Opinion
Civil Action No. 01-2690, Section "C" (4)
February 19, 2002
ORDER AND REASONS
This matter comes before the Court on motion to stay plaintiff's action in favor of arbitration filed by the defendants Sears National Bank ("SNB") and Sears Roebuck Company ("Sears"). Having considered the record, the memoranda of counsel and the law, the Court has determined that the motion should be granted for the following reasons.
The plaintiff filed this class action alleging that the defendants improperly levied penalties for a late payment on her SNB charge card. According to the amended complaint, the plaintiff's claims arise under the National Bank Act, 12 U.S.C. § 85, et seq, the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1964, and Arizona law. The defendants argue that the claims are all subject to the arbitration provision contained in the written credit card agreement.
The plaintiff first argues that she did not enter into a written agreement to arbitrate with either SNB or Sears, as required by the Federal Arbitration Act, 9 U.S.C. § 1, et seq, and Louisiana law. The defendants replied to this argument with documentation showing that in August 1999, the plaintiff signed an application which, in turn, provides "[i]f approved, you agree to the terms disclosed below which apply to your account and the terms of the Sears Card Account, or Sears Card Starter Account, Cardholder Account and Security Agreement which will be provided to you with your credit card(s)." SNB provides an affidavit to support its subsequent mailing of the card and agreement to the plaintiff at her billing address, and the later mailing of an amended agreement in March 2001. Both agreements contained arbitration provisions pertaining to "[a]ny and all claims, disputes or controversies of any nature whatsoever (whether in contract, tort, or otherwise) arising out of, relating to, or in connection with (a) this Agreement . . ." and "(d) the relationships which result from this Agreement . . ." including the relationship with SMB or Sears. The March 2001 arbitration provision also pertained to "(e) the establishment, operating, handling or termination of the Account." In addition, the agreements provided for their application when the card or account is used, which has been recognized as acceptance of terms under Louisiana law. See Bank of Louisiana v. Berry, 648 So.2d 991, 993 (La.App. 5th Cir. 1994).
Next, the plaintiff argues that Sears is not subject to any agreement to arbitrate since the credit agreement is with SNB. The arbitration provision however specifically includes both disputes pertaining to the agreement and the relationship with SNB and Sears. Assuming that Sears was not considered a thirdparty beneficiary of the clause, the plaintiff's argument still fail. The Fifth Circuit recognizes that arbitration is appropriate both where the signatory plaintiff relies on the terms of a written agreement with an arbitration clause in its claim against a nonsignatory defendant, and where that signatory plaintiff raises allegations of substantially interdependent and concerted misconduct by both the signatory and nonsignatory defendants. Grigson v. Creative Artists Agency. L.L.C., 210 F.3d 524, 527 (5th Cir. 2000).
In her "sur-reply," the plaintiff argues that Louisiana law applies and that the Louisiana Consumer Credit Law, La. Rev. Stat. 9:3511C ("LCCL"), invalidates consumer credit transactions "by which the consumer consents to the jurisdiction of another state, and (2) that fix venue." However, the choice of law provision in the agreement under examination merely provides for the interpretation of the agreement under the laws of the United States and Arizona, and that the agreement is entered into in Arizona. "In this case, however, the parties did not consent to the jurisdiction of another state. Jurisdiction is not an issue in this case. Instead, they specifically agreed to be bound by the law of another state in cases where the LCCL was inapplicable." Whitehurst v. James Noel Flying Services, 509 So.2d 1035, 1037 (La.App. 3d Cir. 1987). For purposes of enforcing the arbitration provision to this lawsuit, the Court finds that there is nothing amiss with this choice of law provision under either federal or state law.
Accordingly,
IT IS ORDERED that the motion to stay plaintiff's action in favor of arbitration filed by the defendants Sears National Bank and Sears Roebuck Company is GRANTED.