ORDER GRANTING MOTION TO COMPEL ARBITRATION, DENYING CLASS CERTIFICATION, AND STAYING CASE PENDING COMPLETION OF ARBITRATION

S. THOMAS ANDERSON, District Judge.

Plaintiffs Monika Drozdowski and Robert Drozdowski filed this purported class action against Defendant Citibank, Inc., for alleged violations of the Telephone Consumer Protection Act, 47 U.S.C. § 227 (the "TCPA"). (ECF No. 1.) Defendant has moved to compel arbitration.1 (ECF No. 12) The parties have fully briefed the Court. For the reasons set forth below, Defendant's motion seeking to compel arbitration is GRANTED.

The TCPA was enacted to regulate the growth of the telemarketing industry based on a determination by Congress that "[u]nrestricted telemarketing . . . can be an intrusive invasion of privacy."2 The TCPA makes it unlawful "to make any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using an automatic telephone dialing system or an artificial or prerecorded voice . . . to any telephone number assigned to a . . . cellular telephone service."3 The TCPA provides a private cause of action to persons who receive such calls.4

The TCPA also makes it unlawful for any entity to make more than one call in a twelve-month period to any number that is registered with the National Do-Not-Call Registry or the entity's internal do-not-call list.5 A listing on the National Do-Not-Call Registry "must be honored indefinitely, or until the registration is cancelled by the consumer or the telephone number is removed by the database administrator."6 Internal requests must be honored for five years.7 Persons receiving calls in violation of this portion of the TCPA are also provided with a private cause of action.

In the amended complaint, Plaintiffs allege that Citibank called Plaintiffs' "cellular telephone number" using dialing equipment regulated by the TCPA without Plaintiffs' consent in connection with certain credit card accounts.8 Plaintiffs contend that letters sent in April 2013 in connection with three accounts issued by Citibank to Robert Drozdowski advised Citibank that he was represented by counsel.9 Despite being told to contact Plaintiff's attorney, Citibank allegedly continued to make calls to Robert Drozdowski in an effort to collect a debt.10

Plaintiffs also contend that, at some point after September 2013, Monika Drozdowski revoked consent to call her.11 Plaintiffs allege that Citibank continued to make calls to Monika Drozdowski until Plaintiffs threatened to call the police.12 Plaintiffs contend that Citibank's actions are in violation of the TCPA. They allege that other consumers have received similar TCPA violative calls from Citibank, and, therefore, they ask the Court to certify a class and appoint them as the class representative.13

At issue are the following credit card accounts that were issued to Plaintiffs: (1) a Citibank MasterCard account currently ending in 6589 (formerly ending in 8358, 6510), issued to Robert Drozdowski in February 1999 ("Citi Account I"); (2) an AT&T Universal Card account currently ending in 0612 (formerly ending in 8132) issued to Robert Drozdowski in January 2001 ("Citi Account II"); (3) a Citibank MasterCard account currently ending in 5319 (formerly ending in 2709 and 5589) issued to Monika Drozdowski in October 2013 ("Citi Account III"); and (4) a Sears MasterCard account currently ending in 9117 issued to Robert Drozdowski in the early 2000s ("Citi Account IV") (collectively, the "Accounts").14

Citibank has responded to the amended complaint with a motion to compel arbitration. (ECF No. 12.) According to Citibank, Plaintiffs' claims must be arbitrated on an individual, non-class basis pursuant to the binding arbitration agreements (collectively, the "Arbitration Agreement") between Plaintiffs and Citibank contained in the card agreements governing the Accounts. The Court finds Citibank's motion to be meritorious.

