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A.D. v. Credit One Bank, N.A.

United States District Court, N.D. Illinois, Eastern Division

August 19, 2016

A.D., by and through her guardian ad litem Judith Serrano, on behalf of herself and all others similarly situated, Plaintiff,
CREDIT ONE BANK, N.A., Defendant.


          MATTHEW F. KENNELLY United States District Judge.

         A.D., a minor acting through her guardian ad litem Judith Serrano, has sued Credit One Bank, N.A., under the Telephone Consumer Protection Act (TCPA), 47 U.S.C. § 227, on behalf of herself and others similarly situated. A.D. alleges that Credit One violated the TCPA by repeatedly calling her on her cellular phone without her consent, using an automated dialer, ostensibly to collect on a debt she did not owe. Credit One has moved to dismiss for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1) on the basis that A.D. and members of the putative class lack standing to sue. Credit One has also moved to compel arbitration based on an arbitration agreement it had with A.D.'s guardian ad litem. A.D. opposes both motions and has moved for class certification under Rule 23(b)(3). For the reasons stated below, the Court denies A.D.'s motion for class certification, denies Credit One's motion to dismiss, and grants Credit One's motion to compel arbitration and stay proceedings.


         Credit One is a national bank that provides banking services and credit cards throughout the United States. Judith Serrano, the plaintiff's mother, has been one of its customers since about 2003, when she opened a credit card account with Credit One and began using the card for everyday purchases. A.D., Serrano's daughter, is not an account holder and is not named on her mother's account.

         In order to open her account, Serrano signed a standard "Visa / Mastercard Cardholder Agreement, Disclosure Statement and Arbitration Agreement." The agreement provided, among other things, that Serrano consented to receive communications from Credit One:

COMMUNICATIONS: You are providing express written permission authorizing Credit One Bank or its agents to contact you at any phone number (including mobile, cellular / wireless, or similar devices) or email address you provide at anytime [sic], for any lawful purpose. The ways in which we may contact you include live operator, automatic telephone dialing systems (auto-dialer), prerecorded message, text message or email. Phone numbers and email addresses you provide include those you give to us, those from which you contact us or which we obtain through other means. Such lawful purposes include, but are not limited to . . . collection on the Account . . . .

Pl.'s Ex. 2, dkt. no. 78-3, at 6. The agreement also included an arbitration provision, which stated:

Agreement to Arbitrate: You and we agree that either you or we may, without the other's consent, require that any controversy or dispute between you and us (all of which are called "Claims"), be submitted to mandatory, binding arbitration. This arbitration provision is made pursuant to a transaction involving interstate commerce, and shall be governed by, and enforceable under, the Federal Arbitration Act (the "FAA"), 9 U.S.C. § 1 et seq., and (to the extent State law is applicable), the State law governing this Agreement.
Claims Covered: Claims subject to arbitration include, but are not limited to, disputes relating to the establishment, terms, treatment, operation, handling, limitations on or termination of your account . . . billing, billing errors, credit reporting, the posting of transactions, payment or credits, or collections matters relating to your account.

Id. at 8. The agreement further provided:

Claims subject to arbitration include not only Claims made directly by you, but also Claims made by anyone connected with you or claiming through you, such as a co-applicant or authorized user of your account, your agent, representative or heirs, or a trustee in bankruptcy.

Id. The Cardholder Agreement defined "authorized user" as anyone the cardholder allows to use her account. See Id. at 4.

         A.D. filed this suit against Credit One in December 2014 after receiving "at least twelve calls at different times" from Credit One to her cellular phone. Compl., dkt. no. 1, ¶ 9. She alleged that these calls were made "using an automatic telephone dialing system, " and that she never gave consent to receive such calls. Id. ¶ 8. A.D. also alleged that "[a]t no time did [she] engage in any transaction with [Credit One] or do business with Credit One in any way." Id. "Based on the content of the messages left and the conversations with [Credit One's] agents who spoke on the phone, " A.D. alleged that "[Credit One] was seeking to collect on a consumer loan extended to another person." Id. ¶ 9. A.D. did not identify who she thought that other person might have been.

         Credit One answered A.D.'s complaint in February 2015. In its answer, it asserted an affirmative defense in which it "reserve[d] its right to compel arbitration." Answer, dkt. no. 17, at 14 ¶ 4. It provided no further explanation. Credit One moved to stay proceedings in April 2015 to await an anticipated FCC ruling, moved for leave to file a third-party complaint against Serrano in May 2015, and moved to transfer venue in August 2015. The Court denied each of these motions, none of which was based upon the asserted affirmative defense that this dispute was subject to arbitration.

         During discovery, Credit One reviewed its records and learned that it acquired A.D.'s telephone number when it received a call from that number on November 10, 2010. The person who called Credit One from that telephone number accessed Serrano's account by giving Serrano's account number and confirming the last four digits of her social security number. During her deposition in April 2016, A.D. testified that her telephone number is on her mother's family phone service plan and that her mother pays its bills. She also testified that although her mother has used the phone, the phone belongs to A.D. alone. According to A.D., the only two people who have ever had access to the phone are she and her mother, but only Serrano knows the last four digits of Serrano's social security number. Based on this testimony, the only explanation for Credit One acquiring A.D.'s telephone number and determining that it was associated with Serrano's account was that Serrano called Credit One and accessed her account using A.D.'s telephone.

         Credit One also learned in A.D.'s and Serrano's depositions in April 2016 that prior to the telephone calls A.D. allegedly received, A.D. enjoyed some benefits of her mother's Credit One account holder status. Serrano testified that she regularly used the card to purchase food and drink for herself and her daughter. Serrano also testified that on at least one occasion in early 2014, she preordered drinks ...

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