Accardo v. Equifax, Inc., 2:18-cv-05030

Background

Plaintiff Joseph Accardo sued Equifax, Lending Club, Synchrony, and TransUnion under the Fair Credit Reporting Act, alleging loans in his name were the result of identity theft and were wrongfully reported and verified.
TransUnion was dismissed with prejudice and Synchrony reached a settlement in principle; remaining active defendants effectively are Lending Club and Equifax.
Lending Club moved to compel arbitration, relying on electronic Borrower Membership and Loan Agreements (containing an arbitration clause) and internal records asserting Accardo accepted the agreements when obtaining a 2015 loan.
Accardo submitted a sworn affidavit denying he opened the account or signed any agreement and asserting he is an identity-theft victim; he also submitted dispute letters and filed a police report.
Lending Club supplemented its proof with a fraud-investigation declaration listing “red flags” suggesting the applicant was legitimate (W-2, paystubs, verification call, payment history, post-default borrower communications) and arguing Accardo bears the burden to prove identity theft.
Magistrate Judge Tomlinson found a genuine factual dispute about whether Accardo (not an identity thief) formed the agreements; she recommended denying the motion to compel arbitration, ordering a limited summary trial on formation, directing the parties to propose a limited discovery schedule, and denying Accardo’s motion to amend without prejudice.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether a valid arbitration agreement was formed between Accardo and Lending Club	Accardo says he never opened the account, never signed any agreements, and the loan resulted from identity theft	Lending Club says electronic records and declarations show Accardo assented to clickwrap agreements and thus is bound; identity-theft claim is unsupported	There is a genuine factual dispute; deny motion to compel arbitration and order a summary trial on formation
Standard and burden for resolving a formation dispute on a motion to compel	Accardo contends Lending Club failed to make the requisite prima facie showing	Lending Club contends it made a prima facie showing and burden shifts to Accardo to put formation in issue	Court found Lending Club submitted sufficient evidence to create a dispute; Accardo’s affidavit likewise creates an issue of fact requiring resolution at trial
Whether limited discovery on formation should proceed before resolution	Accardo argues he needs discovery to contest formation and identity-theft question	Lending Club had largely withheld discovery pending arbitration	Court recommended limited discovery focused on formation and directed parties to submit a proposed schedule within 14 days
Plaintiff’s motion to amend complaint (name correct Equifax entity; class claim vs. Lending Club)	Accardo sought leave to amend and add class claim	Lending Club opposed compelling arbitration first; procedural posture affects amendment	Court recommended denying the motion to amend without prejudice given the pending summary trial on arbitration formation

Key Cases Cited

Shearson/Am. Express Inc. v. McMahon, 482 U.S. 220 (U.S. 1987) (federal policy favoring arbitration)
Nicosia v. Amazon.com, Inc., 834 F.3d 220 (2d Cir. 2016) (procedural standards for motions to compel arbitration)
Bensadoun v. Jobe–Riat, 316 F.3d 171 (2d Cir. 2003) (motion-to-compel standard analogous to summary judgment)
Chambers v. Time Warner, Inc., 282 F.3d 147 (2d Cir. 2002) (courts consider all relevant admissible evidence on arbitration motions)
Cap Gemini Ernst & Young, U.S., L.L.C. v. Nackel, 346 F.3d 360 (2d Cir. 2003) (threshold issues: formation and scope governed by state law)
Doctor's Associates, Inc. v. Jabush, 89 F.3d 109 (2d Cir. 1996) (unequivocal denial and some evidence required to trigger trial under 9 U.S.C. § 4)
Hellstrom v. U.S. Dep't of Veterans Affairs, 201 F.3d 94 (2d Cir. 2000) (summary judgment generally inappropriate before discovery)