The Federal Arbitration Act ("FAA") states that a "written provision" in a contract providing for "settle[ment] by arbitration" of "a controversy . . . arising out of" that "contract . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract."15 The FAA "requires courts to enforce privately negotiated agreements to arbitrate, like other contracts, in accordance with their terms."16 "[A]ny doubts are to be resolved in favor of arbitration unless it may be said with positive assurance that [an] arbitration clause is not susceptible of an interpretation that covers the asserted dispute."17 "Before compelling an unwilling party to arbitrate, the court must engage in a limited review to determine whether the dispute is arbitrable; meaning that a valid agreement to arbitrate exists between the parties and that the specific dispute falls within the substantive scope of that agreement."18 The FAA mandates a liberal policy favoring the enforcement of arbitration agreements and requires that any doubts regarding whether a dispute is subject to arbitration be resolved in favor of arbitration.19 The party resisting arbitration bears the burden of showing that the arbitration agreement is invalid or does not encompass the claims at issue.20

The Sixth Circuit generally uses four factors to determine when to grant a motion to compel arbitration: "(1) Whether the parties agreed to arbitrate; (2) the scope of the agreement to arbitrate; (3) if federal statutory claims are involved, whether Congress intended those claims to be arbitrable; and (4) if only some of the claims are subject to arbitration, whether the nonarbitrable claims should be stayed pending arbitration."21

As an initial matter, the Court notes that Plaintiffs filed a "notice of supplemental authority" regarding the evidentiary value of exemplar credit card agreements. Plaintiffs point out that Citibank failed to include a copy of the original Sears MasterCard contract that Robert Drozdowski executed and reason that Citibank "thereby fail[ed] to provide the Court with necessary evidence establishing that Citibank even had a right in the first place to amend the original contract" to include an arbitration clause.22 Instead of the original agreement, Citibank submitted an exemplar card agreement in effect as of 1998 and a "change in terms notice" in effect since 2003.23

Plaintiffs are correct that the Court in Danley v. Encore Capital Grp., Inc., 2015 WL 7733450 (E.D. Mich. Dec. 1, 2015), issued an opinion addressing the evidentiary value of credit card agreement exemplars and questioning whether "the sample or embedded credit card agreements provided by defendants are the same agreements accepted by plaintiffs."24 The Danley Court pointed out that "[u]nauthenticated sample credit card agreements, one dated many years after the credit card was first used and therefore accepted by plaintiff is not the type of evidence the court can use to support an order compelling arbitration."25 Despite this language, the opinion did not hold that credit card agreement exemplars may not be used to compel arbitration but only that unauthenticated exemplars are of questionable evidentiary value.

In a subsequent order granting the motion to compel arbitration, the Danley Court noted that, following its previous order, the defendants had met their evidentiary burden by submitting a declaration that authenticated the exemplar.

Barnette who has "access to the business records related to the credit card accounts issued by Citibank including, in particular, the records of cardmember accounts and the applicable card agreements."27 Barnette references the declaration of another employee, Cathleen Walters, and the exemplar card agreement attached to the Walters declaration for Citi Account III and states that the exemplar is a "true and correct business record created and maintained by Citibank, or its affiliates, in the court of regularly conducted business activity."28 Walters also authenticates the exemplars for Citi Accounts I and II in her declaration.29 Additionally, Citibank has submitted the declaration of its employee Andrew Grayot which authenticates the exemplar for Citi Account IV.30

As in Danley, Plaintiffs have not pointed to any evidence to show that the agreements and exemplars that have been produced are not the same as those entered between Plaintiffs and Citibank. Therefore, the supplemental authority submitted by Plaintiffs is unavailing, and Citibank may rely on the agreements and exemplars attached to its motion to compel arbitration.

The card agreements governing the Accounts in the present case include a choice of law provision that provides for the application of federal and South Dakota law.31 "Tennessee courts `will honor a choice of law clause if the state whose law is chosen bears a reasonable relation to the transaction and absent a violation of the forum state's public policy,'" factors which are present in this case.32 Thus, while the FAA governs the enforceability of the Arbitration Agreement, South Dakota law governs the determination of whether a valid agreement to arbitrate exists.33 South Dakota law, like federal law, favors arbitration. "If there is doubt whether a case should be resolved by traditional judicial means or by arbitration, arbitration will prevail."34

Turning to the four factors used to decide whether to grant a motion to compel arbitration,35 the Court must first determine whether the parties agreed to arbitrate disputes that might arise during their relationship. As evidence that the parties did so agree, Citibank has pointed out that each of the Accounts at issue is governed by a card agreement that contains an Arbitration Agreement. The Arbitration Agreement was added to Citi Accounts I and II through a change-in-terms notice mailed to Robert Drozdowski,36 was contained in the card agreement mailed to Monika Drozdowski when she opened her Citi Account III,37 and was added to Citi Account IV through a change-in-terms notice and a new agreement mailed to Robert Drozdowski.38

