K. v. EXPERIAN INFORMATION SOLUTIONS, INC.
1:23-cv-00856
M.D.N.C.Sep 17, 2025Background
- Danny K. applied for a VA home loan; closing was delayed because Experian could not produce his credit report due to an allegedly incorrect last name in Experian’s records.
- Danny K. requested reinvestigations in July 2022 and again via letter in August 2023; Experian said its system did not accept a single initial for a last name and later declined a dispute letter it believed was not authorized.
- Danny K. sued Experian under the Fair Credit Reporting Act alleging Experian failed to correct his credit file, causing a delayed closing, a higher-rate mortgage, and extra rent.
- Experian answered and, nearly ten months later, moved to compel arbitration, relying on plaintiff’s alleged July 3, 2023 enrollment in Experian’s CreditWorks and its Terms of Use containing an arbitration and a delegation clause.
- Experian submitted a corporate-declarant affidavit and a screenshot of the CreditWorks enrollment page showing a hyperlink to Terms of Use and a checkbox/button to create an account; the Terms included a broad arbitration clause and a clause delegating arbitrability and waiver questions to the arbitrator.
- The court found the Experian declarant admissible, concluded the webpage gave reasonable notice (citing Fourth Circuit precedent), held the parties agreed to arbitrate, and sent waiver issues to the arbitrator because of the clear delegation clause; the case was stayed pending arbitration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did the parties form a valid arbitration agreement? | Plaintiff says he did not assent because the enrollment webpage did not give adequate notice of the Terms of Use and Smith’s declaration lacks personal knowledge. | Experian says plaintiff enrolled in CreditWorks and accepted the Terms of Use when creating an account; Smith’s declaration and webpage screenshot prove enrollment and notice. | Court: Experian met its burden; Smith’s declaration admissible; webpage gave reasonable notice; agreement to arbitrate formed. |
| Is the delegation clause enforceable (who decides arbitrability/waiver)? | Plaintiff does not challenge the delegation clause’s validity (argues only waiver based on delay). | Experian points to a clear-and-unmistakable delegation clause assigning arbitrability and waiver questions to the arbitrator. | Court: Delegation clause is clear and unmistakable; arbitrator will decide waiver and arbitrability gateway questions. |
| Did Experian waive the right to arbitrate by delaying its motion ~10 months? | Plaintiff contends Experian’s delay and litigation conduct waived arbitration. | Experian argues delay did not waive rights and waiver was delegated to arbitrator. | Court: Because waiver was delegated, the arbitrator must decide waiver; court did not find waiver. |
| Should the court stay the litigation pending arbitration? | Plaintiff argues Experian waived relief by delay. | Experian requests a stay under the FAA. | Court: Stay granted under 9 U.S.C. § 3; case referred to arbitration and stayed; parties to report status every 90 days. |
Key Cases Cited
- Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (establishes liberal federal policy favoring arbitration)
- Rent-A-Center, W., Inc. v. Jackson, 561 U.S. 63 (parties may clearly and unmistakably delegate gateway arbitrability questions to arbitrator)
- United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574 (courts cannot compel arbitration of disputes not agreed to be submitted)
- Berkeley Cnty. Sch. Dist. v. Hub Int’l Ltd., 944 F.3d 225 (summary-judgment standard applied to disputes over arbitration agreement formation)
- Rowland v. Sandy Morris Fin. & Est. Plan. Servs., LLC, 993 F.3d 253 (formation of arbitration agreement governed by state contract law; summary-judgment approach)
- Minnieland Priv. Day Sch., Inc. v. Applied Underwriters Captive Risk Assurance Co., 867 F.3d 449 (party seeking to compel arbitration bears burden to establish agreement)