Frazier v. W. Union Co., 377 F. Supp. 3d 1248

Background

Plaintiffs filed a putative class action alleging fraud/RICO and state consumer-law claims arising from Western Union money transfers; transactions were governed by printed Terms and Conditions on Send Money Forms and receipts.
Two different arbitration provisions apply: a 2005 clause naming the National Arbitration Forum (NAF) and a 2016–2017 clause naming National Arbitration and Mediation (NAM).
Some named plaintiffs produced signed receipts or testified they signed forms (Laubler, Riggs, Seward); two plaintiffs (Frazier, Simon) did not but testified they received receipts and did not recall signing.
Defendants produced declarations describing WUFSI’s routine practice of presenting Terms and Conditions and obtaining signatures; defendants moved to stay and compel arbitration under the FAA.
Plaintiffs challenge (1) whether each plaintiff and each defendant is bound, (2) enforceability of NAF/NAM clauses (NAF no longer accepts consumer cases; NAM clause contains a delegation provision and fee/discovery terms), and (3) whether RICO claims are arbitrable/effectively vindicated in arbitration.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Are individual plaintiffs bound to arbitration?	Frazier and Simon say they did not recall signing and no signed docs exist; others accept they are not bound.	Defs: signatures or WUFSI routine-practice evidence shows notice and assent; conduct/receipts suffice even without signature.	Court: All named plaintiffs (Laubler, Riggs, Seward, Frazier, Simon) are bound; routine-practice and receipts establish assent.
Is WUFSI bound and can it enforce arbitration?	Pls: Tennille precedent argued WUFSI not a signatory/entitled to enforce.	Defs: WUFSI operates the Money Transfer System and is party to the Terms; treating WUFSI as bound is required to give effect to the contracts.	Court: Tennille is distinguishable; WUFSI is bound by the Terms and may enforce arbitration.
Can nonsignatory Western Union and Ersek enforce arbitration?	Pls: They are nonsignatories and cannot compel arbitration.	Defs: Equitable estoppel applies because claims against nonsignatories are interdependent and intertwined with the contracts.	Court: Claims are interdependent and intertwined with the Terms (e.g., warnings, liability caps), so Western Union and Ersek may enforce arbitration via equitable estoppel.
Are the NAF and NAM arbitration clauses enforceable and do they permit RICO claims to be arbitrated?	Pls: NAF is unavailable (so clause unenforceable); NAM is unconscionable / prevents effective vindication of RICO (fees, discovery limits, arbitrator discretion).	Defs: FAA/Section 5 and Colorado contract principles allow substitution/interpretation; NAM's delegation clause must be severed/enforced so arbitrator decides unconscionability and statutory remedies; costs/discovery limits do not foreclose RICO claims.	Court: NAF clause is ambiguous but enforceable (resolve ambiguity for arbitration and FAA §5 supports substitution); NAM delegation clause severed and sent to arbitrator; effective-vindication arguments (fees/discovery) rejected as speculative or for arbitrator to decide; RICO claims fall within arbitration scope.

Key Cases Cited

Belnap v. Iasis Healthcare, 844 F.3d 1272 (10th Cir. 2017) (FAA governs arbitrability and Tenth Circuit standards)
Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (U.S. 1983) (doubts about scope resolved in favor of arbitration)
Rent-A-Center, W., Inc. v. Jackson, 561 U.S. 63 (U.S. 2010) (delegation clauses enforceable unless specifically challenged)
Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (U.S. 1967) (courts decide only issues relating to making/performance of arbitration agreement)
Green Tree Financial Corp.-Alabama v. Randolph, 531 U.S. 79 (U.S. 2000) (presumption in favor of arbitration; effective vindication doctrine contours)
American Express Co. v. Italian Colors Restaurant, 570 U.S. 228 (U.S. 2013) (costly arbitration does not automatically void agreement under effective-vindication theory)
Khan v. Dell Inc., 669 F.3d 350 (3d Cir. 2012) (resolving ambiguity re: named arbitrator and substitution under FAA §5)
Hill v. Ricoh Americas Corp., 603 F.3d 766 (10th Cir. 2010) (arbitrator’s fee-discretion does not necessarily preclude statutory remedies)