Regarding Citi Account I, Robert Drozdowski contends that the change-of-terms provision in the original card agreement only permitted Citibank to change the existing terms and not to add terms. The provision states that Citibank "can change this Agreement" and explains how and when a cardholder can opt-out of a change or "accept[ ] the new terms."39 In accordance with this provision, in 2001 Citibank notified Robert Drozdowski that it was changing his existing card agreement to include a provision regarding binding arbitration, which was a "new term" that was accepted when Robert Drozdowski chose not to opt-out.40

Robert Drozdowski also had the opportunity to opt out of the Arbitration Agreement for Citi Accounts II and IV but chose not to do so.41 Additionally, he had the opportunity to opt out of subsequent changes to the Arbitration Agreement in 2005 but did not do so.42 Instead, he kept the Accounts open.43

Citibank acquired the Sears credit card program in 2003 and, at that time, informed Robert Drozdowski that it was "making certain changes to the terms of your Sears Credit Card Account Agreement, including changes regarding binding arbitration of disputes and the law governing your Account."44 He had the opportunity to opt-out of these changes, as well as changes in 2009, but he chose not to, and continued to use the account for purchases.45 Robert Drozdowski kept Citi Account IV open until after this lawsuit was filed.46

Robert Drozdowski was sent a new card agreement in 2010 for this account, which also contained an arbitration provision.47 He argues that Citibank cannot rely on the 2010 card agreement without producing the original agreement that governed the account when it was opened. However, he has produced no evidence that the 2010 card agreement is not the agreement that governed his Sears account.

Under South Dakota law at the time of the relevant events, credit card issuers were authorized to change the terms of their existing credit card agreements by sending notices of the changed terms to cardholders.48 The addition of an arbitration provision is one such change to the agreement.49 As explained by the District Court for the Northern District of California:

In this case also, Plaintiffs used the Accounts after receiving the change-in-terms notices and the card agreement.51 Under South Dakota law, Plaintiffs' use of the Accounts constitutes their acceptance of the terms of the card agreement, including the Arbitration Agreement.52

Plaintiffs argue that Citibank has failed to provide specific details about the manner in which Monika Drozdowski entered into the agreement for Citi Account III. Citibank has submitted evidence that she was provided the card agreement containing the Arbitration Agreement when she opened her Citibank account in October 2013.53 In the thirty days after issuance, she did not cancel the account, and the account remained open as of January 2016 and carried a balance.54 Her use of the card is evidenced by the periodic billing statements for the account.55 Thus, Monika Drozdowski became bound by the Arbitration Agreement.

The Court finds that, by failing to opt-out and using the credit cards after the amendments to the card agreements, both Plaintiffs "assented to the terms of the arbitration agreement"56 and agreed to arbitrate.

Next, the Court looks at the scope of the Arbitration Agreement. Once it is determined that the parties have agreed to binding arbitration, an "order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute."57 Arbitration agreements that apply to "any claim" relating to the parties' agreement or their relationship are "deemed to 2406029 at *5 (N.D. Cal. Sept. 29, 2005) (noting that § 54-11-9 "expressly authorizes contract formation by an individual's use of a credit card"). be broadly written."58 "Once an arbitration clause is deemed to have been broadly written, `only an express provision excluding a specific dispute, or the most forceful evidence of a purpose to exclude the claim from arbitration will remove the dispute from consideration by the arbitrators.'"59

The card agreements contain the following Arbitration Agreement, which provides that either party can elect mandatory binding arbitration:

between Plaintiffs and Citibank relating to the accounts and/or Plaintiffs' "relationships" with Citibank. The Arbitration Agreement also explicitly states that it must be enforced pursuant to the FAA.

