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Regan v. Stored Value Cards, Inc.

United States District Court, N.D. Georgia, Atlanta Division

January 13, 2015

ROBERT REGAN, on behalf of himself and all others similarly situated, Plaintiff,
v.
STORED VALUE CARDS, INC. and CENTRAL NATIONAL BANK AND TRUST COMPANY, ENID, OKLAHOMA, Defendants

Page 1358

For Robert Regan, on behalf of himself and all others similarly situated, Plaintiff: Edward Adam Webb, Matthew C. Klase, LEAD ATTORNEYS, Webb, Klase & Lemond, LLC, Atlanta, GA; Robert H. Stansfield, LEAD ATTORNEY, Greer, Stansfield & Turner, LLP, Covington, GA.

For Stored Value Cards, Inc., Defendant: Jessica L. Nelson, Russell S. Ponessa, LEAD ATTORNEYS, Hinshaw & Culbertson, LLP-MN, Minneapolis, MN; Kelly G. Laudon, Kim M. Ruckdaschel-Haley, LEAD ATTORNEYS, Lindquist & Vennum, Minneapolis, MN; Michael Jay Goldman, LEAD ATTORNEY, Hawkins Parnell Thackston & Young, LLP-GA, Atlanta, GA; Scott Eric Zweigel, William J. Holley, II, LEAD ATTORNEYS, Parker, Hudson, Rainer & Dobbs, LLP, Atlanta, GA; Brenton Sewell Bean, Hawkins Parnell Thackston & Young, LLP-GA, Atlanta, GA.

For Central National Bank and Trust Company, Enid, Oklahoma, Defendant: Kelly G. Laudon, Kim M. Ruckdaschel-Haley, LEAD ATTORNEYS, Lindquist & Vennum, Minneapolis, MN; Kim M. Ruckdaschel-Haley, LEAD ATTORNEYS, Lindquist & Vennum, Minneapolis, MN; Scott Eric Zweigel, William J. Holley, II, LEAD ATTORNEYS, Parker, Hudson, Rainer & Dobbs, LLP, Atlanta, GA; William J. Holley, II, LEAD ATTORNEYS, Parker, Hudson, Rainer & Dobbs, LLP, Atlanta, GA.

Page 1359

ORDER

Amy Totenberg, United States District Judge.

This matter is before the Court on Defendants' Motion to Compel Arbitration and Stay or Dismiss Proceedings [Doc. 7] pursuant to the Federal Arbitration Act (" FAA" ), 9 U.S.C. § § 1-16. Defendants contend that Plaintiff is bound by a contractual arbitration agreement arising from Plaintiff's use of a prepaid debit card. As material factual disputes exist regarding the formation of the contract containing the arbitration agreement, Defendants' Motion is DENIED.

I. Legal Standard

Defendant has asked the Court to compel arbitration under Sections 3 and 4 of the FAA. (Doc. 7-1 at 1.) As a starting place, the Court is " mindful of the Supreme Court's instruction that " arbitration is simply a matter of contract.'" Dasher v. RBC Bank (USA), 745 F.3d 1111, 1116 (11th Cir. 2014), cert. denied, 135 S.Ct. 144, 190 L.Ed.2d 231 (2014) (citing First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 943, 115 S.Ct. 1920, 131 L.Ed.2d 985 (1995)). Due to the contractual nature of arbitration, " the first task of a court asked to compel arbitration of a dispute is to determine whether the parties agreed to arbitrate that dispute." Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626, 105 S.Ct. 3346, 87 L.Ed.2d 444 (1985); see also Chastain v. Robinson-Humphrey Co., Inc., 957 F.2d 851, 854 (11th Cir. 1992). A court must first consider " any formation challenge to the contract containing the arbitration clause," Solymar Invs., Ltd. v. Banco Santander S.A., 672 F.3d 981, 990 (11th Cir. 2012), because " a party plainly cannot be bound by an arbitration clause to which it does not consent." BG Grp., PLC v. Republic of Argentina, 134 S.Ct. 1198, 1213, 188 L.Ed.2d 220 (2014) (citing Granite Rock Co. v. Teamsters, 561 U.S. 287, 299, 130 S.Ct. 2847, 177 L.Ed.2d 567 (2010)). Section 4 of the FAA is clear on this point: " If the making of the arbitration agreement [is] in issue, the court shall proceed summarily to the trial thereof" -- as opposed to ordering arbitration pursuant to that agreement. 9 U.S.C. § 4.[1]

Page 1360

Unless there is clear and unambiguous evidence that the parties agreed to have an arbitrator decide disputes over contract formation, Martinez v. Carnival Corp., 744 F.3d 1240, 1246 (11th Cir. 2014) (quoting and citing Rent --A-- Center, W., Inc. v. Jackson, 561 U.S. 63, 68-69, 79, 130 S.Ct. 2772, 177 L.Ed.2d 403 (2010)), such " gateway" issues of " arbitrability" are " for a court to decide." BG Grp., 134 S.Ct. at 1213 (citing Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 84, 123 S.Ct. 588, 154 L.Ed.2d 491 (2002)). And while " the validity of an arbitration agreement is generally governed by the Federal Arbitration Act," " state law generally governs whether an enforceable contract or agreement to arbitrate exists" at all. Caley v. Gulfstream Aerospace Corp., 428 F.3d 1359, 1367-68 (11th Cir. 2005).[2] A genuine dispute of fact concerning contract formation precludes a court from deciding as a matter of law that the parties did or did not enter into an agreement to arbitrate. See Granite Rock Co. v. Teamsters, 561 U.S. at 297-99 (holding that the district court must first " resolve any issue that calls into question the formation or applicability of the specific arbitration clause that a party seeks to have the court enforce" ); Solymar Investments, Ltd. v. Banco Santander S.A., 672 F.3d 981, 989-90 (11th Cir. 2012); Magnolia Capital Advisors, Inc. v. Bear Stearns & Co., 272 F.App'x 782, 785-86 (11th Cir. 2008). Finally, " a district court considering the making of an agreement to arbitrate should give to the party denying the agreement the benefit of all reasonable doubts and inferences that may arise." Id. at 786 (internal quotation marks omitted).

II. Factual Background

On January 15, 2014, Plaintiff, a 67 year old man, was arrested based on a warrant sworn out by a local merchant, [3] jailed overnight at the Rockdale County Jail (" Rockdale" ), and then released the next day. (Compl. ¶ ¶ 38, 40.) When he was booked, the officers at Rockdale took the $764.00 in cash he had on his person. ( Id. ¶ 39.) When he was released, the officers did not give him cash, but rather " assigned" him a Numi Prestige Prepaid Mastercard (the " Card" ) loaded with the same amount of money. (Pl.'s Resp. Ex. A ¶ 11, Decl. of Robert Regan, Doc. 12-1.) Plaintiff did not want the Card, but he " was not given any option of receiving [his] $764.00 in cash or by check." ( Id. ¶ ¶ 15-16.)

After the officers -- who are not parties to this suit -- handed Plaintiff the Card, they handed him " numerous" documents pertaining to his arrest, booking, and release. ( Id. ¶ ¶ 12-13.) Among ...


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