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 Post subject: Sarver v. Trans Union
PostPosted: Mon Jan 15, 2007 11:00 pm 
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Credit card issuer filed motion to compel arbitration of cardholder's claims that issuer failed to correct and unlawfully reported information regarding his credit card accounts. The District Court, Bucklo, J., held that: (1) arbitration clauses in credit card member agreements were not unconscionable or contrary to public policy, and (2) arbitration clauses covered the dispute. Motion granted. Sarver v. Trans Union, LLC, 264 F.Supp.2d 691, N.D.Ill., May 22, 2003.

Arbitration clauses in credit card member agreements, which covered all disputes that "arise out of" the card member agreements, encompassed cardholder's claims that issuer failed to correct and unlawfully reported information regarding his credit card accounts. Id.

Statutory rights may be arbitrated so long as the prospective litigant effectively may vindicate his or her statutory cause of action in the arbitral forum. Id. Arbitration clauses in credit card member agreements were not contrary to public policy because they did not provide for the awarding of attorney fees, which were necessary to fulfill the public policy behind consumer protection statutes such as the Fair Credit Reporting Act (FCRA) since clauses did not forbid the arbitrator from awarding attorneys fees. Id.

“While a prohibition against awarding fees in arbitration could preclude arbitration of statutory rights, the arbitration clauses here contain no such prohibition. Cf. Graham Oil Co. v. ARCO Products Co., 43 F.3d 1244, 1247-48 (9th Cir.1994) (holding that court, not arbitrator, must decide claims under the Petroleum Marketing Practices Act because arbitration clause at issue expressly forfeited parties' statutorily-mandated right to recover, among other things, attorneys' fees). The arbitration clauses here do not forbid the arbitrator from awarding attorneys fees. Thus, there is no reason to believe that Mr. Sarver will be unable to vindicate effectively his rights under the FCRA in arbitration.â€

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David Szwak
Chairman, Consumer Protection Section, Louisiana State Bar Association
Bodenheimer, Jones & Szwak
509 Market Street, 7th Floor
Mid South Tower
Shreveport, Louisiana 71101
318-221-6444
Fax 318-221-6555


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