Monika Drozdowski argues that her claim falls outside the scope of the Arbitration Agreement because the calls did not relate to her own account, Citi Account III. According to Plaintiffs, she was not an authorized user of Citi Account IV, and Citibank made calls to her concerning her husband's alleged lack of payments on Citi Account IV.61

As noted by Citibank, the parties contractually agreed that, to the extent a disagreement arose regarding the "application, enforceability, or interpretation" of the Arbitration Agreement, it would be decided by an arbitrator.62 The parties further agreed that "[a]ny questions about whether Claims are subject to arbitration shall be resolved by interpreting this arbitration provision is the broadest way the law will allow it to be enforced."63 Because the arbitration provision is broadly written, "only an express provision excluding a specific dispute, or `the most forceful evidence of a purpose to exclude the claim from arbitration,' will remove the dispute from consideration by the arbitrator."64

Here, the underlying conduct for the alleged TCPA violations, i.e., Citibank's calls to Monika Drozdowski's cell phone, relates to and implicates her relationship with Citibank. The Arbitration Agreement applies to any claim relating to "our relationship."65 Plaintiffs have not shown that Monika Drozdowski's claim does not relate to her relationship with Citibank or that it falls outside the broad scope of the Arbitration Agreement. "[T]he parties should be compelled to arbitration unless it can be said with `positive assurance' that the party's claims do not fall within the scope of the Arbitration Agreement."66 Thus, Monika Drozdowski's claim is subject to the Arbitration Agreement.67

Plaintiffs also argue that Robert Drozdowski's claim falls outside the scope of the agreements. Plaintiffs allege that Citibank violated the TCPA by calling his cell phone "in an attempt to collect Robert's debt owed on the Sears Mastercard" after "Robert's attorney sent Citibank a notice of representation letter regarding a debt owed on the Sears Mastercard."68 Clearly, these allegations relate to Robert Drozdowski's account and relationship with Citibank. Because the Arbitration Agreement expressly extends to Plaintiffs' "relationship" with Citibank, as well as the Accounts, the claims asserted are within the scope of the Arbitration Agreement.

Next, the Court must decide whether Congress intended TCPA claims to be arbitrable. Plaintiffs argue that Congress did not intend TCPA claims to be arbitrable given the TCPA's legislative purpose and statutory design. As the opponents of arbitration, Plaintiffs have the burden of establishing that Congress intended to disallow arbitration, either by pointing to evidence within the statute's text or legislative history or by showing an irreconcilable conflict between arbitration and the TCPA's underlying purposes.69 "Throughout such an inquiry, it should be kept in mind that questions of arbitrability must be addressed with a healthy regard for the federal policy favoring arbitration."70

Although Plaintiffs contend that a class action is necessary to vindicate a large number of consumers' rights, they have not identified any right created by the TCPA that would not be available in individual arbitration proceedings.71 Nor have they presented any evidence to show that arbitration would be prohibitively expensive.72 Moreover, Plaintiffs have cited no cases which have held that claims under the TCPA are nonarbitrable, whereas Citibank has cited several cases which have "considered the issue [and] have found nothing in the text or legislative history of the TCPA to suggest that Congress intended TCPA claims to be nonarbitrable."73 Other cases have found TCPA claims to be subject to arbitration without expressly addressing the issue of whether Congress intended those claims to be arbitrable.74 Accordingly, Plaintiffs have failed to meet their burden of showing that the TCPA displays an intention to preclude a waiver of judicial remedies.

Based on this analysis, the Court finds that Plaintiffs' claims must be arbitrated.75 Accordingly, Citibank's motion to compel arbitration is GRANTED.

The Court must enforce the Arbitration Agreement as written, including the language requiring arbitration on an individual, non-class basis.76 Here, the Arbitration Agreement expressly provides that "[c]laims and remedies sought as part of a class action, private attorney general or other representative action can be arbitrated only on an individual basis and the arbitrator may award relief only on an individual (non-class, non-representative) basis," and "neither you, we or any other person may pursue the Claim in arbitration as a class action, private attorney general action or other representative action."77 Therefore, Plaintiffs' request to certify a class in this matter is DENIED.

Section 3 of the FAA provides that, when a valid arbitration agreement requires a dispute to be submitted to binding arbitration, the district court shall stay the action "until such arbitration has been had in accordance with the terms of the agreement."78 The action against Citibank is hereby STAYED and will be administratively closed pending completion of arbitration pursuant to the express terms of the Arbitration Agreement.

IT IS SO ORDERED.