Earlier this week, in Card v. Wells Fargo, 2020 U.S. Dist. LEXIS 45117 (D. Or. March 16, 2020), relying on Section 4 of the Federal Arbitration Act, the court deferred ruling on Defendant’s motion to compel arbitration, finding that an evidentiary hearing or jury trial is required to determine whether a valid arbitration agreement exists.

Defendant Wells Fargo contended that Plaintiff agreed to an arbitration agreement when he applied for a credit card online in 2010. In addition, Defendant asserted that it sent Plaintiff updated customer agreements that also included nearly identical arbitration agreements in 2011, 2014, and 2016. First, the court found that there was a genuine issue of material fact as to whether Plaintiff received the arbitration agreements in the mail from Defendant. The court noted that Defendant’s assertions regarding the mailing dates were based on a tracking system, but while the system tracked the exact date that credit cards were sent to Plaintiff, it only identified the month when updated customer agreements were sent. And, while admitting that he received mail at the address to which Wells Fargo contended it sent the credit cards and customer agreements and asserting that he typically reviews disclosures and credit agreements when they arrive in the mail, Plaintiff disputed that he ever received any arbitration agreements or disclosures from Wells Fargo.      

The court also found the facts as to whether Plaintiff agreed to arbitrate when he applied online for his credit card in 2010 to be disputed. Wells Fargo contended that the arbitration agreement was an enforceable “clickwrap” agreement, but the court disagreed that it was a pure clickwrap agreement because the arbitration agreement was not on the same webpage and the applicant was not forced to scroll through it and click “I agree.” However, the court also found that the arbitration agreement was also not a pure “browsewrap” agreement because even though the arbitration agreement was accessed through a separate hyperlink, the user had to acknowledge disclosure of the arbitration agreement in the application process. 

Finding that a summary judgment standard applied to determine whether an agreement to arbitrate exists, the court concluded that there were disputed issues as to whether Plaintiff agreed to arbitrate his claims. Thus, under Section 4 of the FAA and consistent with the court’s earlier decision in Campos v. Blustem, 2015 WL 5737601 (D. Or. September 30, 2015), the court determined that the existence of a valid arbitration agreement must be determined by a jury or, if the parties waived their right to a jury trial, by a court after an evidentiary hearing.

For those of us at TCPAWorld using arbitration agreements, this case highlights the importance of being able to establish, without dispute, the existence of a valid arbitration agreement. Otherwise, many of the benefits of arbitration – that is faster and cheaper – could be lost trying to get in arbitration! 

Published by Amy Brown Doolittle

Amy Doolittle co-leads the Squire Patton Boggs Class Action & Multidistrict Litigation Practice and serves as a member of the firm’s Global Board. She has extensive experience in product liability and mass tort matters, financial services litigation, consumer and commercial arbitrations, class actions and MDL proceedings. Amy has represented clients in high-stakes litigation proceedings across a wide array of industries, from pharmaceutical and chemical companies to financial services and insurance companies. Amy has argued in front of various state and federal trial courts and courts of appeal. Amy is the author of “Class Actions 101: Overdraft Fee Litigation: The Only Certainty is that Nothing is Certain” published in the Spring 2011 issue of CADS Report, an American Bar Association publication. She is co-author of “Out of the Frying Pan and Into the Fire: Class Arbitration From the Defense Perspective” and spoke on “Classwide Arbitration: Fiction, Reality Or Nightmare?” at the American Bar Association Tort Trial & Insurance Practice Section’s 2007 conference, “The Future of Class Action Litigation in America.” View all posts by Amy Brown Doolittle