253 F. Supp. 3d 197
D.D.C.2017Background
- Plaintiff Samenow (pro se) opened five Citibank credit card accounts (2010–2016); Citibank closed all five in March 2016 and plaintiff sued under the Equal Credit Opportunity Act.
- Each account was governed by a mailed Card Agreement; two originally contained arbitration clauses, and three had arbitration clauses added later via mailed amendment notices that permitted an opt-out period.
- Defendant moved to compel arbitration under the Federal Arbitration Act (FAA) and to stay the consolidated actions pending arbitration.
- Plaintiff challenged enforceability on grounds of lack of mutual assent, procedural unconscionability (hidden terms; inadequate notice; inability to opt out without harming credit), and substantive unconscionability (one-sided terms; limited remedies; forum selection).
- The court found the arbitration provisions were binding, not procedurally or substantively unconscionable, and that the FAA’s strong policy favoring arbitration required compelling arbitration and staying the litigation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Applicable law for contract-defenses | D.C. law should apply due to contacts with D.C. and challenge to choice-of-law clause | Card Agreements specify federal and South Dakota law; choice-of-law provision valid | Court applied D.C. choice-of-law principles and concluded no true conflict; proceeded under D.C. law (with SD parallels) |
| Existence of assent to arbitration | Samenow claims he was unaware of arbitration provisions and did not receive/conspicuously see them | Citibank produced exemplar Card Agreements and declarations showing mailing and that acceptance occurs by use or failure to cancel | Court found sufficient evidence of mailing and that plaintiff assented by receiving and using accounts; no genuine dispute of material fact on assent |
| Procedural unconscionability | Arbitration clauses were hidden, opt-out illusory (would harm credit), notices not adequately given (mail vs. electronic) | Amendments and original agreements clearly disclosed arbitration and provided opt-out; mailed notice is sufficient; plaintiff experienced with credit products | Court rejected procedural-unconscionability claims for all five accounts: notices were adequate and opt-out not shown to be illusory |
| Substantive unconscionability | Clauses favor arbitration (limited forum, less discovery, no jury), and arbitration policy is unfair to consumers | Clauses are mutual (apply to both parties), use neutral AAA/JAMS/NAF forums and standard rules; FAA preempts state rules that unduly disfavor arbitration | Court found no substantive unconscionability: terms not egregiously one-sided; FAA favors enforcement; arbitration compelled |
Key Cases Cited
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011) (FAA preempts state rules that invalidate arbitration agreements on grounds unique to arbitration)
- Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985) (federal policy strongly favors arbitration)
- Rent-A-Ctr., W., Inc. v. Jackson, 561 U.S. 63 (2010) (separability doctrine: arbitration clause is severable from remainder of contract)
- Aliron Int’l, Inc. v. Cherokee Nation Indus., Inc., 531 F.3d 863 (D.C. Cir. 2008) (motion to compel arbitration is treated like summary judgment on formation)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) (summary judgment standard; no genuine issue of material fact)
- Olle v. 5401 W. Ave. Residential, LLC, 569 F. Supp. 2d 141 (D.D.C. 2008) (arbitration clauses can cover related statutory claims)