Regan v. Stored Value Cards, Inc.
85 F. Supp. 3d 1357
N.D. Ga.2015Background
- Defendants move to compel arbitration under FAA §§ 3-4, arguing Plaintiff is bound by a Cardholder Agreement.
- Court must first resolve contract formation because Plaintiff contends no assent to arbitration terms; genuine disputes exist.
- Plaintiff received a prepaid Mastercard at jail release; he did not sign the Cardholder Agreement and did not realize it contained arbitration terms.
- Card terms and fees were present; Plaintiff incurred fees from card usage and maintenance.
- Governing law for contract formation is Georgia; court notes potential relevance of Oklahoma law but applies Georgia to formation; no decision on enforceability reached.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a contract containing arbitration terms was formed | Plaintiff denies assent to contract containing arbitration. | Card and terms valid; Plaintiff accepted by using the card. | Arbitration formation disputed; denial sustained awaiting fact-finder. |
| Mutual assent under Georgia law | Extrinsic evidence shows no meeting of the minds. | Use of the card could indicate assent. | Genuine issues of formation preclude legal enforcement of arbitration at this stage. |
| Whether use of a card constitutes acceptance of terms | No prior notice or opportunity to reject; no signature. | Card usage can constitute acceptance. | Not decided; factual dispute remains about assent. |
| Applicable governing law for contract formation | Georgia law governs formation; card issued in Georgia. | Oklahoma law in contract clause applies. | Georgia law governs formation; court declines to decide on enforceability. |
Key Cases Cited
- Chastain v. Robinson-Humphrey Co., Inc., 957 F.2d 851 (11th Cir. 1992) (gateway issue on formation; court decides contract formation first)
- Granite Rock Co. v. Teamsters, 561 U.S. 287 (2010) (formation issues precede arbitration enforcement)
- Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (Supreme Court 1985) (arbitration is a matter of contract; formation first)
- Read v. Gulf Oil Corp., 114 Ga. App. 21 (Ga. Ct. App. 1966) (use of credit card cases; assent depends on facts)
- Legg v. Stovall Tire & Marine, 245 Ga. App. 594 (Ga. Ct. App. 2000) (objectively determined mutual assent; extrinsic evidence permissible)
- Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (Supreme Court 1967) (arbitration formation issues severable from validity)
- Rent-A-Center, W., Inc. v. Jackson, 561 U.S. 63 (2010) (statutory gateway issues and arbitrability)
- Chastain v. Robinson-Humphrey Co., Inc., 957 F.2d 851 (11th Cir. 1992) (reiterated gateway issue analysis)