A District Court judge in Florida has granted a defendant’s motion to compel arbitration of Fair Credit Reporting Act and state law claims filed by a plaintiff who accused the defendant of reporting his closed credit card account as delinquent after unauthorized charges were made on it.
The background: The plaintiff was issued a credit card in 2019 and used it until canceling the account in November 2024, at which point he was told the account had no remaining balance.
- Unbeknownst to the plaintiff, unauthorized charges were made on the account weeks after he closed it, and the balance quickly compounded with late fees and interest over the ensuing months.
- The defendant flagged the closed account as overdue to the credit reporting agencies, causing the plaintiff’s credit score to drop. As a result, the plaintiff was denied a new credit card, had an existing card rescinded by its issuer, and was prevented from purchasing a home.
- The plaintiff sued the defendant and two credit reporting agencies, accusing the defendant of violating the FCRA, the Florida Consumer Collection Practices Act, and the Florida Deceptive and Unfair Trade Practices Act.
- The defendant moved to compel arbitration under a clause in the cardholder agreement. The plaintiff never responded to the motion, but objected after a Magistrate Court judge recommended it be granted, arguing he never agreed to arbitrate, that the clause was unconscionable, that the agreement’s Utah choice-of-law provision violated Florida public policy, and that his claims fell outside the clause’s scope.
The ruling: Judge John Antoon II of the District Court for the Middle District of Florida overruled the plaintiff’s objections and granted the motion, noting that the plaintiff had waived his objections by failing to respond to the motion but reviewing them anyway.
- The judge relied on an affidavit from the head of the defendant’s legal department, who affirmed that the cardholder agreement containing the arbitration clause was mailed to the plaintiff when he was approved for the card, and that the plaintiff manifested his assent by using the card without opting out of the clause.
- Applying Florida law, because the plaintiff had not shown he was unable to discover the clause or had no choice but to enter the agreement, Judge Antoon rejected the unconscionability argument, and noted the plaintiff cited no authority for invalidating a choice-of-law clause simply because another state’s law could extinguish his Florida claims.
- The clause covered “all federal or state law claims, disputes or controversies, whether preexisting, present or future, arising from or relating directly or indirectly to” the agreement, which the judge ruled was sufficiently broad to cover the statutory claims.
- The plaintiff was ordered to submit his claims against the defendant to arbitration within 21 days, with proceedings stayed pending the outcome and joint status reports due every 90 days.
