Opinion
Case No.: SACV 22-00383-CJC(DFMx)
2022-06-23
Susan SALGADO, Plaintiff, v. CITIGROUP CORPORATE HOLDINGS, INC., Equifax Information Services, LLC, Trans Union, LLC, and Experian Information Solutions, Inc., Defendants.
Lauren B. Veggian, Michael Frederick Cardoza, Cardoza Law Corporation, San Francisco, CA, Erika Angelos Heath, Law Offices of Erika Heath, San Francisco, CA, for Plaintiff. Daniel J. Shannon, Marcos Daniel Sasso, Stroock and Stroock and LaVan LLP, Los Angeles, CA, for Defendant Citigroup Corporate Holdings, Inc. Thomas P. Quinn, Jr., Nokes and Quinn APC, Laguna Beach, CA, Jennifer Rebecca Brooks, Seyfarth Shaw LLP, Houston, TX, for Defendant Equifax Information Services, LLC. Kristin L. Marker, Rachael Swernofsky, Quilling Selander Lownds Winslett and Moser PC, Plano, TX, for Defendant Trans Union, LLC. Patrick Jeffrey Hall, Cheryl L. O'Connor, Jones Day, Irvine, CA, for Defendant Experian Information Solutions, Inc.
Lauren B. Veggian, Michael Frederick Cardoza, Cardoza Law Corporation, San Francisco, CA, Erika Angelos Heath, Law Offices of Erika Heath, San Francisco, CA, for Plaintiff.
Daniel J. Shannon, Marcos Daniel Sasso, Stroock and Stroock and LaVan LLP, Los Angeles, CA, for Defendant Citigroup Corporate Holdings, Inc.
Thomas P. Quinn, Jr., Nokes and Quinn APC, Laguna Beach, CA, Jennifer Rebecca Brooks, Seyfarth Shaw LLP, Houston, TX, for Defendant Equifax Information Services, LLC.
Kristin L. Marker, Rachael Swernofsky, Quilling Selander Lownds Winslett and Moser PC, Plano, TX, for Defendant Trans Union, LLC.
Patrick Jeffrey Hall, Cheryl L. O'Connor, Jones Day, Irvine, CA, for Defendant Experian Information Solutions, Inc.
ORDER DENYING DEFENDANTS EQUIFAX INFORMATION SERVICES, LLC'S, TRANS UNION, LLC'S, AND EXPERIAN INFORMATION SOLUTIONS, INC.'S MOTION TO STAY CASE PENDING ARBITRATION BETWEEN PLAINTIFF AND DEFENDANT CITIGROUP CORPORATE HOLDINGS, INC. [Dkt. 28]
CORMAC J. CARNEY, UNITED STATES DISTRICT JUDGE I. INTRODUCTION & BACKGROUND
Plaintiff Susan Salgado brings this suit against CitiGroup Corporate Holdings, Inc. ("Citibank"), Equifax Information Services, LLC ("Equifax"), Trans Union, LLC ("Trans Union"), and Experian Information Solutions, Inc. for violation of the Fair Credit Reporting Act and California's Consumer Credit Reporting Agency Act and Identify Theft Act. (Dkt. 1 [Complaint, hereafter "Compl."].) Plaintiff, who banked with Citibank, alleges that she was the victim of identity theft when an unknown thief ran up $7,000 in charges on her Citibank credit card. (Id. ¶¶ 49-59.) Plaintiff made known to Defendants that she was the victim of identity theft and requested that they investigate her account. (Id. ¶¶ 60, 63, 68, 72.) Plaintiff alleges that Citibank did not respond to her, Experian and Trans Union told her that the "furnisher" (which is Citibank) verified her debt, and Equifax responded that they would not remove the debt while their investigation was ongoing. (Id. ¶¶ 62, 65, 67, 70, 75.)
The state claims are brought solely against Citibank.
On May 10, 2022, Plaintiff and Citibank entered a stipulation to arbitrate and stay the action. (Dkt. 26 [Stipulation].) They agreed that Plaintiff's claims against Citibank are subject to an arbitration clause contained in a credit card agreement between Plaintiff and Citibank. (Id. ) Plaintiff and Citibank made clear that their stay request applied only to Plaintiff's claims against Citibank. (Id. ) Now before the Court is Experian's, Trans Union's, and Equifax's (collectively, the "CRA Defendants") motion to stay the remainder of this case. (Dkt. 28 [Motion to Stay, hereafter "Mot."].) For the following reasons, the motion is DENIED .
Having read and considered the papers presented by the parties, the Court finds this matter appropriate for disposition without a hearing. See Fed. R. Civ. P. 78 ; Local Rule 7-15. Accordingly, the hearing set for June 27, 2022, at 1:30 p.m. is hereby vacated and off calendar.
