held to it

unless Congress itself has evinced an intention to preclude waiver

of judicial remedies for the statutory rights at issue.” Gilmer v.

Interstate/Johnson Lane Corp., 500 U.S. 20, 26, 111 S. Ct. 1647

(1991). If such Congressional intent exists, “it will be

discoverable in the text of the [statute], its legislative history,

or an ‘inherent conflict’ between arbitration and the statute’s

underlying purpose.” Id. 

(...continued) 13

agreement on the ground that arbitration would be prohibitively

expensive, that party bears the burden of showing the likelihood of

incurring such costs.” Id. at 92. “The ‘risk’ that [the party] will

be saddled with prohibitive costs is too speculative to justify the

invalidation of an arbitration agreement.” Id. at 91. To the extent

Plaintiffs have alleged that the costs of individual arbitration

may be exorbitant, they have presented no evidence whatsoever and,

therefore, have failed to sustain their burden to prove this claim.

-16-
RFPA prohibits financial institutions from providing the

Government with information concerning a customer’s financial

records, unless the customer authorized the disclosure of the

information or the Government obtained a valid warrant or subpoena.

12 U.S.C. § 3402. At the time of its passage, RFPA “fill[ed] the

void in . . . Federal law regarding statutory protection against

unrestricted access to third-party records” and “represented a

compromise between a bank customer’s right to financial privacy and

the need of law enforcement agencies to obtain financial records

pursuant to legitimate investigations.” United States v. Frazin,

780 F.2d 1461, 1465 (9th Cir. 1986). 

Under RFPA, any agency or department of the United Sates or

financial institution that violates its provisions is liable for

civil penalties. 12 U.S.C. § 3417. In addition, as Plaintiffs

correctly point out, RFPA also permits parties to seek injunctive

relief for statutory violations. 12 U.S.C. § 3418. 

Plaintiffs do not dispute that, under the Arbitration

Provision, they may individually pursue RFPA’s civil and injunctive

remedies in arbitration proceedings. Most significantly, they have

failed to point to any language in RFPA, its legislative history,

or case law suggesting that class-wide injunctive relief is

mandated by or necessary to carry out RFPA’s purpose. In short,

Plaintiffs have presented no legal authority suggesting that RFPA

precludes enforcement of the Arbitration Provision.

-17-
Plaintiffs’ remaining arguments rest on the presumption that

“piecemeal, one-off, non-binding outcomes . . . . cannot provide 14

meaningful relief to Cardmembers - relief that is consistent with

the federal government’s charge to safeguard interstate commerce.”15

Pls. Mot. 21. The Supreme Court has made it clear, however, that

Plaintiffs appear to use the term “one-off” to describe 14

individual, as opposed to class-wide, arbitration, although they

never define the term.

In particular, Plaintiffs argue that 15

Given the global configuration of American Express’

procedures, Plaintiffs cannot envision one-off arbitral

relief that will ensure compliance with the RFPA with

respect to the RFPA-indicated [sic] individual

Cardmember. Without a categorical change of its

procedures how can American Express ensure compliance

with the RFPA with respect to a single individual when

that Cardmember makes a phone call to American Express

from a public pay phone? Or makes a phone call to

American Express from a phone number not identified as

hers? Or executes an online transaction using the

computer at a public library? Or executes an online

transaction with American Express using a computer in

another state? Plaintiffs posit that such compliance is

impossible. Even if it were possible for the

individualized injunction to follow the arbitrationvindicated Cardmember throughout her travels in

interstate commerce, the intensive monitoring of such a

RFPA/arbitration-vindicated Cardmember would be

antithetical to a host of other privacy safeguards and

controls on private surveillance.

Pls. Mot. 24. 

This speculative, not to say rhetorical, argument is a pure

public policy argument. Plaintiffs overlook the fact that Congress

has already enunciated our federal public policy by enacting the

FAA. 

-18-
such “generalized attacks on arbitration that rest on ‘suspicion of

arbitration as a method of weakening the protections afforded in

the substantive law to would-be complainants’” must be rejected.

Randolph, 531 U.S. at 89-90 (citation omitted). Even claims

“arising under a statute designed to further important social

policies may be arbitrated because ‘so long as the prospective

litigant effectively may vindicate [his or her] statutory cause of

action in the arbitral forum’ the statue serves its function.” Id.

at 90 (citation omitted).

In essence, Plaintiffs have presented a policy argument about

the limits of arbitration and the prejudicial impact it has on

their statutory claims. In passing the FAA, Congress established a

“‘liberal federal policy favoring arbitration agreements.’”

Compucredit Corp., 2012 WL 43514, at *3 (quoting Moses H. Cone

Mem’l Hosp., 460 U.S. 1 at 24). To invalidate the Arbitration

Provision based upon Plaintiffs’ policy arguments would undermine

this firmly established Congressional policy choice. 

For these reasons, the Court concludes that the Arbitration

Provision is valid and enforceable under RFPA.

-19-
IV. Conclusion

For the foregoing reasons, Plaintiffs’ Motion to Invalidate

the Arbitration Restrictions is denied and Defendants’ Motion to

Compel Arbitration is granted. An Order will accompany this

Memorandum Opinion.16

 /s/ 

January 31, 2012 Gladys Kessler

United States District Judge

 

The Court has today received from Plaintiffs a Notice, and a

16

Motion to Take Notice, of Supplemental Authority and Notice of

Defendants’ Waiver of Arbitration and Abandonment of Motion to

Compel Arbitration [Dkt. No. 61]. It is difficult, on first

reading, to comprehend the nature of their legal argument. In any

event, Defendants will have an opportunity to respond.

-20-