CORMAC J. CARNEY, District Judge.
Plaintiffs Janice Abat, Ildiko Nylen, Jean Rossean, Linda Shakespeare, Shannon Carriero, Nancy Wilksen, Erica Hall, on behalf of themselves and all other persons similarly situated (collectively "Plaintiffs") initiated this class action against Chase Bank USA, N.A. ("Chase") and other defendants. Plaintiffs bring claims against Chase under the federal Credit Repair Organizations Act ("CROA"), 15 U.S.C. § 1679 et seq., and on behalf of those members of the class that are California residents, claims under the California Consumer Legal Remedies Act ("CLRA"), CAL. CIV. CODE § 1750 et seq., and the Unfair Competition Law ("UCL"), CAL. BUS. & PROF. CODE § 17200 et seq., (collectively "Counts X and XI"). Before the Court is Chase's motion for partial summary judgment on Counts X and XI on the ground that the disputes under those claims are governed by a valid, enforceable choice of law provision in the credit card agreements between Plaintiffs and Chase that selects Delaware law. Chase's motion for partial summary judgment on Counts X and XI is GRANTED.
The choice of law provision contained in the credit card agreements between Plaintiffs and Chase provides for Delaware law to resolve any dispute between the parties concerning any item in those agreements. The choice of law provision states: "This agreement is governed by the laws of the United States and the State of Delaware. Any dispute concerning any item in this agreement will be resolved by those laws." Under California law, the party advocating the applicability of the choice of law provision has the burden of establishing that the causes of action alleged by the putative class fall within its scope. Wash. Mut. Bank, F.A. v. Super. Ct., 24 Cal.4th 906, 916, 103 Cal.Rptr.2d 320, 15 P.3d 1071 (Cal.2001). However, in this case, the plain meaning of the language used by the parties—"governed by," and "any dispute concerning"— gives the provision broad scope. Nedlloyd Lines v. Super. Ct., 3 Cal.4th 459, 468-69,
In their Second Amended Complaint, Plaintiffs allege "Defendants' practices in connection with the marketing and sale of credit repair and debt management plan services violate the CLRA. . . ." (Pl.'s Second Am. Compl. ¶ 345.) Plaintiffs essentially allege that Chase knew of, participated in, and benefited from the fraudulent business activity of credit counseling agencies to recover past due consumer debt. Since Plaintiffs' statutory claims concern repayment of their debt to Chase, and since repayment is an essential item of each of their credit card agreements with Chase, Plaintiffs statutory claims must be resolved under Delaware law pursuant to the choice of law provision in the parties' credit card agreements.
The choice of law provision is enforceable because there is a substantial relationship between Delaware and the parties and transaction and, in this case, California does not have a materially greater interest than Delaware in enforcing its statutes. A federal court must apply the choice of law principles of the state in which it sits for state law claims for which it has exercised supplemental jurisdiction. Paracor Fin., Inc. v. General Elec. Capital Corp., 96 F.3d 1151, 1164 (9th Cir.1996). California courts use the approach set out in the Restatement (Second) of Conflicts of Laws § 187(2), which "reflect[s] strong policy considerations favoring the enforcement of freely negotiated choice of law clauses." Wash. Mut. Bank, 24 Cal.4th at 917-18, 103 Cal.Rptr.2d 320, 15 P.3d 1071 (quoting Nedlloyd Lines, 3 Cal.4th at 462, 466, 11 Cal.Rptr.2d 330, 834 P.2d 1148) (applying the Restatement approach to a choice of law provision contained in an adhesion contract). Where there is a substantial relationship between the chosen state and the parties or transaction at issue, California courts enforce choice of law provisions unless the party opposing the enforcement of the provision shows that California has materially greater interest in applying its own law and the chosen law would contravene California's fundamental public policy.
For the foregoing reasons, Defendants' motion for partial summary judgment on Counts X and XI is GRANTED.