A District Court judge in Massachusetts has dismissed a lawsuit filed against a creditor and a collection law firm for allegedly violating the Fair Debt Collection Practices Act by suing an individual to collect on a time-barred debt because the underlying debt was covered by a mandatory arbitration agreement.
A copy of the ruling in the case of Christensen v. Barclays Bank Delaware and Stillman Law Office, LLC can be accessed by clicking here.
The plaintiff obtained a credit card from one of the defendants and stopped making payments on it. Barclays hired Stillman Law Office to file a lawsuit against the plaintiff. But the lawsuit was filed more than three years after the plaintiff defaulted on the debt, and Massachusetts has a three-year statute of limitations. The plaintiff moved to have the lawsuit against her dismissed and the defendants did not oppose the motion, which was granted. The plaintiff then filed suit against the defendants, alleging they violated the FDCPA by suing to collect on a time-barred debt.
However, when she received her card in the mail from Barlcays and when she activated it, she agreed to the terms and conditions of the cardholder agreement, which contained a mandatory arbitration clause, which also covered any “agents” working on behalf of the creditor, which indemnified Stillman.
Judge Allison Burroughs of the District Court for the District of Massachusetts was unpersuaded by any of the plaintiff’s arguments regarding her not being bound by the mandatory arbitration clause of the cardholder agreement. But any challenge to a cardholder agreement must go before an arbitrator anyway, Judge Burroughs noted.
With respect to Plaintiff’s argument that no agreement was formed, the record supports the conclusion that Plaintiff accepted the terms of the Cardmember Agreement when she activated and used her Barclays credit card. The Court need not, however, resolve this issue because the Supreme Court has held that “a challenge to the validity of the contract as a whole, and not specifically to the arbitration clause, must go to the arbitrator.” [Buckeye Check Cashing, 546 U.S. at 449.] Therefore, to the extent that Plaintiff contends that she never entered into the Cardmember Agreement as a whole, that dispute must still be raised in arbitration