II. ANALYSIS
"[T]he power to stay proceedings is incidental to the power inherent in every court to control disposition of the cases on its docket with economy of time and effort for itself, for counsel, and for litigants." Landis v. N. Am. Co. , 299 U.S. 248, 254, 57 S.Ct. 163, 81 L.Ed. 153 (1936). The power to stay a case "calls for an exercise of a sound discretion" and a weighing of "competing interests." CMAX, Inc. v. Hall , 300 F.2d 265, 268 (9th Cir. 1962). Among those interests are "the possible damages which may result from the granting of a stay, the hardship or inequity which a party may suffer in being required to go forward, and the orderly course of justice measured in terms of the simplifying or complicating of issues, proof, and questions of law which could be expected to result from a stay." Id.
Plaintiff's arbitrable claims against Citibank are no doubt intertwined with her non-arbitrable claims against the CRA Defendants. A prerequisite for Plaintiff's FCRA claims against the CRA Defendants is that the credit report maintained by the CRA Defendants contains an inaccuracy. See Guimond v. Trans Union Credit Info. Co. , 45 F.3d 1329, 1333 (9th Cir. 1995) ; Carvalho v. Equifax Info. Servs., LLC , 629 F.3d 876, 890 (9th Cir. 2010) ; Bornstein v. Trans Union LLC , 2019 WL 2372020, at *3 (D. Ariz. June 5, 2019). Plaintiff's claims against Citibank rely on the same factual prerequisite. (See Compl. ¶¶ 135-39, 140-45.) If the arbitrator were to find the information that Citibank furnished to the CRA Defendants was accurate, that could render this case moot. See Ishaki v. Equifax Info. Servs., LLC , 2019 WL 12875983, at *1 (D. Nev. Sept. 20, 2019) ("That is, if the information BMW provided to the credit reporting agencies was accurate, and BMW did not violate the FCRA, Plaintiff likely has no cause of action against the Defendant credit reporting agencies."). As such, the interest in the orderly course of justice tilts in favor of granting a stay. See id. at *2.
That is, however, just one consideration. The Court must also consider the harm to Plaintiff in granting a stay. See id. (denying motion to stay in light of prejudice to plaintiff, despite acknowledging possible inefficiencies of proceeding in parallel). The Court finds that such harm would be substantial, outweighing the inefficiencies that may accompany proceeding in parallel. There is no indication as to when the arbitration with Citibank will end. In that time, potentially inaccurate information will remain on Plaintiff's credit report, subjecting her to negative economic ramifications. More importantly, the CRA Defendants—who are not parties to the arbitration—have expressly indicated that they have no intention of being bound by the arbitrator's findings. (Mot. at 6 ["While Plaintiff may certainly be bound by any findings in the arbitration, the CRA Defendants will not because they are not a party to the arbitration or arbitration agreement."].) More specifically, the CRA Defendants will not recognize findings that do not work in their favor. Therefore, should the Court stay this case, Plaintiff faces the prospect of (1) proving that inaccurate information was furnished and reported in her arbitration against Citibank, which may take a substantial amount of time, (2) moving to lift the stay in this case, and (3) proving the inaccuracy once more in this Court once the CRA Defendants refuse to acknowledge the arbitrator's finding on that issue, which may take additional years. All the while, Plaintiff will have a potential inaccuracy affecting her credit report. Of course, allowing this case and the arbitration to proceed in parallel does not remove the risk that Plaintiff must prove an inaccuracy twice, but it does lessen the risk of a potential years-long delay in removing the inaccuracy from Plaintiff's credit report. The CRA Defendants argue that they would be prejudiced if they were made to waste time and resources litigating this case when it could be mooted should the arbitrator find Citibank furnished accurate information to the CRA Defendants. (Dkt. 31 [Reply] at 4.) But the Court finds that the potential harm to Plaintiff identified above outweighs the harm the CRA Defendants would face should they be made to expend resource litigating issues that might possibly be mooted. The Court's decision is consistent with the outcome reached by other courts entertaining this same issue. See Ishaki , 2019 WL 12875983 ; Noriega v. Citibank N.A. , 2022 WL 2167454, 2022 U.S. Dist. LEXIS 62271 (C.D. Cal. April 4, 2022) ; Neufeld v. Cap. Bank N.A. , 2019 U.S. Dist. LEXIS 76329 (E.D. Cal. May 6, 2019).
The CRA Defendants focus most on the inaccuracy issue. However, the CRA Defendants briefly mention in their reply certain other issues that may be litigated in both this case and the arbitration. (Dkt. 31 [Reply] at 5.) The same concern expressed in this paragraph, however, applies to those other issues.
The CRA Defendants also express a vague concern that proceeding in parallel may violate the one satisfaction rule. But courts in this circuit have found that this rule does not apply to the FCRA. See Ishaki , 2019 WL 12875983 ; Contreras v. Kohl's Department Stores, Inc. , 2017 WL 6372646 *3 (C.D. Cal. Dec. 12, 2017).
III. CONCLUSION
For the foregoing reasons, the motion to stay is DENIED .