Court Opinion

ID: 2662988
Source: CourtListenerOpinion
Date Created: 2014-04-03 13:15:59.451048+00
Date Added: 2024-06-11T12:58:10.190086
License: Public Domain

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,1   with   Defendants.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

1
  Plaintiff Charles Aneke is a primary account holder, who
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.
2
 Defendant American Express Travel is a New York-based bank holding
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].4 Plaintiffs concede that this Provision applies to their

3
  Plaintiffs are each subject to separate Cardmember Agreements
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.
4
    The term “claim” is defined as

       [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

4
 (...continued)
Ex. A to Carey Decl., 10 [emphasis in original].
5
 All capitalization in the following sections has been taken
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.7    On October 14, 2011, Defendants filed a Motion to

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

6
  On October 11, 2011, Plaintiffs filed an Errata notice,
substituting their original Motion with a revised version. All
references to Plaintiffs’ Motion are to the revised version.
7
 Plaintiffs’ Motion also included a request to certify the lawsuit
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,8 which pertain to matters of

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

8
  The Arbitration Provision states that it is “made pursuant to
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.9 Defendants argue that Plaintiffs lack

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).

9
 Plaintiffs argue that the Arbitration Provision violates the
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.10 This alleged injury is

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

10
    Although Defendants had not yet sought arbitration when
Plaintiffs filed their Motion, they did so only four days later in
their Motion to Compel Arbitration.
11
  Defendants’ argument that Plaintiffs lack standing to challenge
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.

11
 (...continued)
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,

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

12
  Because Utah law applies to this case, there is no cause to
consider Plaintiffs’ argument that the Arbitration Provision is
unenforceable under the DCCPPA.
13
  Plaintiffs also claim that they “cannot yet make a good faith
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.

13
 (...continued)
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,14 non-binding outcomes    . . . . cannot provide

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

14
   Plaintiffs appear to use the term “one-off” to describe
individual, as opposed to class-wide, arbitration, although they
never define the term.
15
     In particular, Plaintiffs argue that

        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 arbitration-
        vindicated   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

16
   The Court has today received from Plaintiffs a Notice, and a
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-