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Masters v. Lowe's Home Centers

June 11, 2009

DORIS J. MASTERS, INDIVIDUALLY AND ON BEHALF OF A CLASS OF SIMILARLY SITUATED INDIVIDUALS, PLAINTIFF,
v.
LOWE'S HOME CENTERS, INC., DEFENDANT.



MEMORANDUM AND ORDER

This matter comes before the Court on Defendant Lowe's Home Centers, Inc.'s Motion to Stay and Compel Arbitration (Doc. 11). Plaintiff has responded and Defendant has replied. For the following reasons, the Court DENIES the Motion.

BACKGROUND

According to the allegations in the complaint, on October 15, 2007, Defendant Lowe's Home Centers, Inc. (Lowes) gave Plaintiff Doris J. Masters (Masters) a receipt which displayed more than the last five digits of Masters's credit card number. Masters alleges that Lowes thus violated the Fair and Accurate Transactions Act (FACTA), an amendment to the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681c(g). The truncation requirement of FACTA provides:

No person that accepts credit cards or debit cards for the transaction of business shall print more than the last five digits of the card number... upon any receipt provided to the cardholder at the point of sale or transaction.

15 U.S.C. § 1681c(g).

Masters attached a copy of the "receipt" in question to her complaint. Lowes points out, and Masters does not dispute, that what Masters characterizes as a "receipt" is actually the written memorialization of an in-person payment that Masters made on her Lowes branded credit card at the Lowes store in Glen Carbon, Illinois.*fn1 Lowes contends that by making this in-person payment at a Lowes store, Masters was exercising one of her rights under the Lowes credit card account agreement (Agreement) that she entered into with GE Money Bank. The Agreement contains an arbitration clause which, if applicable to the instant dispute, compels Masters to submit the dispute to arbitration and forbids her from bring the dispute on behalf of a class. The Agreement also contains a choice of law provision specifying that the Agreement is governed by Utah state law and the Federal Arbitration Act.

The Arbitration Clause*fn2 of the Agreement reads: ARBITRATION PROVISION. Please read this arbitration provision carefully. IT PROVIDES THAT ANY PAST, PRESENT OR FUTURE LEGAL DISPUTE OR CLAIM OF ANY KIND, INCLUDING STATUTORY AND COMMON LAW CLAIMS AND CLAIMS FOR EQUITABLE RELIEF, THAT RELATE IN ANY WAY TO YOUR ACCOUNT OR YOUR RELATIONSHIP WITH US ("CLAIM") WILL BE RESOLVED BY BINDING ARBITRATION IF EITHER YOU, WE OR LOWE'S ELECTS TO ARBITRATE.

It goes on to state:

As used in this provision,: "We," "Us." and "Our" means (1) GE Money Bank and all of its respective parents, subsidiaries, affiliates, predecessors, successors, assigns, employees, officers and directors (collectively, the "Bank"), and (2) Lowe's Companies, Inc. and all of its respective parents, subsidiaries, affiliates, predecessors, successors, assigns, employees, officers and directors (collectively,"Lowe's"), if Lowe's is named as a co-party with the Bank in a Claim asserted by you.

Lowes has elected to arbitrate, and argues that the above clause compels Masters to submit this dispute to arbitration. Masters counters that, because only she and GE Money Bank were signatories to the agreement, Lowes's right to invoke the arbitration provision of the credit card agreement only arises when Lowes is named as a co-party with GE Money Bank. Because GE Money Bank is not a party to this action, Masters insists that Lowes cannot compel her to arbitrate her claim. Lowes counters that, because Masters claim relates to Lowes's obligations to her under the Agreement, she is equitably estopped from refusing to arbitrate her claims against Lowes.

ANALYSIS

Defendants request a stay of this action in accordance with Section 3 of the Federal Arbitration Act (FAA), which reads, "if a suit is brought on the merits of a dispute covered by an arbitration agreement, the court in which such suit is pending, upon being satisfied that the issue involved in such suit of proceeding is referable to arbitration under such an agreement shall... stay the trial of the action until such arbitration has been had...." Moses H. Cone Memorial Hosp. v. Mercury Const. Corp., 460 U.S. 1, 23 n.27 (1983) (quoting 9 U.S.C. § 3).

When it passed the Federal Arbitration Act (FAA), 9 U.S.C. § 1 et seq., Congress intended to place agreements to arbitrate on an equal footing with other contracts. Allied-Bruce Terminex Cos., Inc. v. Dobson, 513 U.S. 265, 270-71 (1995). In pertinent part, FAA reads:

A written provision in any... contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract...or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract... shall be valid, irrevocable, and enforceable, save ...


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